VISTAGEN THERAPEUTICS, INC. INDEMNIFICATION AGREEMENT
Exhibit 10.1
THIS
AGREEMENT is entered into, effective as of April 26, 2021 between
VistaGen Therapeutics, Inc., a Nevada corporation (the "Company"),
and Xxxxxx Xxxxxx, Ph.D.
WHEREAS, it is
essential to the Company to retain and attract as directors and
officers the most capable persons available;
WHEREAS, Indemnitee
is a director of the Company;
WHEREAS, both the
Company and Indemnitee recognize the increased risk of litigation
and other claims which may be asserted against directors and
officers of corporations; and
WHEREAS, in
recognition of lndemnitee's need for substantial protection against
personal liability in order to enhance Indemnitee's continued and
effective service to the Company, and in order to induce Indemnitee
to provide services to the Company as a director, the Company
wishes to provide in this Agreement for the indemnification of and
the advancing of expenses to Indemnitee to the fullest extent
(whether partial or complete) permitted by law and as set forth in
this Agreement, and, to the extent insurance is maintained, for the
coverage of Indemnitee under the Company's directors' and officers'
liability insurance policies.
NOW,
THEREFORE, in consideration of the above premises and of
lndemnitee's continuing to serve the Company directly or, at its
request, with another enterprise, and intending to be legally bound
hereby, the parties agree as follows:
1.
Certain Definitions:
(a)
Board: the Board of
Directors of the Company.
(b)
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 Securities Exchange Act
of 1934, as amended), other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or
a corporation owned directly or indirectly by the shareholders of
the Company in substantially the same proportions as their
ownership of stock of the Company, is or becomes the "Beneficial
Owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing 20% or more
of the total voting power represented by the Company's then
outstanding Voting Securities, or (ii) during any period of two
consecutive years, individuals who at the beginning of such period
constitute the Board and any new director whose election by the
Board or nomination for election by the Company's shareholders 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, cease for any reason to constitute a
majority thereof, or (iii) the shareholders of the Company approve
a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation that would result
in the Voting Securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining
outstanding or by being conve1ied into Voting Securities of the
surviving entity) at least 80% of the total voting power
represented by the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or the shareholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company (in one transaction or a series of
transactions) of all or substantially all of the Company's
assets.
(c)
Expenses: any
expense, liability, or loss, including attorneys' fees, judgments,
fines, ERISA excise taxes and penalties, amounts paid or to be paid
in settlement, any interest, assessments, or other charges imposed
thereon, and any federal, state, local, or foreign taxes imposed as
a result of the actual or deemed receipt of any payments under this
Agreement, paid or incurred in connection with investigating,
defending, being a witness in, or participating in (including on
appeal), or preparing for any of the foregoing in, any Proceeding
relating to any Indemnifiable Event.
(d)
Indemnifiable
Event: any event or occurrence that takes place either prior
to or after the execution of this Agreement, related to the fact
that Indemnitee is or was a director of the Company, or while a
director is or was serving at the request of the Company as a
director, officer, employee, trustee, agent, or fiduciary of
another foreign or domestic corporation, partnership, joint
venture, employee benefit plan, trust, or other enterprise, or was
a director, officer, employee, or agent of a foreign or domestic
corporation that was a predecessor corporation of the Company or of
another enterprise at the request of such predecessor corporation,
or related to anything done or not done by Indemnitee in any such
capacity, whether or not the basis of the Proceeding is alleged
action in an official capacity as a director, officer, employee, or
agent or in any other capacity while serving as a director,
officer, employee, or agent of the Company, as described
above.
(e)
Independent
Counsel: the person or body appointed in connection with
Section 3.
(f)
Proceeding: any
threatened, pending, or completed action, suit, or proceeding
(including an action by or in the right of the Company), or any
inquiry, hearing, or investigation, whether conducted by the
Company or any other party, that Indemnitee in good faith believes
might lead to the institution of any such action, suit, or
proceeding, whether civil, criminal, administrative, investigative,
or other.
(g)
Reviewing Party:
the person or body appointed in accordance with Section
3.
(h)
Voting Securities:
any securities of the Company that vote generally in the election
of directors.
2.
Agreement to
Indemnify.
(a)
General Agreement.
General Agreement. In the event Indemnitee was, is, or becomes 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 Proceeding by
reason of (or arising in part out of) an Indemnifiable Event, the
Company shall indemnify Indemnitee from and against any and all
Expenses to the fullest extent permitted by law, as the same exists
or may hereafter be amended or interpreted (but in the case of any
such amendment or interpretation, only to the extent that such
amendment or interpretation permits the Company to provide broader
indemnification rights than were permitted prior thereto). The
parties hereto intend that this Agreement shall provide for
indemnification in excess of that expressly permitted by statute,
including, without limitation, any indemnification provided by the
Company's Articles of Incorporation, its Bylaws, vote of its
shareholders or disinterested directors, or applicable
law.
(b)
Initiation of
Proceeding. Notwithstanding anything in this Agreement to
the contrary, Indemnitee shall not be entitled to indemnification
pursuant to this Agreement in connection with any Proceeding
initiated by Indemnitee against the Company or any director of the
Company unless (i) the Company has joined in or the Board has
consented to the initiation of such Proceeding; (ii) the Proceeding
is one to enforce indemnification rights under Section 5; or (iii)
the Proceeding is instituted after a Change in Control (other than
a Change in Control approved by a majority of the directors on the
Board who were directors immediately prior to such Change in
Control) and Independent Counsel has approved its
initiation.
(c)
Expense Advances.
If so requested by Indemnitee, the Company shall advance (within
ten business days of such request) any and all Expenses to
Indemnitee (an "Expense Advance"); provided that, if and to the
extent that the Reviewing Party determines that Indemnitee would
not be permitted to be so indemnified under applicable law, the
Company shall be entitled to be reimbursed by Indemnitee (who
hereby agrees to reimburse the Company) for all such amounts
theretofore paid. If Indemnitee has commenced or commences legal
proceedings in a court of competent jurisdiction to secure a
determination that Indemnitee should be indemnified under
applicable law, as provided in Section 4, any determination made by
the Reviewing Party that Indemnitee would not be permitted to be
indemnified under applicable law shall not be binding ai1d
Indemnitee shall not be required to reimburse the Company for any
Expense Advance until a final judicial determination is made with
respect thereto (as to which all rights of appeal therefrom have
been exhausted or have lapsed). Indemnitee's obligation to
reimburse the Company for Expense Advances shall be unsecured and
no interest shall be charged thereon.
(d)
Mandatory
Indemnification. Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee has been successful on the
merits in defense of any Proceeding relating in whole or in part to
an Indemnifiable Event or in defense of any issue or matter
therein, Indemnitee shall be indemnified against all Expenses
incurred in connection therewith.
(e)
Partial
Indemnification. If indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for
some or a portion of Expenses, but not, however, for the total
amount thereof, the Company shall nevertheless indemnify Indemnitee
for the po1iion thereof to which Indemnitee is
entitled.
(f)
Prohibited
Indemnification. No indemnification pursuant to this
Agreement shall be paid by the Company on account of any Proceeding
in which final unappealed judgment beyond the right of appeal is
rendered against Indemnitee for an accounting of profits made from
the purchase 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 laws.
3.
Reviewing Party.
Prior to any Change in Control, the Reviewing Party shall be any
appropriate person or body consisting of a member or members of the
Board or any other person or body appointed by the Board who is not
a party to the particular Proceeding with respect to which
Indemnitee is seeking indemnification; after a Change in Control,
the Reviewing Party shall be the Independent Counsel referred to
below. With respect to all matters arising after a Change in
Control (other than a Change in Control approved by a majority of
the directors on the Board who were directors immediately prior to
such Change in Control) concerning the rights of lndemnitee to
indemnity payments and Expense Advances under this Agreement or any
other agreement or under applicable law or the Company's Articles
of Incorporation or Bylaws now or hereafter in effect relating to
indemnification for Indemnifiable Events, the Company shall seek
legal advice only from Independent Counsel selected by Indemnitee
and approved by the Company (which approval shall not be
unreasonably withheld), and who has not otherwise performed
services for the Company or the Indemnitee (other than in
connection with indemnification matters) within the last five
years. The Independent Counsel shall not include any person who,
under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine
Indemnitee's rights under this Agreement. Such counsel, among other
things, shall render its written opinion to the Company and
Indemnitee as to whether and to what extent the Indemnitee should
be permitted to be indemnified under applicable law. The Company
agrees to pay the reasonable fees of the Independent Counsel and to
indemnify fully such counsel against any and all expenses
(including attorneys' fees), claims, liabilities, loss, and damages
arising out of or relating to this Agreement or the engagement of
Independent Counsel pursuant hereto.
4.
Indemnification Process
and Appeal.
(a)
Indemnification
Payment. Indemnitee shall be entitled to indemnification of
Expenses, and shall receive payment thereof, from the Company in
accordance with this Agreement as soon as practicable after
Indemnitee has made written demand on the Company for
indemnification, unless the Reviewing Party has given a written
opinion to the Company that Indemnitee is not entitled to
indemnification under applicable law.
(b)
Suit to Enforce
Rights. Regardless of any action by the Reviewing Party, if
Indemnitee has not received full indemnification within thirty days
after making a demand in accordance with Section 4(a), Indemnitee
shall have the right to enforce its indemnification rights under
this Agreement by commencing litigation in any court in the State
of California having subject matter jurisdiction thereof and in
which venue is proper seeking an initial determination by the court
or challenging any determination by the Reviewing Party or any
aspect thereof. The Company hereby consents to service of process
and to appear in any such proceeding. Any determination by the
Reviewing Party not challenged by the Indemnitee shall be binding
on the Company and Indemnitee. The remedy provided for in this
Section 4 shall be in addition to any other remedies available to
Indemnitee in law or equity.
(c)
Defense to
Indemnification, Burden of Proof, and Presumptions. It shall
be a defense to any action brought by Indemnitee against the
Company to enforce this Agreement (other than an action brought to
enforce a claim for Expenses incurred in defending a Proceeding in
advance of its final disposition where the required undertaking has
been tendered to the Company) that it is not permissible under
applicable law for the Company to indemnify Indemnitee for the
amount claimed. In connection with any such action or any
determination by the Reviewing Party or otherwise as to whether
Indemnitee is entitled to be indemnified hereunder, the burden of
proving such a defense or determination shall be on the Company.
Neither the failure of the Reviewing Party or the Company
(including its Board, independent legal counsel, or its
shareholders) to have made a determination prior to the
commencement of such action by Indemnitee that indemnification of
the claimant is proper under the circumstances because he has met
the standard of conduct set forth in applicable law, nor an actual
determination by the Reviewing Party or Company (including its
Board, independent legal counsel, or its shareholders) that the
Indemnitee had not met such applicable standard of conduct, shall
be a defense to the action or create a presumption that the
Indemnitee has not met the applicable standard of conduct. For
purposes of this Agreement, the termination of any claim, action,
suit, or proceeding, by judgment, order, settlement (whether with
or without court approval), conviction, or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that
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.
5.
Indemnification for
Expenses Incurred in Enforcing Rights. The Company shall
indemnify Indemnitee against any and all Expenses that are incurred
by Indemnitee in connection with any action brought by Indemnitee
for
(i)
indemnification of Expenses by the Company under this Agreement or
any other agreement or under applicable law or the Company's
Articles of Incorporation or Bylaws now or hereafter in effect
relating to indemnification for Indemnifiable Events,
and/or
(ii)
recovery under directors' and officers' liability insurance
policies maintained by the Company, but only in the event that
Indemnitee ultimately is determined to be entitled to such
indemnification or insurance recovery, as the case may be. In
addition, the Company shall, if so requested by Indemnitee, advance
the foregoing Expenses to Indemnitee, subject to and in accordance
with Section 2(c).
6.
Notification and Defense
of Proceeding.
(a)
Notice. Promptly
after receipt by Indemnitee of notice of the commencement of any
Proceeding, Indemnitee will, if a claim in respect thereof is to be
made against the Company under this Agreement, notify the Company
of the commencement thereof; but the omission so to notify the
Company will not relieve it from any liability that it may have to
Indemnitee, except as provided in Section 6(c).
(b)
Defense. With
respect to any Proceeding as to which Indemnitee notifies the
Company of the commencement thereof, the Company will be entitled
to participate in the Proceeding at its own expense and except as
otherwise provided below, to the extent the Company so wishes, it
may assume the defense thereof with counsel reasonably satisfactory
to Indemnitee. After notice from the Company to Indemnitee of its
election to assume the defense of any Proceeding, the Company will
not be liable to Indemnitee under this Agreement or otherwise for
any Expenses subsequently incurred by Indemnitee in connection with
the defense of such Proceeding other than reasonable costs of
investigation or as otherwise provided below. Indemnitee shall have
the right to employ his own counsel in such Proceeding, but all
Expenses related thereto incurred after notice from the Company of
its assumption of the defense shall be at Indemnitee's expense
unless: (i) the employment of counsel by Indemnitee has been
authorized by the Company, (ii) Indemnitee has reasonably
determined that there may be a conflict of interest between
Indemnitee and the Company in the defense of the Proceeding, after
a Change in Control (other than a Change in Control approved by a
majority of the directors on the Board who were directors
immediately prior to such Change in Control), the employment of
counsel by Indemnitee has been approved by the Independent Counsel,
or (iv) the Company shall not in fact have employed counsel to
assume the defense of such Proceeding, in each of which case all
Expenses of the Proceeding shall be borne by the Company. The
Company shall not be entitled to assume the defense of any
Proceeding brought by or on behalf of the Company or as to which
Indemnitee shall have made the determination provided for in (ii)
above.
(c)
Settlement of
Claims. The Company shall not be liable to indemnify
Indemnitee under this Agreement or otherwise for any amounts paid
in settlement of any Proceeding effected without the Company's
written consent, provided, however, that if a Change in Control has
occurred (other than a Change in Control approved by a majority of
the directors on the Board who were directors immediately prior to
such Change in Control), the Company shall be liable for
indemnification of Indemnitee for amounts paid in settlement if the
Independent Counsel has approved the settlement. The Company shall
not settle any Proceeding in any manner that would impose any
penalty or limitation on Indemnitee without Indemnitee's written
consent. Neither the Company nor the Indemnitee will unreasonably
withhold their consent to any proposed settlement. The Company
shall not be liable to indemnify the Indemnitee under this
Agreement with regard to any judicial award if the Company was not
given a reasonable and timely opportunity, at its expense, to
participate in the defense of such action; the Company's liability
hereunder shall not be excused if participation in the Proceeding
by the Company was barred by this Agreement.
7.
Establishment of
Trust. In the event of a Change in Control (other than a
Change in Control approved by a majority of the directors on the
Board who were directors immediately prior to such Change in
Control) the Company shall, upon written request by Indemnitee,
create a Trust for the benefit of the Indemnitee and from time to
time upon written request of Indemnitee shall fund the 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, participating in,
and/or defending any Proceeding relating to an Indemnifiable Event.
The amount or amounts to be deposited in the Trust pursuant to the
foregoing funding obligation shall be determined by the Reviewing
Party. The terms of the Trust shall provide that (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 ten business days of a request by the Indemnitee, any and
all Expenses to the Indemnitee (and the Indemnitee hereby agrees to
reimburse the Trust under the same circumstances for which the
Indemnitee would be required to reimburse the Company under Section
2(c) of this Agreement), (iii) the Trust shall continue to be
funded by the Company in accordance with the funding obligation set
forth above, (iv) 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 (v)
all unexpended funds in the 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 chosen by the Indemnitee. Nothing in this Section
7 shall relieve the Company of any of its obligations under this
Agreement. All income earned on the assets held in the Trust shall
be reported as income by the Company for federal, state, local, and
foreign tax purposes. The Company shall pay all costs of
establishing and maintaining the Trust and shall indemnify the
Trustee against any and all expenses (including attorneys' fees),
claims, liabilities, loss, and damages arising out of or relating
to this Agreement or the establishment and maintenance of the
Trust.
8.
Non-Exclusivity.
The rights of Indemnitee hereunder shall be in addition to any
other rights Indemnitee may have under the Company's Articles of
Incorporation, Bylaws, applicable law, or otherwise. To the extent
that a change in applicable law (whether by statute or judicial
decision) permits greater indemnification by agreement than would
be afforded currently under the Company's Articles of
Incorporation, Bylaws, applicable law, or this Agreement, it is the
intent of the parties that Indemnitee enjoy by this Agreement the
greater benefits so afforded by such change.
9.
Liability
Insurance. To the extent the Company maintains an insurai1ce
policy or policies providing directors' and officers' liability
insurance, Indemnitee shall be covered by such policy or policies,
in accordance with its or their terms, to the maximum extent of the
coverage available for any Company director or
officer.
10.
Period of
Limitations. No legal action shall be brought and no cause
of action shall be asserted by or on behalf of the Company or any
affiliate of the Company against Indemnitee, Indemnitee's spouse,
heirs, executors, or personal or legal representatives after the
expiration of two (2) years from the date of accrual of such cause
of action, or such longer period as may be required by state law
under the circumstances. Any claim or cause of action of the
Company or its affiliate shall be extinguished and deemed released
unless asserted by the timely filing of a legal action within such
period; provided, however, that if any shorter period of
limitations is otherwise applicable to any such cause of action the
shorter period shall govern.
11.
Amendment of this
Agreement. 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 binding unless in the form of a writing signed
by the pa1iy against whom enforcement of the waiver is sought, and
no such waiver shall operate as a waiver of any other provisions
hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver. Except as specifically provided herein, no
failure to exercise or any delay in exercising any right or remedy
hereunder shall constitute a waiver thereof.
12.
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 Indemnitee, who shall execute all papers required and
shall do everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable the
Company effectively to bring suit to enforce such
rights.
13.
No Duplication of
Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any claim made
against Indemnitee to the extent Indemnitee has otherwise received
payment (under any insurance policy, Bylaw, or otherwise) of the
amounts otherwise Indemnifiable hereunder.
14.
Binding Effect.
This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective
successors (including any direct or indirect successor by purchase,
merger, consolidation, or otherwise to all or substantially all of
the business and/or assets of the Company), assigns, spouses,
heirs, and personal and legal representatives. The Company shall
require and cause any successor (whether direct or indirect by
purchase, merger, consolidation, or otherwise) to all,
substantially all, or a substantial part, of the business and/or
assets of the Company, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent
that the Company would be required to perform if no such succession
had taken place. The indemnification provided under this Agreement
shall continue as to Indemnitee for any action taken or not taken
while serving in an indemnified capacity pertaining to an
Indemnifiable Event even though he may have ceased to serve in such
capacity at the time of any Proceeding.
15.
Severability. If
any provision (or portion thereof) of this Agreement shall be held
by a court of competent jurisdiction to be invalid, void, or
otherwise unenforceable, the remaining provisions shall remain
enforceable to the fullest extent permitted by law. Furthermore, to
the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of this Agreement
containing any provision held to be invalid, void, or otherwise
unenforceable, that is not itself invalid, void, or unenforceable)
shall be construed so as to give effect to the intent manifested by
the provision held invalid, void, or unenforceable.
16.
Governing Law. This
Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of California applicable to
contracts made and to be performed in such State without giving
effect to the principles of conflicts of laws.
17.
Notices. All
notices, demands, and other communications required or permitted
hereunder shall be made in writing and shall be deemed to have been
duly given if delivered by hand, against receipt, or mailed,
postage prepaid, certified or registered mail, return receipt
requested, and addressed to the Company at:
000
Xxxxxxxx Xxxxxx
Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Chief
Executive Officer
and to
Indemnitee at:
Xxxxxx
Xxxxxx, Ph.D.
000 X.
00xx
Xxxxxx
Xxx
Xxxxx, XX 00000
Notice
of change of address shall be effective only when done in
accordance with this Section. All notices complying with this
Section shall be deemed to have been received on the date of
delivery or on the third business day after mailing.
IN
WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the day specified
above.
By: /s/
Xxxxx X. Xxxxx
Name:
Xxxxx X. Xxxxx
Title:
Chief Executive Officer
/s/
Xxxxxx Xxxxxx
Xxxxxx
Xxxxxx, Ph.D.
