INDEMNIFICATION AGREEMENT
[NAME OF DIRECTOR]
This Agreement dated _______________ is between Apollo Genetics, Inc.
(the "Company"), a Delaware corporation, and [NAME OF DIRECTOR] (the
"Director"), who is a director of the Company. Its purpose is to provide the
maximum protection for the Indemnitee (as defined below) against personal
liability arising out of Director's service to the Company so as to encourage
the continuation of such service and the effective exercise of the director's
business judgment.
The parties hereto agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the meanings hereafter assigned to them:
(a) "Change in Control" shall mean that the following has occurred:
(i) there has been a change in control of the Company, not approved by a
resolution of the Company's Board of Directors, of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") or any successor provision thereof, including
in any event the acquisition by any "person" (as such term is used in
Sections 13(d) and 14(d)(2) of the Exchange Act) of beneficial ownership,
directly or indirectly, of securities of the Company representing 25% or
more of the combined voting power of the Company's then outstanding
securities, (ii) followed within a period of not more than two years by a
change in the identity of a majority of the members of the Company's Board
of Directors otherwise than through death, disability or retirement in
accordance with the Company's normal retirement policies.
(b) "Claim" shall mean any threatened, pending or completed action,
suit or proceeding, or any inquiry or investigation, whether conducted by
the Company or any other party, that the Indemnitee in good faith believes
might lead to the institution of any such action, suit or proceeding,
whether civil, criminal, administrative, investigative or other.
(c) "Expenses" shall include attorneys' fees and all other costs,
expenses and obligations paid or incurred in connection with investigating,
defending, being a witness in or participating in (including on appeal), or
preparing to defend, be a witness in or participate in, any Claim relating
to any Indemnifiable Event.
(d) "Indemnifiable Event" shall mean any event or occurrence related
to the fact that the Director is or was a director, officer, employee,
agent or fiduciary of the Company, or is or was serving at the request of
the Company as a director, officer, employee, trustee, agent or fiduciary
of another corporation, partnership,
joint venture, employee benefit plan, trust or other enterprise, or by
reason of anything done or not done by the Director in any such capacity.
(e) "Indemnitee" shall mean Director and any partnership,
corporation, trust or other entity of which Director is or was a partner, a
partner of the general partner of, shareholder, trustee, director, officer,
member, employee or agent and any other entity or person that may be
subject to a Claim by reason of (or arising in part out of) an
Indemnifiable Event, and the references to Indemnitee in this
Indemnification Agreement shall be understood to refer severally to each
Indemnitee.
(f) "Potential Change in Control" shall mean that any of the
following have occurred: (i) any person publicly announces an intention to
take or to consider taking actions which if consummated might result in a
Change in Control, (ii) any "person" (as such term is used in Section 13(d)
and 14(d)(2) of the Exchange Act) acquires beneficial ownership, directly
or indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities, or
(iii) the Company's Board of Directors adopts a resolution to the effect
that, for purposes of this Agreement, a Potential Change in Control has
occurred.
(g) "Reviewing Party" shall mean the person or body appointed by the
Company's Board of Directors pursuant to Section 2(b) hereof, which shall
not be or include a person who is a party to the particular Claim for which
the Indemnitee is seeking indemnification.
2. BASIC INDEMNIFICATION ARRANGEMENT.
(a) In the event that the Indemnitee was or is a party to or witness
or other participant in, or is threatened to be made a party to or witness
or other participant in, a Claim by reason of (or arising in part out of)
an Indemnifiable Event, the Company shall indemnify the Indemnitee to the
fullest extent permitted by law as soon as practicable but in any event no
later than thirty days after written demand is presented to the Company,
against all Expenses, judgments, fines, penalties and amounts paid in
settlement (including all interest, assessments and other charges paid or
payable in respect of such Expenses, judgments, fines, penalties or amounts
paid in settlement) of such Claim. If so requested by the Indemnitee, the
Company shall advance (within two business days of such request) all
Expenses to the Indemnitee (an "Expense Advance"). Notwithstanding
anything in this Agreement to the contrary, prior to a Change in Control,
the Indemnitee shall not be entitled to indemnification pursuant to this
Agreement in connection with any Claim initiated by the Indemnitee against
the Company or any director or officer of the Company (otherwise than to
enforce his rights under this Agreement) unless the Company has consented
to the initiation of such Claim.
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(b) In the event of any demand by the Indemnitee for indemnification
hereunder or under the Company's Amended and Restated Certificate of
Incorporation or By-laws, the Board of Directors of the Company shall
designate a Reviewing Party, who shall, if there has been a Change of
Control of the Company, be the special independent counsel referred to in
Section 3 hereof. The obligations of the Company under Section 2(a) shall
be subject to the condition that the Reviewing Party shall not have
determined (in a written opinion, in any case in which the special
independent counsel referred to in Section 3 hereof is involved) that the
Indemnitee is not permitted to be indemnified under applicable law, and the
obligation of the Company to make an Expense Advance pursuant to Section
2(a) shall be subject to the condition that, if, when and to the extent
that the Reviewing Party determines that the Indemnitee is not permitted to
be so indemnified under applicable law, the Company shall be entitled to be
reimbursed by the Indemnitee (who hereby agrees to reimburse the Company)
for all such amounts theretofore paid. If the Indemnitee has commenced
legal proceedings in a court of competent jurisdiction to secure a
determination that the Indemnitee may be indemnified under applicable law,
any determination made by the Reviewing Party that the Indemnitee is not
permitted to be indemnified under applicable law shall not be binding, and
the Indemnitee shall not be required to reimburse the Company for any
Expense Advance until a final judicial determination is made with respect
hereto (as to which all rights of appeal therefrom have been exhausted or
lapsed). If there has been no determination by the Reviewing Party or if
the Reviewing Party determines that the Indemnitee is not permitted to be
indemnified in whole or in part under applicable law, the Indemnitee shall
have the right to commence litigation in any court in the State of Delaware
having subject matter jurisdiction thereof and in which venue is proper
seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, and the Company
hereby consents to service of process and to appear in any such proceeding.
Any determination by the Reviewing Party otherwise shall be conclusive and
binding on the Company and the Indemnitee.
3. CHANGE IN CONTROL. The Company agrees that if there is a Change in
Control of the Company, then with respect to all matters thereafter arising
concerning the rights of the Indemnitee to indemnity payments and Expense
Advances under this Agreement or any other agreement or under the Company's
Amended and Restated Certificate of Incorporation or By-laws now or hereafter in
effect relating to Claims for Indemnifiable Events, the Company shall seek legal
advice only from special independent counsel selected by the Indemnitee and
approved by the Company (which approval shall not be unreasonably withheld) who
has not otherwise performed services for the Company within the last ten years
(other than in connection with such matters) or for the Indemnitee. Such
counsel among other things, shall render its written opinion to the Company and
the Indemnitee as to whether and to what extent the Indemnitee is permitted to
be indemnified under applicable law. The Company agrees to pay the reasonable
fees of the special independent counsel and to indemnify such counsel against
any and all expenses (including attorneys' fees), claims, liabilities and
damages relating to this Agreement or its engagement pursuant hereto.
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4. ESTABLISHMENT OF TRUST. In the event of a Potential Change in
Control, the Company may create a Trust for the benefit of the Indemnitee
(either alone or together with one or more other indemnitees) and from time to
time fund such Trust in such amounts as the Company's Board of Directors may
determine to satisfy Expenses reasonably anticipated to be incurred in
connection with investigating, preparing for and defending any Claim relating to
an Indemnifiable Event, and all judgments, fines, penalties and settlement
amounts of all Claims relating to an Indemnifiable Event from time to time paid
or claimed, reasonably anticipated or proposed to be paid. The terms of any
Trust established pursuant hereto shall provide that upon a Change in Control
(i) the Trust shall not be revoked or the principal thereof invaded, without the
written consent of the Indemnitee, (ii) the Trustee shall advance, within two
business days of a request by the Indemnitee, all Expenses to the Indemnitee
(and the Indemnitee hereby agrees to reimburse the Trust under the circumstances
under which the Indemnitee would be required to reimburse the Company under
Section 2(b) of this Agreement), (iii) the Trustee shall promptly pay to the
Indemnitee all amounts for which the Indemnitee shall be entitled to
indemnification pursuant to this Agreement or otherwise, and (iv) all unexpended
funds in such Trust shall revert to the Company upon a final determination by
the Reviewing Party or a court of competent jurisdiction, as the case may be,
that the Indemnitee has been fully indemnified under the terms of this
Agreement. The Trustee shall be a person or entity satisfactory to the
Indemnitee. Nothing in this Section 4 shall relieve the Company of any of its
obligations under this Agreement.
5. INDEMNIFICATION FOR ADDITIONAL EXPENSES. The Company shall indemnify
the Indemnitee against all expenses (including attorneys' fees) and, if
requested by the Indemnitee, shall (within two business days of such request)
advance such expenses to the Indemnitee, which are incurred by the Indemnitee in
connection with any claim asserted against or action brought by the Indemnitee
for (i) indemnification or advance payment of Expenses by the Company under this
Agreement or any other agreement or Company By-law or provision of the Company's
Amended and Restated Certificate of Incorporation now or hereafter in effect
relating to Claims for Indemnifiable Events or (ii) recovery under any
directors' and officers' liability insurance policies maintained by the Company,
regardless of whether the Indemnitee ultimately is determined to be entitled to
such indemnification, advance expense payment or insurance recovery, as the case
may be.
6. PARTIAL INDEMNITY, ETC. If the Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for a portion of
the Expenses, judgments, fines, penalties and amounts paid in settlement of a
Claim but not for the total amount thereof, the Company shall indemnify the
Indemnitee for the portion thereof to which the Indemnitee is entitled.
Notwithstanding any other provision of this Agreement, to the extent that the
Indemnitee has been successful on the merits or otherwise in defense of Claims
relating to an Indemnifiable Event or in defense of any issue or matter therein,
including dismissal without prejudice, the Indemnitee shall be indemnified
against all Expenses incurred in connection therewith. In connection with any
determination by the Reviewing Party or otherwise as to whether the Indemnitee
is entitled to be indemnified hereunder, the burden of proof shall be on the
Company to establish that the Indemnitee is not so entitled.
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7. NO PRESUMPTION. For purposes of this Agreement, the termination of
any claim, action, suit or proceeding by judgment, order, settlement (whether
with or without court approval) or conviction, or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that the
Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is not
permitted by applicable law.
8. NON-EXCLUSIVITY, ETC. The rights of the Indemnitee hereunder shall be
in addition to any other rights the Indemnitee may have under the Company's
Amended and Restated Certificate of Incorporation and By-laws or the Delaware
General Corporation Law or otherwise. To the extent that a change in the
Delaware General Corporation Law (whether by statute or judicial decision)
permits greater indemnification by agreement than would be afforded currently
under the Company's Amended and Restated Certificate of Incorporation and By-
laws and this Agreement, it is the intent of the parties hereto that the
Indemnitee shall enjoy by this Agreement the greater benefits afforded by such
change.
9. LIABILITY INSURANCE. To the extent the Company maintains an insurance
policy or policies providing directors' and officers' liability insurance, the
Director shall be covered by such policy or policies, in accordance with its or
their terms, to the maximum extent to the coverage available for any Company
director or officer.
10. AMENDMENTS, ETC. 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 constitute a
waiver of any other provisions hereof (whether or not similar) nor shall such
waiver constitute a continuing waiver.
11. SUBROGATION. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of the Indemnitee, who shall execute all such papers and do all such
things as may be necessary or desirable to secure such rights.
12. NO DUPLICATION OF PAYMENTS. The Company shall not be liable under
this Agreement to make any payment in connection with any claim made against the
Indemnitee to the extent the Indemnitee has otherwise received payment (under
any insurance policy, the Company's Amended and Restated Certificate of
Incorporation, or the Company's By-laws or otherwise) of the amounts otherwise
indemnifiable hereunder.
13. BINDING EFFECT, ETC. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
or assets of the Company, spouses, heirs, and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
the Director continues to serve as an officer or director of the Company or of
any other enterprise at the Company's request.
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14. SEVERABILITY. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
15. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the Commonwealth of Massachusetts
applicable to contracts made and to be performed in such state without giving
effect to the principles of conflicts of law.
IN WITNESS WHEREOF, the undersigned have executed this Indemnification
Agreement as of the date first above written.
APOLLO GENETICS, INC.
By:_________________________________
Title:
_________________________________
[NAME OF DIRECTOR]
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