INDEMNITY AGREEMENT
EXHIBIT 10.1
INDEMNITY AGREEMENT
THIS AGREEMENT is made and entered into this __ day of September, 2001 by and between SangStat Medical Corporation, a Delaware corporation (the "Corporation"), and ______________ ("Agent").
WHEREAS, the current By-laws and Certificate of Incorporation (collectively, the "Charter Documents") require the Corporation to indemnify and advance expenses to its directors and officers to the full extent permitted by the Delaware General Corporation Law, as amended (as applicable, the "Code") and the Agent intends to continue serving as a director or officer of the Corporation in part in reliance on such Charter Documents and Code;
(a) The Corporation hereby agrees to hold harmless and indemnify Agent to the fullest extent authorized or permitted by the provisions of the Charter Documents and the Code, as the same may be amended from time to time (but only to the extent that such amendment permits the Corporation to provide broader indemnification rights than the Charter Documents or the Code permitted prior to adoption of such amendment).
(b) Notwithstanding the foregoing, (i) the obligations of the Corporation under Section 2(a) shall be subject to the condition that the Reviewing Party (as defined below) shall not have determined (in a written opinion, in any case in which the Independent Legal Counsel referred to in Section 11(a) hereof is involved) that Agent would not be permitted to be indemnified under applicable law, and (ii) the obligation of the Corporation to make an advance pursuant to Section 8 shall be subject to the condition that, if, when and to the extent that the Reviewing Party determines that Agent would not be permitted to be so indemnified under applicable law, the Corporation shall be entitled to be reimbursed by Agent (who hereby agrees to reimburse the Corporation) for all such amounts theretofore paid; provided, however, that if Agent has commenced or thereafter commences legal proceedings in a court of competent jurisdiction to secure a determination that Agent should be indemnified under applicable law, any determination made by the Reviewing Party that Agent would not be permitted to be indemnified under applicable law shall not be binding and Agent shall not be required to reimburse the Corporation for any advance until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed). If there has not been a Change in Control (as defined in Section 11(a)), the Reviewing Party shall be selected by the Board of Directors, and if there has been such a Change in Control (other than a Change in Control which has been approved by a majority of the Corporation's Board of Directors who were directors immediately prior to such Change in Control), the Reviewing Party shall be the Independent Legal Counsel referred to in Section 11(a) hereof. If there has been no determination by the Reviewing Party or if the Reviewing Party determines that Agent substantively would not be permitted to be indemnified in whole or in part under applicable law, Agent 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, including the legal or factual bases therefor, and the Corporation 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 Corporation and Agent.
"Reviewing Party" shall mean any appropriate person or body consisting of a member or members of the Corporation's Board of Directors or any other person or body appointed by the Board who is not a party to the particular claim for which Agent is seeking indemnification, or Independent Legal Counsel.
(a) against any and all expenses (including attorneys' fees), witness fees, damages, judgments, fines and amounts paid in settlement and any other amounts that Agent becomes legally obligated to pay because of any claim or claims made against or by him in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, arbitrational, administrative or investigative (including an action by or in the right of the Corporation) to which Agent is, was or at any time becomes a party, or is threatened to be made a party, by reason of the fact that Agent is, was or at any time becomes a director, officer, employee or other agent of Corporation, or is or was serving or at any time serves at the request of the Corporation as a director, officer, employee or other agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise; and
(b) otherwise to the fullest extent as may be provided to Agent by the Corporation under the non-exclusivity provisions of the Code and the Charter Documents.
(a) on account of any claim against Agent for an accounting of profits made from the purchase or sale by Agent of securities of the Corporation pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and amendments thereto or similar provisions of any federal, state or local statutory law;
(b) on account of Agent's conduct that was knowingly fraudulent or deliberately dishonest or that constituted willful misconduct;
(c) on account of Agent's conduct that constituted a breach of Agent's duty of loyalty to the Corporation or resulted in any personal profit or advantage to which Agent was not legally entitled;
(d) for which payment is actually made to Agent under a valid and collectible insurance policy or under a valid and enforceable indemnity clause, bylaw or agreement, except in respect of any excess beyond payment under such insurance, clause, bylaw or agreement;
(e) if indemnification is not lawful (and, in this respect, both the Corporation and Agent have been advised that the Securities and Exchange Commission believes that indemnification for liabilities arising under the federal securities laws is against public policy and is, therefore, unenforceable and that claims for indemnification should be submitted to appropriate courts for adjudication); or
(f) in connection with any proceeding (or part thereof) initiated by Agent, or any proceeding by Agent against the Corporation or its directors, officers, employees or other agents, unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board of Directors of the Corporation, (iii) such indemnification is provided by the Corporation, in its sole discretion, pursuant to the powers vested in the Corporation under the Code, or (iv) the proceeding is initiated pursuant to Section 9 hereof.
(a) the Corporation will be entitled to participate therein at its own expense;
(b) except as otherwise provided below, the Corporation may, at its option and jointly with any other indemnifying party similarly notified and electing to assume such defense, assume the defense thereof, with counsel reasonably satisfactory to Agent. After notice from the Corporation to Agent of its election to assume the defense thereof, the Corporation will not be liable to Agent under this Agreement for any legal or other expenses subsequently incurred by Agent in connection with the defense thereof except for reasonable costs of investigation or otherwise as provided below. Agent shall have the right to employ separate counsel in such action, suit or proceeding but the fees and expenses of such counsel incurred after notice from the Corporation of its assumption of the defense thereof shall be at the expense of Agent unless (i) the employment of counsel by Agent has been authorized by the Corporation, (ii) Agent shall have reasonably concluded that there may be a conflict of interest between the Corporation and Agent in the conduct of the defense of such action or (iii) the Corporation shall not in fact have employed counsel to assume the defense of such action, in each of which cases the fees and expenses of Agent's separate counsel shall be at the expense of the Corporation. The Corporation shall not be entitled to assume the defense of any action, suit or proceeding brought by or on behalf of the Corporation or as to which Agent shall have made the conclusion provided for in clause (ii) above; and
(c) the Corporation shall not be liable to indemnify Agent under this Agreement for any amounts paid in settlement of any action or claim effected without its written consent, which shall not be unreasonably withheld. The Corporation shall be permitted to settle any action except that it shall not settle any action or claim in any manner which would impose any penalty or limitation on Agent without Agent's written consent, which may be given or withheld in Agent's sole discretion.
11. CHANGE IN CONTROL AND ESTABLISHMENT OF TRUST.
(a) The Corporation agrees that if there is a Change in Control (as defined below) of the Corporation (other than a Change in Control which has been approved by a majority of the Corporation's Board of Directors who were directors immediately prior to such Change in Control) then with respect to all matters thereafter arising concerning the rights of Agent to indemnity payments and advances under this Agreement or any other agreement or Corporation By-law now or hereafter in effect relating to claims, the Corporation shall seek legal advice only from Independent Legal Counsel (as defined below) selected by Agent and approved by the Corporation (which approval shall not be unreasonably withheld). Such counsel, among other things, shall render its written opinion to the Corporation and Agent as to whether and to what extent the Agent would be permitted to be indemnified under applicable law. The Corporation agrees to pay the reasonable fees of the Independent Legal Counsel referred to above and to indemnify fully such counsel against any and all expenses (including attorneys' fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto. Change in Control shall be deemed to have occurred if (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Corporation or a corporation owned directly or indirectly by the stockholders of the Corporation in substantially the same proportions as their ownership of stock of the Corporation, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Corporation representing 20% or more of the total voting power represented by the Corporation's then outstanding securities of the Corporation that generally vote in the election of directors, or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Corporation and any new director whose election by the Board of Directors or nomination for election by the Corporation's stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved (collectively, the "Incumbent Directors"), cease for any reason to constitute a majority thereof, or (iii) the stockholders of the Corporation approve a merger or consolidation of the Corporation with any other corporation, other than a merger or consolidation which would result in the securities of the Corporation that generally vote in the election of directors of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into such types of securities of the surviving entity) at least 80% of the total voting power represented by the such types of securities of the Corporation or such surviving entity outstanding immediately after such merger or consolidation, or the stockholders of the Corporation approve a plan of complete liquidation of the Corporation or an agreement for the sale or disposition by the Corporation of (in one transaction or a series of transactions) all or substantially all the Corporation's assets. "Independent Legal Counsel" shall mean an attorney or firm of attorneys, selected in accordance with the provisions of this section, who shall not have otherwise performed services for the Corporation or Agent within the last five years (other than with respect to matters concerning the rights of Agent under this Agreement, or of other indemnitees under similar indemnity agreements).
(b) In the event of a Potential Change in Control (as defined below), the Corporation shall, upon written request by Agent, create a trust for the benefit of Agent and from time to time upon written request of Agent shall fund such trust in an amount sufficient to satisfy any and all expenses reasonably anticipated at the time of each such request to be incurred in connection with investigating, preparing for and defending any claim, and any and all judgments, fines, penalties and settlement amounts of any and all claims from time to time actually paid or claimed, reasonably anticipated or proposed to be paid, provided that in no event shall more than $500,000 be required to be deposited in any trust created hereunder in excess of amounts deposited in respect of reasonably anticipated expenses, and provided further that in no event shall more than $10,000,000 in the aggregate be required to be deposited in any such trust and any such trusts created pursuant to similar indemnification agreements to which the Company is a party. The amount or amounts to be deposited in the trust pursuant to the foregoing funding obligation shall be determined by the Reviewing Party, in any case in which the Independent Legal Counsel referred to above is involved. The terms of the trust 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 Agent, (ii) the trustee shall advance, within two business days of a request by the Agent, any and all expenses to the Agent (and the Agent hereby agrees to reimburse the trust under the circumstances under which the Agent would be required to reimburse the Corporation under Section 2(b) of this Agreement), (iii) the trust shall continue to be funded by the Corporation in accordance with the funding obligation set forth above, (iv) the trustee shall promptly pay to Agent all amounts for which Agent shall be entitled to indemnification pursuant to this Agreement or otherwise, and (v) all unexpended funds in such trust shall revert to the Corporation upon a final determination by the Reviewing Party or a court of competent jurisdiction, as the case may be, that Agent has been fully indemnified under the terms of this Agreement. The trustee shall be chosen by Agent. Nothing in this Section 11 shall relieve the Corporation of any of its obligations under this Agreement. Potential Change in Control shall be deemed to have occurred if (i) the Corporation enters into an agreement, the consummation of which would result in the occurrence of a Change in Control; (ii) any person (including the Corporation) publicly announces an intention to take or to consider taking actions which if consummated would constitute a Change in Control; (iii) any person, other than a trustee or other fiduciary holding securities under an employee benefit plan of the Corporation or a corporation owned, directly or indirectly, by the stockholders of the Corporation in substantially the same proportions as their ownership of stock of the Corporation, who is or becomes the beneficial owner, directly or indirectly, of securities of the Corporation representing 9.5% or more of the combined voting power of the Corporation's then outstanding securities that generally vote in the election of directors, increases his beneficial ownership of such securities by five percentage points (5%) or more over the percentage so owned by such person; or (iv) the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred. Notwithstanding anything to the contrary set forth herein, in the event of a request by Agent to create a trust under this Section 11(b), the Corporation shall not be obligated to establish such trust if at least a majority of the Corporation's Board of Directors in office immediately prior to a Change in Control, and prior to the consummation of such Change in Control, determine that the creation of such trust would not be in the best interests of the Corporation.
(a) The rights conferred on Agent by this Agreement shall continue after Agent has ceased to be a director, officer, employee or other agent of the Corporation or to serve at the request of the Corporation as a director, officer, employee or other agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise and shall inure to the benefit of Agent's heirs, executors and administrators.
(b) The Corporation shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Corporation, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place.
18. GOVERNING LAW. This Agreement shall be interpreted and enforced in accordance with the laws of the State of Delaware.
(a) If to Agent, at the address indicated on the signature page hereof.
(b) If to the Corporation, to
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SangStat Medical Corporation |
or to such other address as may have been furnished to Agent by the Corporation.
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SANGSTAT MEDICAL CORPORATION
By: ____________________________ Name:__________________________ Title:___________________________ |
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AGENT
By: ______________________________ Print Name:________________________ Address:__________________________ Fax: ____________________________ |
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