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Exhibit 10.20
INDEMNIFICATION AGREEMENT
This Indemnification Agreement
(this " Agreement ") is made as of January ___, 2007 (the
"Effective Date") by and between IsoTis, Inc., a Delaware
corporation (the " Company "), and _____________, who serves
as a director and/or officer of the Company (the "
Indemnitee ").
WHEREAS, highly competent persons
have become more reluctant to serve corporations as directors or
officers unless they are provided with adequate protection through
insurance and/or indemnification against the risks of claims being
asserted against them arising out of their service to and
activities on behalf of such corporations;
WHEREAS, the board of directors of
the Company (the " Board ") has determined that, in order to
help attract and retain qualified individuals as directors and
officers, the best interests of the Company and its investors will
be served by attempting to maintain, on an ongoing basis, at the
Company’s sole expense, insurance to protect persons serving
the Company and its subsidiaries as directors or officers 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 for many years, 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 and
officers in service to corporations or business enterprises are
being increasingly subjected to expensive and time-consuming
litigation;
WHEREAS, the Board has determined
that, in order to help attract and retain qualified individuals as
directors and officers, the best interests of the Company and its
investors will be served by assuring such individuals that the
Company will indemnify them to the maximum extent permitted by
law;
WHEREAS, the Certificate of
Incorporation (the " Certificate of Incorporation ") of the
Company require, and the By-Laws (the " By-Laws ") of the
Company permit, indemnification of the officers and directors of
the Company, and Indemnitee may also be entitled to indemnification
pursuant to the Delaware General Corporation Law (" DGCL
");
WHEREAS, the Certificate of
Incorporation, the By-Laws and the DGCL either expressly provide
for or do not preclude the Company from entering into contracts
with its directors and officers with respect to indemnification and
the advancement of defense costs;
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
investors and that the Company should act to assure such persons
that there will be increased certainty of such protection in the
future;
WHEREAS, it therefore is
reasonable, prudent and necessary for the Company contractually to
obligate itself to indemnify, and to advance defense costs 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;
WHEREAS, this Agreement is a
supplement to and in furtherance of the Certificate of
Incorporation, By-Laws and any resolutions adopted pursuant
thereto, and shall not be deemed a substitute therefor, nor shall
it be deemed to diminish or abrogate any rights of Indemnitee
thereunder;
WHEREAS, the Board recognizes that
the Indemnitee does not regard the protection available under the
Company’s Certificate of Incorporation, the By-Laws and
insurance program as adequate in the present circumstances, and may
not be willing to serve or continue to serve as a director, officer
or in such other capacity as the Company may request without
adequate protection, and the Company desires Indemnitee to serve in
such capacity; and
WHEREAS, Indemnitee is willing to
serve, and continue to serve, as a member of the Board (and any
committee thereof) or as an officer of the Company, on the
condition that he or she be indemnified as provided for herein.
NOW, THEREFORE, in consideration
of the premises and the covenants contained herein, the Company and
Indemnitee do hereby covenant and agree as follows:
1. Services to the
Company. Indemnitee will serve or continue to serve, at the
will of the Company, as a director or officer of the Company for so
long as Indemnitee is duly elected or appointed or until Indemnitee
tenders his or her resignation. This Agreement shall not serve as a
binding commitment on the part of Indemnitee to continue to serve
in such capacity, or on the part of the Company to cause him or her
to be nominated to successive terms as a director or officer or to
not otherwise be removed for cause or without cause, as permitted
under law.
2. Definitions. As
used in this Agreement:
(a)
" Beneficial Owner " shall have the meaning given to such
term in Rule 13d-3 issued under the Exchange Act; provided,
however, that Beneficial Owner shall exclude any Person becoming a
Beneficial Owner by reason of the stockholders of the Company
approving a merger of the Company with another entity.
(b)
A " Change in Control " shall be deemed to occur upon the
earliest to occur after the date of this Agreement of any of the
following events:
(i)
Acquisition of Stock by Third Party . Any Person (as defined
below, but excluding any subsidiary or employee benefit plan of the
Company), subsequent to the date of this Agreement, becomes the
Beneficial Owner, directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the
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combined voting power of the Company’s then outstanding
securities entitled to vote generally in the election of directors,
unless (1) the change in the relative Beneficial Ownership of
the Company’s securities by any Person results solely from a
reduction in the aggregate number of outstanding shares of
securities entitled to vote generally in the election of directors,
or (2) such acquisition was approved in advance by the Continuing
Directors (as defined below) and such acquisition would not
constitute a Change in Control under part (iii) of this
definition;
(ii)
Change in Board of Directors . Individuals who, as of the
date hereof, constitute the Board, and any new director whose
election by the Board or nomination for election by the
Company’s stockholders was approved by a vote of at least two
thirds of the directors then still in office who were directors on
the date hereof or whose election for nomination for election was
previously so approved (collectively, the " Continuing
Directors "), cease for any reason to constitute at least a
majority of the members of the Board;
(iii)
Corporate Transactions . The effective date of a
reorganization, merger or consolidation of the Company (a "
Business Combination "), in each case, unless, following
such Business Combination: (1) all or substantially all of the
individuals and entities who were the Beneficial Owners of
securities entitled to vote generally in the election of directors
immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 51% of the combined voting power
of the then outstanding securities entitled to vote generally in
the election of directors of the Company resulting from such
Business Combination (including, without limitation, a corporation
which as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or
through one or more Subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business
Combination, of the securities entitled to vote generally in the
election of directors; (2) no Person (excluding any
corporation resulting from such Business Combination) is the
Beneficial Owner, directly or indirectly, of 15% or more of the
combined voting power of the then outstanding securities entitled
to vote generally in the election of directors of such corporation
except to the extent that such ownership existed prior to the
Business Combination; and (3) at least a majority of the Board
resulting from such Business Combination were Continuing Directors
at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination;
(iv)
Liquidation . The approval by the stockholders of the
Company of a complete liquidation of the Company or an agreement or
series of agreements for the sale or disposition by the Company of
all or substantially all of the Company’s assets, other than
factoring the Company’s current receivables or escrows due
(or, if such approval is not required, the decision by the Board to
proceed with such a liquidation, sale, or disposition in one
transaction or a series of related transactions); or
(v)
Other Events . There occurs any other event of a nature that
would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation
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14A (or a response to any similar item on any similar schedule
or form) promulgated under the Exchange Act (as defined below),
whether or not the Company is then subject to such reporting
requirement.
(c)
" Corporate Status " shall describe the status of a person
who is or was a director, officer, trustee, partner, member,
fiduciary, employee or agent of the Company or of any other
Enterprise (as defined below), which such person is or was serving
at the request of the Company.
(d)
" Disinterested Director " shall mean a director of the
Company who is not and was not a party to the Proceeding (as
defined below) in respect of which indemnification is sought by
Indemnitee.
(e)
" Enterprise " shall mean any corporation, limited liability
company, partnership, joint venture, trust, employee benefit plan
or other enterprise of which Indemnitee is or was serving at the
request of the Company as a director, officer, trustee,
administrator, partner, member, fiduciary, employee or agent.
(f)
" Exchange Act " shall mean the Securities Exchange Act of
1934, as amended.
(g)
" Expenses " shall include all reasonable attorneys’
fees, retainers, court costs, transcript costs, fees of experts and
accountants, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery
service fees, and all other disbursements or expenses of the types
and amounts customarily 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 (as defined below). Expenses also shall include costs
incurred in connection with any appeal resulting from any
Proceeding (as defined below), including, without limitation, the
premium, security for, and other costs relating to any bond,
supersedeas bond, or other appeal bond or its equivalent. Expenses,
however, shall not include amounts paid in settlement by Indemnitee
or the amount of judgments or fines against Indemnitee.
(h)
" Independent Counsel " shall mean a law firm, or a member
of a law firm, that is experienced in matters of corporation law
and neither presently is, nor in the past five (5) years 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 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.
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(i)
References to " fines " shall include any excise tax
assessed on a person with respect to any employee benefit plan
pursuant to applicable law.
(j)
References to " serving at the request of the Company "
shall include any service provided at the request of the Company as
a director, officer, trustee, administrator, partner, member,
fiduciary, employee or agent of the Company which imposes duties
on, or involves services by, such director, officer, trustee,
administrator, partner, member, fiduciary, employee or agent with
respect to an employee benefit plan, its participants or
beneficiaries.
(k)
" Person " shall have the meaning set forth in Sections
13(d) and 14(d) of the Exchange Act; provided, however, that Person
shall exclude (i) the Company and (ii) any trustee or
other fiduciary holding securities under an employee benefit plan
of the Company or a subsidiary of the Company.
(l)
Any action taken or omitted to be taken by a person for a purpose
which he or she reasonably believed to be in the interests of the
participants and beneficiaries of an employee benefit plan shall be
deemed to have been taken in " good faith " and for a
purpose which is " not opposed to the best interests of the
Company ", as such terms are referred to in this Agreement and
used in the DGCL.
(m)
The term " Proceeding " shall include any threatened,
pending or completed action, suit, arbitration, alternate dispute
resolution mechanism, 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, including any related appeal, 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 director, officer, trustee,
administrator, partner, member, fiduciary, employee or agent of the
Company, by reason of any action taken or not taken by him or her
while acting as director, officer, trustee, administrator, partner,
member, fiduciary, employee or agent 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 director, officer, trustee, administrator, partner,
member, fiduciary, employee or agent of any other 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.
3. Indemnity in
Third-Party Proceedings. The Company shall indemnify and hold
harmless Indemnitee in accordance with the provisions of this
Section 3 if Indemnitee is made, or is threatened to be made,
a party to or a participant in (as a witness or otherwise) 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 and held harmless
against all judgments, fines, penalties, amounts paid in settlement
(if such settlement is approved in writing in advance by the
Company, which approval shall not be unreasonably withheld)
(including, without limitation, all interest, assessments and other
charges paid or payable in connection with or in respect of any of
the foregoing) (collectively, "Losses") and Expenses
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actually and reasonably incurred by Indemnitee or on his or her
behalf in connection with such Proceeding or any action, discovery
event, claim, issue or matter therein or related thereto, if
Indemnitee acted in good faith, for a purpose which 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, in
addition, had no reasonable cause to believe that his or her
conduct was unlawful.
4. Indemnity in
Proceedings by or in the Right of the Company. The Company
shall indemnify Indemnitee in accordance with the provisions of
this Section 4 if Indemnitee is made, or is threatened to be
made, a party to or a participant in (as a witness or otherwise)
any Proceeding by or in the right of the Company to procure a
judgment in its favor. Pursuant to this Section 4, Indemnitee
shall be indemnified and held harmless against all Expenses
actually and reasonably incurred by him or her or on his or her
behalf in connection with the defense or settlement of such
Proceeding or any action, discovery event, claim, issue or matter
therein or related thereto, if Indemnitee acted in good faith, for
a purpose which he or she reasonably believed to be in or not
opposed to the best interests of the Company. No indemnification,
however, shall be made under this Section 4 in respect of any
claim, issue or matter as to which Indemnitee shall have been
adjudged to be liable to the Company, unless and only to the extent
that the court in which the Proceeding was brought or, if no
Proceeding was brought in a court, any court of competent
jurisdiction, determines upon application that, in view of all the
circumstances of the case, Indemnitee fairly and reasonably is
entitled to indemnification for such portion of the Expenses as the
court deems proper.
5. Indemnification for
Expenses Where Indemnitee is Wholly or Partly Successful.
Notwithstanding and in addition to the provisions of Section 3
and 4 of this Agreement, to the extent that Indemnitee is a party
to a Proceeding and is successful, on the merits or otherwise, in
the defense of any claim, issue or matter therein, the Company
shall indemnify and hold harmless Indemnitee against all Expenses
actually and reasonably incurred by him or her or on his or her
behalf in connection with such successful defense. For the
avoidance of doubt, if Indemnitee is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to one
or more but not less than all claims, issues or matters in such
Proceeding, the Company shall indemnify Indemnitee against 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. For purposes of this Section 5, and without
limitation, the termination of any claim, issue or matter in such a
Proceeding by withdrawal or dismissal, with or without prejudice,
shall be deemed to be a successful result as to such claim, issue
or matter.
6. Indemnification for
Expenses of a Witness. To the extent that Indemnitee is, by
reason of his or her Corporate Status, a witness in or otherwise
incurs Expenses in connection with any Proceeding to which
Indemnitee is not a party, he or she shall be indemnified and held
harmless by the Company against all Expenses actually and
reasonably incurred by him or her or on his or her behalf in
connection therewith.
7. Additional
Indemnification.
(a)
Notwithstanding any limitation in Sections 3, 4, or 5 hereof
or in Section 145 of the DGCL or other applicable statutory
provision, the Company shall
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indemnify Indemnitee to the fullest extent permitted by law if
Indemnitee is made, or is 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 Losses and
Expenses actually and reasonably incurred by Indemnitee in
connection with the Proceeding; provided, however, that no
indemnification shall be made under this Section 7(a) on account of
Indemnitee’s conduct which constitutes a breach of
Indemnitee’s duty of loyalty to the Company or its investors
or is an act or omission not in good faith or which involves
intentional misconduct or a knowing violation of the law.
(b)
For purposes of Sections 7(a), the meaning of the phrase "
to the fullest extent permitted by law " shall include, but
not be limited to:
(i)
to the fullest extent authorized or permitted by the
then-applicable provisions of the DGCL or other applicable
statutory provision, that authorize or contemplate indemnification
by agreement, or the corresponding provision of any amendment to or
replacement of the DGCL or other applicable statutory provision,
and
(ii)
to the fullest extent authorized or permitted by any amendments to
or replacements of the DGCL or other applicable statutory
provision, adopted after the date of this Agreement that increase
the extent to which a corporation limited liability company or
partnership, as applicable, may indemnify its officers, directors
or persons holding similar fiduciary responsibilities.
(c)
Indemnitee shall be entitled to the prompt payment of all Expenses
reasonably incurred in enforcing successfully (fully or partially)
this Agreement.
8. Contribution. To
the fullest extent permissible under applicable law, if the
indemnification provided for in this Agreement is unavailable to
Indemnitee in whole or in part for any reason whatsoever, the
Company, in lieu of indemnifying Indemnitee, shall contribute to
the amount incurred by Indemnitee, whether for judgments, fines,
penalties, excise taxes, amounts paid or to be paid in settlement
and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is
deemed fair and reasonable in light of all of the circumstances of
such Proceeding in order to reflect (i) the relative benefits
received by the Company, on the one hand, and Indemnitee, on the
other, as a result of the event(s) and/or transaction(s) giving
cause to such Proceeding; and/or (ii) the relative fault of
the Company, on the one hand (and its directors, officers,
employees and agents), and Indemnitee, on the other, in connection
with such event(s) and/or transaction(s).
9. Exclusions.
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