INDEMNIFICATION AGREEMENT
Exhibit 10.11
This Indemnification Agreement (the “Agreement”) made and entered into this October 15, 2004
(the “Effective Date”), by and between 3am Labs, Inc., a Delaware corporation (the “Company”), and
Xxxxxxx Xxxxx (the “Indemnitee”).
WHEREAS, it is essential that the Company be able to retain and attract as directors the most
capable persons available;
WHEREAS, the Company’s Bylaws permit it to enter into indemnification arrangements and
agreements;
WHEREAS, the Company desires to provide the Indemnitee with specific contractual assurances of
the Indemnitee’s rights to full indemnification against litigation risks and expenses (regardless,
among other things, of any amendment to or revocation of the Company’s Bylaws or any change in the
ownership of the Company or the composition of its Board of Directors) and, to the extent insurance
is available, the coverage of the Indemnitee under the Company’s directors and officers liability
insurance policies; and
WHEREAS, the Indemnitee is relying upon the rights afforded under this Agreement in accepting
Indemnitee’s position as a director of the Company.
NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:
1. Definitions.
(a) “Corporate Status” describes the status of a person who is serving or has served (i) as a
director, officer or employee of the Company, (ii) in any capacity with respect to any employee
benefit plan of the Company, or (iii) as a director, partner, member, trustee, officer, employee,
or agent of any other Entity at the written request of the Company.
(b) “Entity” shall mean any corporation, partnership, limited liability company, joint
venture, trust, foundation, association, organization or other legal entity and any group or
division of the Company or any of its subsidiaries.
(c) “Expenses” shall mean all reasonable fees, costs and expenses incurred in connection with
any Proceeding (as defined below), including, without limitation, attorneys’ fees, disbursements
and retainers (including, without limitation, any such fees, disbursements and retainers incurred
by Indemnitee pursuant to Section 10 of this Agreement), fees and disbursements of expert
witnesses, private investigators and professional advisors (including, without limitation,
accountants), court costs, transcript costs, fees of experts, travel expenses, duplicating,
printing and binding costs, telephone and fax transmission charges, postage, delivery services,
secretarial services, and other disbursements and expenses.
(d) “Indemnifiable Expenses,” “Indemnifiable Liabilities” and “Indemnifiable Amounts” shall
have the meanings ascribed to those terms in Section 3(a) below.
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(e) “Liabilities” shall mean judgments, damages, liabilities, losses, penalties, excise taxes,
fines and amounts paid in settlement.
(f) “Proceeding” shall mean any threatened, pending or completed claim, action, suit,
arbitration, alternate dispute resolution process, investigation, administrative hearing, appeal,
or any other proceeding, whether civil, criminal, administrative or investigative, whether formal
or informal, including a proceeding initiated by Indemnitee pursuant to Section 10 of this
Agreement to enforce Indemnitee’s rights hereunder.
2. Services of Indemnitee. It is the intent of this Agreement to secure for
Indemnitee rights of indemnity that are as favorable as may be permitted under the law and public
policy of the State of Delaware. In consideration of the Company’s covenants and commitments
hereunder, Indemnitee agrees to serve as a director of the Company; provided, that
this Agreement shall not impose any obligation on Indemnitee or the Company to continue
Indemnitee’s service to the Company beyond any period otherwise required by law or by other
agreements or commitments of the parties, if any.
3. Agreement to Indemnify.
The Company agrees to indemnify Indemnitee as follows:
(a) Subject to the exceptions contained in Section 4(a) below, if Indemnitee becomes 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) from and after the Effective Date by reason of Indemnitee’s Corporate Status,
Indemnitee shall be indemnified by the Company against all Expenses and Liabilities incurred or
paid by Indemnitee in connection with such Proceeding (referred to herein as “Indemnifiable
Expenses” and “Indemnifiable Liabilities,” respectively, and collectively as “Indemnifiable
Amounts”).
(b) Subject to the exceptions contained in Section 4(b) below, if Indemnitee becomes a party
or is threatened to be made a party to any Proceeding from and after the Effective Date by or in
the right of the Company to procure a judgment in its favor by reason of Indemnitee’s Corporate
Status, Indemnitee shall be indemnified by the Company against all Indemnifiable Expenses.
4. Exceptions to Indemnification. Indemnitee shall be entitled to indemnification
under Sections 3(a) and 3(b) above in all circumstances other than the following:
(a) If indemnification is requested under Section 3(a) and it has been adjudicated by a court
of competent jurisdiction that, in connection with the subject of the Proceeding out of which the
claim for indemnification has arisen, (a) Indemnitee failed to act in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, (b)
due to Indemnitee’s own gross negligence or willful misconduct, or (c) with respect to any criminal
action or proceeding, Indemnitee had reasonable cause to believe that Indemnitee’s conduct was
unlawful, Indemnitee shall not be entitled to payment of Indemnifiable Amounts hereunder.
(b) If indemnification is requested under Section 3(b) and
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(i) it has been adjudicated finally by a court of competent jurisdiction that, in connection
with the subject of the Proceeding out of which the claim for indemnification has arisen,
Indemnitee failed to act in good faith and in a manner Indemnitee reasonably believed to be in or
not opposed to the best interests of the Company, Indemnitee shall not be entitled to payment of
Indemnifiable Expenses hereunder; or
(ii) it has been adjudicated finally by a court of competent jurisdiction that Indemnitee is
liable to the Company with respect to any claim, issue or matter involved in the Proceeding out of
which the claim for indemnification has arisen, including, without limitation, a claim that
Indemnitee received an improper personal benefit or improperly took advantage of a corporate
opportunity, Indemnitee shall not be entitled to payment of Indemnifiable Expenses hereunder with
respect to such claim, issue or matter unless the Court of Chancery of the State of Delaware shall
determine upon application that, despite the adjudication of liability, but in view of all the
circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for such
Indemnifiable Expenses which such court shall deem proper.
5. Procedure for Payment of Indemnifiable Amounts. Indemnitee shall submit to the
Company a written request specifying the Indemnifiable Amounts for which Indemnitee seeks payment
under Section 3 of this Agreement and the basis for the claim. Subject to Section 4 and applicable
procedural and approval provisions of the General Corporation Law of the State of Delaware, as
amended and in effect from time to time, the Company shall pay such Indemnifiable Amounts to
Indemnitee within twenty (20) calendar days of receipt of the request. At the request of the
Company, Indemnitee shall furnish such documentation and information as are reasonably available to
Indemnitee and necessary to establish that Indemnitee is entitled to indemnification hereunder and
consistent with the requirements of the General Corporation Law of the State of Delaware, as
amended and in effect from time to time.
6. Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provision of this Agreement, and without limiting any such provision, 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 against
all Expenses 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 against all Expenses reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection with each successfully resolved claim, issue or matter. For
purposes of this Agreement, 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.
7. Effect of Certain Resolutions. Neither the settlement nor termination of any
Proceeding nor the failure of the Company to award indemnification or to determine that
indemnification is payable shall create an adverse presumption that Indemnitee is not entitled to
indemnification hereunder. In addition, the termination of any proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not create a
presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company or, with respect
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to any criminal action or proceeding, had reasonable cause to believe that Indemnitee’s action
was unlawful.
8. Agreement to Advance Interim Expenses. The Company shall pay to Indemnitee all
Indemnifiable Expenses incurred by Indemnitee in connection with any Proceeding, including a
Proceeding by or in the right of the Company, in advance of the final disposition of such
Proceeding, if Indemnitee furnishes the Company with a written undertaking to repay the amount of
such Indemnifiable Expenses advanced to Indemnitee if it is determined by a court of competent
jurisdiction that Indemnitee is not entitled under this Agreement to indemnification with respect
to such Indemnifiable Expenses, which undertaking shall be an unsecured general obligation of the
Indemnitee. The terms and conditions of such undertaking shall be determined by a quorum of the
disinterested members of the Board of Directors, if any, acting in good faith and as required by
the proper exercise of their fiduciary duties or, if not available, then by the written opinion of
independent legal counsel or by the Company’s stockholders.
9. Procedure for Payment of Interim Expenses. Indemnitee shall submit to the Company
a written request specifying the Indemnifiable Expenses for which Indemnitee seeks an advancement
under Section 8 of this Agreement, together with documentation evidencing that Indemnitee has
incurred such Indemnifiable Expenses. Payment of Indemnifiable Expenses under Section 8 shall be
made no later than twenty (20) calendar days after the Company’s receipt of such request and the
undertaking required by Section 8.
10. Remedies of Indemnitee.
(a) Right to Petition Court. In the event that Indemnitee makes a request for payment
of Indemnifiable Amounts under Sections 3 and 5 above or a request for an advancement of
Indemnifiable Expenses under Sections 8 and 9 above and the Company fails to make such payment or
advancement in a timely manner pursuant to the terms of this Agreement, Indemnitee may petition the
appropriate judicial authority to enforce the Company’s obligations under this Agreement.
(b) Burden of Proof. In any judicial proceeding brought under Section 10(a) above,
the Company shall have the burden of proving that Indemnitee is not entitled to payment of
Indemnifiable Amounts hereunder.
(c) Expenses. The Company agrees to reimburse Indemnitee in full for any Expenses
incurred by Indemnitee in connection with investigating, preparing for, litigating, defending or
settling any action brought by Indemnitee under Section 10(a) above, or in connection with any
claim or counterclaim brought by the Company in connection therewith, unless the appropriate
judicial authority determines that the Company had no obligations under this Agreement with respect
to the Indemnitee’s request for payment of Indemnifiable Amounts under Sections 3 and 5 above or
request for an advancement of Indemnifiable Expenses under Sections 8 and 9 above.
(d) Validity of Agreement. Subject to applicable law, including, but not limited to
the General Corporation Law of the State of Delaware, precluding the Company’s compliance with any
provision of this Agreement, the Company shall be precluded from
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asserting in any Proceeding, including, without limitation, an action under Section 10(a)
above, that the provisions of this Agreement are not valid, binding and enforceable or that there
is insufficient consideration for this Agreement and shall stipulate in court that the Company is
bound by all the provisions of this Agreement.
(e) Failure to Act Not a Defense. The failure of the Company (including its Board of
Directors or any committee thereof, independent legal counsel, or stockholders) to make a
determination concerning the permissibility of the payment of Indemnifiable Amounts or the
advancement of Indemnifiable Expenses under this Agreement shall not be a defense in any action
brought under Section 10(a) above, and shall not create a presumption that such payment or
advancement is not permissible.
11. Representations and Warranties of the Company. The Company hereby represents and
warrants to Indemnitee as follows:
(a) Authority. The Company has all necessary corporate power and authority to enter
into, and be bound by the terms of, this Agreement, and the execution, delivery and performance of
the undertakings contemplated by this Agreement have been duly authorized by the Company.
(b) Enforceability. This Agreement, when executed and delivered by the Company in
accordance with the provisions hereof, shall be a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws affecting the enforcement of creditors’ rights generally or general equitable
principles, and to the extent limited by applicable federal or state securities laws.
12. Insurance. To the extent that the Company’s Board of Directors determines it to
be necessary and appropriate, the Company will use commercially reasonable efforts to obtain,
within sixty (60) days of such determination, and maintain a policy or policies of insurance in an
amount not less than $1,000,000 in the aggregate for the Company’s Board of Directors and executive
officers, with reputable insurance companies providing the members of the Board of Directors with
coverage for losses from wrongful acts, and to ensure the Company’s performance of its
indemnification obligations under this Agreement. In all policies of director and officer
liability insurance, Indemnitee shall be named as an insured in such a manner as to provide
Indemnitee at least the same rights and benefits as are accorded to the most favorably insured of
the Company’s officers and directors. Notwithstanding the foregoing, if the Company, after
employing commercially reasonable efforts as provided in this Section, 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 use its
commercially reasonable efforts to obtain and maintain a policy or policies of insurance with
coverage having features as similar as practicable to those described above.
13. Fees and Expense. During the term of the Indemnitee’s service as a director, the
Company shall promptly reimburse the Indemnitee for all reasonable and documented expenses
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incurred by him in connection with his service as a director or member of any board committee
or otherwise in connection with the Company’s business, provided, that all expenses in excess of
$1,000 (other than travel and lodging expenses incurred in connection with attendance of any
meetings of the board of directors and/or any board committee) shall be approved in writing in
advance by the Company.
14. Contract Rights Not Exclusive. The rights to payment of Indemnifiable Amounts and
advancement of Indemnifiable Expenses provided by this Agreement shall be in addition to, but not
exclusive of, any other rights which Indemnitee may have at any time under applicable law, the
Company’s Bylaws, as amended, the Company’s Second Amended and Restated Certificate of
Incorporation, or any other agreement, vote of stockholders or directors, or otherwise, both as to
action in Indemnitee’s official capacity and as to action in any other capacity as a result of
Indemnitees’s serving as a director of the Company.
15. Successors. This Agreement shall be (a) binding upon all successors and assigns
of the Company (including any transferee of all or a substantial portion of the business, stock
and/or assets of the Company and any direct or indirect successor by merger or consolidation or
otherwise by operation of law) and (b) binding on and shall inure to the benefit of the heirs,
personal representatives, executors and administrators of Indemnitee. This Agreement shall
continue for the benefit of Indemnitee and such heirs, personal representatives, executors and
administrators after Indemnitee has ceased to have Corporate Status.
16. Subrogation. In the event of any payment of Indemnifiable Amounts under this
Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of
contribution or recovery of Indemnitee against other persons, and Indemnitee shall take, at the
request of the Company, all reasonable action necessary to secure such rights, including the
execution of such documents as are necessary to enable the Company to bring suit to enforce such
rights.
17. Change in Law. To the extent that a change in applicable law (whether by statute
or judicial decision) shall permit broader indemnification than is provided under the terms of the
Second Amended and Restated Certificate of Incorporation or Bylaws of the Company, as amended, and
this Agreement, Indemnitee shall be entitled to such broader indemnification and this Agreement
shall be deemed to be amended to such extent.
18. 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, or any clause thereof, shall be determined by a court of competent
jurisdiction to be illegal, invalid or unenforceable, in whole or in part, such provision or clause
shall be limited or modified in its application to the minimum extent necessary to make such
provision or clause valid, legal and enforceable, and the remaining provisions and clauses of this
Agreement shall remain fully enforceable and binding on the parties.
19. Indemnitee as Plaintiff. Except as provided in Section 10 of this Agreement and
in the next sentence, Indemnitee shall not be entitled to payment of Indemnifiable Amounts or
advancement of Indemnifiable Expenses with respect to any Proceeding brought by Indemnitee against
the Company, any Entity which it controls, any director or officer thereof, or any third
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party, unless the Company has consented to the initiation of such Proceeding. This Section
shall not apply to affirmative defenses asserted by Indemnitee in an action brought against
Indemnitee. In connection with any Proceeding in which the Company made payment of Indemnifiable
Amounts or advancement of Indemnifiable Expenses with respect to such Proceeding, any amounts
recovered by the Indemnitee in such Proceeding shall be held in trust for the benefit of the
Company and paid over to the Company as soon as reasonably practical.
20. Modifications and Waiver. Except as provided in Section 17 above with respect to
changes in applicable law which broaden the right of Indemnitee to be indemnified by the Company,
no supplement, modification or amendment of this Agreement shall be binding unless executed in
writing by each 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 provisions of this Agreement (whether or not
similar), nor shall such waiver constitute a continuing waiver.
21. General Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given (a) when delivered by
hand, (b) when transmitted by facsimile and receipt is acknowledged, or (c) if mailed by certified
or registered mail with postage prepaid, on the third business day after the date on which it is so
mailed:
| (i) | If to Indemnitee, to: | Xxxxxxx Xxxxx | ||||||
| with copy to: | ||||||||
| (ii) | If to the Company, to: | 3am Labs, Inc | ||||||
| 000 Xxxxxxx Xxxx Xxxxx Xxxxxx, XX 00000 Attn: President |
||||||||
| with copy to: | ||||||||
| Xxxxxxx XxXxxxxxx LLP 000 Xxxxxxx Xxxxxx Xxxxxx, Xxxxxxxxxxxxx 00000 Attention: Xxxxxx X. Xxxx, Esq. Telecopier No.: (000) 000-0000 |
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or to such other address as may have been furnished in the same manner by any party to the others.
22. Governing Law. This Agreement shall be governed by and construed in accordance
with the General Corporation Law of the State of Delaware as to matters within the scope thereof,
and as to all other matters shall be governed by and construed in accordance with the internal laws
of the Commonwealth of Massachusetts, without regard to its principles of conflicts of laws. If
the Agreement is translated into another language, the English language version shall control if
any dispute shall arise over the interpretation of the wording of the Agreement. Each of the
parties to this Agreement hereby agrees that the state and federal courts of the Commonwealth of
Massachusetts shall have exclusive jurisdiction to hear and determine any claims or disputes
between the parties hereto pertaining directly or indirectly to this Agreement, and all documents,
instruments and agreements executed pursuant hereto or thereto, or to any matter arising here from
(unless otherwise expressly provided for herein or therein). To the extent permitted by law, each
party hereby expressly submits and consents in advance to such jurisdiction in any action or
proceeding commenced by any of the other parties hereto in any of such courts, and agrees that
service of such summons and complaint or other process or papers may be made by registered or
certified mail addressed to such party at the address to which notices are to be sent pursuant to
this Agreement. Each of the parties waives any claim that Boston, Massachusetts is an inconvenient
forum or an improper forum based on lack of venue. The choice of forum set forth in this Section
shall not be deemed to preclude the enforcement of any judgment obtained in such forum or the
taking of any action to enforce the same in any other appropriate jurisdiction. Each party hereto
hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial
by jury in respect of any litigation directly or indirectly arising out of, under or in connection
with this Agreement. Each party hereto (i) certifies that no representative, agent or attorney of
the other party has represented, expressly or otherwise, that the other party would not, in the
event of litigation, seek to enforce the foregoing waiver and (ii) acknowledges that it and the
other parties hereto have been induced to enter into this Agreement by, among other things, the
mutual waivers and certifications in this Section.
23. Agreement Governs. This Agreement is to be deemed consistent wherever possible
with relevant provisions of the Company’s Bylaws and Second Amended and Restated Certificate of
Incorporation; however, in the event of a conflict between this Agreement and such provisions, the
provisions of this Agreement shall control.
24. Mitigation. Indemnitee shall be obligated to use reasonable efforts to mitigate
any liability, loss, costs, claims or damages sustained by it in connection with any matter for
which the Company may have an obligation to indemnify hereunder.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement as of the
day and year first above written.
| 3AMLABS, INC. |
||||
| By: | /s/ Xxxxxxx Xxxxx | |||
| Name: | Xxxxxxx Xxxxx | |||
| Title: | President and CEO | |||
| DIRECTOR: |
||||
| By: | /s/ Xxxxxxx Xxxxx | |||
| Xxxxxxx Xxxxx | ||||
