Exhibit 10.4
INDEMNITY AGREEMENT
This Indemnity Agreement (the "Agreement") is made as of
______________, by and between Specialized Health Products International, Inc.,
a Delaware corporation (the "Company"), and person whose signature appears at
the end of this Agreement (the "Indemnitee"), an officer and/or director of the
Company.
RECITALS
A. The Indemnitee is currently serving as an officer and/or director of
the Company and in such capacity renders valuable services to the Company.
B. Both the Company and the Indemnitee recognize the substantial risk
of litigation against officers and directors of corporations, and the Indemnitee
has indicated that he or she does not regard the indemnification available under
the Company's Bylaws as adequate to protect against legal risks associated with
service to the Company and may be unwilling to continue in office in the absence
of greater protection and indemnification.
C. The Board of Directors of the Company has determined that it is in
the best interests of the Company and its stockholders to induce the Indemnitee
to continue to serve as an officer and/or director and retain the benefits of
his or her experience and skill by entering into this Agreement to provide
protection from potential liabilities which might arise by reason of the fact
that he or she is an officer and/or director of the Company beyond the
protection afforded by Delaware law and the Company's Bylaws.
AGREEMENT
In consideration of the continued services of the Indemnitee and as an
inducement to the Indemnitee to continue to serve as an officer and/or director,
the Company and the Indemnitee do hereby agree as follows:
1. DEFINITIONS. As used in this Agreement:
(a) The term "Company' shall include Specialized Health Products
International, Inc., a Delaware corporation and any wholly-owned subsidiary.
(b) The term "Expenses" includes, without limitation, attorneys' fees,
disbursements and retainers, accounting and witness fees, travel and deposition
costs, any interest, assessment or other charges, any federal, state, local or
foreign taxes imposed as a result of the actual or deemed receipt of any
payments under this Agreement, any other expense, liability or loss, any amounts
paid or to be paid in settlement by or on behalf of Indemnitee, and any expenses
of establishing a right to indemnification (pursuant to this Agreement or
otherwise), paid or incurred in connection with investigating, defending, being
a witness in, or participating in, or preparing for any of the foregoing in, any
Proceeding relating to an Indemnifiable Event, including reasonable compensation
for time spent by the Indemnitee in connection with the investigation, defense
or appeal of a Proceeding or of an action for indemnification for which he or
she is not otherwise compensated by the Company or any third party. The
Indemnitee shall be deemed to be compensated by the Company or a third party for
time spent in connection with the investigation, defense or appeal of a
Proceeding or an action for Indemnification if, among other things, he or she is
a salaried employee of the Company or such third party and his or her salary is
not reduced In proportion to the time spent in connection with the Proceeding or
action for Indemnification. The term "Expenses" does not include the amount of
judgments, fines, penalties or ERISA excise taxes actually levied against the
Indemnitee.
(c) The term "Indemnifiable Event" shall include any event or
occurrence that takes place either prior to or after the execution of this
Agreement, related to the service of Indemnitee as an officer and/or director of
the Company, or his or her service 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 related to anything done or not done by Indemnitee in any such
capacity, whether or not the basis of a Proceeding arising in whole or in part
from such Indemnifiable Event 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 or at the request of the
Company, as described above, and whether or not he or she is serving in such
capacity at the time any liability or Expenses are incurred for which
indemnification or reimbursement is to be provided under this Agreement.
(d) The term "Proceeding" shall include (i) any threatened, pending or
completed action, suit or proceeding, whether brought in the name of the Company
or otherwise and whether of a civil, criminal, administrative, investigative or
other nature; and (ii) any inquiry, hearing or investigation, whether or not
conducted by the Company, that Indemnitee in good faith believes might lead to
the institution of any such action. suit or proceeding.
2. AGREEMENT TO SERVE. The Indemnitee agrees to continue to serve as an officer
and/or director of the Company at the will of the Company for so long as
Indemnitee is duly elected or appointed or until such time as Indemnitee tenders
a resignation in writing; provided, however, that nothing in this Agreement
shall be construed as providing the Indemnitee any right to continued
employment.
3. INDEMNIFICATION IN THIRD PARTY ACTIONS. In connection with any Proceeding
arising in whole or in part from an Indemnifiable Event (other than a Proceeding
by or in the name of the Company to procure a judgment in its favor), the
Company shall indemnify the Indemnitee against all Expenses and all judgments,
fines, penalties and ERISA excise taxes actually and reasonably incurred by the
Indemnitee in connection with such Proceeding, to the fullest extent permitted
by Delaware law. The Company shall also cooperate fully with Indemnitee and
render such assistance as Indemnitee may reasonably require in the defense of
any Proceeding in which Indemnitee was or is a party or is threatened to be made
a party, and shall make available to Indemnitee and his or her counsel all
information and documents reasonably available to it which relate to the subject
of any such Proceeding.
4. INDEMNIFICATION IN PROCEEDINGS BY OR IN THE NAME OF THE COMPANY. In any
Proceeding by or in the name of the Company to procure a judgment in its favor
arising in whole or in part from an Indemnifiable Event, the Company shall
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indemnify the Indemnitee against all Expenses actually and reasonably incurred
by Indemnitee in connection with such Proceeding, to the fullest extent
permitted by Delaware law.
5. CONCLUSIVE PRESUMPTION REGARDING STANDARD OF CONDUCT. The Indemnitee shall be
conclusively presumed to have met the relevant standards of conduct as defined
by Delaware law for indemnification pursuant to this Agreement, unless a
determination is made that the Indemnitee has not met such standards by (i) the
Board of Directors of the Company by a majority vote of a quorum thereof
consisting of directors who were not parties to such Proceeding, (ii) the
stockholders of the Company by majority vote, or (iii) in a written opinion by
independent legal counsel, selection of whom has been approved by the Indemnitee
in writing.
6. INDEMNIFICATION OF EXPENSES OF SUCCESSFUL PARTY. Notwithstanding any other
provisions of this Agreement, to the extent that the Indemnitee has been
successful in defense of any Proceeding or in defense of any claim, issue or
matter therein, on the merits or otherwise, including the dismissal of a
Proceeding without prejudice. the Indemnitee shall be indemnified against all
Expenses incurred in connection therewith to the fullest extent permitted by
Delaware law.
7. ADVANCES OF EXPENSES. The Expenses incurred by the Indemnitee in any
Proceeding shall be paid promptly by the Company in advance of the final
disposition of the Proceeding at the written request of the Indemnitee to the
fullest extent permitted by Delaware law; provided that if Delaware law in
effect at the time so requires, the Indemnitee shall undertake in writing to
repay such amount to the extent that it is ultimately determined that the
Indemnitee is not entitled to indemnification.
8. PARTIAL INDEMNIFICATION. If the Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of the
Expenses, judgments, fines, penalties or ERISA excise taxes actually and
reasonably incurred by Indemnitee in the investigation, defense, appeal or
settlement of any Proceeding but not, however. for the total amount thereof, the
Company shall nevertheless indemnify the Indemnitee for the portion of such
Expenses, judgments, fines, penalties or ERISA excise taxes to which the
Indemnitee is entitled.
9. INDEMNIFICATION PROCEDURE; DETERMINATION OF RIGHT TO INDEMNIFICATION.
(a) Promptly after receipt by the Indemnitee of notice of the
commencement of any Proceeding, the 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.
(b) If a claim under this Agreement is not paid by the Company within
30 days of receipt of written notice, the right to indemnification as provided
by this Agreement shall be enforceable by the Indemnitee in any court of
competent jurisdiction. it shall be a defense to any such action (other than an
action brought to enforce a claim for Expenses incurred in defending any
Proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Company) that the Indemnitee has
failed to meet a standard of conduct which makes it permissible under Delaware
law for the Company to indemnity the Indemnitee for the amount claimed. The
burden of proving by clear and convincing evidence that indemnification or
advances are not appropriate shall be on the Company. Neither the failure of the
directors or stockholders of the Company or independent legal counsel to have
made a determination prior to the commencement of such action that
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indemnification or advances are proper in the circumstances because the
Indemnitee has met the applicable standard of conduct, nor an actual
determination by the directors or stockholders of the Company or independent
legal counsel that the Indemnitee has 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.
(c) The Indemnitee's Expenses incurred in connection with any
Proceeding concerning Indemnitee's right to indemnification or advances in whole
or in part pursuant to this Agreement shall also be indemnified by the Company
regardless of the outcome of such Proceeding, unless 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.
(d) With respect to any Proceeding for which indemnification is
requested, the Company will be entitled to participate therein at its own
expense and, except as otherwise provided below, to the extent that it may wish,
the Company may assume the defense thereof, with counsel satisfactory to the
Indemnitee. After notice from the Company to the Indemnitee of its election to
assume the defense of a Proceeding, the Company will not be liable to the
Indemnitee under this Agreement for any legal or other expenses subsequently
incurred by the Indemnitee in connection with the defense thereof, other than
reasonable costs of investigation or as otherwise provided below. The Indemnitee
shall cooperate fully with the Company and render such assistance as the Company
may reasonably require in the Company's participation in any such Proceeding and
shall make available to the Company and its counsel all information and
documents reasonably available to Indemnitee which relate to the subject of such
Proceeding. 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. The Company shall not
settle any Proceeding in any manner which would impose any penalty or limitation
on the Indemnitee without the Indemnitee's prior written consent. The Indemnitee
shall have the right to employ counsel in any Proceeding, but the fees and
expenses of such counsel incurred after notice from the Company of its
assumption of the defense thereof shall be at the expense of the Indemnitee,
unless (i) the employment of counsel by the Indemnitee has been authorized by
the Company, (ii) the Indemnitee shall have reasonably concluded that there may
be a conflict of interest between the Company and the Indemnitee in the conduct
of the defense of a Proceeding, or (iii) the Company shall not in fact have
employed counsel to assume the defense of a Proceeding, in each of which cases
the fees and expenses of the Indemnitee's counsel shall be at the expense of 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 the Indemnitee
has made the conclusion that there may be a conflict of interest between the
Company and the Indemnitee.
10. LIMITATIONS ON INDEMNIFICATION. No payments pursuant to this Agreement shall
be made by the Company:
(a) To indemnify or advance Expenses to the Indemnitee with respect to
Proceedings initiated or brought voluntarily by the Indemnitee and not by way of
defense, except with respect to Proceedings brought to establish or enforce a
right to indemnification under this Agreement or any other Statute or law or
otherwise as required under Delaware law, but such Indemnification or
advancement of Expenses may be provided by the Company in specific cases if a
majority of the Board of Directors finds it to be appropriate;
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(b) To indemnify the Indemnitee for any Expenses, judgments, fines,
penalties or ERISA excise taxes for which the Indemnitee is indemnified by the
Company otherwise than pursuant to this Agreement;
(c) To indemnify the Indemnitee under this Agreement for any amounts
paid in settlement of any Proceeding effected without the Company's written
consent; however, the Company will not unreasonably withhold its consent to any
proposed settlement;
(d) To indemnify the Indemnitee for any Expenses, judgments, fines,
penalties or ERISA excise taxes for which payment is actually made to the
Indemnitee under a valid and collectible insurance policy, except in respect of
any excess beyond the amount of payment under such insurance;
(e) To indemnify the Indemnitee for any Expenses, judgments, fines or
penalties sustained in any Proceeding 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, the rules
and regulations promulgated thereunder and amendments thereto or similar
provisions of any federal, state or local statutory law;
(f) To indemnify the Indemnitee against any Expenses, judgments, fines,
penalties or ERISA excise taxes based upon or attributable to the Indemnitee
having been finally adjudged to have gained any personal profit or advantage to
which he or she was not legally entitled;
(g) To indemnify the Indemnitee for any Expenses. judgments, fines,
penalties or ERISA excise taxes resulting from Indemnitee's conduct which is
finally adjudged to have been willful misconduct, knowingly fraudulent.
deliberately dishonest or in violation of Indemnitee's duty of loyalty to the
Company; or
(h) If a court of competent jurisdiction shall finally determine that
any indemnification hereunder is unlawful.
11. MAINTENANCE OF LIABILITY INSURANCE.
(a) The Company hereby covenants and agrees that, as long as the
Indemnitee shall continue to serve as an officer and/or director of the Company
and thereafter so long as the Indemnitee shall be subject to any possible
Proceeding, the Company, subject to subsection (c), shall promptly obtain and
maintain in full force and effect directors' and officers' liability insurance
("D&O Insurance") in reasonable amounts from established and reputable insurers.
(b) In all D&O Insurance policies, the Indemnitee shall be named as an
insured in such a manner as to provide the Indemnitee the same rights and
benefits as are accorded to the most favorably insured of the Company's officers
or directors.
(c) Notwithstanding the foregoing, the Company shall have no obligation
to obtain or maintain D&O Insurance if the Company determines in good faith that
such insurance is not reasonably available. The premium costs for such insurance
are disproportionate to the amount of coverage provided, or the coverage
provided by such insurance is so limited by exclusions that it provides an
insufficient benefit.
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12. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. The indemnification provided by
this Agreement shall not be deemed to limit or preclude any other rights to
which the Indemnitee may be entitled under the Certificate of Incorporation, the
Bylaws, any agreement, any vote of stockholders or disinterested directors,
Delaware law, or otherwise, both as to action In Indemnitee's official capacity
and as to action in another capacity on behalf of the Company while holding such
office.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon, and shall
inure to the benefit of, the Indemnitee and Indemnitee's heirs, personal
representatives and assigns, and the Company and its successors and assigns.
14. SEPARABILITY. Each provision of this Agreement is a separate and distinct
agreement and Independent of the others, so that if any provision hereof shall
be held to be invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect the validity or enforceability of the other
provisions hereof. To the extent required. any provision of this Agreement may
be modified by a court of competent jurisdiction to preserve Its validity and to
provide the Indemnitee with the broadest possible indemnification permitted
under Delaware law.
15. SAVINGS CLAUSE. If this Agreement or any portion thereof be invalidated on
any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee as to Expenses, judgments, fines, penalties or
ERISA excise taxes with respect to any Proceeding to the full extent permitted
by any applicable portion of this Agreement that shall not have been invalidated
or by any applicable provision of the law of Delaware or the law of any other
jurisdiction.
16. INTERPRETATION; GOVERNING LAW. This Agreement shall be construed as a whole
and in accordance with its fair meaning. Headings are for convenience only and
shall not be used in construing meaning. This Agreement shall be governed and
interpreted In accordance with the laws of the State of Delaware.
17. AMENDMENTS. No amendment, waiver, modification, termination or cancellation
of this Agreement shall be effective unless in writing signed by the party
against whom enforcement is sought. The Indemnification rights afforded to the
Indemnitee hereby are contract rights and may not be diminished, eliminated or
otherwise affected by amendments to the Company's Certificate of Incorporation,
Bylaws or agreements including D&O Insurance policies.
18. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each party and
delivered to the other.
19. NOTICES. Any notice required to be given under this Agreement shall be
directed to the Company at 000 Xxxx 000 Xxxx, Xxxxxxxxx, Xxxx 00000 and to
Indemnitee at the address specified below or to such other address as either
shall designate in writing.
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20. SUBJECT MATTER. The intended purpose of this Agreement is to provide for
Indemnification, and this Agreement is not intended to affect any other aspect
of any relationship between the Indemnitee and the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.-
SPECIALIZED HEALTH PRODUCTS INTERNATIONAL, INC. INDEMNITEE
By.______________________________________
Its ______________________________________ _____________________________
_____________________________
Xxxxxx Xxxxxxx
_____________________________
City, State, Zip Code
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