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EXHIBIT 10.2
INDEMNITY AGREEMENT
This indemnity agreement dated as of February 26,
2007 is between Denali Sciences, Inc., a Delaware corporation
(" Denali "), Velcera
Pharmaceuticals, Inc., a Delaware corporation ("
Velcera " and together with Denali,
the " Companies "), and
Timothy M. Hofer (the " Indemnitee
"),
Indemnitee is the sole director of Denali and is
willing to serve, continue to serve and to take on additional
service for or on behalf of Denali on the condition that he is
indemnified as provided herein; and
It is intended that the Companies will promptly
pay Indemnitee all amounts necessary to effectuate in full the
indemnity provided herein.
The parties hereto agree as follows:
1. Services by
Indemnitee . Indemnitee agrees to serve as director of
Denali, so long as Indemnitee is duly appointed or elected and
qualified in accordance with the applicable provisions of
Denali’s certificate of incorporation and bylaws, and until
such time as Indemnitee resigns or fails to stand for election or
is removed as director.
2. Indemnification . Subject to the limitations set forth
herein and in Section 6 hereof, the Companies hereby agree to
indemnify Indemnitee as follows:
The Companies shall, with respect to any
Proceeding (as hereinafter defined) associated with Indemnitee
acting in his official capacity as director of Denali relating to
the consideration, approval or consummation of that certain Merger
Agreement dated January 31, 2007 between Velcera, Denali and Denali
Acquisition Corp. (the " Merger "), indemnify Indemnitee to the fullest extent permitted by
Section 145 of the General Corporation Law of Delaware (the
" DGCL ") and the certificate
of incorporation of Denali in effect on the date hereof or as such
law or certificate of incorporation may from time to time be
amended (but, in the case of any such amendment, only to the extent
such amendment permits Denali to provide broader indemnification
rights than the law or Certificate of Incorporation permitted
Denali to provide before such amendment). Notwithstanding the
foregoing, the Companies shall not be required to indemnify
Indemnitee for acts or omissions of Indemnitee constituting bad
faith, gross negligence or intentional misconduct, except for
actual or alleged gross negligence in connection with the scope or
depth of the performance of due diligence with respect to Velcera
and its business. The right to indemnification conferred herein and
in the certificate of incorporation of Denali shall be presumed to
have been relied upon by Indemnitee in serving or continuing to
serve Denali and shall be enforceable as a contract right. Without
in any way diminishing the scope of the indemnification provided by
this Section 2, the Companies will indemnify Indemnitee against
Expenses (as hereinafter defined) and Liabilities (as hereinafter
defined) actually and reasonably incurred by Indemnitee or on his
behalf in connection with the investigation, defense, settlement or
appeal of such Proceeding. In addition to, and not as a limitation
of, the foregoing, the rights of indemnification of Indemnitee
provided under this agreement shall include those rights set forth
in Sections 7 below. Notwithstanding the foregoing, the Companies
shall be required to indemnify Indemnitee in connection with a
Proceeding commenced by Indemnitee (other than a Proceeding
commenced by Indemnitee to enforce Indemnitee’ rights under
this agreement) only if the commencement of such Proceeding was
authorized by the Board of Directors. Notwithstanding anything to
the contrary contained herein, the Companies shall have no
obligation to indemnify Indemnitee to the extent such
indemnification would not be permitted under Section 145 of the
DGCL or Denali’s certificate of incorporation in effect on
the date hereof.
3. Presumptions
and Effect of Certain Proceedings . Upon making a request
for indemnification, Indemnitee shall be presumed to be entitled to
indemnification under this agreement and the Companies shall have
the burden of proof to overcome that presumption in reaching any
contrary determination. The termination of any Proceeding by
judgment, order, settlement, arbitration award or conviction, or
upon a plea of nolo contendere or its equivalent shall not affect
this presumption or, except as determined by a judgment or other
final adjudication adverse to Indemnitee, establish a presumption
with regard to any factual matter relevant to determining
Indemnitee’s rights to indemnification hereunder. If the
person or persons so empowered to make a determination pursuant to
Section 4 hereof shall have failed to make the requested
determination within ninety (90) days after any judgment, order,
settlement, dismissal, arbitration award, conviction, acceptance of
a plea of nolo contendere or its equivalent, or other disposition
or partial disposition of any Proceeding or any other event that
could enable the Companies to determine Indemnitee’s
entitlement to indemnification, the requisite determination that
Indemnitee is entitled to indemnification shall be deemed to have
been made.
4. Procedure for
Determination of Entitlement to Indemnification .
(a) Whenever
Indemnitee believes that Indemnitee is entitled to indemnification
pursuant to this agreement, Indemnitee shall submit a written
request for indemnification to the Companies. Any request for
indemnification shall include sufficient documentation or
information reasonably available to Indemnitee for the
determination of entitlement to indemnification. In any event,
Indemnitee shall submit Indemnitee’s claim for
indemnification within a reasonable time, not to exceed ninety (90)
days after any judgment, order, settlement, dismissal, arbitration
award, conviction, acceptance of a plea of nolo contendere or its
equivalent, or final termination, whichever is the later date for
which Indemnitee requests indemnification.
(b) Independent
Legal Counsel (as hereinafter defined) shall determine whether
Indemnitee is entitled to indemnification. Determination of
Indemnitee’s entitlement to indemnification shall be made not
later than ninety (90) days after the Companies’ receipt of
Indemnitee’s written request for such indemnification,
provided that any request for indemnification for Liabilities,
other than amounts paid in settlement, shall have been made after a
determination thereof in a Proceeding.
2
5. Specific
Limitations on Indemnification . Notwithstanding anything in
this agreement to the contrary, the Companies shall not be
obligated under this agreement to make any payment to Indemnitee
with respect to any Proceeding:
(a) To the extent
that payment is actually made to Indemnitee under any insurance
policy, or is made to Indemnitee by either of the Companies or
affiliates otherwise than pursuant to this agreement.
Notwithstanding the availability of such insurance, Indemnitee also
may claim indemnification from the Companies pursuant to this
agreement by assigning to the Companies any claims under such
insurance to the extent Indemnitee is paid by the
Companies;
(b) For
Li
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