INDEMNITY AGREEMENT
This Indemnity Agreement, dated as of ______________ by and between Xxxxxx
Pharmaceutical, Inc., a Delaware corporation (the "Company"), and
______________, a director and/or officer of the Company (the "Indemnitee").
RECITALS
A. The Company desires to attract and retain the services of highly
qualified individuals, such as the Indemnitee, to serve as officers and
directors of the Company.
B. The Company and the Indemnitee recognize the substantial increase in
corporate litigation subjecting officers and directors of corporations to
increased risk of personal liability on account of their service to their
corporations.
C. The Company recognizes 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.
D. The Company desires and has requested the Indemnitee to serve or
continue to serve as a director or officer of the Company and wishes to protect
the Indemnitee from personal liability while in such service to the maximum
extent permitted by law.
E. The Indemnitee is willing to serve, or to continue to serve, the
Company, provided that he/she 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 of 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 of the General Corporation Law of the State of Delaware ("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 are
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 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
and 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 action or proceeding, 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, 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 thepurchase 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 reimbursed directly to Indemnitee under 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 by the Indemnitee 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 the 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 the Certificate
of Incorporation, any By-Law, any 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 indemnify the Indemnitee for the
portion thereof to which the Indemnitee is 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 10(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 of D&O Insurance. 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 to do so. 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
own 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 paid by 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 12 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)
A majority vote of the stockholders of the Company; or
(4) A panel of three arbitrators, 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
11(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
11(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 12 hereof, and (ii) the requirements of Section 11(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.
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The parties hereto have entered into this Indemnity Agreement effective as
of the date first above written.
THE COMPANY:
Xxxxxx Pharmaceutical, Inc.
00 Xxxx Xxxx
Xxxxxx, XX 00000
By: ______________________
Name:_____________________
Title:____________________
INDEMNITEE:
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NAME
Address:
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