Exhibit
10.1
NILE THERAPEUTICS,
INC.
INDEMNIFICATION
AGREEMENT
This Indemnification Agreement
(“ Agreement ”) is effective as of
, 2008, by and between Nile Therapeutics, Inc., a Delaware
corporation (the “ Company ”), and
(“ Indemnitee ”).
A. The Company recognizes the
continued difficulty in obtaining liability insurance for its
directors, officers, employees, controlling persons, fiduciaries
and other agents and affiliates, the significant increases in the
cost of such insurance and the general reductions in the coverage
of such insurance.
B. The Company further recognizes
the substantial increase in corporate litigation in general,
subjecting directors, officers, employees, controlling persons,
fiduciaries and other agents and affiliates to expensive litigation
risks at the same time as the availability and coverage of
liability insurance has been severely limited.
C. The current protection available
to directors, officers, employees, controlling persons, fiduciaries
and other agents and affiliates of the Company may not be adequate
under the present circumstances, and directors, officers,
employees, controlling persons, fiduciaries and other agents and
affiliates of the Company (or persons who may be alleged or deemed
to be the same), including the Indemnitee, may not be willing to
continue to serve or be associated with the Company in such
capacities without additional protection.
D. The Company (a) desires to
attract and retain the involvement of highly qualified persons,
such as Indemnitee, to serve and be associated with the Company,
and (b) accordingly, wishes to provide for the indemnification
and advancement of expenses to the Indemnitee to the maximum extent
permitted by law.
E. In view of the considerations set
forth above, the Company desires that Indemnitee shall be
indemnified and advanced expenses by the Company as set forth
herein.
In consideration of the mutual
promises and covenants contained herein, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Certain
Definitions.
(a) “ Change in Control
” shall be deemed to have occurred if, on or after the date
of this Agreement, (i) any “person” (as such term
is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended), other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company
acting in such capacity or a corporation owned directly or
indirectly by the shareholders of the Company in substantially the
same proportions as their ownership of stock of the Company,
becomes the “beneficial owner” (as defined in
Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company
representing more than 50% of the total voting
power represented by the Company’s then outstanding Voting
Securities (as defined below), (ii) during any period of two
(2) consecutive years, individuals who at the beginning of
such period constitute the Board of Directors of the Company and
any new director whose election by the Board of Directors or
nomination for election by the Company’s shareholders was
approved by a vote of at least two thirds (2/3) of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to
constitute a majority thereof, or (iii) the shareholders of
the Company approve a merger or consolidation of the Company with
any other corporation other than a merger or consolidation which
would result in the Voting Securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities
of the surviving entity) at least 80% of the total voting power
represented by the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or (iv) the shareholders of the Company approve
a plan of complete liquidation of the Company or an agreement for
the sale or disposition by the Company of (in one transaction or a
series of related transactions) all or substantially all of the
Company’s assets.
(b) “ Claim ”
shall mean with respect to a Covered Event (as defined below): any
threatened, asserted, pending or completed action, suit, proceeding
or alternative dispute resolution mechanism, or any hearing,
inquiry or investigation that Indemnitee in good faith believes
might lead to the institution of any such action, suit, proceeding
or alternative dispute resolution mechanism, whether civil,
criminal, administrative, investigative or other.
(c) References to the “
Company ” shall include, in addition to Nile
Therapeutics, Inc., any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger
to which Nile Therapeutics, Inc. (or any of its wholly owned
subsidiaries) is a party, which, if its separate existence had
continued, would have had power and authority to indemnify its
directors, officers, employees, agents or fiduciaries, so that if
Indemnitee is or was a director, officer, employee, agent or
fiduciary of such constituent corporation, or is or was serving at
the request of such constituent corporation as a director, officer,
employee, agent or fiduciary of another corporation, partnership,
joint venture, employee benefit plan, trust or other enterprise,
Indemnitee shall stand in the same position under the provisions of
this Agreement with respect to the resulting or surviving
corporation as Indemnitee would have with respect to such
constituent corporation if its separate existence had
continued.
(d) “ Covered Event
” shall mean any event or occurrence related to the fact that
Indemnitee is or was a director, officer, employee, 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, 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 Indemnitee while serving
in such capacity.
(e) “ Expenses ”
shall mean any and all losses, claims, damages expenses and
liabilities, joint or several (including attorneys’ fees and
all other costs, expenses and obligations incurred in connection
with investigating, defending, being a witness in or participating
in (including on appeal), or preparing to defend, to be a witness
in or to participate in, any action,
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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) actually and reasonably incurred, of any
Claim and any federal, state, local or foreign taxes imposed on the
Indemnitee as a result of the actual or deemed receipt of any
payments under this Agreement.
(f) “ Expense Advance
” shall mean a payment to Indemnitee pursuant to
Section 3 of Expenses in advance of the settlement of or final
judgement in any action, suit, proceeding or alternative dispute
resolution mechanism, hearing, inquiry or investigation, which
constitutes a Claim.
(g) “ Independent Legal
Counsel ” shall mean an attorney or firm of attorneys,
selected in accordance with the provisions of Section 2(d)
hereof, who shall not have otherwise performed services for the
Company or Indemnitee within the last three (3) years (other
than with respect to matters concerning the rights of Indemnitee
under this Agreement, or of other indemnitees under similar
indemnity agreements).
(h) References to “ other
enterprises ” shall include employee benefit plans;
references to “ fines ” shall include any excise
taxes assessed on Indemnitee with respect to an employee benefit
plan; and 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 its beneficiaries; and if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed
to be in the interest 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.
(i) “ Reviewing Party
” shall mean, subject to the provisions of Section 2(d),
any person or body appointed by the Board of Directors in
accordance with applicable law to review the Company’s
obligations hereunder and under applicable law, which may include a
member or members of the Company’s Board of Directors,
Independent Legal Counsel or any other person or body not a party
to the particular Claim for which Indemnitee is seeking
indemnification.
(j) “ Section ”
refers to a section of this Agreement unless otherwise
indicated.
(k) “ Voting Securities
” shall mean any securities of the Company that vote
generally in the election of directors.
2. Indemnification
.
(a) Indemnification of
Expenses . Subject to the provisions of Section 2(b)
below, the Company shall indemnify Indemnitee for Expenses to the
fullest extent permitted by law if 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 Claim
(whether by reason of or arising in part out of a Covered Event),
including all interest, assessments and other charges incurred in
connection with or in respect of such Expenses.
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(b) Review of Indemnification
Obligations . Notwithstanding the foregoing, in the event any
Reviewing Party shall have determined (in a written opinion, in any
case in which Independent Legal Counsel is the Reviewing Party)
that Indemnitee is not entitled to be indemnified hereunder under
applicable law, (i) the Company shall have no further
obligation under Section 2(a) to make any payments to
Indemnitee not made prior to such determination by such Reviewing
Party and (ii) the Company shall be entitled to be reimbursed
by Indemnitee (who hereby agrees to reimburse the Company) for all
Expenses theretofore paid in indemnifying Indemnitee (within thirty
(30) days after such determination); provided, however
, that if Indemnitee has commenced or thereafter commences legal
proceedings in a court of competent jurisdiction to secure a
determination that Indemnitee is entitled to be indemnified
hereunder under applicable law, any determination made by any
Reviewing Party that Indemnitee is not entitled to be indemnified
hereunder under applicable law shall not be binding and Indemnitee
shall not be required to reimburse the Company for any Expenses
theretofore paid in indemnifying Indemnitee until a final judicial
determination is made with respect thereto (as to which all rights
of appeal therefrom have been exhausted or lapsed).
Indemnitee’s obligation to reimburse the Company for any
Expenses shall be unsecured and no interest shall be charged
thereon.
(c) Indemnitee Rights on
Unfavorable Determination; Binding Effect . If any Reviewing
Party determines that Indemnitee substantively is not entitled to
be indemnified hereunder in whole or in part under applicable law,
Indemnitee shall have the right to commence litigation seeking an
initial determination by the court or challenging any such
determination by such Reviewing Party or any aspect thereof,
including the legal or factual bases therefor, and, subject to the
provisions of Section 15, the Company hereby consents to
service of process and to appear in any such proceeding. Absent
such litigation, any determination by any Reviewing Party shall be
conclusive and binding on the Company and Indemnitee.
(d) Selection of Reviewing Party;
Change in Control . If there has not been a Change in Control,
any 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 which has been approved by a majority of the
Company’s Board of Directors who were directors immediately
prior to such Change in Control), any Reviewing Party with respect
to all matters thereafter arising concerning the rights of
Indemnitee to indemnification of Expenses under this Agreement or
any other agreement or under the Company’s Certificate of
Incorporation or bylaws as now or hereafter in effect, or under any
other applicable law, if desired by Indemnitee, shall be
Independent Legal Counsel selected by the Indemnitee and approved
by Company (which approval shall not be unreasonably withheld).
Such counsel, among other things, shall render its written opinion
to the Company and Indemnitee as to whether and to what extent
Indemnitee would be entitled to be indemnified hereunder under
applicable law and the Company agrees to abide by such opinion. The
Company agrees to pay the reasonable fees of the Independent Legal
Counsel referred to above and to indemnify fully such counsel
against any and all expenses (including attorneys’ fees),
claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto. Notwithstanding any
other provision of this Agreement, the Company shall not be
required to pay Expenses of more than one Independent Legal Counsel
in connection with all matters concerning a single Indemnitee, and
such Independent Legal Counsel shall be the Independent Legal
Counsel for any or all other Indemnitees unless (i) the
Company
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otherwise determines or (ii) any Indemnitee
shall provide a written statement setting forth in detail a
reasonable objection to such Independent Legal Counsel representing
other Indemnitees.
(e) Mandatory Payment of
Expenses . Notwithstanding any other provision of this
Agreement other than Section 10 hereof, to the extent that
Indemnitee has been successful on the merits or otherwise,
including, without limitation, the dismissal of an action without
prejudice, in defense of any Claim, Indemnitee shall be indemnified
against all Expenses incurred by Indemnitee in connection
therewith.
(f) Contribution . If the
indemnification provided for in this Agreement is for any reason
held by a court of competent jurisdiction to be unavailable to an
Indemnitee, then in lieu of indemnifying Indemnitee thereunder, the
Company shall contribute to the amount paid or payable by
Indemnitee as a result of such Expenses (i) in such proportion
as is appropriate to reflect the relative benefits received by the
Company and Indemnitee, 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 Indemnitee in connection with the action
or inaction which resulted in such Expenses, as well as any other
relevant equitable considerations. In connection with the
registration of the Company’s
