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EXHIBIT
10.3
FORM OF
MEDICINOVA,
INC.
INDEMNIFICATION
AGREEMENT
This Indemnification
Agreement (this “Agreement”) is entered into as of
, 200 (the “Effective
Date”), by and between MEDICINOVA, INC., a Delaware
corporation (the “Company”), and
(“Indemnitee”).
RECITALS
A. Indemnitee is either a
member of the board of directors of the Company (the “Board
of Directors”) or an officer of the Company, or both, and in
such capacity or capacities, or otherwise as an Agent (as
hereinafter defined) of the Company, is performing a valuable
service for the Company.
B. Indemnitee is willing to
serve, continue to serve and to take on additional service for or
on behalf of the Company on the condition that he or she be
indemnified as herein provided.
C. It is intended that
Indemnitee shall be paid promptly by the Company all amounts
necessary to effectuate in full the indemnity provided
herein.
NOW, THEREFORE, in
consideration of the premises and the covenants in this Agreement,
and of Indemnitee continuing to serve the Company as an Agent and
intending to be legally bound hereby, the parties hereto agree as
follows:
1. Services by
Indemnitee . Indemnitee agrees to serve (a) as a director or an
officer of the Company, or both, so long as Indemnitee is duly
appointed or elected and qualified in accordance with the
applicable provisions of the Certificate of Incorporation and
bylaws of the Company, and until such time as Indemnitee resigns or
fails to stand for election or is removed from Indemnitee’s
position, or (b) as an Agent of the Company. Indemnitee may from
time to time also perform other services at the request or for the
convenience of, or otherwise benefiting, the Company. Indemnitee
may at any time and for any reason resign or be removed from such
position (subject to any other contractual obligation or other
obligation imposed by operation of law), in which event the Company
shall have no obligation under this Agreement to continue
Indemnitee in any such position.
2. Indemnification .
Subject to the limitations set forth herein and in Section 6
hereof, the Company hereby agrees to indemnify Indemnitee as
follows:
The Company shall, with
respect to any Proceeding (as hereinafter defined) associated with
Indemnitee’s being an Agent of the Company, indemnify
Indemnitee to the fullest extent
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NDEMNIFICATION A GREEMENT
permitted by applicable law and the
Certificate of Incorporation of the Company 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 the Company to provide broader
indemnification rights than the law or Certificate of Incorporation
permitted the Company to provide before such amendment). The right
to indemnification conferred herein and in the Certificate of
Incorporation shall be presumed to have been relied upon by
Indemnitee in serving or continuing to serve the Company as an
Agent and shall be enforceable as a contract right. Without in any
way diminishing the scope of the indemnification provided by this
Section 2, the Company will indemnify Indemnitee to the full extent
permitted by law if and wherever Indemnitee is or was a party or is
threatened to be made a party to any Proceeding, including any
Proceeding brought by or in the right of the Company, by reason of
the fact that Indemnitee is or was an Agent or by reason of
anything done or not done by Indemnitee in such capacity, against
Expenses (as hereinafter defined) and Liabilities (as hereinafter
defined) actually and reasonably incurred by Indemnitee or on his
or her 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 3 and 8 below. Notwithstanding the foregoing,
the Company shall be required to indemnify Indemnitee in connection
with a Proceeding commenced by Indemnitee (other than a Proceeding
commenced by Indemnitee to enforce Indemnitee’s rights under
this Agreement) only if the commencement of such Proceeding was
authorized by the Board of Directors.
3. Advancement of
Expenses . All reasonable Expenses incurred by or on behalf of
Indemnitee (including costs of enforcement of this Agreement) shall
be advanced from time to time by the Company to Indemnitee within
thirty (30) days after the receipt by the Company of a written
request for an advance of Expenses, whether prior to or after final
disposition of a Proceeding (except to the extent that there has
been a Final Adverse Determination (as hereinafter defined) that
Indemnitee is not entitled to be indemnified for such Expenses),
including, without limitation, any Proceeding brought by or in the
right of the Company. The written request for an advancement of any
and all Expenses under this paragraph shall contain reasonable
detail of the Expenses incurred by Indemnitee. In the event that
such written request shall be accompanied by an affidavit of
counsel to Indemnitee to the effect that such counsel has reviewed
such Expenses and that such Expenses are reasonable in such
counsel’s view, then such expenses shall be deemed reasonable
in the absence of clear and convincing evidence to the contrary. By
execution of this Agreement, Indemnitee shall be deemed to have
made whatever undertaking as may be required by law at the time of
any advancement of Expenses with respect to repayment to the
Company of such Expenses. In the event that the Company shall
breach its obligation to advance Expenses under this Section 3, the
parties hereto agree that Indemnitee’s remedies available at
law would not be adequate and that Indemnitee would be entitled to
specific performance.
4. 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 Company shall have the
burden of proof to overcome that presumption in reaching any
contrary determination. The termination of any Proceeding by
judgment, order,
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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 5 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 Company to
determine Indemnitee’s entitlement to indemnification, the
requisite determination that Indemnitee is entitled to
indemnification shall be deemed to have been made.
5. 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 Company. 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 five (5) years after any judgment, order,
settlement, dismissal, arbitration award, conviction, acceptance of
a plea of nolo contendere or its equivalent, or final
determination, whichever is the later date for which Indemnitee
requests indemnification. The Secretary or other appropriate
officer shall, promptly upon receipt of Indemnitee’s request
for indemnification, advise the Board of Directors in writing that
Indemnitee has made such request. Determination of
Indemnitee’s entitlement to indemnification shall be made not
later than ninety (90) days after the Company’s 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.
(b) The Company shall be
entitled to select the forum in which Indemnitee’s
entitlement to indemnification will be heard; provided, however,
that if there is a Change in Control of the Company, Independent
Legal Counsel (as hereinafter defined) shall determine whether
Indemnitee is entitled to indemnification. The forum shall be any
one of the following:
(i) the stockholders of the
Company;
(ii) a majority vote of
Disinterested Directors (as hereinafter defined), even though less
than a quorum;
(iii) Independent Legal
Counsel, whose determination shall be made in a written opinion;
or
(iv) a panel of three (3)
arbitrators, one selected by the Company, another by Indemnitee and
the third by the first two arbitrators; or if for any reason three
(3)
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arbitrators are not selected
within thirty (30) days after the appointment of the first
arbitrator, then selection of additional arbitrators shall be made
by the American Arbitration Association. If any arbitrator resigns
or is unable to serve in such capacity for any reason, the American
Arbitration Association shall select such arbitrator’s
replacement. The arbitration shall be conducted pursuant to the
commercial arbitration rules of the American Arbitration
Association now in effect.
6. Specific Limitations on
Indemnification . Notwithstanding anything in this Agreement to
the contrary, the Company 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 the Company or an affiliate otherwise
than pursuant to this Agreement. Notwithstanding the availability
of such insurance, Indemnitee also may claim indemnification from
the Company pursuant to this Agreement by assigning to the Company
any claims under such insurance to the extent Indemnitee is paid by
the Company;
(b) Provided there has been
no Change in Control, for Liabilities in connection with
Proceedings settled without the Company’s consent, which
consent, however, shall not be unreasonably withheld;
(c) For an accounting of
profits made from the purchase or sale by Indemnitee of securities
of the Company within the meaning of Section 16(b) of the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”), or similar provisions of any state statutory or common
law; or
(d) To the extent it would be
otherwise prohibited by law, if so established by a judgment or
other final adjudication adverse to Indemnitee.
7. Fees and Expenses of
Independent Legal Counsel or Arbitrators . The Company agrees
to pay the reasonable fees and expenses of Independent Legal
Counsel or a panel of three arbitrators should such Independent
Legal Counsel or such arbitrators be retained to make a
determination of Indemnitee’s entitlement to indemnification
pursuant to Section 5(b) of this Agreement, and to fully indemnify
such Independent Legal Counsel or arbitrators against any and all
expenses and losses incurred by any of them arising out of or
relating to this Agreement or their engagement pursuant
hereto.
8. Remedies of
Indemnitee .
(a) In the event that (i) a
determination pursuant to Section 5 hereof is made that Indemnitee
is not entitled to indemnification, (ii) advances of Expenses are
not made pursuant to this Agreement, (iii) payment has not been
timely made following a determination of entitlement to
indemnification pursuant to this Agreement or (iv) Indemnitee
otherwise seeks enforcement of this Agreement, Indemnitee shall be
entitled to a final adjudication in the Court of Chancery of the
State of Delaware of the remedy sought. Alternatively, unless (x)
the determination was made by a panel of arbitrators pursuant to
Section 5(b)(iv) hereof, or (y) court
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approval is required by law
for the indemnification sought by Indemnitee, Indemnitee at
Indemnitee’s option may seek an award in arbitration to be
conducted by a single arbitrator pursuant to the commercial
arbitration rules of the American Arbitration Association now in
effect, which award is to be made within ninety (90) days following
the filing of the demand for arbitration. The Company shall not
oppose Indemnitee’s right to seek any such adjudication or
arbitration award. In any such proceeding or arbitration,
Indemnitee shall be presumed to be entitled to indemnification and
advancement of Expenses under this Agreement and the Company shall
have the burden of proof to overcome that presumption.
(b) In the event that a
determination that Indemnitee is not entitled to indemnification,
in whole or in part, has been made pursuant to Section 5 hereof,
the decision in the judicial proceeding or arbitration provided in
paragraph (a) of this Section 8 shall be made de novo and
Indemnitee shall not be prejudiced by reason of a determination
that Indemnitee is not entitled to indemnification.
(c) If a determination that
Indemnitee is entitled to indemnification has been made pursuant to
Section 5 hereof
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