INDEMNIFICATION AGREEMENT
Exhibit 10.23
INDEMNIFICATION AGREEMENT (this “Agreement”) dated as of ___, 2006 by and between
Restore Medical, Inc. (the “Company”), a Delaware corporation, and (“Indemnitee”):
WHEREAS, competent persons are reluctant to serve a corporation as a director, officer or in
another capacity unless they are provided with adequate protection through insurance or adequate
indemnification against inordinate risks of claims and actions against them arising out of their
service to and activities on behalf of corporations;
WHEREAS, the Board of Directors of the Company has determined that the ability to attract and
retain such persons is in to the best interests of the Company’s stockholders and that the Company
should act to assure such persons that there will be increased certainty of such protection in the
future; and
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate
itself to indemnify such persons to the fullest extent permitted by applicable law so that they
will serve or continue to serve the Company free from undue concern that they will not be so
indemnified; and
WHEREAS, Indemnitee is willing to serve, continue to serve and to take on additional service
for or on behalf of the Company on the condition that Indemnitee be so indemnified;
NOW, THEREFORE, in consideration of the premises, the mutual agreements herein set forth below
and other good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
1. Definitions. For purposes of this Agreement the following terms shall have the
meanings set forth below:
(a) “Board” shall mean the Board of Directors of the Company.
(b) “Corporate Status” describes the status of a person who is or was a director,
officer, employee, agent or fiduciary of the Company or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise which such
person is or was serving at the express written request of the Company.
(c) “Disinterested Director” means a director of the Company who is not and was not a
party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(d) “Enterprise” shall mean the Company and any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was
serving at the express written request of the Company as a director, officer, employee,
agent or fiduciary.
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(e) “Expenses” shall include all attorneys’ fees, retainers, court costs, transcript
costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees, and all other
disbursements or expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, being or preparing to be a
witness in a Proceeding.
(f) “Good Faith” shall mean Indemnitee having acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of the Company,
and, with respect to any criminal Proceeding, having had no reasonable cause to believe
Indemnitee’s conduct was unlawful.
(g) “Independent Counsel” means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and neither presently is, nor in the past five
years has been, retained to represent: (i) the Company or Indemnitee in any matter material
to either such party or (ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel”
shall not include any person who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in representing either the Company or
Indemnitee in an action to determine Indemnitee’s rights under this Agreement.
(h) “Proceeding” includes any action, suit, arbitration, alternate dispute resolution
mechanism, investigation, administrative hearing or any other actual, threatened or
completed proceeding whether civil, criminal, administrative or investigative, other than
one initiated by Indemnitee. For purposes of the foregoing sentence, a “Proceeding” shall
not be deemed to have been initiated by Indemnitee where Indemnitee seeks pursuant to
Section 8 of this Agreement to enforce Indemnitee’s rights under this Agreement.
2. Term of Agreement. This Agreement shall continue until and terminate upon the
later of: (a) 10 years after the date that Indemnitee has ceased to serve as a director, officer,
employee, agent or fiduciary of the Company or of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise which Indemnitee served at the express
written request of the Company or (b) the final termination of all pending Proceedings in respect
of which Indemnitee is granted rights of indemnification or advancement of expenses hereunder and
of any proceeding commenced by Indemnitee pursuant to Section 8 of this Agreement relating thereto.
3. Services by Indemnitee, Notice of Proceedings.
(a) Services. Indemnitee agrees to serve as a director of the Company. Indemnitee may at any time and
for any reason resign from such position (subject to any other contractual obligation or any
obligation imposed by operation of law).
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(b) Notice of Proceeding. Indemnitee agrees promptly to notify the Company in writing
upon being served with any summons, citation, subpoena, complaint, indictment, information or other
document relating to any Proceeding or matter that may be subject to indemnification or advancement
of Expenses covered hereunder.
4. Indemnification
(a) In General. In connection with any Proceeding, the Company shall indemnify and
advance Expenses to Indemnitee as provided in this Agreement and to the fullest extent permitted by
applicable law in effect on the date hereof and to such greater extent as applicable law may
thereafter from time to time permit.
(b) Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee
shall be entitled to the rights of indemnification provided in this Section 4(b) if, by reason of
Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be made, a party to any
Proceeding, other than a Proceeding by or in the right of the Company. Indemnitee shall be
indemnified against Expenses, judgments, penalties, fines and amounts paid in settlements actually
and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding
or any claim, issue or matter therein, if Indemnitee acted in Good Faith.
(c) Proceedings by or in the Right of the Company. Indemnitee shall be entitled to
the rights of indemnification provided in this Section 4(c) if, by reason of Indemnitee’s Corporate
Status, Indemnitee is or is threatened to be made a party to any Proceeding brought by or in the
right of the Company to procure a judgment in its favor. Indemnitee shall be indemnified against
Expenses, judgments, penalties and amounts paid in settlement, actually and reasonably incurred by
Indemnitee or on Indemnitee’s behalf in connection with such Proceeding if Indemnitee acted in Good
Faith. Notwithstanding the foregoing, no such indemnification shall be made in respect of any
claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be
liable to the Company if applicable law prohibits such indemnification; provided, however, that, if
applicable law so permits, indemnification shall nevertheless be made by the Company in such event
if and only to the extent that the Court of Chancery of the State of Delaware, or the court in
which such Proceeding shall have been brought or is pending, shall determine.
(d) Indemnification of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by
reason of Indemnitee’s Corporate Status, a party to and is successful, on the merits or otherwise,
in any Proceeding, Indemnitee shall be indemnified to the maximum extent permitted by law against
all Expenses, judgments, penalties, fines and amounts paid in settlement, actually and reasonably
incurred by Indemnitee or on Indemnitee’s behalf in connection therewith. If Indemnitee is not
wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or
more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify
Indemnitee to the maximum extent permitted by law, against all Expenses, judgments, penalties,
fines and amounts paid in settlement, actually and reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection with each successfully resolved claim, issue or matter. For
purposes of this Section 4(d) and without limitation, the termination of any claim, issue or matter
in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful
result as to such claim, issue or matter, so long as there has been no finding (either adjudicated
or pursuant to Section 6) that Indemnitee did not act in Good Faith.
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(e) Indemnification for Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of Indemnitee’s Corporate
Status, a witness in any Proceeding, Indemnitee shall be indemnified against all Expenses actually
and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.
5. Advancement of Expenses. Notwithstanding any provision to the contrary in Section
6, the Company shall advance all Expenses which, by reason of Indemnitee’s Corporate Status, were
incurred by or on behalf of Indemnitee in connection with any Proceeding, within 20 days after the
receipt by the Company of a statement or statements from Indemnitee requesting such advance or
advances, whether prior to or after final disposition of such Proceeding. Such statement or
statements shall reasonably evidence the Expenses incurred by Indemnitee and shall be preceded or
accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses if it shall
ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses.
Any advance and undertakings to repay pursuant to this Section 5 shall be unsecured and interest
free.
6. Procedures for Determination of Entitlement to Indemnification
(a) Initial Request. To obtain indemnification under this Agreement, Indemnitee shall
submit to the Company a written request, including therein or therewith such documentation and
information as is reasonably available to Indemnitee and is reasonably necessary to determine
whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company
shall promptly advise the Board in writing that Indemnitee has requested indemnification.
(b) Method of Determination. A determination (if required by applicable law) with
respect to Indemnitee’s entitlement to indemnification shall be made by the Board by a majority
vote of
Disinterested Directors, even though less than a quorum. In the event that there are no
Disinterested Directors or if such Disinterested Directors so direct, the determination shall be
made by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered
to Indemnitee.
(c) Selection, Payment, Discharge, of Independent Counsel. In the event the
determination of entitlement to indemnification is to be made by Independent Counsel pursuant to
Section 6(b) of this Agreement, the Independent Counsel shall be selected, paid and discharged in
the following manner:
(1) The Independent Counsel shall be selected by the Board, and the Company shall give
written notice to Indemnitee advising Indemnitee of the identity of the Independent Counsel
so selected.
(2) Following the initial selection described in clause (1) of this Section 6(c),
Indemnitee or the Company, as the case may be, may, within seven days after such written
notice of selection has been given, deliver to the other party a written objection to such
selection. Such objection may be asserted only on the ground that the Independent
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Counsel
so selected does not meet the requirements of “Independent Counsel” as defined in this
Agreement, and the objection shall set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the person so selected shall act as
Independent Counsel. If such written objection is made, the
Independent Counsel so selected
may not serve as Independent Counsel unless and until a court has determined that such
objection is without merit.
(3) Either the Company or Indemnitee may petition any court of competent jurisdiction
if the parties have been unable to agree on the selection of Independent Counsel within 20
days after submission by Indemnitee of a written request for indemnification pursuant to
Section 6(a) of this Agreement. Such petition may request a determination whether an
objection to the party’s selection is without merit and/or seek the appointment as
Independent Counsel of a person selected by the Court or by such other person as the Court
shall designate. A person so appointed shall act as Independent Counsel under Section 6(b)
of this Agreement.
(4) The Company shall pay any and all reasonable fees and expenses of Independent
Counsel incurred by such Independent Counsel in connection with acting pursuant to this
Agreement, and the Company shall pay all reasonable fees and expenses incident to the
procedures of this Section 6(c), regardless of the manner in which such Independent Counsel
was selected or appointed.
(5) Upon the due commencement of any judicial proceeding or arbitration pursuant to
Section 8(c) of this Agreement, Independent Counsel shall be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of professional
conduct then prevailing).
(d) Cooperation. Indemnitee shall cooperate with the person, persons or entity making the determination with
respect to Indemnitee’s entitlement to indemnification under this Agreement, including providing to
such person, persons or entity upon reasonable advance request any documentation or information
which is not privileged or otherwise protected from disclosure and which is reasonably available to
Indemnitee and reasonably necessary to such determination. Any costs or expenses (including
attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person,
persons or entity making such determination shall be borne by the Company (irrespective of the
determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies
and agrees to hold Indemnitee harmless therefrom.
(e) Payment. If it is determined that Indemnitee is entitled to indemnification,
payment to Indemnitee shall be made within 10 days after such determination.
7. Presumptions and Effect of Certain Proceedings
(a) Burden of Proof. In making a determination with respect to entitlement to
Indemnification hereunder, the person or persons or entity making such determination shall presume
that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a
request for indemnification in accordance with Section 6(a), and the Company shall have the burden
of proof to overcome that presumption in connection with the making by any person, persons or
entity of any determination contrary to that presumption.
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(b) Effect of Other Proceedings. The termination of any Proceeding or of any claim,
issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement)
of itself adversely affect the right of Indemnitee to indemnification or create a presumption that
Indemnitee did not act in Good Faith.
(c) Reliance as Safe Harbor. For purposes of any determination of Good Faith,
Indemnitee shall be deemed to have acted in Good Faith if Indemnitee’s action is based on the
records or books of account of the Enterprise, including financial statements, or on information
supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the
advice of legal counsel for the Enterprise or on information or records given or reports made to
the Enterprise by an independent certified public accountant or by an appraiser or other expert
selected with reasonable care by the Enterprise. The provisions of this Section 7(c) shall not be
deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may
be deemed to have met the applicable standard of conduct set forth in this Agreement.
(d) Actions of Others. The knowledge and/or actions, or failure to act, of any director, officer, agent or
employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right
to indemnification under this Agreement.
8. Remedies of Indemnitee
(a) Application. This Section 8 shall apply in the event of a Dispute. For purposes
of this article, “Dispute” shall mean any of the following events:
(1) a determination is made pursuant to Section 6 of this Agreement that Indemnitee is
not entitled to indemnification under this Agreement;
(2) advancement of Expenses is not timely made pursuant to Section 5 of this Agreement;
(3) if the determination of entitlement to be made pursuant to Section 6(b) of this
Agreement is to be made by the Board and the Board has not made such determination within 60
days after receipt by the Company of the request for indemnification;
(4) if the determination of entitlement to be made pursuant to Section 6(b) of this
Agreement is to be made by Independent Counsel and Independent Counsel has not made such
determination within 90 days after receipt by the Company of the request for
indemnification;
(5) payment of indemnification is not made pursuant to Section 4(e) of this Agreement
within 10 days after receipt by the Company of a written request therefore; or
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(6) payment of indemnification is not made within 10 days after a determination has
been made that Indemnitee is entitled to indemnification or such determination is deemed to
have been made pursuant to Section 6 of this Agreement.
(b) Adjudication. In the event of a Dispute, Indemnitee shall be entitled to an
adjudication in an appropriate court in the State of Delaware, or in any other court of competent
jurisdiction, of Indemnitee’s entitlement to such indemnification or advancement of Expenses.
Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted
by a single arbitrator pursuant to the rules of the American Arbitration Association. Indemnitee
shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days
following the date on which Indemnitee first has the right to commence such proceeding pursuant to
this Section 8(b). The Company shall not oppose Indemnitee’s right to seek any such adjudication
or award in arbitration.
(c) De Novo Review. In the event that a determination shall have been made pursuant to Section 6 of this
Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or
arbitration commenced pursuant to this Section 8 shall be conducted in all respects as a de novo
trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that
adverse determination. In any such proceeding or arbitration, the Company shall have the burden of
proving that Indemnitee is not entitled to indemnification or advancement of Expenses, as the case
may be.
(d) Company Bound. If a determination shall have been made or deemed to have been
made pursuant to Section 6 of this Agreement that Indemnitee is entitled to indemnification, the
Company shall be bound by such determination in any judicial proceeding or arbitration absent (i) a
misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make
Indemnitee’s statement not materially misleading, in connection with the request for
indemnification or (ii) a prohibition of such indemnification under applicable law.
(e) Procedures Valid. The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 8 that the procedures and presumptions
of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or
before any such arbitrator that the Company is bound by all of the provisions of this Agreement.
(f) Expenses of Adjudication. In the event that Indemnitee, pursuant to this Section
8, seeks a judicial adjudication of or an award in arbitration to enforce Indemnitee’s rights
under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover
from the Company, and shall be indemnified by the Company against, any and all expenses (of the
types described in the definition of Expenses in this Agreement) actually and reasonably incurred
by Indemnitee in such adjudication or arbitration, but only if Indemnitee prevails therein. If it
shall be determined in such adjudication or arbitration that Indemnitee is entitled to receive part
but not all of the indemnification or advancement of expenses sought, the expenses incurred by
Indemnitee in connection with such adjudication or arbitration shall be appropriately prorated.
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9. Non-exclusivity, Insurance, Subrogation
(a) Non-Exclusivity. The rights of indemnification and to receive advancement of
Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which
Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the
Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No
amendment, alteration, rescission or replacement of this Agreement or any provision hereof shall be
effective as to Indemnitee with respect to any action taken or omitted by such Indemnitee in
Indemnitee’s Corporate Status prior to such amendment, alteration, rescission or replacement.
(b) Insurance. The Company shall, from time to time, make the good faith
determination whether or not it is practicable for the Company to obtain and maintain a policy or
policies of insurance with a reputable insurance company providing the Indemnitee with coverage for
losses from wrongful acts. For so long as Indemnitee shall remain a director or officer of the
Company and with respect to any such prior service, in all policies of director and officer
liability insurance, 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 and officers. Notwithstanding the foregoing, the Company shall have no
obligation to obtain or maintain such insurance if the Company determines in good faith that such
insurance is not reasonably available, if the premium costs for such insurance are disproportionate
to the amount of coverage provided, or if the coverage provided by such insurance is limited by
exclusions so as to provide an insufficient benefit. The Company shall promptly notify Indemnitee
of any good faith determination not to provide such coverage.
(c) Subrogation. In the event of any 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 papers required and take all action necessary to secure such rights, including
execution of such documents as are necessary to enable the Company to bring suit to enforce such
rights.
(d) No Duplicative Payment. The Company shall not be liable under this Agreement to
make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee
has otherwise actually received such payment under any insurance policy, contract, agreement or
otherwise.
10. Miscellaneous Provisions
(a) Entire Agreement. This Agreement contains the entire understanding between the
parties hereto with respect to the subject matter hereof and supersedes any prior understandings,
agreements or representations, written or oral, relating to the subject matter hereof.
(b) Counterparts. This Agreement may be executed in separate counterparts, each of
which will be an original and all of which taken together shall constitute one and the same
agreement, and any party hereto may execute this Agreement by signing any such counterpart.
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(c) Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law but if any provision
of this Agreement is held to be invalid, illegal or unenforceable under any applicable law or rule,
the validity,
legality and enforceability of the other provision of this Agreement will not be affected or
impaired thereby.
(d) Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, personal representatives and successors
and assigns.
(e) Modification, Amendment, Waiver or Termination. No provision of this Agreement
may be modified, amended, waived or terminated except by an instrument in writing signed by the
parties to this Agreement. No course of dealing between the parties will modify, amend, waive or
terminate any provision of this Agreement or any rights or obligations of any party under or by
reason of this Agreement.
(f) Notices. All notices, consents, requests, instructions, approvals or other
communications provided for herein shall be in writing and delivered by personal delivery,
overnight courier, mail, electronic facsimile or e-mail addressed to the receiving party at the
address set forth herein. All such communications shall be effective when received.
Attn: Chief Executive Officer
Any party may change the address set forth above by notice to each other party given as
provided herein.
(g) Headings. The headings and any table of contents contained in this Agreement are
for reference purposes only and shall not in any way affect the meaning or interpretation of this
Agreement.
(h) Governing Law. ALL MATTERS RELATING TO THE INTERPRETATION, CONSTRUCTION, VALIDITY
AND ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF DELAWARE,
WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW PROVISIONS THEREOF.
(i) Third-Party Benefit. Nothing in this Agreement, express or implied, is intended
to confer upon any other person any rights, remedies, obligations or liabilities of any nature
whatsoever.
(j) Jurisdiction and Venue. THIS AGREEMENT MAY BE ENFORCED IN ANY FEDERAL COURT OR STATE COURT SITTING IN DELAWARE, AND
EACH PARTY CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT
VENUE IN SUCH FORUM IS NOT CONVENIENT. IF ANY PARTY COMMENCES ANY ACTION UNDER ANY TORT OR
CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT IN
ANOTHER JURISDICTION
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OR VENUE, ANY OTHER PARTY TO THIS AGREEMENT SHALL HAVE THE OPTION OF
TRANSFERRING THE CASE TO THE ABOVE-DESCRIBED VENUE OR JURISDICTION OR, IF SUCH TRANSFER CANNOT BE
ACCOMPLISHED, TO HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE.
(k) Remedies. The parties agree that money damages may not be an adequate remedy for
any breach of the provisions of this Agreement and that any party may, in its discretion, apply to
any court of law or equity of competent jurisdiction for specific performance and injunctive relief
in order to enforce or prevent any violations this Agreement, and any party against whom such
proceeding is brought hereby waives the claim or defense that such party has an adequate remedy at
law and agrees not to raise the defense that the other party has an adequate remedy at law.
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IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement as of the
date set forth in the first paragraph.
| RESTORE MEDICAL, INC. | ||||
| By: | ||||
| Name: | ||||
| Its: | ||||
| Indemnitee Name: | ||||
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