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EXHIBIT 10.23
INDEMNIFICATION AGREEMENT
THIS AGREEMENT, made and entered into this _____ day of ____________,
1996 between Immusol, Inc., a California corporation ("Corporation"), and
_________________ ("Director"),
RECITALS:
A. Director, a member of the Board of Directors of
Corporation, performs a valuable service in such capacity for Corporation; and
B. The Articles of Incorporation, as amended, of the
Corporation authorize and permit contracts between Corporation and the members
of its Board of Directors with respect to indemnification of such directors;
and
C. In accordance with the authorization as provided by
the California General Corporation Law, as amended ("Code"), Corporation may
purchase and maintain a policy or policies of Directors and Officers Liability
Insurance ("D & O Insurance"), covering certain liabilities which may be
incurred by its directors and officers in the performance as directors of
Corporation; and
D. As a result of developments affecting the terms,
scope and availability of D & O Insurance there exists general uncertainty as
to the extent of protection afforded members of the Board of Directors by such
D & O Insurance and by statutory and bylaw indemnification provisions; and
E. In order to induce Director to continue to serve as a
member of the Board of Directors of Corporation, Corporation has determined and
agreed to enter into this contract with Director;
NOW, THEREFORE, in consideration of Director's continued service as a
director after the date hereof, the parties hereto agree as follows:
1. Indemnity of Director. Corporation hereby agrees to hold
harmless and indemnify Director to the fullest extent authorized by the
provisions of the Code, as it may be amended from time to time.
2. Additional Indemnity. Subject only to the limitations set
forth in Section 3 hereof, Corporation hereby further agrees to hold harmless
and indemnify Director:
(a) against any and all expenses (including attorneys'
fees), witness fees, judgments, fines and amounts paid in settlement actually
and reasonably incurred by
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Director in connection with any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative
(including an action by or in the right of Corporation) to which Director is,
was or at any time becomes a party, or is threatened to be made a party, by
reason of the fact that Director is, was or at any time becomes a director,
officer, employee or agent of Corporation, or is or was serving or at any time
serves at the request of Corporation as a director, officer, employee or 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
Director by Corporation under the non-exclusivity provision of the Articles of
Incorporation, as amended, of Corporation and the Code.
3. Limitations on Additional Indemnity.
(a) No indemnity pursuant to Section 2 hereof shall be
paid by Corporation for any of the following:
(i) except to the extent the aggregate of losses
to be indemnified thereunder exceeds the sum of such losses for which the
Director is indemnified pursuant to Section 1 hereof or pursuant to any D & O
Insurance purchased and maintained by Corporation;
(ii) in respect to remuneration paid to Director
if it shall be determined by a final judgment or other final adjudication that
such remuneration was in violation of law;
(iii) on account of any suit in which judgment is
rendered against Director for an accounting of profits made from the purchase
or sale by Director of securities of Corporation 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 statutory law;
(iv) on account of Director's acts or omissions
that involve intentional misconduct or a knowing and culpable violation of law;
(v) on account of any action, claim or proceeding
(other than a proceeding referred to in Section 8(b) hereof) initiated by the
Director unless such action, claim or proceeding was authorized in the specific
case by action of the Board of Directors;
(vi) on account of Director's conduct which is the
subject of an action, suit or proceeding described in Section 7(c)(ii) hereof;
or
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(vii) if a final decision by a court having
jurisdiction in the matter shall determine that such indemnification is not
lawful (and, in this respect, both Corporation and Director 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).
(b) In addition to those limitations set forth above in
paragraph (a) of this Section 3, no indemnity pursuant to Section 2 hereof in
an action by or in the right of Corporation shall be paid by Corporation for
any of the following:
(i) on account of acts or omissions that Director
believes to be contrary to the best interests of the Corporation or its
shareholders or that involve the absence of good faith on the part of Director;
(ii) with respect to any transaction from which
Director derived an improper personal benefit;
(iii) on account of acts or omissions that show a
reckless disregard for Director's duty to the corporation or its shareholders
in circumstances in which Director was aware, or should have been aware, in the
ordinary course of performing a director's duties, of a risk of serious injury
to Corporation or its shareholders;
(iv) on account of acts or omissions that
constitute an unexcused pattern of inattention that amounts to an abdication of
Director's duty to the corporation or its shareholders;
(v) to the extent prohibited by Section 310 of
the California Corporations Code, "Contracts in which director has material
financial interest;"
(vi) to the extent prohibited by Section 316 of
the California Corporations Code, "Corporate actions subjecting directors to
joint and several liability" (for prohibited distributions, loans and
guarantees);
(vii) in respect of any claim, issue or matter as
to which Director shall have been adjudged to be liable to Corporation in the
performance of Director's duty to Corporation and its shareholders, unless and
only to the extent that the court in which such proceeding is or was pending
shall determine upon application that, in view of all the circumstances of the
case, Director is fairly and reasonably entitled to indemnity for expenses and
then only to the extent that the court shall determine;
(viii) of amounts paid in settling or otherwise
disposing of a pending action without court approval; or
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(ix) of expenses incurred in defending a pending
action which is settled or otherwise disposed of without court approval.
4. Contribution. If the indemnification provided in Sections 1
and 2 hereof is unavailable by reason of a court decision described in
subsection 3(a)(vii) hereof based on grounds other than any of those set forth
in subsections 3(a)(ii) through (vi) hereof or in subsections 3(b)(i) through
(vi) hereof, then in respect of any threatened, pending or completed action,
suit or proceeding in which Corporation is jointly liable with Director (or
would be if joined in such action, suit or proceeding), Corporation shall
contribute to the amount of expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred and paid
or payable by Director in such proportion as is appropriate to reflect (i) the
relative benefits received by Corporation on the one hand and Director on the
other hand from the transaction from which such action, suit or proceeding
arose, and (ii) the relative fault of Corporation on the one hand and of
Director on the other in connection with the events which resulted in such
expenses, judgments, fines or settlement amounts, as well as any other relevant
equitable considerations. The relative fault of Corporation on the one hand
and of Director on the other shall be determined by reference to, among other
things, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent the circumstances resulting in such expenses,
judgments, fines or settlement amounts. Corporation agrees that it would not
be just and equitable if contribution pursuant to this Section 4 were
determined by pro rata allocation or any other method of allocation which does
not take account of the foregoing equitable considerations.
5. Continuation of Obligations. All agreements and obligations
of Corporation contained herein shall continue during the period Director is a
director, officer, employee or agent of Corporation (or is or was serving at
the request of Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise) and shall continue thereafter so long as Director shall be subject
to any possible claim or threatened, pending or completed action, suit or
proceeding, whether civil, criminal or investigative, by reason of the fact
that Director was a director of Corporation or serving in any other capacity
referred to herein.
6. Notification and Defense of Claim. Not later than thirty (30)
days after receipt by Director of notice of the commencement of any action,
suit or proceeding, Director will, if a claim in respect thereof is to be made
against Corporation under this Agreement, notify Corporation of the
commencement thereof; but the omission so to notify Corporation will not
relieve it from any liability which it may have to Director otherwise than
under this Agreement. With respect to any such action, suit or proceeding as
to which Director notifies Corporation of the commencement thereof:
(a) Corporation will be entitled to participate therein
at its own expense;
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(b) except as otherwise provided below, to the extent it
may wish, Corporation jointly with any other indemnifying party similarly
notified will be entitled to assume the defense thereof, with counsel
reasonably satisfactory to Director. After notice from Corporation to Director
of its election so as to assume the defense thereof, Corporation will not be
liable to Director under this Agreement for any legal or other expenses
subsequently incurred by Director in connection with the defense thereof other
than reasonable costs of investigation or as otherwise provided below.
Director shall have the right to employ its counsel in such action, suit or
proceeding but the fees and expenses of such counsel incurred after notice from
Corporation of its assumption of the defense thereof shall be at the expense of
Director unless (i) the employment of counsel by Director has been authorized
by Corporation, (ii) Director shall have reasonably concluded that there may be
a conflict of interest between Corporation and Director in the conduct of the
defense of such action or (iii) 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 Director's separate counsel shall be at the expense of
Corporation. Corporation shall not be entitled to assume the defense of any
action, suit or proceeding brought by or on behalf of Corporation or as to
which Director shall have made the conclusion provided for in (ii) above; and
(c) Corporation shall not be liable to indemnify Director
under this Agreement for any amounts paid in settlement of any action or claim
effected without its written consent. 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 Director without Director's
written consent. Neither Corporation nor Director will unreasonably withhold
its consent to any proposed settlement.
7. Advancement and Repayment of Expenses.
(a) In the event that Director employs Director's own
counsel pursuant to subsection 6(b)(i) through (iii) above, Corporation shall
advance to Director, prior to any final disposition of any threatened or
pending action, suit or proceeding, whether civil, criminal, administrative or
investigative, any and all reasonable expenses (including legal fees and
expenses) incurred in investigating or defending any such action, suit or
proceeding within ten (10) days after receiving copies of invoices presented to
Director for such expenses; and
(b) Director agrees that Director will reimburse
Corporation for all reasonable expenses paid by Corporation in defending any
civil or criminal action, suit or proceeding against Director in the event and
only to the extent it shall be ultimately determined by a final judicial
decision (from which there is no right of appeal) that Director is not
entitled, under applicable law, the Bylaws of Corporation, as amended, this
Agreement or otherwise, to be indemnified by Corporation for such expenses.
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(c) Notwithstanding the foregoing, Corporation shall not
be required to advance such expenses to Director if Director (i) commences any
action, suit or proceeding as a plaintiff unless such advance is specifically
approved by a majority of the Board of Directors or (ii) is a party to an
action, suit or proceeding brought by Corporation and approved by a majority of
the Board of Directors which alleges willful misappropriation of corporate
assets by Director, disclosure of confidential information in violation of
Director's fiduciary or contractual obligations to Corporation, or any other
willful and deliberate breach in bad faith of Director's duty to Corporation or
its shareholders.
8. Enforcement.
(a) Corporation expressly confirms and agrees that it has
entered into this Agreement and assumed the obligations imposed on Corporation
hereby in order to induce Director to continue as a director of Corporation,
and acknowledges that Director is relying upon this Agreement in continuing in
such capacity.
(b) In the event Director is required to bring any action
to enforce rights or to collect moneys due under this Agreement and is
successful in such action, Corporation shall reimburse Director for all of
Director's reasonable fees and expenses in bringing and pursuing such action.
9. Subrogation. In the event of payment under this Agreement,
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Director, who shall execute all documents required and
shall do all acts that may be necessary to secure such rights and to enable
Corporation effectively to bring suit to enforce such rights.
10. Non-Exclusivity of Rights. The rights conferred on Director
by this Agreement shall not be exclusive of any other right which Director may
have or hereafter acquire under any statute, provision of Corporation's
Articles of Incorporation, as amended, or Bylaws, as amended, agreement, vote
of shareholders or directors, or otherwise, both as to action in his official
capacity and as to action in another capacity while holding office.
11. Survival of Rights. The rights conferred on Director by this
Agreement shall continue after Director has ceased to be a director, officer,
employee or other agent of Corporation and shall inure to the benefit of
Director's heirs, executors and administrators.
12. Separability. Each of the provisions 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.
13. Governing Law. This Agreement shall be interpreted and
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enforced in accordance with the laws of the State of California.
14. Binding Effect. This Agreement shall be binding upon Director
and upon Corporation, its successors and assigns, and shall inure to the
benefit of Director, his heirs, personal representatives and assigns and to the
benefit of Corporation, its successors and assigns.
15. Amendment and Termination. No amendment, modification,
termination or cancellation of this Agreement shall be effective unless in
writing signed by both parties hereto.
16. Counterparts. This Agreement may be executed in counterparts,
each of which will be deemed an original, and all of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.
IMMUSOL, INC.,
a California corporation
By: _________________________
_______________, President
DIRECTOR:
_____________________________
(Signature)
_____________________________
(Print Name)
[SIGNATURE PAGE TO INDEMNIFICATION AGREEMENT]
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LIST OF DIRECTORS
Tsvi Goldenberg, Ph.D.
Flossie Wong-Staal, Ph.D.
Anchie Kuo, M.D.
Frank Litvack, M.D.
Melvin Perelman, Ph.D.