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EXHIBIT 10.65
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement") is made and entered
into this ___ day of May, 2000, between Discovery Partners International, Inc.,
a Delaware corporation ("Corporation"), and Xxxxxxxx Xxxxxxxxx ("Indemnitee").
A. Indemnitee, as a member of Corporation's Board of Indemnitees
(the "Board")and/or an officer of Corporation, performs valuable services for
Corporation.
B. The stockholders of Corporation have adopted Bylaws (the
"Bylaws") providing for the indemnification of the officers, directors, agents
and employees of Corporation to the maximum extent authorized by Section 145 of
the Delaware General Corporation Law, as amended (the "Law").
C. The Bylaws and the Law, as amended and in effect from time to
time or any successor or other statutes of Delaware having similar import and
effect, currently purport to be the controlling law governing Corporation with
respect to certain aspects of corporate law, including indemnification of
directors and officers.
D. In accordance with the authorization provided by the Law,
Corporation may from time to time purchase and maintain a policy or policies of
Indemnitees and Officers Liability Insurance ("D & O Insurance"), covering
certain liabilities which may be incurred by its directors and officers in the
performance of services as directors and officers of Corporation.
E. As a result of developments affecting the terms, scope and
availability of D & O Insurance there exists general uncertainty as to the
extent and overall desirability of protection afforded members of the Board by
such D & O Insurance, if any, and by statutory and bylaw indemnification
provisions.
G. Corporation (i) desires to attract and retain the involvement of
highly qualified individuals, such as Indemnitee, to serve Corporation and (ii)
wishes to provide for the indemnification and advancing of expenses to
Indemnitee to the maximum extent permitted by law.
H. In view of the considerations set forth above, Corporation
desires that Indemnitee be indemnified by Corporation as set forth herein.
NOW, THEREFORE, in consideration of Indemnitee's service to Corporation,
the parties hereto agree as follows:
1. Certain Definitions. The following terms used in this Agreement
shall have the meanings set forth below. Other terms are defined where
appropriate in this Agreement.
(a) "Disinterested Director" shall mean a director of
Corporation who is not or was not a party to the Proceeding in respect of which
indemnification is being sought by Indemnitee.
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(b) "Expenses" shall include all direct and indirect costs
(including, without limitation, attorneys' fees, retainers, court costs,
transcripts, fees of experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery service fees,
all other disbursements or out-of-pocket expenses and reasonable compensation
for time spent by Indemnitee for which he or she is otherwise not compensated by
Corporation) actually and reasonably incurred in connection with a Proceeding or
establishing or enforcing a right to indemnification under this Agreement,
applicable law or otherwise; provided, however, that "Expenses" shall not
include any Liabilities.
(c) "Final Adverse Determination" shall mean that a
determination that Indemnitee is not entitled to indemnification shall have been
made pursuant to Section 5 hereof and either (i) a final adjudication in a
Delaware court or decision of an arbitrator pursuant to Section 12(a) hereof
shall have denied Indemnitee's right to indemnification hereunder, or (ii)
Indemnitee shall have failed to file a complaint in a Delaware court or seek an
arbitrator's award pursuant to Section 12(a) for a period of one hundred twenty
(120) days after the determination made pursuant to Section 5 hereof.
(d) "Independent Legal Counsel" shall mean a law firm or
member of a law firm selected by Corporation and approved by Indemnitee (which
approval shall not be unreasonably withheld) and that neither is presently nor
in the past five years has been retained to represent: (i) Corporation, in any
material matter, or (ii) any other party to the Proceeding giving rise to a
claim for indemnification hereunder. Notwithstanding the foregoing, the term
"Independent Legal 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 Corporation or Indemnitee in a
Proceeding to determine Indemnitee's right to indemnification under this
Agreement.
(e) "Liabilities" shall mean liabilities of any type
whatsoever including, but not limited to, any judgments, fines, ERISA excise
taxes and penalties, and penalties and amounts paid in settlement (including all
interest assessments and other charges paid or payable in connection with or in
respect of such judgments, fines, penalties or amounts paid in settlement) of
any Proceeding.
(f) "Proceeding" shall mean any threatened, pending or
completed action, claim, suit, arbitration, alternative dispute resolution
mechanism, investigation, administrative hearing or any other proceeding whether
civil, criminal, administrative or investigative, including any appeal
therefrom.
(g) "Change of Control" shall mean the occurrence of any of
the following events after the date of this Agreement:
(i) A change in the composition of the Board, as a
result of which fewer than two-thirds (2/3) of the incumbent directors are
directors who either (1) had been directors of Corporation twenty-four (24)
months prior to such change or (2) were elected, or nominated for election, to
the Board with the affirmative votes of at least a majority of the directors who
had been directors of Corporation 24 months prior to such change and who were
still in office at the time of the election or nomination; or
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(ii) Any "person" (as such term is used in section 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended) through the
acquisition or aggregation of securities is or becomes the beneficial owner,
directly or indirectly, of securities of Corporation representing twenty percent
(20%) or more of the combined voting power of Corporation's then outstanding
securities ordinarily (and apart from rights accruing under special
circumstances) having the right to vote at elections of directors (the "Capital
Stock"), except that any change in ownership of Corporation's securities by any
person resulting solely from a reduction in the aggregate number of outstanding
shares of Capital Stock shall be disregarded until such person increases in any
manner, directly or indirectly, such person's beneficial ownership of any
securities of Corporation.
2. Indemnity of Indemnitee. Corporation hereby agrees to hold
harmless and indemnify Indemnitee to the fullest extent authorized or permitted
by the provisions of the Law, as may be amended from time to time.
3. Additional Indemnity. Subject only to the exclusions set forth in
Section 4 hereof, Corporation hereby further agrees to hold harmless and
indemnify Indemnitee:
(a) against any and all Expenses in connection with any
Proceeding (including an action by or in the right of Corporation) to which
Indemnitee is, was or at any time becomes a party, or is threatened to be made a
party, by reason of the fact that Indemnitee is, was or at any time becomes a
director, officer, employee or agent of Corporation, or is or was serving or at
any time serves at the request of Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise; and
(b) otherwise to the fullest extent as may be provided to
Indemnitee by Corporation under the non-exclusivity provisions of the Bylaws of
Corporation and the Law.
4. Limitations on Additional Indemnity. No indemnity pursuant to
Section 3 hereof shall be paid by Corporation:
(a) except to the extent the aggregate of losses to be
indemnified thereunder exceeds the sum of such losses for which the Indemnitee
is indemnified pursuant to Section 2 hereof or reimbursed pursuant to any D & O
Insurance purchased and maintained by Corporation;
(b) in respect of 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;
(c) on account of any Proceeding in which judgment is rendered
against Indemnitee for an accounting of profits made from the purchase or sale
by Indemnitee of securities of Corporation pursuant to the provisions of Section
16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar
provisions of any federal, state or local statutory law;
(d) on account of a Final Adverse Determination that
Indemnitee's conduct was knowingly fraudulent or deliberately dishonest or
constituted willful misconduct;
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(e) provided there has been no Change of Control, on account
of or arising in response to any Proceeding (other than a Proceeding referred to
in Section 10(b) or 12 hereof) initiated by Indemnitee or any of Indemnitee's
affiliates against Corporation or any officer, director or stockholder of
Corporation unless such Proceeding was authorized in the specific case by action
of the Board;
(f) if a final decision by a court having jurisdiction in the
matter shall determine that such indemnification is not lawful; or
(g) on account of any Proceeding to the extent that Indemnitee
is a plaintiff, a counter-complainant or a cross-complainant therein (other than
a Proceeding permitted by Section 4(e) hereof).
5. Procedure for Determination of Entitlement to Indemnification.
(a) Whenever Indemnitee believes that he or she is entitled to
indemnification pursuant to this Agreement, Indemnitee shall submit a written
request for indemnification to Corporation. Any request for indemnification
shall include sufficient documentation or information reasonably available to
Indemnitee to support his or her claim for indemnification. Indemnitee shall
submit his or her claim for indemnification within a reasonable time not to
exceed five years after any judgment, order, settlement, dismissal, arbitration
award, conviction, acceptance of a plea of nolo contendere or its equivalent,
final termination or other disposition or partial disposition of any Proceeding,
whichever is the later date for which Indemnitee requests indemnification. The
President, Secretary or other appropriate officer shall, promptly upon receipt
of Indemnitee's request for indemnification, advise the Board in writing that
Indemnitee has made such a request. Determination of Indemnitee's entitlement to
indemnification shall be made not later than ninety (90) days after
Corporation's receipt of his or her written request for such indemnification.
(b) The Indemnitee shall be entitled to select the forum in
which Indemnitee's request for indemnification will be heard, which selection
shall be included in the written request for indemnification required in Section
5(a). This forum shall be any one of the following:
(i) The stockholders of Corporation;
(ii) A quorum of the Board consisting of Disinterested
Directors;
(iii) Independent Legal Counsel, who shall make the
determination in a written opinion; or
(iv) A panel of three arbitrators, one selected by
Corporation, another by Indemnitee and the third by the first two arbitrators
selected. If for any reason three arbitrators are not selected within thirty
(30) days after the appointment of the first arbitrator, then selection of
additional arbitrators shall be made by the American Arbitration Association. If
any arbitrator resigns or is unable to serve in such capacity for any reason,
the American Arbitration Association shall select his or her replacement. The
arbitration shall be conducted pursuant to the commercial arbitration rules of
the American Arbitration Association now in effect.
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If Indemnitee fails to make such designation, his or her claim shall be
determined by the forum selected by Corporation.
6. Presumption and Effect of Certain Proceedings. Upon making a
request for indemnification, Indemnitee shall be presumed to be entitled to
indemnification under this Agreement and Corporation shall have the burden of
proof to overcome that presumption in reaching any contrary determination. The
termination of any Proceeding by judgment, order, settlement, arbitration award
or conviction, or upon a plea of nolo contendere or its equivalent shall not
affect this presumption or, except as may be provided in Section 4 hereof,
establish a presumption with regard to any factual matter relevant to
determining Indemnitee's rights to indemnification hereunder. If the person or
persons so empowered to make a determination pursuant to Section 5(b) hereof
shall have failed to make the requested determination within thirty (30) days
after any judgment, order, settlement, dismissal, arbitration award, conviction,
acceptance of a plea of nolo contendere or its equivalent, or other disposition
or partial disposition of any Proceeding or any other event which could enable
Corporation to determine Indemnitee's entitlement to indemnification, the
requisite determination that Indemnitee is entitled to indemnification shall be
deemed to have been made.
7. Contribution. If the indemnification provided in Sections 2 and 3
is unavailable and may not be paid to Indemnitee for any reason other than those
set forth in Section 4, then in respect of any Proceeding in which Corporation
is or is alleged to be jointly liable with Indemnitee (or would be if joined in
such Proceeding), Corporation shall contribute to the amount of Expenses and
Liabilities paid or payable by Indemnitee in such proportion as is appropriate
to reflect (i) the relative benefits received by Corporation on the one hand and
Indemnitee on the other hand from the transaction from which such Proceeding
arose, and (ii) the relative fault of Corporation on the one hand and of
Indemnitee on the other hand in connection with the events which resulted in
such Expenses and Liabilities, as well as any other relevant equitable
considerations. The relative fault of Corporation on the one hand and of
Indemnitee on the other 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 and
Liabilities. Corporation agrees that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
or any other method of allocation which does not take account of the foregoing
equitable considerations.
8. Insurance and Funding. Corporation hereby represents and warrants
that it shall purchase and maintain insurance to protect itself and/or
Indemnitee against any Expenses and Liabilities in connection with any
Proceeding to the fullest extent permitted by the Law.
9. Continuation of Obligations. All agreements and obligations of
Corporation contained herein shall continue during the period Indemnitee is a
director, officer, employee or agent of Corporation (or is or was serving at the
request of Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise) and shall continue thereafter so long as Indemnitee shall be subject
to any possible Proceeding, by reason of the fact that Indemnitee was serving
Corporation or such other entity in any capacity referred to herein.
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10. Notification and Defense of Claim. Promptly after receipt by
Indemnitee of notice of the commencement of any Proceeding, Indemnitee will, if
a claim in respect thereof is to be made against Corporation under this
Agreement, notify Corporation of the commencement thereof; but the omission so
to notify Corporation will not relieve it from any liability which it may have
to Indemnitee otherwise than under this Agreement. With respect to any
Proceeding as to which Indemnitee notifies Corporation of the commencement
thereof:
(a) Corporation will be entitled to participate therein at its
own expense;
(b) Except as otherwise provided below, to the extent that it
may wish, Corporation jointly with any other indemnifying party similarly
notified will be entitled to assume the defense thereof, with counsel reasonably
satisfactory to Indemnitee. After notice from Corporation to Indemnitee of its
election to assume the defense thereof, Corporation will not be liable to
Indemnitee under this Agreement for any Expenses subsequently incurred by
Indemnitee in connection with the defense thereof other than reasonable costs of
investigation or as otherwise provided below. Indemnitee shall have the right to
employ his or her own counsel in such Proceeding but the Expenses associated
with the employment of such counsel incurred after notice from Corporation of
its assumption of the defense thereof shall be at the expense of Indemnitee
unless (i) the employment of counsel by Indemnitee has been authorized by
Corporation, (ii) Indemnitee shall have reasonably concluded that there may be a
conflict of interest between Corporation and Indemnitee in the conduct of the
defense of such Proceeding or (iii) Corporation shall not in fact have employed
counsel to assume the defense of such Proceeding, in each of which cases the
Expenses of Indemnitee's separate counsel shall be at the expense of
Corporation. Corporation shall not be entitled to assume the defense of any
Proceeding brought by or on behalf of Corporation or as to which Indemnitee
shall have made the conclusion provided for in (ii) above; and
(c) Provided there has been no Change of Control, Corporation
shall not be liable to indemnify Indemnitee under this Agreement for any amounts
paid in settlement of any Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. Corporation shall be permitted to
settle any Proceeding except that it shall not settle any Proceeding in any
manner which would impose any penalty, out-of-pocket liability, or limitation on
Indemnitee without Indemnitee's written consent.
11. Advancement and Repayment of Expenses.
(a) In the event that Indemnitee employs his or her own
counsel pursuant to Section 10(b)(i) through (iii) above, Corporation shall
advance to Indemnitee, prior to any final disposition of any Proceeding any and
all Expenses incurred in investigating or defending any such Proceeding within
ten (10) days after receiving copies of invoices presented to Indemnitee for
such Expenses.
(b) Indemnitee agrees that Indemnitee will reimburse
Corporation for all Expenses paid by Corporation in defending any Proceeding
against Indemnitee in the event and only to the extent that there has been a
Final Adverse Determination that Indemnitee is not entitled, under the
provisions of the Law, the Bylaws, this Agreement or otherwise, to be
indemnified by Corporation for such Expenses.
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12. Remedies of Indemnitee.
(a) In the event that (i) a determination pursuant to Section
5 hereof is made that Indemnitee is not entitled to indemnification, (ii)
advances of Expenses are not made pursuant to this Agreement, (iii) payment has
not been timely made following a determination of entitlement to indemnification
pursuant to this Agreement, or (iv) Indemnitee otherwise seeks enforcement of
this Agreement, Indemnitee shall be entitled to a final adjudication in an
appropriate court of his or her rights. Alternatively, Indemnitee at his or her
option may seek an award in arbitration to be conducted by a single arbitrator
pursuant to the commercial arbitration rules of the American Arbitration
Association now in effect, whose decision is to be made within ninety (90) days
following the filing of the demand for arbitration. The Corporation shall not
oppose Indemnitee's right to seek any such adjudication or arbitration award.
(b) In the event that a determination that Indemnitee is not
entitled to indemnification, in whole or in part, has been made pursuant to
Section 5 hereof, the decision in the judicial proceeding or arbitration
provided in paragraph (a) of this Section 12 shall be made de novo and
Indemnitee shall not be prejudiced by reason of a determination that he or she
is not entitled to indemnification.
(c) If a determination that Indemnitee is entitled to
indemnification has been made pursuant to Section 5 hereof or otherwise pursuant
to the terms of this Agreement, Corporation shall be bound by such determination
in the absence of (i) a misrepresentation of a material fact by Indemnitee or
(ii) a specific finding (which has become final) by an appropriate court that
all or any part of such indemnification is expressly prohibited by law.
(d) In any court proceeding pursuant to this Section 12,
Corporation shall be precluded from asserting that the procedures and
presumptions of this Agreement are not valid, binding and enforceable. The
Corporation shall stipulate in any such court or before any such arbitrator that
Corporation is bound by all the provisions of this Agreement and is precluded
from making any assertion to the contrary.
(e) Expenses reasonably incurred by Indemnitee in connection
with his or her request for indemnification under this Agreement, meeting
enforcement of this Agreement or to recover damages for breach of this Agreement
shall be borne by Corporation.
(f) Corporation and Indemnitee agree herein that a monetary
remedy for breach of this Agreement, at some later date, will be inadequate,
impracticable and difficult to prove, and further agree that such breach would
cause Indemnitee irreparable harm. Accordingly, Corporation and Indemnitee agree
that Indemnitee shall be entitled to temporary and permanent injunctive relief
to enforce this Agreement without the necessity of proving actual damages or
irreparable harm. The Corporation and Indemnitee further agree that Indemnitee
shall be entitled to such injunctive relief, including temporary restraining
orders, preliminary injunctions and permanent injunctions, without the necessity
of posting bond or other undertaking in connection therewith. Any such
requirement of bond or undertaking is hereby waived by Corporation, and
Corporation acknowledges that in the absence of such a waiver, a bond or
undertaking may be required by the court.
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13. Enforcement. Corporation expressly confirms and agrees that it
has entered into this Agreement and assumed the obligations imposed on
Corporation hereby in order to induce Indemnitee to continue as a director of
Corporation, and acknowledges that Indemnitee is relying upon this Agreement in
continuing in such capacity.
14. Separability. Each of the provisions of this Agreement is a
separate and distinct agreement and independent of the others, so that if any or
all of the provisions hereof shall be held to be invalid or unenforceable to any
extent for any reason, such invalidity or unenforceability shall not affect the
validity or enforceability of the other provisions hereof, or the obligation of
the Corporation to indemnify Indemnitee to the full extent provided by the
Bylaws or the Law, and the affected provision shall be construed and enforced so
as to effectuate the parties' intent to the maximum extent possible.
15. Governing Law. This Agreement shall be governed by and
interpreted and enforced in accordance with the internal laws of the State of
Delaware.
16. Consent to Jurisdiction. The Corporation and Indemnitee each
irrevocably consent to jurisdiction of the courts of the State of Delaware for
all purposes in connection with any Proceeding which arises out of or relates to
this Agreement and agree that any Proceeding instituted under this Agreement
shall be brought only in the state courts of the State of Delaware.
17. Binding Effect. This Agreement shall be binding upon Indemnitee
and upon Corporation, its successors and assigns, and shall inure to the benefit
of Indemnitee, his or her heirs, executors, administrators, personal
representatives and assigns and to the benefit of Corporation, its successors
and assigns.
18. Entire Agreement. This Agreement represents the entire agreement
between the parties hereto and there are no other agreements, contracts or
understandings between the parties hereto with respect to the subject matter of
this Agreement, except as specifically referred to herein. This Agreement
supersedes any and all agreements regarding indemnification heretofore entered
into by the parties.
19. Amendment and Termination. No amendment, modification, waiver,
termination or cancellation of this Agreement shall be effective for any purpose
unless set forth in writing signed by both parties hereto.
20. Subrogation. In the event of payment under this Agreement,
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all documents required and
shall do all acts that may be necessary to secure such rights and to enable
Corporation effectively to bring suit to enforce such rights.
21. Non-Exclusivity of Rights. The rights conferred on Indemnitee by
this Agreement shall not be exclusive of any other right which Indemnitee may
have or hereafter acquire under any statute, provision of Corporation's
Certificate of Incorporation or Bylaws, agreement, vote of stockholders or
directors, or otherwise, both as to action in his official capacity and as to
action in another capacity while holding office.
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22. Survival of Rights. The rights conferred on Indemnitee by this
Agreement shall continue after Indemnitee has ceased to be a director, officer,
employee or other agent of Corporation or such other entity.
23. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be addressed to Indemnitee or to
Corporation, as the case may be, at the address shown on page 1 of this
Agreement, or to such other address as may have been furnished by either party
to the other, and shall be deemed to have been duly given if (a) delivered by
hand and receipted for by the party to whom said notice or other communication
shall have been directed, or (b) mailed by certified or registered mail with
postage prepaid, on the third business day after the date on which it is so
mailed.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.
INDEMNITEE: DISCOVERY PARTNERS
INTERNATIONAL, INC.,
a Delaware corporation
______________________________ By: _______________________________
Its: _______________________________
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