Exhibit 10.31
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT, dated as of___________ (this
"Agreement"), is made and entered into by and between Osiris Therapeutics,
Inc., a Delaware corporation (the "Company"), and _____________________
("Indemnitee").
WHEREAS, it is essential to the Company to retain and attract as
directors and officers the most capable persons available;
WHEREAS, Indemnitee is a director and/or officer of the Company;
WHEREAS, both the Company and Indemnitee recognize the increased risk of
litigation and other claims being asserted against directors and officers of
companies in today's environment;
WHEREAS, the Company's Restated Certificate of Incorporation (the
"Certificate") and By-Laws (the "By-Laws") provide that the Company will
indemnify its directors and officers to the fullest extent permitted by law
and will advance expenses in connection therewith, and Indemnitee's
willingness to serve as a director and/or officer of the Company is based in
part on Indemnitee's reliance on such provisions; and
WHEREAS, in recognition of Indemnitee's need for substantial protection
against personal liability in order to enhance Indemnitee's continued service
to the Company in an effective manner, and Indemnitee's reliance on the
aforesaid provisions of the Certificate and By-Laws, and in part to provide
Indemnitee with specific contractual assurance that the protection promised
by such provisions will be available to Indemnitee regardless of; among other
things, any amendment to or revocation of such provisions or any change in
the composition of the Company's Board of Directors or any acquisition or
business combination transaction relating to the Company, the Company wishes
to provide in this Agreement for the indemnification of and the advancement
of expenses to Indemnitee as set forth in this Agreement.
NOW, THEREFORE, in consideration of he mutual agreements herein set
forth, the parties hereto hereby agree as follows:
l. Certain Definitions.
1.1. Claim. The term "Claim" shall mean any threatened, pending or
completed action, suit or proceeding, or any inquiry or investigation that
Indemnitee in good faith believes might lead to the institution of any such
action, suit or proceeding, whether civil, criminal, administrative,
investigative or other.
1.2 Indemnifiable Event. The term "Indemnifiable Event" shall mean any
actual or asserted event or occurrence related to the fact that Indemnitee is
or was a director, officer, employee, agent, or fiduciary of the Company, or
is or was serving at the
request of the Company as a director, officer, employee, trustee, agent, or
fiduciary of another corporation, partnership, joint venture, employee
benefit plan, trust, or other entity, or anything done or not done by
Indemnitee in any such capacity.
2. Basic Indemnification Arrangement. (a) In the event Indemnitee was,
is or becomes a party to or other participant in, or is threatened to be made
a party to or other participant in, a Claim by reason of (or arising in whole
or in part out of) an Indemnifiable Event, the Company shall indemnify
Indemnitee to the fullest extent permitted by law against any and all costs,
charges and expenses, including, without limitation, attorneys' fees and
other fees and expenses, judgments, fines and amounts paid in settlement
(including all interest, assessments and other charges paid or payable in
connection with or in respect of any such attorneys' fees and other fees and
expenses, judgments, fines or amounts paid in settlement) actually and
reasonably incurred by Indemnitee in connection with such Claim or any appeal
therefrom, if Indemnitee acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interest of the
Company, and, with respect to any criminal action, proceeding or
investigation, had no reasonable cause to believe his or her conduct was
unlawful.
(b) In the event Indemnitee was, is or becomes a party to or other
participant in, or is threatened to be made a party to or other participant
in, a Claim by or in the right of the Company to procure a judgement in its
favor by reason of (or arising in whole or in part out of) an Indemnifiable
Event, the Company will indemnify Indemnitee to the fullest extent permitted
by law against costs, charges and expenses, including, without limitation,
attorneys' fees and other fees and expenses, actually and reasonably incurred
by Indemnitee in connection with such Claim or any appeal therefrom, if
Indemnitee acted in good faith and in a manner he or she reasonably believed
to be in or not opposed to the best interests of the Company, except that no
indemnification shall be made in respect of any such Claim 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 or the court in which such
action, suit or 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 indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
(c) To the extent that the Indemnitee has been successful on the merits
or otherwise, including, without limitation, the dismissal of an action
without prejudice, in defense of any Claim referred to in Sections 2(a) OR 2
(b) hereof; Indemnitee shall be indemnified against costs, charges and
expenses (including attorneys' fees and other fees and expenses) actually and
reasonably incurred by him in connection therewith.
(d) Subject to the Section 3(a), any indemnification under Sections 2(a)
or 2(b), unless ordered by a court, shall be made by the Company only as
authorized in the specific case upon a determination that indemnification of
the Indemnitee is proper in the circumstances because Indemnitee has
satisfied the applicable standard set forth in Section 2(a) or 2(b), as the
case may be. Subject to Section 4(a), such determination shall
2
be made (i) by the Board of Directors of the Company (the "Board"), by a
majority vote of a quorum consisting of directors who were not parties to
such action, suit or proceeding, (ii) if such a quorum of disinterested
directors is not available or if such disinterested directors so direct, by
independent legal counsel (designated in the manner provided below in this
subsection (d)) in a written opinion or (iii) by the stockholders of the
Company (the "Stockholders") by a majority vote of Stockholders present at a
meeting at which a quorum is present Independent legal counsel shall be
designated by vote of a majority of the disinterested directors; provided,
however, that if the Board is unable or fails to so designate, such
designation shall be made by the Indemnitee subject to the approval of the
Company which approval shall not be unreasonably withheld. Independent legal
counsel shall not be any person or firm who, under the applicable standards
of professional conduct then prevailing, would have a conflict of interest in
representing either the Company or the Indemnitee in an action to determine
the Indemnitee's rights under this Agreement. The Company agrees to pay the
reasonable fees and expenses of such independent legal counsel and to
indemnify fully such counsel against costs, charges and expenses, including,
without limitation, attorneys' fees and other fees and expenses, actually and
reasonably incurred by such counsel in connection with this Agreement or the
opinion of such counsel pursuant hereto.
(e) All expenses, including, without limitation, attorneys' fees and
other fees and expenses, incurred by Indemnitee in his capacity as a director
or officer of the Company in connection with a Claim shall be paid by the
Company in advance of the final disposition of such Claim in the manner
prescribed by Section 3(b) hereof
3. Certain Procedures Relative to Indemnification and Advancement of
Expenses. (a) Except as otherwise permitted or required by the Delaware
General Corporation Law (the "DGCL"), for purposes of pursuing any rights to
indemnification under Sections 2(a), 2(b) or 4(a) hereof, as the case may be,
Indemnitee may, but shall not be required to, (i) submit to the entity
mailing the determination whether the Indemnitee is entitled to
indemnification (the "Determining Entity") a written statement of request for
indemnification stating that he or she is entitled to indemnification
hereunder and the basis for asserting such a claim for indemnification; and
(ii) present to the Company reasonable evidence of all expenses for which
payment is requested. Submission of such a written statement to the
Determining Entity shall create a presumption that the Indemnitee is entitled
to indemnification under Sections 2(a), 2(b) or 4(a) hereof, as the case may
be, and the Determining Entity shall be deemed to have determined that
Indemnitee is entitled to such indemnification unless within 30 calendar days
after receipt of such written statement the Determining Entity shall
determine (i) in the case of a determination made by the Board, by a vote of
a majority of the directors who are not parties to such suit, action or
proceeding at a meeting at which a quorum is present, (ii) in the case of a
determination made by independent legal counsel, in its judgment, or (iii) in
the case of a determination made by the Stockholders, by a vote of a majority
of the Stockholders present at a meeting of Stockholders entitled to vote
thereon at a meeting at which a quorum is present, in each case based upon
clear and convincing evidence (sufficient to rebut the foregoing presumption)
that Indemnitee is not entitled to
3
indemnification and Indemnitee shall have received notice within such 30
calendar day period in writing of such determination that Indemnitee is not
so entitled to indemnification. The notice to the Indemnitee specified in the
preceding sentence shall disclose with particularity the evidence in support
of the Determining Entity's determination. The provisions of this Section
3(a) are intended to be procedural only and shall not affect the right of
Indemnitee to indemnification under this Agreement and any determination by
the Determining Entity that the Indemnitee is not entitled to indemnification
and any failure to make the payments requested in the written statement for
indemnification shall be subject to judicial review as provided in Section 7
hereof.
(b) For purposes of determining whether to authorize advancement of
expenses pursuant to Section 2(e) hereof; Indemnitee shall submit to the
Board a sworn statement of request for advancement of expenses substantially
in the form of Exhibit 1 attached hereto and made apart hereof (the
'Undertaking"), averring that (i) he or she has reasonably incurred or will
reasonably incur actual expenses in connection with a Claim and (ii) he or
she undertakes to repay such amount if it shall ultimately be determined that
he or she is not entitled to be indemnified by the Company under this
Agreement or otherwise. For purposes of requesting advancement of expenses
pursuant to Section 4(b) hereof; Indemnitee shall submit an Undertaking or
such other form of request as he or she determines to be appropriate (an
"Expense Request"). Upon receipt of an Undertaking or Expense Request, as the
case may be, the Board shall within 10 calendar days authorize immediate
payment of the expenses stated in the Undertaking or Expense Request, as the
case may be, whereupon such payments shall immediately be made by the
Company. No security shall be required in connection with any Undertaking or
Expense Request and any Undertaking or Expense Request shall be accepted
without reference to the Indemnitee's ability to make repayment.
4. Indemnification for Additional Expenses. (a) Pursuant to Section
145(f) of the DGCL, without limiting any right which Indemnitee may have
pursuant to Section 2 hereof; the Certificate, the By-Laws, the DGCL, any
policy of insurance or otherwise, but subject to the limitations on the
maximum permissible indemnity which may exist under applicable law at the
time of any request for indemnity hereunder determined as contemplated by
this Section 4(a), the Company shall indemnify Indemnitee against any amount
which he or she is or becomes legally obligated to pay relating to or an sing
out of any Claim because of any act, failure to act or neglect or breach of
duty, including any actual or alleged error, misstatement or misleading
statement, by reason of an Indemnifiable Event. The payments which the
Company is obligated to make pursuant to this Section 4(a) shall include,
without limitation, damages, judgments, settlements and charges, costs,
expenses, expenses of investigation and expenses of defense of legal actions,
suits, proceedings or claims, including attorneys' fees, and appeals
therefrom, and expenses of appeal, attachment or similar bonds, including
attorneys' fees; provided, however, that the Company shall not be obligated
under this Section 4(a) to make any payment in connection with any claim
against Indemnitee:
4
(i) to the extent of any fine or similar governmental imposition
which the Company is prohibited by applicable law from paying which results
in a final, nonappealable order; or
(ii) to the extent based upon or attributable to Indemnitee gaining
in fact a personal profit to which he or she was not legally entitled,
including, without limitation, profits made from the purchase and sale by
Indemnitee of equity securities of the Company which are recoverable by the
Company pursuant to Section 16(b) of the Securities Exchange Act of 1934,
and profits arising from transactions in publicly traded securities of the
Company which were effected by Indemnitee in violation of Section 10(b) of the
Securities Exchange Act of 1934, including Rule 10b-5 promulgated thereunder.
The procedures set forth in Section 3(a) shall be available to the
Indemnitee for purposes on indemnification under this Section 4(a).
(b) Expenses, including without limitation, attorneys' fees and other
fees and expenses, incurred by Indemnitee in defending any actual or
threatened civil or criminal action, suit, proceeding or claim shall be paid
by the Company in advance of the final disposition thereof as authorized in
accordance with Section 3(b) hereof.
5. Partial Indemnity. Etc. If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of
the expenses, judgments, fines and amounts paid in settlement of a Claim but
not, however, for all of the total amount thereof; the Company will
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee
is entitled. Moreover, notwithstanding any other provision of this Agreement,
to the extent that Indemnitee has been successful on the merits or otherwise
in defense of any or all Claims relating in whole or in part to an
Indemnifiable Event or in defense of any issue or matter therein, including,
without limitation, dismissal without prejudice, Indemnitee will be
indemnified against all costs, charges and expenses, including, without
limitation, attorneys' fees and other fees and expenses, incurred in
connection therewith.
6. No Presumption. For purposes of this Agreement, the termination of any
Claim by judgment, order, settlement (whether with or without court
approval), or conviction, or upon a plea of nolo contendere or its
equivalent, will not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court
has determined that indemnification is not permitted by applicable law.
7. Enforcement. (a) If a claim for indemnification made to the Company is
not paid in full by the Company within 30 calendar days after a written claim
has been received by the Company, the Indemnitee may at any time thereafter
bring suit against the Company to recover the unpaid amount of the claim.
5
(b) In any action brought under Section 7(a) hereof; it shall be a
defense to a claim for indemnification pursuant to Sections 2(a) or 2(b)
hereof (other than an action brought to enforce a claim for expenses incurred
in defending any proceeding in advance of its final disposition where the
Undertaking, if any is required, has been tendered to the Company) that the
Indemnitee has not met the standards of conduct which make it permissible
under the DGCL for the Company to indemnify the Indemnitee for the amount
claimed, but the burden of proving such defense shall be on the Company.
Neither the failure of the Stockholders, to have made a determination prior
to commencement of such action that indemnification of the Indemnitee is
proper in the circumstances because he has met the applicable standard of
conduct set forth in the DGCL, nor an actual determination by the Company,
including the Board, independent legal counsel or the Stockholders, that the
Indemnitee has not met such applicable standard of conduct, shall be a
defense to the action or create a presumption that the Indemnitee has not met
the applicable standard of conduct.
(c) It is intent of the Company that the Indemnitee not be required to
incur the expenses associated with the enforcement of his rights under this
Agreement by litigation or other legal action because the cost and expense
thereof would substantially detract from the benefits intended to be extended
to the Indemnitee hereunder. Accordingly, if it should appear to the
Indemnitee that the Company has failed to comply with any of its obligations
under this Agreement or in the event that the Company or any other person
takes any action to declare this Agreement void or unenforceable, or
institutes any action, suit or proceeding designed (or having the effect of
being designed) to deny, or to recover from the Indemnitee the benefits
intended to be provided to the Indemnitee hereunder, the Company irrevocably
authorizes the Indemnitee from time to tune to retain counsel of his choice,
at the expense of the company as hereinafter provided, to represent the
Indemnitee in connection with the initiation or defense of any litigation or
other legal action, whether by or against the company or any director,
officer, stockholder or other person affiliated with the Company, in any
jurisdiction. Regardless of the outcome thereof; the Company shall pay and be
solely responsible for any and all costs, charges and expenses, including,
without limitation, attorneys' and other fees and expenses, reasonably
incurred by the Indemnitee (i) as a result of the Company's failure to
perform this Agreement or any provision thereof or (ii) as a result of the
Company or any person contesting the validity or enforceability of this
Agreement or any provision thereof as aforesaid.
8. Non-Exclusivity and Severability. (a) The rights of Indemnitee
hereunder will be in addition to any other rights Indemnitee may have under
the Certificate, the By-Laws or the DGCL or otherwise; provided, however.
that to the extent that Indemnitee otherwise would have any greater right to
indemnification under any provision of the Certificate or By-Laws as in
effect on the date hereof; Indemnitee will be deemed to have such greater
right hereunder; and, provided further that to the extent that any change is
made to the DGCL (whether by legislative action or judicial decision), the
Certificate and/or the By-Laws which permits any greater right to
indemnification than
6
that provided under this Agreement as of the date hereof; Indemnitee will be
deemed to have such greater right hereunder. The Company will not adopt any
amendment to the Certificate or the By-Laws the effect of which would be to
deny, diminish or encumber Indemnitee's right to indemnification under the
Certificate, the By-Laws, the DGCL, or otherwise as applied to any act or
failure to act occurring in whole or in part prior to the date upon which the
amendment was approved by the Company's Board of Directors and/or its
Stockholders, as the case may be.
(b) If any provision of this Agreement or the application of any
provision hereof to any person or circumstance is held invalid, unenforceable
or otherwise illegal, the remainder of this Agreement and the application of
such provision to any other person or circumstance will not be affected, and
the provision so held to be invalid, unenforceable or otherwise illegal will
be reformed to the extent (and only to the extent) necessary to make it
enforceable, valid or legal.
9. Liability Insurance. To the extent the company maintains an insurance
policy or policies providing directors' and officers' liability insurance,
Indemnitee will be covered by such policy or policies, in accordance with its
or their terms, to the maximum extent of the coverage available for any
Company director or officer.
10. Allowance for Compliance with Commission Requirements. Indemnitee
acknowledges that the Securities and Exchange Commission (the "Commission")
has expressed the opinion that indemnification of directors and officers from
liabilities under the Securities Act of 1933 ("Act") is against public policy
as expressed in the Act and is, therefore, unenforceable. Indemnitee hereby
acknowledges and agrees that it will not be a breach of this Agreement for
the Company to undertake with the Commission in connection with the
registration for sale of any shares or other securities of the Company from
time to time that, in the event of a claim for indemnification against such
liabilities (other than the payment by the company of expenses incurred or
paid by a director or officer of the company in the successful defense of any
action, suit or proceeding) is asserted in connection with such shares or
other securities being registered, the Company will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of competent jurisdiction the question of whether or not such
indemnification by the Company is against public policy as expressed in the
Act and the Company will be governed by the final adjudication of such issue.
Indemnitee further agrees that such submission to a court of competent
jurisdiction shall not be a breach of this Agreement.
11. Subrogation. In the event of a payment under this Agreement, the
Company will be subrogated to the extent of such payment to all of the
related rights of recovery of Indemnitee against other persons or entities.
Indemnitee will execute all papers reasonably required and will do everything
that may be reasonably necessary to secure such rights and enable the Company
effectively to bring suit to enforce such rights, including all of
Indemnitee's reasonable costs and expenses, including attorneys'
7
fees and disbursements, to be reimbursed by, or at the option of Indemnitee
advanced by, the Company.
12. No Duplication of Payments. The Company will not be liable under this
Agreement to make any payment in connection with any claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, the Certificate, the By-Laws or otherwise) of
the amounts otherwise indemnifiable hereunder.
13. Successors and Binding Agreement. (a) The Company will use reasonable
efforts to require any successor (whether direct or indirect, by purchase,
merger, consolidation, reorganization or otherwise) to all or substantially
all of the business or assets of the Company, by agreement in form and
substance satisfactory to Indemnitee, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent the Company
would be required to perform if no such succession had taken place. This
Agreement will be binding upon and inure to the benefit of the Company and
any successor to the Company, including, without limitation, any person
acquiring directly or indirectly all or substantially all of the business or
assets of the Company whether by purchase, merger, consolidation,
reorganization or otherwise (and such successor will thereafter be deemed the
"Company" for purposes of this Agreement), but this Agreement will not
otherwise be assignable, transferable or delegable by the Company.
(b) This Agreement will inure to the benefit of and be enforceable by
Indemnitee's personal or legal representatives, executors, administrators,
successors, heirs, distributees and legatees.
(c) This Agreement is personal in nature and neither of the parties
hereto may, without the consent of the other, assign, transfer or delegate
this Agreement or any rights or obligations hereunder except as expressly
provided in Sections 12(a) and 12(b). Without limiting the generality or
effect of the foregoing, Indemnitee's right to receive payments hereunder
will not be assignable, transferable or delegable, whether by pledge,
creation of a security interest, or otherwise, other than by a transfer by
Indemnitee's will or by the laws of descent and distribution and, in the
event of any attempted assignment or transfer contrary to this Section 12(c),
the company will have no liability to pay any amount so attempted to be
assigned, transferred or delegated.
14. Notices. For all purposes of this Agreement, all communications,
including, without limitation, notices, consents, requests or approvals,
required or permitted to be given hereunder will be in writing and will be
deemed to have duly given when hand delivered or dispatched by electronic
facsimile transmission (with receipt thereof orally confirmed), or five
calendar days after having been mailed by United States registered or
certified mail, return receipt requested, postage prepaid, or one business
day after having been sent for next-day delivery by a nationally recognized
overnight courier service such as Federal Express, UPS or Purolator,
addressed to the company, to the
8
attention of the President of the company, at its principal executive office
and to Indemnitee or Indemnitee's principal residence as shown in the
Company's most current records, or to such other address as any party may
have furnished to the other in writing and in accordance herewith, except
that notices of changes of address will be effective only upon receipt.
15. Governing Law. The validity, interpretation, construction and
performance of this Agreement will be governed by and construed in accordance
with the substantive laws of the State of Delaware, without giving effect to the
principle of conflict of laws of such State.
16. Miscellaneous. No provision of this Agreement may be waived, modified
or discharged unless such waiver, modification or discharge is agreed to in
writing signed by Indemnitee and the company. No waiver by either party
hereto at any tune of any breach by the other party hereto or compliance with
any condition or provision of this Agreement to be performed by such other
party will be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, expressed or implied with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement.
17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original but all of which
together will constitute one and the same agreement.
IN WITNESS WHEREOF, the parties to this Agreement have executed this
Agreement as of the date first above written.
OSIRIS THERAPEUTICS, INC.
By:-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and CEO
INDEMNITEE:
--------------------------------------------
9
Exhibit
UNDERTAKING
STATE OF ____________ )
) SS
COUNTY OF__________ )
I,_____________ being first duly sworn do depose and say as follows:
l. This Undertaking is submitted pursuant to the Indemnification
Agreement, dated as of February 2, 1994, between Osiris Therapeutics, Inc.
(the "Company"), a Delaware corporation and the undersigned.
2. I am requesting advancement of certain costs, charges and expenses
which I have incurred or will incur in defending an actual or pending civil
or criminal action, suit, proceeding or claim.
3. I hereby undertake to repay this advancement of expenses if it shall
ultimately be determined that I am not entitled to be indemnified by the
Company under the aforesaid Indemnification Agreement or otherwise.
4. The costs, charges and expenses for which advancement is requested
are, in general, all expenses related to ____________________.
__________________________
Subscribed and sworn to before me, a Notary Public in and for said County
and State, this ______ day of________________ 19__.
[Seal]
My commission expires the _______ day of_____________, 19__.
10