TopSpin Medical, Inc. INDEMNIFICATION AGREEMENT
EXHIBIT 10.4
TopSpin Medical, Inc.
This INDEMNIFICATION AGREEMENT (the “Agreement”) is made as of , 2009 by and between
TopSpin Medical, Inc., a Delaware corporation (the “Company”), and (“Indemnitee”).
WHEREAS,
|
The Company desires to attract and retain qualified directors, officers, employees and other agents (hereinafter collectively “Office Holders”, and individually “Office Holder”), and to provide them with protection against liability and expenses incurred while acting in that capacity; | |
WHEREAS,
|
The Amended and Restated Certificate of Incorporation of the Company (the “Certificate”) and the Amended and Restated Bylaws of the Company (the “Bylaws”) contain provisions for indemnifying Office Holders of the Company, and the Bylaws and Delaware law contemplate that separate contracts may be entered into between the Company and its Office Holders with respect to their indemnification by the Company, which contracts may provide greater protection than is afforded by the Certificate and Bylaws; | |
WHEREAS,
|
The Company understands that Indemnitee has reservations about serving or continuing to serve the Company without adequate protection against personal liability arising from such service, and that it is also of critical importance to Indemnitee that adequate provision be made for advancing costs and expenses of legal defense; and | |
WHEREAS,
|
The Board of Directors of the Company has approved as being in the best interests of the Company indemnity contracts substantially in the form of this Agreement for directors and officers of the Company and its subsidiaries and for certain other employees and agents of the Company designated by the Board of Directors. |
NOW, THEREFORE, in order to induce Indemnitee to serve or to continue to serve as an Office Holder
of the Company, and in consideration of Indemnitee’s service to the Company, the parties agree as
follows:
1. Contractual Indemnity. In addition to the indemnification provisions of the Bylaws, the
Company hereby agrees, subject to the limitations of Sections 2 and 5 hereof:
1.1. To indemnify, defend and hold Indemnitee harmless to the greatest extent possible under
applicable law from and against any and all judgments, fines, penalties, amounts paid in settlement
and any other amounts reasonably incurred or suffered by Indemnitee (including attorneys’ fees) in
connection with any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, including an action by or in the right of the Company,
to which Indemnitee is, was or at any time becomes a party, or is threatened to be made a party, by
reason of the fact that Indemnitee is, was or at any time becomes an Office Holder of the Company
or is or was serving or at any time serves at the request of the Company as an Office Holder of
another corporation, partnership, joint venture, trust or other enterprise (collectively referred
to hereafter as a “Claim”), whether or not arising prior to the date of this Agreement.
1.2. To pay any and all expenses reasonably incurred by Indemnitee in defending any Claim
or Claims (including reasonable attorneys’ fees and other reasonable costs of investigation and
defense), as the same are incurred and in advance of the final disposition of any such Claim or
Claims, upon receipt of an undertaking by or on behalf of Indemnitee to reimburse such amounts if
it shall be ultimately determined that Indemnitee: (i) is not entitled to be indemnified by the
Company under this Agreement, and (ii) is not entitled to be indemnified by the Company under the
Certificate or the Bylaws.
The termination of any action or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that:
(i) Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be
in the best interests of the Company, or (ii) with respect to any criminal action or proceeding,
Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful.
2. Limitations on Contractual Indemnity. Indemnitee shall not be entitled to
indemnification or advancement of expenses under Section 1:
2.1. if a court of competent jurisdiction, by final judgment or decree, shall determine that (i)
the Claim or Claims in respect of which indemnity is sought arise from Indemnitee’s fraudulent,
dishonest or willful misconduct, or (ii) such indemnity is not permitted under applicable law; or
2.2. on account of any suit in which judgment is rendered for an accounting of profits made from
the purchase or sale by Indemnitee of securities of the Company in violation of the provisions of
Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions
of any federal, state or local statutory law; or
2.3. for any acts or omissions or transactions from which an Office Holder may not be indemnified
under the Delaware General Corporation Law; or
2.4. with respect to proceedings or claims initiated or brought voluntarily by Indemnitee and not
by way of defense, except (i) with respect to proceedings brought in good faith to establish or
enforce a right to indemnification under this Agreement or any other statute or law, or (ii) at the
Company’s discretion, in specific cases if the Board of Directors of the Company has approved the
initiation or bringing of such suit; or
2.5. 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 an insurance carrier under a policy of directors’ and officers’ liability
insurance maintained by the Company; or
2.6. on account of any suit brought against Indemnitee for misuse or misappropriation of non public
information, or otherwise involving Indemnitee’s status as an “insider” of the Company, in
connection with any purchase or sale by Indemnitee of securities of the Company.
3. Continuation of Contractual Indemnity. Subject to the termination provisions of Section
11, all agreements and obligations of the Company contained herein shall continue for so long as
Indemnitee shall be subject to any possible action, suit, proceeding or other assertion of a Claim
or Claims.
4. Expenses; Indemnification Procedure. The Company shall advance all expenses incurred by
Indemnitee in connection with the investigation, defense, settlement or appeal of any civil or
criminal action or proceeding referenced in Section 1 hereof (but not amounts actually paid in
settlement of any such action or proceeding). Indemnitee hereby undertakes to repay such amounts
advanced if, and to the extent that, it shall ultimately be determined that Indemnitee is not
entitled to be indemnified by the Company as authorized hereby. The advances to be made hereunder
shall be paid by the Company to Indemnitee within twenty (20) days following delivery of a written
request therefor by Indemnitee to the Company.
5. Notification and Defense of Claim. If any action, suit, proceeding or other Claim is
brought
against Indemnitee in respect of which indemnity may be sought under this Agreement:
5.1. Indemnitee will promptly notify the Company in writing of the commencement thereof, and the
Company and any other indemnifying party similarly notified will be entitled to participate therein
at its own expense or to assume the defense thereof and to employ counsel reasonably satisfactory
to Indemnitee. Notice to the Company shall be directed to the Chief Executive Officer of the
Company at the address shown on the signature page of this Agreement (or such other address as the
Company shall designate in writing to Indemnitee). Notice shall be deemed received three (3)
business days after the date postmarked if sent by domestic certified or registered mail, properly
addressed; otherwise notice shall be deemed received when such notice shall actually be received by
the Company. Indemnitee shall have the right to employ its own counsel in connection with any such
Claim and to participate in the defense thereof, but the fees and expenses of such counsel shall be
at the expense of Indemnitee unless (i) the Company shall not have assumed the defense of the Claim
and employed counsel for such defense, or (ii) the named parties to any such action (including any
impleaded parties) include both Indemnitee and the Company, and Indemnitee shall have reasonably
concluded that joint representation is inappropriate under applicable standards of professional
conduct due to a material conflict of interest between Indemnitee and the Company, in either of
which events the reasonable fees and expenses of such counsel to the Indemnitee shall be borne by
the Company upon delivery to the Company of the undertaking referred to in Section 1.2. However,
in no event will the Company be obligated to pay the fees or expenses of more than one firm of
attorneys representing Indemnitee and any other Office Holders of the Company in connection with
any one Claim or separate but substantially similar or related Claims in the same jurisdiction
arising out of the same general allegations or circumstances.
5.2. The Company shall not be liable to indemnify Indemnitee for any amounts paid in settlement of
any Claim effected without the Company’s written consent, and the Company shall not settle any
Claim in a manner which would impose any penalty or limitation on Indemnitee without Indemnitee’s
written consent; provided, however, that neither the Company nor Indemnitee will unreasonably
withhold its consent to any proposed settlement and, provided further, that if a Claim is settled
by the Indemnitee with the Company’s written consent, or if there be a final judgment or decree for
the plaintiff in connection with the Claim by a court of competent jurisdiction, the Company shall
indemnify and hold harmless Indemnitee from and against any and all losses, costs, expenses and
liabilities incurred by reason of such settlement or judgment.
5.3. Indemnitee shall give the Company such information and cooperation as it may reasonably
require and as shall be within Indemnitee’s power.
5.4. Any indemnification provided for in Section 1 shall be made no later than forty-five (45) days
after receipt of the written request of Indemnitee. If a Claim under this Agreement, under any
statute, or under any provision of the Certificate or Bylaws providing for indemnification, is not
paid in full by the Company within forty-five (45) days after a written request for payment thereof
has first been received by the Company, Indemnitee may, but need not, at any time thereafter bring
an action against the Company to recover the unpaid amount of the claim and, subject to Section 13
of this Agreement, Indemnitee shall also be entitled to be reimbursed for the expenses (including
attorneys’ fees) of bringing such action. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in connection with any action or proceeding
in advance of its final disposition) that Indemnitee has not met the standards of conduct which
make it permissible under applicable law for the Company to indemnify Indemnitee for the amount
claimed but the burden of proving such defense shall be on the Company, and Indemnitee shall be
entitled to receive interim payments of expenses pursuant to Section 4 unless and until such
defense may be finally adjudicated by court order or judgment from which no further right of appeal
exists. It is the parties’ intention that if the Company contests Indemnitee’s right to
indemnification, the question of Indemnitee’s right to indemnification shall be for the court to
decide, and neither the failure of the Company (including its Board of Directors, any committee or
subgroup of the Board of Directors, independent legal counsel, or its stockholders) to have made a
determination that indemnification of Indemnitee is proper in the circumstances because Indemnitee
has
met the applicable standard of conduct required by applicable law, nor an actual determination by
the Company (including its Board of Directors, any committee or subgroup of the Board of Directors,
independent legal counsel, or its stockholders) that Indemnitee has not met such applicable
standard of conduct, shall create a presumption that Indemnitee has or has not met the applicable
standard of conduct.
5.5. If, at the time of the receipt of a notice of a Claim, the Company has director and officer
liability 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.
6. Scope. Notwithstanding any other provision of this Agreement, the Company hereby agrees
to indemnify the Indemnitee against any Claim to the fullest extent permitted by law,
notwithstanding that such indemnification is not specifically authorized by the other provisions of
this Agreement, the Certificate, the Bylaws or by statute. In the event of any change, after the
date of this Agreement, in any applicable law, statute or rule which expands the right of a
Delaware corporation to indemnify its Office Holders, such changes shall be, ipso facto, within the
purview of Indemnitee’s rights and Company’s obligations, under this Agreement. In the event of
any change in any applicable law, statute, or rule which narrows the right of a Delaware
corporation to indemnify its Office Holders, such changes, to the extent not otherwise required by
applicable law to be applied to this Agreement, shall have no effect on this Agreement or the
parties’ rights and obligations hereunder.
7. Partial Indemnification. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of the expenses, judgments, fines
or penalties actually or reasonably incurred by him in the investigation, defense, appeal or
settlement of any civil or criminal action or proceeding, but not, however, for the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such expenses,
judgments, fines or penalties to which Indemnitee is entitled.
8. Public Policy. Both the Company and Indemnitee acknowledge that in certain instances,
Federal law or applicable public policy may prohibit the Company from indemnifying its Office
Holders under this Agreement or otherwise. Indemnitee understands and acknowledges that the
Company has undertaken or may be required in the future to undertake with the Securities and
Exchange Commission to submit the question of indemnification to a court in certain circumstances
for a determination of the Company’s right under public policy to indemnify Indemnitee.
9. Insurance. Although the Company may from time to time maintain insurance for the
purpose of indemnifying Indemnitee and other Office Holders of the Company against personal
liability, including costs of legal defense, nothing in this Agreement shall obligate the Company
to do so.
10. No Restrictions. The rights and remedies of Indemnitee under this Agreement shall not
be deemed to exclude or impair any other rights or remedies to which Indemnitee may be entitled
under the Certificate or Bylaws, or under any other agreement, provision of law or otherwise, nor
shall anything contained herein restrict the right of the Company to indemnify Indemnitee in any
proper case even though not specifically provided for in this Agreement, nor shall anything
contained herein restrict Indemnitee’s right to contribution as may be available under applicable
law.
11. Termination. The Company may terminate this Agreement at any time upon 90 days written
notice, but any such termination will not affect Claims relating to events occurring prior to the
effective date of termination.
12. Severability. Each of the provisions of this Agreement is a separate and distinct
agreement and
independent of the others, so that if any 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 the other provisions hereof.
13. Attorneys’ Fees. In the event of any litigation or other action or proceeding to
enforce or interpret this Agreement, the prevailing party as determined by the court shall be
entitled to an award of its reasonable attorneys’ fees and other costs, in addition to such relief
as may be awarded by a court or other tribunal.
14. Further Assurances. The parties will do, execute and deliver, or will cause to be
done, executed and delivered, all such further acts, documents and things as may be reasonably
required for the purpose of giving effect to this Agreement and the transactions contemplated
hereby.
15. Acknowledgment. The Company expressly acknowledges that it has entered into this
Agreement and assumed the obligations imposed on the Company hereunder in order to induce
Indemnitee to serve or to continue to serve as an Office Holder of the Company, and acknowledges
that Indemnitee is relying on this Agreement in serving or continuing to serve in such capacity.
16. Construction of Certain Phrases.
16.1. “Company”: For purposes of this Agreement, references to the “Company” shall also include,
in addition to the resulting corporation in any consolidation or merger to which TopSpin Medical,
Inc. is a party, any constituent corporation (including any constituent of a constituent) absorbed
in consolidation or merger which, if its separate existence had continued, would have had power and
authority to indemnify its Office Holders, so that if Indemnitee is or was an Office Holder of such
constituent corporation, or is or was serving at the request of such constituent corporation as an
Office Holder of another corporation, partnership, joint venture, trust or other enterprise,
Indemnitee shall stand in the same position under the provisions of this Agreement with respect to
the resulting or surviving corporation as Indemnitee would have with respect to such constituent
corporation if its separate existence had continued.
16.2. Benefit Plans: References to “fines” contained in this Agreement shall include any excise
taxes assessed on Indemnitee with respect to an employee benefit plan; and references to “serving
at the request of the Company” shall include any service as an Office Holder of the Company which
imposes duties on, or involves services by, such Office Holder with respect to an employee benefit
plan, its participants, or beneficiaries.
17. 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, on the date of such receipt, or (ii) if mailed by domestic certified or
registered mail with postage prepaid, on the third business day after the date postmarked.
Addresses for notice to either party are as shown on the signature page of this Agreement, or as
subsequently modified by written notice.
18. Governing Law; Binding Effect; Amendment.
18.1. This Agreement shall be interpreted and enforced in accordance with the laws of the State of
Delaware applicable to contracts entered into in Delaware and any dispute arising from or in
connection with this Agreement shall be submitted to the sole and exclusive jurisdiction of the
competent court in the State of New York.
18.2. This Agreement shall be binding upon Indemnitee and the Company, their successors and
assigns, and shall inure to the benefit of Indemnitee, his heirs, personal representatives and
assigns and to the benefit of the Company, its successors and assigns.
18.3. No amendment, modification, termination or cancellation of this Agreement shall be effective
unless in writing signed by both parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first
above written.
“Company”
TopSpin Medical, Inc.
a Delaware corporation
a Delaware corporation
By: |
||||
Name: |
||||
Title: |
||||
“Indemnitee”
Address: |
||||
