EXHIBIT 10.41
ENDOLOGIX, INC.
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT is made as of October 1, 2002, between
Endologix, Inc., a Delaware corporation (the "Company"), and____________________
("Indemnitee"), an officer and/or member of the Board of Directors of the
Company.
WHEREAS, the Company desires the benefits of having Indemnitee serve as
an officer and/or director secure in the knowledge that expenses, liability and
losses incurred by him/her in his/her good faith service to the Company will be
borne by the Company or its successors and assigns in accordance with applicable
law; and
WHEREAS, the Company desires that Indemnitee resist and defend against
what Indemnitee may consider to be unjustified investigations, claims, actions,
suits and proceedings which have arisen or may arise in the future as a result
of Indemnitee's past or future service to the Company; and
WHEREAS, the parties believe it appropriate to memorialize and reaffirm
the Company's indemnification obligations to Indemnitee and, in addition, set
forth the indemnification agreements contained herein.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties agree as follows:
1. Indemnification. Indemnitee shall be indemnified and held
harmless by the Company to the fullest extent permitted by its Amended and
Restated Certificate of Incorporation (the "Certificate of Incorporation"),
Bylaws and applicable law, as the same exists or may hereafter be amended,
against all expenses, liability and loss (including attorneys' fees, judgments,
fines, and amounts paid or to be paid in any settlement approved in advance by
the Company, such approval not to be unreasonably withheld) (collectively,
"Indefinable Expenses") actually and reasonably incurred or suffered by
Indemnitee in connection with any present or future threatened, pending or
contemplated investigation, claim, action, suit or proceeding, whether civil,
criminal, administrative or investigative (collectively, "Indemnifiable
Litigation"): (i) to which Indemnitee is or was a party or is threatened to be
made a party by reason of any action or inaction in Indemnitee's capacity as a
director, officer, employee or agent of the Company; or (ii) with respect to
which Indemnitee is otherwise involved by reason of the fact that Indemnitee is
or was serving as a director, officer, employee, agent or advisor of the
Company, or of any subsidiary or division, or is or was serving at the request
of the Company as a director, officer, employee, agent or advisor of another
corporation, partnership, joint venture, trust or other enterprise.
Notwithstanding the foregoing: (i) Indemnitee shall have no right to
indemnification for expenses and the payment of profits arising from the
purchase and sale by Indemnitee of securities in violation of Section 16(b) of
the Securities and Exchange Act of 1934, as amended; and (ii) Indemnitee's
rights under this Agreement are not being limited by any terms or provisions of
the Certificate of Incorporation or the Bylaws that are or would be more
restrictive than as provided in this Agreement. To the extent that a change in
applicable law, whether by statute or judicial decision, permits greater
indemnification than would currently be
afforded under the Company's Certificate of Incorporation, Bylaws and/or
applicable law, it is the intent of the parties hereto that Indemnitee shall
enjoy by this Agreement the greater benefits so afforded by such change. This
Agreement and all indemnification obligations of the Company shall apply fully
to all claims, costs, expenses and liabilities connected with or arising at any
time against Indemnitee on account of his or her past, present or future
services or affiliation as a director, officer, employee or advisor of the
Company.
2. Interim Expenses. The Company agrees to pay Indemnifiable
Expenses incurred by Indemnitee in connection with any Indemnifiable Litigation
in advance of the final disposition thereof, provided that the Company has
received an undertaking by or on behalf of Indemnitee, substantially in the form
attached hereto as Exhibit A, to repay the amount so advanced to the extent that
it is ultimately determined that Indemnitee is not entitled to be indemnified by
the Company under this Agreement or otherwise. The advances to be made hereunder
shall be paid by the Company to Indemnitee within ten (10) days following
delivery of a written request therefor by Indemnitee to the Company. Any
advances and undertakings pursuant to this Section 2 shall not be construed as a
loan and be unsecured and interest free.
3. Trust Fund.
(a) The Company may, but is not obligated to, establish a
trust (the "Trust") to fund certain of its obligations under this Agreement and
similar agreements with other directors and/or officers (collectively, including
Indemnitee, the "Beneficiaries"). Therefore, in such event, in addition to
Indemnitee's rights under this Indemnification Agreement and any applicable
insurance policy, Indemnitee shall also have the right to seek indemnification
payments from the trustee (the "Trustee") of any such trust that may be
established hereafter in accordance with the terms of this Agreement and of the
trust agreement.
(b) All communications or demands made by and among the
Trustee and the Beneficiaries of any such Trust are to be made through the
individual designated as the Beneficiaries' Representative. As of the date of
this Agreement, a Trust has not been established, nor has a Beneficiaries'
Representative been designated. The Beneficiaries' Representative shall be
designated and may be changed from time to time and at any time upon agreement
of two-thirds of the Beneficiaries at such time.
4. Procedure for Making Demand. Indemnitee shall give the Company
notice in writing of any claim made against Indemnitee for which indemnification
will or could be sought under this Agreement. Notice to the Company shall be
directed to the Chief Executive Officer of the Company at the address set forth
in this Agreement (or such other address as the Company shall designate in
writing to Indemnitee). Notice shall be deemed received three business days
after the date postmarked and sent by certified or registered mail, properly
addressed; otherwise notice shall be deemed received when such notice shall
actually be received by the Company. In addition, Indemnitee shall give the
Company such information and cooperation as it may reasonably require and as
shall be within Indemnitee's power. Any indemnification provided for in Section
1 shall be made no later than twenty (20) days after receipt of the written
request of Indemnitee.
5. Failure to Indemnify.
(a) If a claim under this Agreement, or any statute, or
under any provision of the Company's Certificate of Incorporation or Bylaws
providing for indemnification, is not paid in full
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by the Company, Insurance Company or, if the Trust Fund shall have been
established, by the Trustee, within twenty (20) days after a written request for
payment thereof has been received by the Company, Indemnitee may, but need not,
at any time thereafter bring an action against the Company to recover the unpaid
amount of the claim and, subject to Section 12, if successful in whole or in
part, Indemnitee shall also be entitled to be paid for the expense (including
but not limited to attorneys' fees and costs) of bringing such action.
(b) It shall be a defense to such action (other than an
action brought to enforce a claim for expenses incurred in connection with any
action, suit or proceeding in advance of its final disposition) that Indemnitee
has not met the standard of conduct which makes it permissible under applicable
law for the Company to indemnify Indemnitee for the amount claimed, but the
burden of proving such defense shall be on the Company and Indemnitee shall be
entitled to receive interim payments of interim expenses pursuant to Section 2
hereof unless and until such defense may be finally adjudicated by court order
or judgment from which no further right of appeal exists. It is the parties'
intention that if the Company contests Indemnitee's right to indemnification,
the question of Indemnitee's right to indemnification shall be for the court to
decide, and neither the failure of the Company (including its board of
directors, independent legal counsel, or its stockholders) to have made a
determination that indemnification of Indemnitee is proper in the circumstances
because Indemnitee has met the applicable standard of conduct required by
applicable law, nor an actual determination by the Company (including its board
of directors, any committee or subgroup of the board of directors, independent
legal counsel, or its stockholders) that Indemnitee has not met such applicable
standard of conduct, shall create a presumption that Indemnitee has or has not
met the applicable standard of conduct.
6. Notice to Insurers. If, at the time of the receipt of a notice
of a claim pursuant to Section 4 thereof, the Company has director and/or
officer liability insurance in effect, the Company shall give prompt notice of
the commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies. When and to the extent that such
insurers pay Indemnifiable Expenses, such Indemnifiable Expenses shall be
considered paid for purposes of this Agreement; and if Indemnitee shall be
compensated for the same Indemnifiable Expenses by such insurers and the
Company, the Indemnitee shall hold for the benefit of the Company and remit to
the Company the insurance proceeds in excess of that necessary to pay such and
all other Indemnifiable Expenses.
7. Retention of Counsel. In the event that the Company shall be
obligated to pay Indemnifiable Expenses as a result of any proceeding against
Indemnitee, the Company, subject to clauses (ii)(A) and (ii)(B) of the second
sentence of this Section 7, shall be entitled to assume the defense of such
proceeding, with counsel reasonably approved by Indemnitee, which approval shall
not be unreasonably withheld, upon the delivery to Indemnitee of written notice
of its election to do so. After delivery of such notice, approval of such
counsel by Indemnitee and the retention of such counsel by the Company, the
Company will not be liable to Indemnitee under this Agreement for any fees of
counsel subsequently incurred by that Indemnitee with respect to that same
proceeding, provided that (i) Indemnitee shall have the right to employ his or
her counsel in any such proceeding at Indemnitee's expense, and (ii) if (A)
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of any such defense,
or (B) the Company shall not, in fact, have employed counsel to assume defense
of such proceeding, then the fees and expenses of Indemnitee's counsel shall be
at the expense of the Company.
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8. Successors. This Agreement establishes contract rights which
shall be binding upon, and shall inure to the benefit of, the successors,
assigns, heirs and legal representatives of the parties hereto.
9. Mutual Acknowledgment. Both the Company and Indemnitee
acknowledge that in certain instances, Federal law or applicable public policy
may prohibit the Company from indemnifying its directors and officers under this
Agreement or otherwise. Indemnitee understands and acknowledges that the Company
may be required in the future to undertake to the Securities and Exchange
Commission to submit the question of indemnification to a court in certain
circumstances for a determination of the Company's right under public policy to
indemnify Indemnitee, and, in that event, the Indemnitee's rights and the
Company's obligations hereunder shall be subject to that determination.
10. Contract Rights Not Exclusive. The contract rights conferred by
this Agreement shall be in addition to, but not exclusive of, any other right
which Indemnitee may have or may hereafter acquire under any statute, provision
of the Company's Certificate of Incorporation or Bylaws, agreement, vote of
shareholders or disinterested directors, policy of insurance, or otherwise, and
the rights of Indemnitee under each thereof shall be cumulative and not
exclusive of one another.
11. Indemnitee's Obligations. The Indemnitee shall promptly advise
the Company in writing of the institution of any investigation, claim, action,
suit or proceeding which is or may be subject to this Agreement and keep the
Company generally informed of, and consult with the Company with respect to, the
status of any such investigation, claim, action, suit or proceeding. Notices to
the Company shall be directed to Endologix, Inc., 00000 Xxxxx Xxxxxxx, Xxxxx
000, Xxxxxx, Xxxxxxxxxx 00000, Attn: CEO (or other such address as the Company
shall designate in writing to Indemnitee). Notice shall be deemed received three
days after the date postmarked if sent by certified or registered mail, properly
addressed. In addition, Indemnitee shall give the Company such information and
cooperation as it may reasonably require and as shall be within Indemnitee's
power.
12. Attorneys' Fees. In the event that any action is instituted by
Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court costs and expenses, including
reasonable attorneys' fees, incurred by Indemnitee with respect to such action,
unless as a part of such action, a court of competent jurisdiction determines
that each of the material assertions made by Indemnitee as a basis for such
action were not made in good faith or were frivolous. In the event of an action
instituted by or in the name of the Company under this Agreement, or to enforce
or interpret any other terms of this Agreement, Indemnitee shall be entitled to
be paid all court costs and expenses, including attorneys' fees, incurred by
Indemnitee in defense of such action (including with respect to Indemnitee's
counterclaims and cross-claims made in such action), unless as a part of such
action the court determines that each of Indemnitee's material defenses to such
action were made in bad faith or were frivolous. These rights are in addition to
Indemnitee's rights to recover Indemnifiable Expenses of any nature or
description, including but not limited to attorneys' fees and costs.
13. Severability. Should any provision of this Agreement, or any
clause hereof, be held to be invalid, illegal or unenforceable, in whole or in
part, the remaining provisions and clauses of this Agreement shall remain fully
enforceable and binding on the parties.
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14. Modification and Waiver. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether of not similar) nor shall such waiver constitute a continuing waiver.
15. Choice of Law. The validity, interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
Delaware.
IN WITNESS WHEREOF, the parties have executed this Indemnification
Agreement as of the day and year first written above.
INDEMNITEE ENDOLOGIX, INC.
By: /s/ Xxxxxxxx X. Xxxxx
______________________________ ________________________________________
Name: Name: Xxxxxxxx X. Xxxxx
Title Chairman and Chief Executive
Officer
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EXHIBIT A
UNDERTAKING AGREEMENT
This UNDERTAKING AGREEMENT is made as of ____________, between
Endologix, Inc., a Delaware corporation (the "Company"), and___________________,
a member of the board of directors and/or an officer of the Company
("Indemnitee").
WHEREAS, Indemnitee may become involved in investigations, claims,
actions, suits or proceedings which have arisen or may arise in the future as a
result of Indemnitee's service to the Company; and
WHEREAS, Indemnitee desires that the Company pay any and all expenses
(including, but not limited to, attorneys' fees and court costs) actually and
reasonably incurred by Indemnitee or on Indemnitee's behalf in defending or
investigating any such suits or claims and that such payment be made in advance
of the final disposition of such investigations, claims, actions, suits or
proceedings to the extent that Indemnitee has not been previously reimbursed by
insurance; and
WHEREAS, the Company is willing to make such payments but, in
accordance with the Certificate of Incorporation and/or Bylaws of the Company
and Section 145 of the General Corporation Law of the State of Delaware, the
Company may make such payments only if it receives an undertaking to repay from
Indemnitee.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties agree as follows:
1. In regard to any payments made by the Company to Indemnitee
pursuant to the terms of the Indemnification Agreement dated as of __________,
2002, between the Company and Indemnitee, Indemnitee hereby undertakes and
agrees to repay to the Company any and all amounts so paid promptly and in any
event within thirty (30) days after the disposition, including any appeals, of
any litigation or threatened litigation on account of which payments were made,
but only to the extent that Indemnitee is ultimately found not to be entitled to
be indemnified by the Company under the Certificate of Incorporation and/or
Bylaws of the Company and Section 145 of the General Corporation Law of the
State of Delaware, or other applicable law.
2. This Agreement shall not affect in any manner rights which
Indemnitee may have against the Company, any insurer or any other person to seek
indemnification for or reimbursement of any expenses referred to herein or any
judgment which may be rendered in any litigation or proceeding.
IN WITNESS WHEREOF, the parties have caused this Undertaking Agreement
to be executed on the date first above written.
INDEMNITEE ENDOLOGIX, INC.
______________________________ By:________________________________________
Name: Name: Xxxxxxxx X. Xxxxx
Title Chairman and Chief Executive
Officer
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