INDEMNIFICATION AGREEMENT
This Indemnification Agreement (this
“ Agreement ”) is made as of this
day of
, 2005 by and between La Jolla Pharmaceutical Company (the “
Company ”) and
(“ Indemnitee ”).
WHEREAS, the Board of Directors has
determined that in order to attract and retain qualified persons as
directors and officers of the Company, it is in the best interests
of the Company and its stockholders to indemnify such persons for
claims and actions against them arising out of their service to and
activities on behalf of the Company;
WHEREAS, the bylaws of the Company
provide for indemnification of its officers and directors to the
fullest extent permitted by applicable law, and the Company wishes
to clarify and enhance the rights and obligations of the Company
and Indemnitee with respect to indemnification;
WHEREAS, the Company has elected to
follow the corporate governance practices and procedures of the
Delaware General Corporation Law (the “ DGCL ”),
as the same may be amended from time to time;
WHEREAS, in order to induce and
encourage experienced and capable persons such as Indemnitee to
serve and continue to serve as directors and officers of the
Company and in any other capacity with respect to the Company, and
to otherwise promote the desirable end that such persons will
resist what they consider unjustified lawsuits and claims made
against them in connection with the good faith performance of their
duties to the Company, with the knowledge that certain costs,
judgments, penalties, fines, liabilities and expenses incurred by
them in their defense of such litigation will be borne by the
Company and that they will receive the maximum protection against
such risks and liabilities as may be afforded by applicable law,
the Board of Directors of the Company has determined that this
Agreement is reasonable, prudent and necessary to promote and
ensure the best interests of the Company and its stockholders;
and
WHEREAS, the Company desires to have
Indemnitee continue to serve as a director or officer of the
Company free from undue concern for unpredictable, inappropriate or
unreasonable legal risks and personal liabilities by reason of
Indemnitee acting in good faith in the performance of
Indemnitee’s duties to the Company; and Indemnitee desires to
continue to serve the Company.
NOW, THEREFORE, in consideration of
Indemnitee’s continued service as a director or officer of
the Company, the parties hereto agree as follows:
1. Indemnity of
Indemnitee . The Company hereby agrees to hold harmless and
indemnify Indemnitee to the fullest extent permitted by the DGCL
and the bylaws of the Company, as each may be amended from time to
time. In furtherance of the foregoing indemnification, and without
limiting the generality thereof:
(a)
Third party proceedings . Indemnitee shall be entitled to
the rights of indemnification provided in this
Section 1(a) if, by reason of his Corporate Status (
as defined in Section 15 ), he is, or is
threatened to be made, a party to or participant in any Proceeding
( as defined in Section 15 ) other than a Proceeding
by or in the right of the Company. Pursuant to this
Section 1(a) , and to the
extent allowed by applicable law, Indemnitee shall be indemnified
against all Expenses ( as defined in Section 15
), judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by him or on his behalf in
connection with such Proceeding or any claim, issue or matter
therein, if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
Company and, with respect to any criminal Proceeding, had no
reasonable cause to believe his conduct was unlawful.
(b)
Proceedings by or in the right of the Company . Indemnitee
shall be entitled to the rights of indemnification provided in this
Section 1(b) if, by reason of his Corporate Status, he
is, or is threatened to be made, a party to or participant in any
Proceeding brought by or in the right of the Company to procure a
judgment in its favor. Pursuant to this Section 1(b) ,
Indemnitee shall be indemnified against all Expenses actually and
reasonably incurred by him or on his behalf in connection with such
Proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
Company; provided, however, that, if applicable law so
provides, no indemnification against such Expenses shall be made in
respect of any claim, issue or matter in such Proceeding as to
which Indemnitee shall have been adjudged to be liable to the
Company unless, and only to the extent, that the Court of Chancery
of the State of Delaware or the court in which such Proceeding
shall have been brought or is pending, 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 costs, judgments,
penalties, fines, liabilities and Expenses as such court shall deem
proper.
(c)
Indemnification for expenses of a party who is wholly or partly
successful . Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of his
Corporate Status, a party to a Proceeding and is successful, on the
merits or otherwise, in any such Proceeding, he shall be
indemnified to the maximum extent permitted by applicable law
against all Expenses actually and reasonably incurred by him or on
his behalf 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 all Expenses actually and reasonably incurred by him or on
his behalf in connection with each 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.
(d)
Additional Indemnity . Notwithstanding any limitation in
Section 1(a), (b) or (c) , the Company shall
indemnify 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 on behalf of the Company
to procure a judgment in its favor) against all Expenses,
judgments, fines and amounts paid in settlement actually and
reasonably incurred by Indemnitee in connection with the
Proceeding; provided that , indemnification of Indemnitee
shall be made by the Company only as authorized in the specific
case upon a determination that the indemnification of Indemnitee is
proper under the circumstances because Indemnitee met the
applicable standard of conduct. For purposes of this
Section 1(d) , the meaning of the phrase “to the
fullest extent permitted by law” shall include, but not be
limited to:
(i) to
the fullest extent permitted by the provisions of the DGCL that
authorize or contemplate additional indemnification by agreement
(or the corresponding provision of any amendment to or successor or
substitute provision of the DGCL); and
(ii) to
the fullest extent authorized or permitted by any amendment to the
DGCL or by any successor or substitute rule, law or provision
adopted after the date of this Agreement that increase the extent
to which a corporation may indemnify it officers and
directors.
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2. Exclusions .
Notwithstanding any provision of Section 1 to the
contrary, no indemnity shall be paid by the Company:
(a) with
respect to remuneration paid to Indemnitee if it shall be
determined by a final judgment or other final adjudication that
such remuneration was in violation of law;
(b) on
account of any suit in which judgment is rendered against
Indemnitee for an accounting of profits made from the purchase or
sale by Indemnitee of securities of the Company pursuant to the
provisions of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or similar provisions of any federal, state or local
statutory law;
(c) on
account of Indemnitee’s conduct which is finally adjudged to
have been knowingly fraudulent or deliberately dishonest, or to
constitute willful misconduct; or
(d) if
a final decision by a court having jurisdiction in the matter shall
determine that such indemnification is not lawful.
3. Contribution . If the
indemnification provided in Section 1 is unavailable
and may not be paid to Indemnitee for any reason (other than those
set forth in Section 2(a), (b) and (c) ), then with
respect to any Proceeding in which the Company is jointly liable
with Indemnitee (or would be if joined in such Proceeding), the
Company shall contribute to the amount of Expenses, judgments,
fines and amounts paid in settlement actually and reasonably
incurred and paid or payable by Indemnitee to the extent allowed by
applicable law, in such proportion as is appropriate to reflect
(i) the relative benefits received by the Company on the one
hand and by the Indemnitee on the other hand from the transaction
from which such Proceeding arose and (ii) the relative fault
of the Company on the one hand and of the Indemnitee on the other
hand in connection with the events which resulted in such Expenses,
judgments, fines or settlement amounts, as well as any other
relevant equitable considerations. The relative fault of the
Company on the one hand and of the Indemnitee on the other hand
shall be determined by reference to, among other things, the
parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent the circumstances resulting
in such Expenses, judgments, fines or settlement amounts. The
Company agrees that it would not be just and equitable if
contribution pursuant to this Section 3 were determined
by pro rata allocation or any other method of allocation which does
not take account of the foregoing equitable
considerations.
4. Indemnification for
Expenses of a Witness . Notwithstanding any other provision of
this Agreement, to the extent that Indemnitee is, by reason of his
Corporate Status, a witness in any Proceeding to which Indemnitee
is not a party, he shall be indemnified against all Expenses
actually and reasonably incurred by him or on his behalf in
connection therewith.
5. Advancement of
Expenses . Notwithstanding any other provision of this
Agreement, to the extent allowed by applicable law, the Company
shall advance all reasonable Expenses incurred by or on behalf of
Indemnitee in connection with any Proceeding by reason of
Indemnitee’s Corporate Status within twenty (20) days
after the receipt by the Company of a statement or statements from
Indemnitee requesting such advance or advances from time to time,
whether prior to or after final disposition of such Proceeding.
Such statement or statements (i) shall reasonably evidence the
Expenses incurred by Indemnitee, (ii) shall include or be
accompanied by such documentation and information as is reasonably
requested by the Company to determine the nature of the Proceeding
and whether Indemnitee is entitled to the advancement of Expenses,
and (iii) shall include or be preceded by an undertaking by or
on behalf of Indemnitee to repay any Expenses advanced if it shall
ultimately be determined that Indemnitee is not entitled to be
indemnified against such Expenses. Any advances and undertakings to
repay pursuant to this Section 5 shall be unsecured and
interest free. Notwithstanding the foregoing, the obligation of the
Company to advance Expenses pursuant to this Section 5
shall be subject to the condition that, if, when
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and to the extent that the Company determines that Indemnitee would
not be permitted to be indemnified under applicable law, the
Company shall be entitled to be reimbursed, within sixty (60) days
of such determination, by Indemnitee (who hereby agrees to
reimburse the Company) for all such amounts theretofore paid;
provided, however , that if Indemnitee has commenced or
thereafter commences legal proceedings in a court of competent
jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the
Company that Indemnitee would not be permitted to be indemnified
under applicable law shall not be binding and Indemnitee shall not
be required to reimburse the Company for any advance of Expenses
until a final judicial determination is made with respect thereto
(as to which all rights of appeal therefrom have been exhausted or
lapsed).
6. Procedure for
Determination of Entitlement to Indemnification .
(a) To
obtain indemnification under this Agreement, Indemnitee shall
submit to the Company a written request, including therein or
therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine
whether and to what extent Indemnitee is entitled to
indemnification. The Chief Executive Officer of the Company shall,
promptly upon receipt of such a request for indemnification, advise
the Board of Directors in writing that Indemnitee has requested
indemnification; provided that , if the Chief Executive
Officer is making such request, then the notice to the Board of
Directors shall be given by the Secretary of the
Company.
(b) Upon
written request by Indemnitee for indemnification, a determination
with respect to Indemnitee’s entitlement thereto shall be
made by the following person or persons who shall be empowered to
make such determination: (i) the Board of Directors by a
majority vote of a quorum of Disinterested Directors ( as
defined in Section 15 ); (ii) by Independent
Counsel ( as defined in Section 15 ) in a
written opinion to the Board of Directors (a copy of which shall be
delivered to Indemnitee) if a quorum of the Board of Directors
consisting of Disinterested Directors is not obtainable or, even if
obtainable, said Disinterested Directors so direct; or
(iii) if so directed by said Disinterested Directors, by the
stockholders of the Company. If it is determined that Indemnitee is
entitled to indemnification, payment to Indemnitee shall be made
within fifteen (15) days after such determination. Indemnitee
shall cooperate with the person, persons or entity making such
determination with respect to Indemnitee’s entitlement to
indemnification, including providing to such person, persons or
entity upon reasonable advance request any documentation or
information which is not privileged or otherwise protected from
disclosure and which is reasonably available to Indemnitee and
reasonably necessary to such determination. Any Independent
Counsel, member of the Board of Directors, or stockholder of the
Company shall act reasonably and in good faith in making a
determination under this Agreement of the Indemnitee’s
entitlement to indemnification. Any Expenses incurred by Indemnitee
in so cooperating with the person, persons or entity making such
determination shall be borne by the Company to the extent allowed
by applicable law (irrespective of the determination as to
Indemnitee’s entitlement to indemnification) and the Company
hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
(c) If
the determination of entitlement to indemnification is to be made
by Independent Counsel pursuant to Section 6(b) hereof,
the Independent Counsel shall be selected as provided in this
Section 6(c) . The Independent Counsel shall be
selected by the Board of Directors (subject to this
Section 6(c) ), and the Company shall give written
notice to Indemnitee advising him of the identity of the
Independent Counsel so selected. Indemnitee may, within seven
(7) days after receipt of such written notice of selection,
deliver to the Company a written objection to such selection;
provided, however, such objection may be asserted only on
the ground that the Independent Counsel so selected does not meet
the requirements of “Independent Counsel,” as defined
in Section 15 of this Agreement, and the objection
shall set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the person so
selected shall act as Independent Counsel. If a written objection
is made and substantiated, the Independent Counsel selected may not
serve as Independent Counsel unless and until such objection is
withdrawn or a court has determined that such objection is without
merit. If,
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within twenty (20) days after submission by Indemnitee of a
written request for indemnification pursuant to
Section 6(a) hereof, (i) an Independent Counsel
has not been selected or
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