Exhibit 10.1
FORM OF INDEMNIFICATION
AGREEMENT
This Indemnification Agreement (this
“ Agreement ”) is made as of
by and between CoTherix, Inc., a Delaware corporation (the “
Company ”), and
(“ Indemnitee ”), who has agreed to serve as the
[insert title or titles] of the Company (the “
Position(s) ”).
RECITALS
WHEREAS, highly competent persons
have become more reluctant to serve publicly held corporations as
directors, officers or in other capacities unless they are provided
with adequate protection through insurance or adequate
indemnification against inordinate risks of claims and actions
against them arising out of their service to and activities on
behalf of the corporation;
WHEREAS, the Board of Directors of
the Company (the “ Board ”) has determined that,
in order to attract and retain qualified individuals, the Company
will attempt to maintain on an ongoing basis, at its sole expense,
liability insurance to protect persons serving the Company and its
subsidiaries from certain liabilities. Although the furnishing of
such insurance has been a customary and widespread practice among
United States-based corporations and other business enterprises,
the Company believes that, given current market conditions and
trends, such insurance may be available to it in the future only at
higher premiums and with more exclusions. At the same time,
directors, officers, and other persons in service to corporations
or business enterprises are being increasingly subjected to
expensive and time-consuming litigation relating to, among other
things, matters that traditionally would have been brought only
against the business enterprise itself. The Amended and Restated
Certificate of Incorporation of the Company (the “
Charter ”) authorizes indemnification of the officers
and directors of the Company and the By-laws of the Company (the
“ By-laws ”) require such indemnification.
Indemnitee may also be entitled to indemnification pursuant to the
General Corporation Law of the State of Delaware (“
DGCL ”). The Charter, By-laws and DGCL provide that
the indemnification provisions set forth therein are not exclusive,
and thereby contemplate that contracts may be entered into between
the Company and members of the board of directors, officers and
other persons with respect to indemnification;
WHEREAS, the uncertainties relating
to such insurance and to indemnification have increased the
difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined
that the increased difficulty in attracting and retaining such
persons is detrimental to the best interests of the Company’s
stockholders and that the Company should act to assure such persons
that there will be increased certainty of such protection in the
future;
WHEREAS, it is reasonable, prudent
and necessary for the Company contractually to obligate itself to
indemnify, and to advance expenses on behalf of, such persons to
the fullest extent permitted by applicable law so that they will
serve or continue to serve the Company free from undue concern that
they will not be so indemnified;
Page 1 of 14
WHEREAS, this Agreement is a
supplement to and in furtherance of the indemnification provided in
the Charter and By-laws and any resolutions adopted pursuant
thereto, and shall not be deemed a substitute therefor, nor to
diminish or abrogate any rights of Indemnitee
thereunder;
WHEREAS, Indemnitee is concerned
that the protection available under the Charter, By-laws and DGCL
and insurance may not be adequate in the present circumstances, and
in consideration of serving as a Fiduciary (as defined below)
desires to be assured of adequate protection, and the Company
desires Indemnitee to serve in such capacity. Indemnitee is willing
to serve, and continue to serve for or on behalf of the Company, on
the condition that Indemnitee be so indemnified; and
NOW, THEREFORE, in consideration of
the premises and the covenants contained herein, the Company and
Indemnitee do hereby covenant and agree as follows:
Section 1. Services to the
Company . In his or her Position(s) with the Company, and if
and to the extent that Indemnitee takes on additional positions as
a Fiduciary within the Company or other Enterprises, and/or changes
positions or titles within the Company or other Enterprises, this
Agreement shall protect Indemnitee in all the capacities in which
he or she is serving (and/or has served) including without
limitation in any such new positions or under any such new titles.
Indemnitee may at any time and for any reason resign from any such
position (subject to any other contractual obligation or any
obligation imposed by operation of law). This Agreement shall not
be deemed an employment contract between the Company (or any of its
subsidiaries or any Enterprise) and Indemnitee. The foregoing
notwithstanding, this Agreement shall continue in force after
Indemnitee has ceased to serve as a Fiduciary of the
Company.
Section 2. Definitions
.
As used in this
Agreement:
(a) “ Business Day
” shall mean any day that is not a Saturday, Sunday, or a day
on which banks in San Francisco, California are required or
permitted to be closed.
(b) “ Corporate Status
” describes the status of a person who is or was a Fiduciary
of the Company or of any other Enterprise in which capacity such
person is or was serving at the request of the Company.
(c) “ Enterprise
” shall mean the Company and any other corporation,
partnership, limited liability company, joint venture, trust,
employee benefit plan or other enterprise or entity of which
Indemnitee is or was serving at the request of the Company as a
Fiduciary.
(d) “ Expenses ”
shall include all reasonable attorneys’ fees and costs,
retainers, court costs, transcript costs, fees of experts, witness
fees, travel expenses, duplicating costs, printing and binding
costs, telephone charges, postage, delivery service fees, and all
other disbursements or expenses incurred in connection with
prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in, or otherwise
participating in, a Proceeding, any and all judgments, fines,
losses, liabilities, penalties and
Page 2 of 14
amounts paid in settlement of any
such claim in a Proceeding, any ERISA excise taxes or penalties
assessed or imposed in connection with any Proceeding, any federal,
state, local or foreign taxes imposed on Indemnitee as a result of
the actual or deemed receipt of any payments under this Agreement;
and all interest, assessments and other charges paid or payable in
connection with or in respect of any of the foregoing. Expenses
also shall include Expenses incurred in connection with any appeal
resulting from any Proceeding, including without limitation the
premium, security for, and other costs relating to any cost bond,
supersedeas bond, or other appeal bond or its
equivalent.
(e) “ Fiduciary ”
means an officer, director, employee, agent, fiduciary, trustee,
managing member or any similar position.
(f) “ Independent
Counsel ” means a law firm, or a partner (or, if
applicable, member) of such a law firm, that is experienced in
matters of corporation law and neither presently is, nor in the
five years prior to the date on which Indemnitee seeks
indemnification from the Company in connection with the applicable
Proceeding has been, retained to represent: (i) the Company or
Indemnitee in any matter material to either such party (other than
with respect to matters concerning the Indemnitee under this
Agreement, or of other indemnitees under similar indemnification
agreements), or (ii) any other party to the Proceeding giving rise
to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term “Independent Counsel” shall not
include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of
interest in representing either the Company or Indemnitee in an
action to determine Indemnitee’s rights under this
Agreement.
(g) “ Proceeding
” shall include any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism,
regulatory proceeding, investigation, inquiry, administrative
hearing or any other actual, threatened or completed proceeding,
whether brought in the right of the Company or otherwise and
whether of a civil, criminal, administrative or investigative
nature, in which Indemnitee was, is or will be involved as a party
or witness or otherwise by reason of the fact that Indemnitee is or
was a Fiduciary of the Company, by reason of any action or omission
by him or her or of any action or omission on his or her part while
acting as a Fiduciary of the Company, or by reason of the fact that
he or she is or was serving at the request of the Company as a
Fiduciary of another Enterprise, in each case whether or not
serving in such capacity at the time any liability or expense is
incurred for which indemnification, reimbursement, or advancement
of expenses can be provided under this Agreement; except one
initiated by Indemnitee to enforce his or her rights under this
Agreement.
Section 3. Indemnity in
Third-Party Proceedings . The Company shall indemnify, defend
and hold harmless Indemnitee in accordance with the provisions of
this Section 3 if Indemnitee was, is, or is threatened to be made,
a party to or other participant in any Proceeding, other than a
Proceeding by or in the right of the Company to procure a judgment
in its favor. Pursuant to this Section 3, Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred
by Indemnitee or on his or her behalf in connection with such
Proceeding or any claim, issue or matter therein, if Indemnitee
acted in good faith and in a manner he or she reasonably believed
to be in or not opposed to the best interests of the Company and,
in the case of a criminal proceeding, had no reasonable cause to
believe that his or her conduct was unlawful. Indemnitee shall not
enter into any settlement in connection with a Proceeding without
10 days prior notice to the Company.
Page 3 of 14
Section 4. Indemnity in
Proceedings by or in the Right of the Company or Enterprise .
The Company shall indemnify, defend and hold harmless Indemnitee in
accordance with the provisions of this Section 4 if Indemnitee is,
or is threatened to be made, a party to or a participant in any
Proceeding by or in the right of the Company or Enterprise to
procure a judgment in its favor. Pursuant to this Section 4,
Indemnitee shall be indemnified against all Expenses actually and
reasonably incurred by him or her or on his or her behalf in
connection with such Proceeding or any claim, issue or matter
therein, if Indemnitee acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best
interests of the Company. No indemnification for Expenses shall be
made under this Section 4 in respect of any claim, issue or matter
as to which Indemnitee shall have been finally adjudged by a court
in a judgment from which there is no further right of appeal to be
liable to the Company or such Enterprise, unless and only to the
extent that the court in which the Proceeding was brought shall
determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnification for
such expenses as such court shall deem proper.
Section 5. Indemnification for
Expenses of a Party Who is Wholly or Partly Successful .
Notwithstanding any other provisions of this Agreement, to the
extent that Indemnitee is a party to or a participant in and is
successful, on the merits or otherwise, in any Proceeding or in
defense of any claim, issue or matter therein, in whole or in part,
the Company shall indemnify Indemnitee against all Expenses
actually and reasonably incurred by him or her in connection
therewith. If Indemnitee is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to one
or more but less than all claims, issues or matters in such
Proceeding, the Company shall indemnify Indemnitee against (a) all
Expenses actually and reasonably incurred by him or her or on his
or her behalf in connection with each successfully resolved claim,
issue or matter and (b) any claim, issue or matter related to any
such successfully resolved claim, issue or matter. For purposes of
this Section and without limitation, the termination of any claim,
issue or matter in such a Proceeding by dismissal, with or without
prejudice, shall be deemed to be a successful result as to such
claim, issue or matter.
Section 6. Indemnification for
Expenses of a Witness . Notwithstanding any other provision of
this Agreement, to the extent that Indemnitee is, by reason of his
or her Corporate Status, a witness in any Proceeding to which
Indemnitee is not a party, the Company shall indemnify, defend and
hold harmless the Indemnitee against all Expenses incurred by him
or her or on his or her behalf in connection therewith.
Section 7. Additional
Indemnification .
(a) Notwithstanding any limitation
in Sections 3, 4, or 5, the Company shall indemnify, defend and
hold harmless Indemnitee to the fullest extent permitted by law if
Indemnitee is a party to or threatened to be made a party to any
Proceeding (including a Proceeding by or in the right of the
Company to procure a judgment in its favor) against all Expenses
actually and reasonably incurred by Indemnitee in connection with
the Proceeding.
Page 4 of 14
(b) For purposes of Section 7(a),
the meaning of the phrase “to the fullest extent permitted by
law” shall include, but not be limited to:
(1) to the fullest extent permitted
by the provision of the DGCL that authorizes or contemplates
additional indemnification by agreement, or the corresponding
provision of any amendment to or replacement of the DGCL,
and
(2) to the fullest extent authorized
or permitted by any amendments to or replacements of the DGCL
adopted after the date of this Agreement that increase the extent
to which a corporation may indemnify its officers and
directors.
Section 8. Exclusions .
Notwithstanding any provision in this Agreement to the contrary,
the Company shall not be obligated under this Agreement to make any
indemnity in connection with any claim made against
Indemnitee:
(a) for which payment has actually
been made to or on behalf of Indemnitee under any insurance policy
or other indemnity provision, except with respect to any excess
beyond the amount paid under any insurance policy or other
indemnity provision.
(b) for an accounting of profits
made from the purchase and sale (or sale and purchase) by
Indemnitee of securities of the Company within the meaning of
Section 16(b) of the Securities Exchange Act of 1934, as amended,
or similar provisions of state statutory law or common law;
or
(c) for which payment is prohibited
by applicable law.
Section 9. Payment and Advances
of Expenses . The Company shall advance, to the extent not
prohibited by law, the Expenses incurred by Indemnitee in
connection with any Proceeding (an “ Advance ”)
as promptly as reasonably possible, and in any event within 10
Business Days after the receipt by the Company of a statement or
statements requesting such payments (which shall include invoices
received by Indemnitee in connection with such Expenses but, in the
case of invoices in connection with legal services, any references
to legal work performed or to expenditures made that would cause
Indemnitee to waive any privilege accorded by applicable law shall
not be included with the invoice) from time to time, whether prior
to or after final disposition of any Proceeding. Advances shall be
unsecured and interest free. Advances shall be made without regard
to Indemnitee’s ability to repay the expenses and without
regard to Indemnitee’s ultimate entitlement to
indemnification under the other provisions of this Agreement.
Advances shall include any and all reasonable Expenses incurred
pursuing an action to enforce this right of advancement, including
Expenses incurred preparing and forwarding statements to the
Company to support the advances claimed. The Indemnitee shall
qualify for advances upon the execution and delivery to the Company
of this Agreement which shall constitute an undertaking providing
that the Indemnitee undertakes to the fullest extent permitted by
law to repay the advance if and to the extent that it is ultimately
determined by final judicial decision from which there is no
further right to appeal that Indemnitee is not entitled to be
indemnified by the Company. The rights of indemnification and to
receive advancement of Expenses as provided by this Agreement shall
in all events continue until final disposition of any proceeding,
including any appeal therein. This Section 9 shall not apply to any
claim made by Indemnitee for which indemnity is excluded pursuant
to Section 8.
Page 5 of 14
Section 10. Procedure for
Notification and Defense of Claim .
(a) To obtain indemnification under
this Agreement, Indemnitee shall submit to the Company a written
request therefor.
(b) The Company will be entitled to
participate in the Proceeding at its own expense.
(c) The Company shall not enter into
any settlement of any Proceeding to which Indemnitee is a party
without Indemnitee’s prior written consent, which shall not
be unreasonably withhe
