Exhibit 10.2
INDEMNIFICATION AGREEMENT
This Agreement made and entered into
this 10th day of September, 2009 (the “Agreement”), by
and between NeuroMetrix, Inc., a Delaware corporation (the
“Company,” which term shall include, where appropriate,
any Entity (as hereinafter defined) controlled directly or
indirectly by the Company) and Thomas T. Higgins (the
“Indemnitee”):
WHEREAS, the Company desires to
retain the Indemnitee to serve as employee and officer of the
Company in the role of Chief Financial Officer, principal financial
officer and principal accounting officer;
WHEREAS, increased corporate
litigation has subjected persons serving in such roles to
litigation risks and expenses, and the limitations on the
availability of directors and officers liability insurance have
made it increasingly difficult for the Company to attract and
retain such persons;
WHEREAS, the Company’s By-laws
(the “By-laws”) require it to indemnify certain persons
associated with the Company and permit it to make other
indemnification arrangements and agreements;
WHEREAS, the Company desires to
provide Indemnitee with specific contractual assurance of
Indemnitee’s rights to full indemnification against
litigation risks and expenses (regardless, among other things, of
any amendment to or revocation of the By-laws or any change in the
ownership of the Company);
WHEREAS, the Company intends that
this Agreement provide Indemnitee with greater protection than that
which is provided by the Company’s By-laws; and
WHEREAS, Indemnitee is relying upon
the rights afforded under this Agreement in becoming an employee
and officer of the Company in the role of Chief Financial Officer,
principal financial officer and principal accounting
officer.
NOW, THEREFORE, in consideration of
the promises and the covenants contained herein, the Company and
Indemnitee do hereby covenant and agree as follows:
1.
Definitions
.
(a)
“Corporate
Status” describes the status of a person who is serving or
has served (i) as employee and officer of the Company in the
role of Chief Financial Officer, principal financial officer and
principal accounting officer, (ii) in any capacity
with respect to any employee benefit plan of the Company, or
(iii) as a director, partner, trustee, officer, employee, or
agent of any other Entity at the request of the Company. For
purposes of subsection (iii) of this Section 1(a), if
Indemnitee is serving or has served as
a director, partner, trustee, officer,
employee or agent
of a Subsidiary, Indemnitee shall be deemed to be serving at the
request of the Company.
(b)
“Entity” shall
mean any corporation, partnership, limited liability company, joint
venture, trust, foundation, association, organization or other
legal entity.
(c)
“Expenses” shall
mean all fees, costs and expenses incurred by Indemnitee in
connection with any Proceeding (as defined below), including,
without limitation, attorneys’ fees, disbursements and
retainers (including, without limitation, any such fees,
disbursements and retainers incurred by Indemnitee pursuant to
Sections 10 and 11(c) of this Agreement), fees and
disbursements of expert witnesses, private investigators and
professional advisors (including, without limitation, accountants
and investment bankers), court costs, transcript costs, fees of
experts, travel expenses, duplicating, printing and binding costs,
telephone and fax transmission charges, postage, delivery services,
secretarial services, and other disbursements and
expenses.
(d)
“Indemnifiable
Expenses,” “Indemnifiable Liabilities” and
“Indemnifiable Amounts” shall have the meanings
ascribed to those terms in
Section 3(a) below.
(e)
“Liabilities”
shall mean judgments, damages, liabilities, losses, penalties,
excise taxes, fines and amounts paid in settlement.
(f)
“Proceeding”
shall mean any threatened, pending or completed claim, action,
suit, arbitration, alternate dispute resolution process,
investigation, administrative hearing, appeal, or any other
proceeding, whether civil, criminal, administrative, arbitrative or
investigative, whether formal or informal, including a proceeding
initiated by Indemnitee pursuant to Section 10 of this
Agreement to enforce Indemnitee’s rights
hereunder.
(g)
“Subsidiary”
shall mean any corporation, partnership, limited liability company,
joint venture, trust or other Entity of which the Company owns
(either directly or through or together with another Subsidiary of
the Company) either (i) a general partner, managing member or
other similar interest or (ii) (A) 50% or more of the
voting power of the voting capital equity interests of such
corporation, partnership, limited liability company, joint venture
or other Entity, or (B) 50% or more of the outstanding voting
capital stock or other voting equity interests of such corporation,
partnership, limited liability company, joint venture or other
Entity.
2.
Services of
Indemnitee . In consideration of
the Company’s covenants and commitments hereunder, Indemnitee
agrees to serve or continue to serve as an employee and officer of
the Company in the role of Chief Financial Officer, principal
financial officer and principal accounting officer. However,
this Agreement shall not impose any obligation on Indemnitee or the
Company to continue Indemnitee’s service to the Company
beyond any period otherwise required by law or by other agreements
or commitments of the parties, if any.
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3.
Agreement to
Indemnify . The Company agrees to
indemnify Indemnitee as follows:
(a)
Proceedings
Other Than By or In the Right of the Company
. Subject
to the exceptions contained in Section 4(a) below, if
Indemnitee was or is a party or is threatened to be made a party to
any Proceeding (other than an action by or in the right of the
Company) by reason of Indemnitee’s Corporate Status,
Indemnitee shall be indemnified by the Company against all Expenses
and Liabilities actually and reasonably incurred or paid by
Indemnitee in connection with such Proceeding (referred to herein
as “Indemnifiable Expenses” and “Indemnifiable
Liabilities,” respectively, and collectively as
“Indemnifiable Amounts”).
(b)
Proceedings By
or In the Right of the Company . Subject to the
exceptions contained in Section 4(b) below, if Indemnitee
was or is a party or is threatened to be made a party to any
Proceeding by or in the right of the Company by reason of
Indemnitee’s Corporate Status, Indemnitee shall be
indemnified by the Company against all Indemnifiable
Expenses.
(c)
Conclusive
Presumption Regarding Standard of Care . In making any
determination required to be made under Delaware law with respect
to entitlement to indemnification hereunder, the person, persons or
entity making such determination shall presume that Indemnitee is
entitled to indemnification under this Agreement if Indemnitee
submitted a request therefor in accordance with Section 5 of
this Agreement, and the Company shall have the burden of proof to
overcome that presumption in connection with the making by any
person, persons or entity of any determination contrary to that
presumption.
4.
Exceptions to
Indemnification . Indemnitee shall be
entitled to indemnification under Sections 3(a) and
3(b) above in all circumstances other than with respect to any
specific claim, issue or matter involved in the Proceeding out of
which Indemnitee’s claim for indemnification has arisen, as
follows:
(a)
Proceedings
Other Than By or In the Right of the Company
. If
indemnification is requested under Section 3(a) and it
has been finally adjudicated by a court of competent jurisdiction
that, in connection with such specific claim, issue or matter,
Indemnitee failed to act (i) in good faith and (ii) in a
manner Indemnitee reasonably believed to be in or not opposed to
the best interests of the Company, or, with respect to any criminal
Proceeding, Indemnitee had reasonable cause to believe that
Indemnitee’s conduct was unlawful, Indemnitee shall not be
entitled to payment of Indemnifiable Amounts hereunder.
(b)
Proceedings By
or In the Right of the Company . If indemnification
is requested under Section 3(b) and
(i)
it has been finally adjudicated by a court of competent
jurisdiction that, in connection with such specific claim, issue or
matter, Indemnitee failed to act (A) in good faith and
(B) in a manner Indemnitee reasonably
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believed to be in
or not opposed to the best interests of the Company, Indemnitee
shall not be entitled to payment of Indemnifiable Expenses
hereunder; or
(ii)
it has been finally adjudicated by a court of competent
jurisdiction that Indemnitee is liable to the Company with respect
to such specific claim, Indemnitee shall not be entitled to payment
of Indemnifiable Expenses hereunder with respect to such claim,
issue or matter unless the Court of Chancery or another court in
which such 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 Indemnifiable Expenses which
such court shall deem proper; or
(iii)
it has been finally adjudicated by a court of competent
jurisdiction that Indemnitee is liable to the Company for an
accounting of profits made from the purchase or sale by the
Indemnitee of securities of the Company pursuant to the provisions
of Section 16(b) of the Securities Exchange Act of 1934,
the rules and regulations promulgated thereunder and
amendments thereto or similar provisions of any federal, state or
local statutory law, Indemnitee shall not be entitled to payment of
Indemnifiable Expenses hereunder.
(c)
Insurance
Proceeds . To the extent payment
is actually made to the Indemnitee under a valid and collectible
insurance policy in respect of Indemnifiable Amounts in connection
with such specific claim, issue or matter, Indemnitee shall not be
entitled to payment of Indemnifiable Amounts hereunder except in
respect of any excess beyond the amount of payment under such
insurance.
5.
Procedure for
Payment of Indemnifiable Amounts . Indemnitee shall
submit to the Company a written request specifying the
Indemnifiable Amounts for which Indemnitee seeks payment under
Section 3 of this Agreement and the basis for the claim.
The Company shall pay such Indemnifiable Amounts to Indemnitee
within sixty (60) calendar days of receipt of the request. At
the request of the Company, Indemnitee shall furnish such
documentation and information as are reasonably available to
Indemnitee and necessary to establish that Indemnitee is entitled
to indemnification hereunder. If Indemnitee is entitled under
any provisions of this Agreement to indemnification by the Company
of some or a portion of the Indemnifiable Amounts but not, however,
for all of the total amount thereof, the Company will nevertheless
indemnify the Indemnitee for the portion thereof to which the
Indemnitee is entitled.
6.
Indemnification for Expenses
of a Party Who is Wholly or Partly Successful
.
Notwithstanding any other
provision of this Agreement, a
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