EXHIBIT 10.6
INDEMNIFICATION
AGREEMENT
This Indemnification Agreement (the
“Agreement” ) is entered into as of the
19 th day of August, 2005, by and among
Sirna Therapeutics, Inc., a Delaware corporation (the
“Company” ) and the indemnitees listed on
the signature page hereto (each an
“Indemnitee” and collectively, the
“Indemnitees” ).
RECITALS
A. The Company and the Indemnitees
recognize the continued difficulty in obtaining liability insurance
for the Company’s directors, officers, employees, controlling
persons, agents and fiduciaries, the significant increases in the
cost of such insurance and the general reductions in the coverage
of such insurance.
B. The Company and the Indemnitees
further recognize the substantial increase in corporate litigation
in general, subjecting directors, officers, employees, controlling
persons, agents and fiduciaries to expensive litigation risks at
the same time as the availability and coverage of liability
insurance has been severely limited.
C. The Indemnitees do not regard the
prior protection available as adequate under the circumstances, and
the Indemnitees and other directors, officers, employees,
controlling persons, agents and fiduciaries of the Company are not
willing to serve in such capacities without additional protection,
so the Company and the Indemnitees desire to enter into this
Agreement.
D. The Company (i) desires to
attract and retain the involvement of highly qualified groups, such
as the Indemnitees, to serve the Company and, in part, to induce
each Indemnitee to be involved with the Company and
(ii) wishes to provide for the indemnification and advancing
of expenses to each Indemnitee to the maximum extent permitted by
law.
E. In view of the considerations set
forth above, the Company desires that each Indemnitee be
indemnified by the Company as set forth herein.
NOW, THEREFORE
, the Company and each Indemnitee
hereby agrees as follows:
1. Indemnification
.
a. Indemnification of
Expenses . The Company shall indemnify and hold harmless each
Indemnitee (including, without limitation, its respective
directors, officers, partners, employees, agents and spouses) and
each person who controls any of them or who may be liable within
the meaning of Section 15 of the Securities Act of 1933, as
amended (the “Securities Act” ), or
Section 20 of the Securities Exchange Act of 1934, as amended
(the “Exchange Act” ) to the fullest
extent permitted by law if such Indemnitee was or 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, any threatened,
pending or completed action, suit, proceeding or alternative
dispute resolution mechanism, or any hearing, inquiry or
investigation that such Indemnitee
reasonably believes might lead to
the institution of any such action, suit, proceeding or alternative
dispute resolution mechanism, whether civil, criminal,
administrative, investigative or other (hereinafter a
“Claim” ) by reason of (or arising in
part out of) any event or occurrence related to the fact that such
Indemnitee is or was a director, officer, employee, controlling
person, agent or fiduciary of the Company, or any subsidiary of the
Company, or is or was serving at the request of the Company as a
director, officer, employee, controlling person, agent or fiduciary
of another corporation, partnership, joint venture, trust or other
enterprise, or by reason of any action or inaction on the part of
such Indemnitee while serving in such capacity including, without
limitation, any and all losses, claims, damages, expenses and
liabilities, joint or several (including, without limitation, any
investigation, legal and other expenses incurred in connection
with, and any amount paid in settlement of, any action, suit,
proceeding or any claim asserted) under the Securities Act, the
Exchange Act or other federal or state statutory law or regulation,
at common law or otherwise, which relate directly or indirectly to
the registration, purchase, sale or ownership of any securities of
the Company or to any fiduciary obligation owed with respect
thereto (hereinafter an “Indemnification
Event” ) against any and all expenses (including,
without limitation, reasonable attorneys’ fees and all other
reasonable costs, expenses and obligations incurred in connection
with investigating, defending a witness in or participating in
(including, without limitation, on appeal), or preparing to defend,
be a witness in or participate in, any such action, suit,
proceeding, alternative dispute resolution mechanism, hearing,
inquiry or investigation), judgments, fines, penalties and amounts
paid in settlement (if such settlement is approved in advance by
the Company, which approval shall not be unreasonably withheld) of
such Claim and any federal, state, local or foreign taxes imposed
on such Indemnitee as a result of the actual or deemed receipt of
any payments under this Agreement (collectively, hereinafter
“Expenses” ), including, without
limitation, all interest, assessments and other charges paid or
payable in connection with or in respect of such Expenses. Such
payment of allowed Expenses shall be made by the Company as soon as
practicable but in any event no later than five (5) days after
written demand by the Indemnitee therefor is presented to the
Company.
b. Reviewing Party .
Notwithstanding the foregoing, (i) the obligations of the
Company under Section 1(a) shall be subject to the condition
that the Reviewing Party (as described in Section 10(e)
hereof) shall not have determined (in a written opinion, in any
case in which the Independent Legal Counsel referred to in
Section 10(d) hereof is involved) that an Indemnitee would not
be permitted to be indemnified under applicable law, and
(ii) each Indemnitee acknowledges and agrees that the
obligation of the Company to make an advance payment of Expenses to
an Indemnitee pursuant to Section 2(a) (an
“Expense Advance” ) shall be subject to
the condition that, if, when and to the extent that the Reviewing
Party determines that an Indemnitee would not be permitted to be so
indemnified under applicable law, the Company shall be entitled to
be reimbursed by such Indemnitee (who hereby agrees to reimburse
the Company) for all such amounts theretofore paid; provided
, however , that if such Indemnitee has commenced or
thereafter commences legal proceedings in a court of competent
jurisdiction to secure a determination that such Indemnitee should
be indemnified under applicable law, any determination made by the
Reviewing Party that such Indemnitee would not be permitted to be
indemnified under applicable law shall not be binding and such
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 lapsed). An Indemnitee’s obligation to
reimburse the
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Company for any Expense Advance
shall be unsecured and no interest shall be charged thereon if such
reimbursement is made within thirty (30) days of such final
judicial determination, unless otherwise required by the court. If
there has not been a Change in Control (as defined in
Section 10(c) hereof), the Reviewing Party shall be selected
by the Board of Directors, and if there has been such a Change in
Control (other than a Change in Control that has been approved by a
majority of the Company’s Board of Directors who were
directors immediately prior to such Change in Control), the
Reviewing Party shall be the Independent Legal Counsel referred to
in Section 10(d) hereof. If there has been no determination by
the Reviewing Party or if the Reviewing Party determines that an
Indemnitee substantively would not be permitted to be indemnified
in whole or in part under applicable law, the Indemnitee shall have
the right to commence litigation seeking an initial determination
by the court or challenging any such determination by the Reviewing
Party or any aspect thereof, including, without limitation, the
legal or factual bases therefor, and the Company hereby consents to
service of process and to appear in any such proceeding. Any
determination by the Reviewing Party otherwise shall be conclusive
and binding on the Company and such Indemnitee.
c. Contribution . If the
indemnification provided for in Section 1(a) above for any
reason is held by a court of competent jurisdiction to be
unavailable to an Indemnitee in respect of any losses, claims,
damages, expenses or liabilities referred to therein, then the
Company, in lieu of indemnifying such Indemnitee thereunder, shall
contribute to the amount paid or payable by such Indemnitee as a
result of such losses, claims, damages, expenses or liabilities
(i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Indemnitees, or
(ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to
in clause (i) above but also the relative fault of the Company
and the Indemnitees in connection with the action or inaction that
resulted in such losses, claims, damages, expenses or liabilities,
as well as any other relevant equitable considerations. In
connection with the registration of the Company’s securities,
the relative benefits received by the Company and the Indemnitees
shall be deemed to be in the same respective proportions that the
net proceeds from the offering (before deducting expenses) received
by the Company and the Indemnitees, in each case as set forth in
the table on the cover page of the applicable prospectus, bear to
the aggregate public offering price of the securities so offered.
The relative fault of the Company and the Indemnitees shall be
determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information
supplied by the Company or the Indemnitees and the parties’
relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company and the Indemnitees
agree that it would not be just and equitable if contribution
pursuant to this Section 1(c) were determined by pro rata or
per capita allocation or by any other method of allocation that
does not take account of the equitable considerations referred to
in the immediately preceding paragraph. In connection with the
registration of the Company’s securities, in no event shall
an Indemnitee be required to contribute any amount under this
Section 1(c) in excess of the lesser of (i) that
proportion of the total of such losses, claims, damages or
liabilities that are indemnified against, equal to the proportion
of the total securities sold under such registration statement that
are being sold by such Indemnitee or (ii) the
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proceeds received by such Indemnitee from its
sale of securities under such registration statement. No person
found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not found guilty of such
fraudulent misrepresentation.
d. Survival Regardless of
Investigation . The indemnification and contribution provided
for in this Section 1 will remain in full force and effect
regardless of any investigation made by or on behalf of the
Indemnitees or any officer, director, employee, agent or
controlling person of the Indemnitees.
e. Change in Control . The
Company agrees that if there is a Change in Control of the Company
(other than a Change in Control that has been approved by a
majority of the Company’s Board of Directors who were
directors immediately prior to such Change in Control) then, with
respect to all matters thereafter arising concerning the rights of
the Indemnitees to payments of Expenses under this Agreement or any
other agreement or under the Company’s Certificate of
Incorporation or Bylaws as now or hereafter in effect, Independent
Legal Counsel (as defined in Section 10(d) hereof) shall be
selected by the Indemnitees and approved by the Company (which
approval shall not be unreasonably withheld). Such counsel, among
other things, shall render its written opinion to the Company and
the Indemnitees as to whether and to what extent the Indemnitees
would be permitted to be indemnified under applicable law. The
Company agrees to abide by such opinion and to pay the reasonable
fees of the Independent Legal Counsel referred to above and to
fully indemnify such counsel against any and all expenses
(including, without limitation, reasonable attorneys’ fees),
claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.
f. Mandatory Payment of
Expenses . Notwithstanding any other provision of this
Agreement, to the extent that the Indemnitees have been successful
on the merits or otherwise, including, without limitation, the
dismissal of an action without prejudice, in the defense of any
action, suit, proceeding, inquiry or investigation referred to in
Section 1(a) hereof or in the defense of any claim, issue or
matter therein, each Indemnitee shall be indemnified against all
Expenses incurred by such Indemnitee in connection
herewith.
2. Expenses; Indemnification
Procedure .
a. Advancement of Expenses .
The Company shall advance all Expenses incurred by the Indemnitees.
The advances to be made hereunder shall be paid by the Company to
the Indemnitees as soon as practicable but in any event no later
than five (5) days after written demand by such Indemnitees
therefor to the Company.
b. Notice/Cooperation by the
Indemnitees . Each Indemnitee shall give the Company notice in
writing as soon as practicable of any Claim made against such
Indemnitee for which indemnification will or could be sought under
this Agreement. Notice to the Company shall be directed to the
Company’s Chief Executive Officer at the Company’s
address (or such other address as the Company shall designate in
writing to the Indemnitees).
c. No Presumptions; Burden of
Proof . For purposes of this Agreement, the termination of any
Claim by judgment, order, settlement (whether with or
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without court approval) or
conviction, or upon a plea of nolo contendere, or its equivalent,
shall not create a presumption that the Indemnitees 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. In addition, neither the failure of the
Reviewing Party to have made a determination as to whether an
Indemnitee has met any particular standard of conduct or had any
particular belief, nor an actual determination by the Reviewing
Party that an Indemnitee has not me
