This Indemnity
Agreement (“Agreement”) is made as of
by and between Spectrum Pharmaceuticals, Inc., a Delaware
corporation (the “Company”), and
(“Indemnitee”).
WHEREAS, highly
competent persons have become more reluctant to serve publicly-held
corporations as directors or in other capacities unless they are
provided with adequate protection through insurance or adequate
indemnification against inordinate risks of claims and actions
against them arising out of their service to and activities on
behalf of the corporation.
WHEREAS, the Board
of Directors of the Company (the “Board”) has
determined that, in order to attract and retain qualified
individuals, the Company will attempt to maintain on an ongoing
basis, at its sole expense, liability insurance to protect persons
serving the Company and its subsidiaries 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, 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, officers and other persons
in service to corporations or business enterprises are being
increasingly subjected to expensive and time-consuming litigation
relating to, among other things, matters that traditionally would
have been brought only against the Company or business enterprise
itself. The Bylaws of the Company require indemnification of the
officers and directors of the Company. Indemnitee may also be
entitled to indemnification pursuant to applicable provisions of
the Delaware General Corporation Law (“DGCL”). The
Bylaws and the DGCL expressly provide that the indemnification
provisions set forth therein are not exclusive, and thereby
contemplate that contracts may be entered into between the Company
and members of the board of directors, officers and other persons
with respect to indemnification.
WHEREAS, the
uncertainties relating to such insurance and to indemnification
have increased the difficulty of attracting and retaining such
persons.
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 stockholders and that the Company should act to
assure such persons that there will be increased certainty of such
protection in the future.
WHEREAS, it is
reasonable, prudent and necessary for the Company contractually to
obligate itself to indemnify, and to advance expenses 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 Bylaws of
the Company and any resolutions adopted pursuant thereto, and shall
not be deemed a substitute therefor, nor to diminish or abrogate
any rights of Indemnitee thereunder.
WHEREAS,
Indemnitee does not regard the protection available under the
Company’s Bylaws and insurance as adequate in the present
circumstances, and may not be willing to serve as an officer or
director without adequate protection, and the Company desires
Indemnitee to serve in such capacity. 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 be so
indemnified.
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 as an officer, director or key employee of the Company for
so long as Indemnitee is duly elected or appointed, until
Indemnitee tenders his resignation or until Indemnitee is
terminated by the Company, as applicable.
2.
Definitions. As used in this Agreement:
(a) References
to “agent” shall mean any person who is or was a
director, officer, or employee of the Company or a subsidiary of
the Company or other person authorized by the Company to act for
the Company, to include such person serving in such capacity as a
director, officer, employee, fiduciary or other official of another
corporation, partnership, limited liability company, joint venture,
trust or other enterprise at the request of, for the convenience
of, or to represent the interests of the Company or a subsidiary of
the Company.
(b) The
terms “Beneficial Owner” and “Beneficial
Ownership” shall have the meanings set forth in
Rule 13d-3 promulgated under the Exchange Act (as defined
below) as in effect on the date hereof.
(c) 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) is or becomes the Beneficial Owner, directly or indirectly,
of securities of the Company representing twenty percent (20%) or
more of the 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 of the
Company entitled to vote generally in the election of directors
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
20% 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 of Directors of the corporation 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 of Directors, 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 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.
(d)
“Corporate Status” describes the status of a person who
is or was a director, officer, trustee, general partner, managing
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.
(e)
“Delaware Court” shall mean the Court of Chancery of
the State of Delaware.
(f)
“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.
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(g)
“Enterprise” shall mean the Company and any other
corporation, constituent corporation (including any constituent of
a constituent) absorbed in a consolidation or merger to which the
Company (or any of its wholly owned subsidiaries) is a party,
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, general partner, managing member, fiduciary, employee or
agent.
(h)
“Exchange Act” shall mean the Securities Exchange Act
of 1934, as amended.
(i)
“Expenses” shall include attorneys’ fees and
costs, retainers, court costs, transcript costs, fees of experts,
witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees,
and all other disbursements or expenses 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 Expenses 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 cost 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.
(j)
“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 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 of other
indemnitees under similar indemnification agreements); or
(ii) any other party to the Proceeding (as defined below)
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.
(k) References
to “fines” shall include any excise tax assessed on
Indemnitee with respect to any employee benefit plan; references to
“serving at the request of the Company” shall include
any service as a director, officer, employee, agent or fiduciary of
the Company which imposes duties on, or involves services by, such
director, officer, employee, agent or fiduciary with respect to an
employee benefit plan, its participants or beneficiaries; and if
Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in the best interests of the participants
and beneficiaries of an employee benefit plan, Indemnitee shall be
deemed to have acted in a manner “not opposed to the best
interests of the Company” as referred to in this
Agreement.
(l) The
term “Person” shall have the meaning as set forth in
Sections 13(d) and 14(d) of the Exchange Act as in effect on the
date hereof; provided , however , that
“Person” shall
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exclude:
(i) the Company; (ii) any Subsidiaries (as defined below)
of the Company; (iii) any employment benefit plan of the
Company or of a Subsidiary (as defined below) of the Company or of
any corporation owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their
ownership of stock of the Company; and (iv) any trustee or
other fiduciary holding securities under an employee benefit plan
of the Company or of a Subsidiary (as defined below) of the Company
or of a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportions
as their ownership of stock of the Company.
(m) A
“Potential Change in Control” shall be deemed to have
occurred if: (i) the Company enters into an agreement or
arrangement, the consummation of which would result in the
occurrence of a Change in Control; (ii) any Person or the
Company publicly announces an intention to take or consider taking
actions which if consummated would constitute a Change in Control;
(iii) any Person who becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing 5% or more of
the combined voting power of the Company’s then outstanding
securities entitled to vote generally in the election of directors
increases his Beneficial Ownership of such securities by 5% or more
over the percentage so owned by such Person on the date thereof; or
(iv) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control has
occurred.
(n) 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 (including intentional or unintentional tort
claims), criminal, administrative or investigative nature, in which
Indemnitee was, is or will be involved as a party or otherwise by
reason of the fact that Indemnitee is or was a director or officer
of the Company, by reason of any action (or failure to act) taken
by him or of any action (or failure to act) on his part while
acting as a director or officer of the Company, or by reason of the
fact that he is or was serving at the request of the Company as a
director, officer, trustee, general partner, managing 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.
(o) The
term “Subsidiary,” with respect to any Person, shall
mean any corporation or other entity of which a majority of the
voting power of the voting equity securities or equity interest is
owned, directly or indirectly, by that Person.
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 was, is, or is
threatened to be made, a party to or a participant (as a witness or
otherwise) in 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 against all
Expenses, judgments, liabilities, fines, penalties and amounts paid
in settlement (including all interest, assessments and
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other charges
paid or payable in connection with or in respect of such Expenses,
judgments, fines, penalties and amounts paid in settlement)
actually and reasonably incurred by Indemnitee or on his behalf in
connection with such Proceeding or any claim, issue or matter
therein, if Indemnitee 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, in the case of a criminal Proceeding, had no
reasonable cause to believe that his conduct was
unlawful.
4.
Indemnity in Proceedings by or in the Right of the Company.
The Company shall indemnify and hold harmless Indemnitee in
accordance with the provisions of this Section 4 if Indemnitee
was, is, or is threatened to be made, a party to or a participant
(as a witness or otherwise) in 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 against all
Expenses actually and reasonably incurred by him or on his behalf
in connection with such Proceeding or any claim, issue or matter
therein, if Indemnitee acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the Company. No indemnification for Expenses shall be made under
this Section 4 in respect of any claim, issue or matter as to
which Indemnitee shall have been finally adjudged by a court to be
liable to the Company, unless and only to the extent that any court
in which the Proceeding was brought or the Delaware Court 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.
5.
Indemnification for Expenses of a Party who is Wholly or Partly
Successful. Notwithstanding any other provisions of this
Agreement, to the extent that Indemnitee is a party to (or a
participant in) and is successful, on the merits or otherwise, in
any Proceeding or in defense of any claim, issue or matter therein,
in whole or in part, the Company shall indemnify and hold harmless
Indemnitee against all Expenses actually and reasonably incurred by
him 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 and hold harmless
Indemnitee against all Expenses actually and reasonably incurred by
him or on his behalf in connection with each successfully resolved
claim, issue or matter. If the Indemnitee is not wholly successful
in such Proceeding, the Company also shall indemnify and hold
harmless Indemnitee against all Expenses reasonably incurred in
connection with a claim, issue or matter related to any claim,
issue, or matter on which the Indemnitee was successful. 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.
6.
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 and held harmless against all Expenses actually and
reasonably incurred by him or on his behalf in connection
therewith.
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7.
Additional Indemnification.
(a) Notwithstanding
any limitation in Sections 3, 4, or 5, the Company shall
indemnify and hold harmless Indemnitee if Indemnitee is a party to
or 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 Expenses, judgments, fines, penalties and
amounts paid in settlement (including all interest, assessments and
other charges paid or payable in connection with or in respect of
such Expenses, judgments, fines, penalties and amounts paid in
settlement) actually and reasonably incurred by Indemnitee in
connection with the Proceeding. No indemnity 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 stockholders or is an act or omission not in good
faith or which involves intentional misconduct or a knowing
violation of the law.
(b) Notwithstanding
any limitation in Sections 3, 4, 5 or 7(a), the Company shall
indemnify and hold harmless Indemnitee if Indemnitee is a party to
or 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 Expenses, judgments, fines, penalties and
amounts paid in settlement (including all interest, assessments and
other charges paid or payable in connection with or in respect of
such Expenses, judgments, fines, penalties and amounts paid in
settlement) actually and reasonably incurred by Indemnitee in
connection with the Proceeding.
8.
Contribution in the Event of Joint Liability.
(a) To
the fullest extent permissible under applicable law, if the
indemnification and hold harmless rights provided for in this
Agreement are unavailable to Indemnitee in whole or in part for any
reason whatsoever, the Company, in lieu of indemnifying and holding
harmless Indemnitee, shall pay, in the first instance, the entire
amount incurred by Indemnitee, whether for judgments, liabilities,
fines, penalties, amounts paid or to be paid in settlement and/or
for Expenses, in connection with any Proceeding without requiring
Indemnitee to contribute to such payment, and the Company hereby
waives and relinquishes any right of contribution it may have at
any time against Indemnitee.
(b) The
Company shall not enter into any settlement of any Proceeding in
which the Company is jointly liable with Indemnitee (or would be if
joined in such Proceeding) unless such settlement provides for a
full and final release of all claims asserted against
Indemnitee.
(c) The
Company hereby agrees to fully indemnify and hold harmless
Indemnitee from any claims for contribution which may be brought by
officers, directors or employees of the Company other than
Indemnitee who may be jointly liable with Indemnitee.
9.
Exclusions. Notwithstanding any provision in this Agreement,
the Company shall not be obligated under this Agreement to make any
indemnity in conn
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