EXHIBIT 10.39
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made as of this _____
day of February, 1997, by and between DENTAL/MEDICAL DIAGNOSTIC SYSTEMS,
INC., a Delaware corporation (the "Company"), and __________________
("Indemnitee").
RECITALS
A. The Company and Indemnitee recognize the increasing difficulty in
obtaining liability insurance for directors, officers, employees and agents,
the significant increases in the cost of such insurance and the general
reductions in the coverage of such insurance.
B. The Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors, officers,
employees, and agents to expensive litigation risk at the same time that the
availability and coverage of liability insurance has been severely limited.
C. Indemnitee does not regard the current protection available as
adequate under the present circumstances, and Indemnitee and other directors,
officers, employers and agents of the Company may not be willing to continue
to serve as directors, officers, employees and agents without additional
protection.
D. The Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve as directors, officers,
employees and agents of the Company and to indemnify its directors, officers,
employees and agents so as to provide them with the maximum protection
permitted by law.
AGREEMENT
The Company and Indemnitee hereby agree as follows:
1. AGREEMENT TO SERVE. Indemnitee agrees to serve and/or continue to
serve the Company, at the Company's will (or under separate written agreement
approved by the Board of Directors of the Company, if such agreement exists),
in the capacity Indemnitee currently serves the Company, as long as
Indemnitee is duly appointed or elected and qualified in accordance with the
applicable provisions of the Bylaws of the Company or any subsidiary of the
Company or (subject to any employment agreement between Indemnitee and the
Company) until such time as Indemnitee tenders a written resignation or is
removed in accordance with the Bylaws; PROVIDED, HOWEVER, that
1
nothing contained in this Agreement is intended to or shall create any right
(express or implied) to continued employment by Indemnitee.
2. INDEMNIFICATION.
(a) THIRD PARTY PROCEEDINGS. The Company shall indemnify
Indemnitee if Indemnitee is or was a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an
action by or in the right of the Company) by reason of the fact that
Indemnitee is or was a director, officer, employee or agent of the Company,
or any subsidiary of the Company, by reason of any action or inaction on the
part of Indemnitee while a director, officer, employee or agent, or by reason
of the fact that Indemnitee is or was serving at the request of the Company
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including, without limitation, attorneys' fees, disbursements and retainers,
accounting and witness fees, travel and deposition costs, and expenses of
investigations), judgments, fines and amounts paid in settlement (if such
settlement is approved in advance by the Company) actually and reasonably
incurred by Indemnitee in connection with such action, suit or proceeding if
Indemnitee acted in good faith and in a manner Indemnitee 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 Indemnitee's conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or upon a plea
of nolo contendere or its equivalent, shall not, of itself, 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, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that Indemnitee's conduct was unlawful.
(b) PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. The Company
shall indemnify Indemnitee if Indemnitee was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by
or in the right of the Company or any subsidiary of the Company to procure a
judgment in its favor by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the Company, or any subsidiary of the
Company, by reason of any action or inaction on the part of Indemnitee while
a director, officer, employee or agent, or by reason of the fact that
Indemnitee is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including, without
limitation, attorneys' fees, disbursements and retainers, accounting and
witness fees, travel and deposition costs, and expenses of investigations)
and, to the fullest extent permitted by law, amounts paid in settlement, in
each case to the extent actually and reasonably incurred by Indemnitee in
connection with the defense or settlement of such action or suit (i) if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed
to be in or not opposed to the best interests of the Company and its
stockholders, except that no indemnification shall be made in respect of any
claim, issue or matter as to which Indemnitee shall have been adjudged to be
liable to the Company in the performance of Indemnitee's duty to the Company
and its stockholders unless and only to the extent that the court in which
such action or suit is or was
2
pending shall determine upon application that, in view of all the
circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnity for expenses and then only to the extent that the court shall
determine; (ii) if Indemnitee is a director, to the extent that the action or
contemplated action seeks monetary damages for breach of Indemnitee's duties
to the Company and its stockholders in circumstances under which Indemnitee's
personal liability therefor has been eliminated as a result of the
provisions of Section 102(b)(7) of the Delaware General Corporation Law; or
(iii) if Indemnitee is an agent other than a director, to the extent that,
were Indemnitee a director, Indemnitee would have the right to be indemnified
under Section 2(b)(ii), above; and in the case of Section 2(b)(ii) and
2(b)(iii) above, indemnification shall include, to the extent not prohibited
by law, indemnification against all judgments, fines and amounts paid in
settlement actually and reasonably incurred by Indemnitee in connection with
such action, suit or proceeding.
(c) MANDATORY PAYMENT OF EXPENSES. To the extent that Indemnitee
has been successful on the merits or otherwise in defense of any action, suit
or proceeding referred to in Subsection (a) or (b) of this Section 2 or in
defense of any claim, issue or matter therein, Indemnitee shall be
indemnified against expenses (including, without limitation, attorneys' fees,
disbursements and retainers, accounting and witness fees, travel and
deposition costs, and expenses of investigations) actually and reasonably
incurred by Indemnitee in connection therewith.
(d) INDEMNIFICATION FOR SERVING AS A WITNESS. Notwithstanding any
other provision of this Agreement, to the extent that Indemnitee is, by
reason of Indemnitee's status as a director, officer, employee or agent of
the Company, a witness in any action, suit or proceeding, whether civil,
criminal, administrative or investigative, Indemnitee shall be indemnified
against expenses actually and reasonably incurred by Indemnitee in connection
therewith.
3. EXPENSES; INDEMNIFICATION PROCEDURE.
(a) ADVANCEMENT OF EXPENSES. The Company shall advance all
reasonable expenses incurred by Indemnitee in connection with the
investigation, defense, settlement or appeal of any civil, criminal,
administrative or investigative action, suit or proceeding referenced in
Section 2(a) or (b) hereof (but not amounts actually paid in settlement of
any such action, suit or proceeding). Indemnitee hereby undertakes to repay
such amounts advanced only if, and to the extent that, it shall ultimately be
determined that Indemnitee is not entitled to be indemnified by the Company
as authorized hereby. The advances to be made hereunder shall be paid by the
Company to Indemnitee within 45 days following delivery of a written request
therefor by Indemnitee to the Company.
(b) NOTICE/COOPERATION BY INDEMNITEE. Indemnitee shall, as a
condition precedent to his right to be indemnified under this Agreement, give
the Company notice, in accordance with Section 14 hereof, of any claim made
against Indemnitee for which indemnification will or could be sought under
this Agreement. Notice to the Company shall be directed to the Chief
Executive Officer of the Company. In addition, Indemnitee shall give the
Company such information and cooperation as it may reasonably require and as
shall be within Indemnitee's power.
3
(c) PROCEDURE. Any indemnification and advances provided for in
Section 2 and this Section 3 shall be made no later than 45 days after
receipt of the written request of Indemnitee. If a claim under this
Agreement, under any statute, or under any provision of the Company's
Certificate of Incorporation or Bylaws providing for indemnification, is not
paid in full by the Company within 45 days after a written request for
payment thereof has first been received by the Company, Indemnitee may, but
need not, at any time thereafter bring an action against the Company to
recover the unpaid amount of the claim and, subject to Section 13 of this
Agreement, Indemnitee shall also be entitled to be paid for the expenses
(including attorneys' fees) of bringing such action. It shall be a defense
to any such action (other than an action brought to enforce a claim for
expenses incurred in connection with any action, suit or proceeding in
advance of its final disposition) that Indemnitee has not met the standards
of conduct which make it permissible under applicable law for the Company to
indemnify Indemnitee. Indemnitee shall be entitled to receive interim
payments of expenses pursuant to Section 3(a) unless and until such defense
may be finally adjudicated by court order or judgment from which no further
right of appeal exists. It is the intention of the parties that if the
Company contests Indemnitee's right to indemnification, the question of
Indemnitee's right to indemnification shall be for the court to decide, and
neither the failure of the Company (including its Board of Directors, any
committee or subgroup of the Board of Directors, independent legal counsel,
or its stockholders) to have made a determination that indemnification of
Indemnitee is proper in the circumstances because Indemnitee has met the
applicable standard of conduct required by applicable law, nor an actual
determination by the Company (including its Board of Directors, any committee
or subgroup of the Board of Directors, independent legal counsel, or its
stockholders) that Indemnitee has not met such applicable standard of
conduct, shall create a presumption that Indemnitee has or has not met the
applicable standard of conduct.
(d) NOTICE TO INSURERS. If, at the time of the receipt of a notice
of a claim pursuant to Section 3(b) hereof, the Company has director and
officer liability 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. 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.
(e) SELECTION OF COUNSEL. In the event the Company shall be
obligated under Section 3(a) hereof to pay the expenses of any proceedings
against Indemnitee, the Company, if appropriate, shall be entitled to assume
the defense of such proceeding, with counsel approved by Indemnitee, upon the
delivery to Indemnitee of written notice of its election so to do. After
delivery of such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees of counsel subsequently incurred
by Indemnitee with respect to the same proceeding, provided that (i)
Indemnitee shall have the right to employ separate counsel in any such
proceeding at Indemnitee's expense; and (ii) if (A) the employment of counsel
by Indemnitee has been previously authorized by the Company, (B) Indemnitee
shall have reasonably concluded that there may be a conflict of interest
between the Company and Indemnitee in the conduct of any such defense, or (C)
4
the Company shall not, in fact, have employed counsel to assume the defense
of such proceeding, then the fees and expenses of Indemnitee's counsel shall
be at the expense of the Company.
4. ADDITIONAL INDEMNIFICATION RIGHTS; NONEXCLUSIVITY.
(a) SCOPE. Notwithstanding any other provision of this Agreement,
the Company hereby agrees to indemnify the Indemnitee to the fullest extent
permitted by law, notwithstanding that such indemnification is not
specifically authorized by the other provisions of this Agreement, the
Company's Certificate of Incorporation, the Company's Bylaws or by statute.
In the event of any change in any applicable law, statute or rule which
narrows the right of a Delaware corporation to indemnify a member of its
board of directors or its officers, employees or agents, such change, to the
extent not otherwise required by such law, statute or rule to be applied to
this Agreement, shall have no effect on this Agreement or the parties' rights
and obligations hereunder.
(b) NONEXCLUSIVITY. The indemnification provided by this Agreement
shall not be deemed exclusive of any rights to which Indemnitee may be
entitled under the Company's Certificate of Incorporation, its Bylaws, any
agreement, any vote of stockholders or disinterested Directors, the
Corporation Law of the State of Delaware or otherwise, both as to action in
Indemnitee's official capacity and as to action in another capacity while
holding such office. The indemnification provided under this Agreement shall
continue as to Indemnitee for any action taken or not taken while serving in
an indemnified capacity even though he may have ceased to serve in such
capacity at the time of any action, suit or other covered proceeding.
5. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the expenses, judgments, fines or penalties actually or reasonably
incurred by him in the investigation, defense, appeal or settlement of any
civil or criminal action, suit or proceeding, but not, however, for the total
amount thereof, the Company shall nevertheless indemnify Indemnitee for the
portion of such expenses, judgments, fines or penalties to which Indemnitee
is entitled.
6. MUTUAL ACKNOWLEDGEMENT. Both the Company and Indemnitee acknowledge
that in certain instances, Federal law or applicable public policy may
prohibit the Company from indemnifying its directors, officers, employees
and/or agents under this Agreement or otherwise. Indemnitee understands and
acknowledges that the Company has undertaken or may be required in the future
to undertake with the Securities and Exchange Commission to submit the
question of indemnification to a court in certain circumstances for a
determination of the Company's right under public policy to indemnify
Indemnitee.
7. LIABILITY INSURANCE. The Company shall, from time to time, make the
good faith determination whether or not it is practicable for the Company to
obtain and maintain a policy or policies of insurance with reputable
insurance companies providing the directors, officers, employees and agents
of the Company with coverage for losses from wrongful acts, or to ensure the
Company's performance of its indemnification obligations under this
agreement. Among other
5
considerations, the Company will weigh the costs of obtaining such insurance
coverage against the protection afforded by such coverage. In all such
policies of liability insurance, Indemnitee shall be named as an insured in
such a manner as to provide Indemnitee the same rights and benefits as are
accorded to the most favorably insured of the Company's directors, if
Indemnitee is a director; or of the Company's officers, if Indemnitee is not
an director of the Company but is an officer; or of the Company's employees,
if Indemnitee is not a director or officer but is an employee; or of the
Company's agents, if Indemnitee is not a director, officer or employee but is
an agent. Notwithstanding the foregoing, the Company shall have no obligation
to obtain or maintain such insurance if the Company 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, if
the coverage provided by such insurance is limited by exclusions so as to
provide an insufficient benefit, or if Indemnitee is covered by similar
insurance maintained by a subsidiary or parent of the Company.
8. SEVERABILITY. Nothing in this Agreement is intended to require or
shall be construed as requiring the Company to do or fail to do any act in
violation of applicable law. The Company's inability, pursuant to court
order, to perform its obligations under this Agreement shall not constitute a
breach of this Agreement. The provisions of this Agreement shall be
severable as provided in this Section 8. If this Agreement or any portion
hereof shall be invalidated on any ground by any court of competent
jurisdiction, then the Company shall nevertheless indemnify Indemnitee to the
full extent permitted by any applicable portion of this Agreement that shall
not have been invalidated, and the balance of this Agreement not so
invalidated shall be enforceable in accordance with its terms.
9. 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 Indemnitee with respect to proceedings or claims initiated or
brought voluntarily by Indemnitee and not by way defense, except with respect
to proceedings brought to establish or enforce a right to indemnification
under this Agreement or any other statute or otherwise as required under
Section 145 of the Delaware General Corporation Law, but such indemnification
or advancement of expenses may be provided by the Company in specific cases
if the Board of Directors has approved the initiation or bringing of such
suit;
(b) LACK OF GOOD FAITH. To indemnify Indemnitee for any expenses
incurred by the Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such proceeding was not made in good faith or was frivolous;
(c) INSURED CLAIMS. To indemnify Indemnitee 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 paid directly to Indemnitee by an insurance carrier
6
under a policy of officers' and directors' liability insurance or other
policy of insurance maintained by the Company;
(d) CLAIMS UNDER SECTION 16(b). To indemnify Indemnitee for
expenses and the payment of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any similar successor statute;
(e) UNLAWFUL CLAIMS. To indemnify Indemnitee in any manner which
is contrary to public policy or which a court of competent jurisdiction has
finally determined to be unlawful;
(f) FAILURE TO SETTLE PROCEEDING. To indemnify Indemnitee for
liabilities in excess of the total amount at which settlement reasonably
could have been made, or for any cost and/or expenses incurred by Indemnitee
following the time such settlement reasonably could have been effected, if
Indemnitee shall have unreasonably delayed, refused or failed to enter into a
settlement of any action, suit or proceeding (or investigation or appeal
thereof) recommended in good faith, in writing, by the Company; or
(g) BREACH OF EMPLOYMENT AGREEMENT. To indemnify Indemnitee for
any breach by Indemnitee of any employment agreement between Indemnitee and
the Company or any of its subsidiaries.
10. CONSTRUCTION OF CERTAIN PHRASES.
For purposes of this Agreement, references to the "Company" shall
include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees
and/or agents, so that if Indemnitee is or was a director, officer, employee
or agent of such constituent corporation, or is or was serving at the request
of such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
Indemnitee shall stand in the same position under the provisions of this
Agreement with respect to the resulting or surviving corporation as
Indemnitee would have with respect to such constituent corporation if its
separate existence had continued.
For purposes of this Agreement, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on Indemnitee with respect to an employee benefit plan;
and references to "serving at the request of the Company" shall include any
service as a director, officer, employee or agent of the Company or any
subsidiary of the Company which imposes duties on, or involves services by,
such director, officer, employee or agent with respect to an employee benefit
plan, its participants, or beneficiaries; and if Indemnitee acted in good
faith and in a manner Indemnitee reasonably believed to be in the interest of
the
7
participants and beneficiaries of an employee benefit plan, Indemnitee shall
be deemed to have acted in a manner "not opposed to the best interest of the
Company" as referred to in this Agreement.
11. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.
12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Company and its successors and assigns, and shall inure to the benefit of
Indemnitee and Indemnitee's estate, heirs, legal representatives and assigns.
13. ATTORNEYS' FEES. In the event that any action is instituted by
Indemnitee under this Agreement to enforce or interpret any of the terms
hereof, Indemnitee shall be entitled to be paid all court costs and expenses,
including reasonable attorneys' fees, incurred by Indemnitee with respect to
such action, unless as a part of such action, the court of competent
jurisdiction determines that each of the material assertions made by
Indemnitee as a basis for such action were not made in good faith or were
frivolous. In the event of an action instituted by or in the name of the
Company under this Agreement to enforce or interpret any of the terms of this
Agreement, Indemnitee shall be entitled to be paid all court costs and
expenses, including attorneys' fees, incurred by Indemnitee in defense of
such action (including with respect to Indemnitee's counterclaims and
cross-claims made in such action), unless as a part of such action the court
determines that each of Indemnitee's material defenses to such action were
made in bad faith or were frivolous.
14. 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, on the date of
such receipt, or (ii) if mailed by domestic certified or registered mail with
postage prepaid, on the third business day after the date postmarked.
Addresses for notice to either party are as shown on the signature page of
this Agreement, or as subsequently modified by written notice.
15. CONSENT TO JURISDICTION. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of
California for all purposes in connection with any action or proceeding which
arises out of or relates to this Agreement and agree that any action
instituted under this Agreement shall be brought only in the state courts of
the State of California, or in Federal courts located in such State.
16. CHOICE OF LAW. This Agreement shall be governed by and its
provisions construed in accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
DENTAL/MEDICAL DIAGNOSTIC SYSTEMS, INC.
8
a Delaware corporation, as the Company
By: _____________________________
Name:________________________
Title:_______________________
Notice Address:
DENTAL/MEDICAL DIAGNOSTIC SYSTEMS, INC.
000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000
AGREED TO AND ACCEPTED:
INDEMNITEE:
__________________________________
__________________________________
Notice Address:
__________________________________
__________________________________
__________________________________
9
Schedule of Parties to Indemnification Agreement
The following officers and directors have or will enter into an
indemnification agreement with the Company:
Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxxxx
Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
10
