INDEMNIFICATION
AGREEMENT
This
Indemnification Agreement (the “Agreement” ) is
entered into as of the 24 th day of February, 2006, by and among Sirna
Therapeutics, Inc., a Delaware corporation (the
“Company” ) and the indemnitees listed on the
signature pages hereto (each an “Indemnitee” and
collectively, the “Indemnitees” ).
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.
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.
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.
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.
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:
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.
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 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
2
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.
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 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.
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.
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
3
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.
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.
Expenses; Indemnification Procedure
.
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.
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).
No
Presumptions; Burden of Proof . For purposes of this Agreement,
the termination of any Claim by judgment, order, settlement
(whether with or 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 met such
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