EXHIBIT 10.1

 

INDEMNITY AGREEMENT

 

THIS INDEMNITY AGREEMENT (this “Agreement”) is made as of March     , 2003, by
and between Vicuron Pharmaceuticals Inc., a Delaware corporation (the
“Company”), and                            (the “Indemnitee”), a director
[and/or officer] of the Company.

 

THE PARTIES TO THIS AGREEMENT enter into this Agreement on the basis of the
following facts, intentions and understandings:

 

A.            THE INDEMNITEE IS CURRENTLY SERVING AS A DIRECTOR [AND/OR AN
OFFICER] OF THE COMPANY AND IN SUCH CAPACITY RENDERS VALUABLE SERVICES TO THE
COMPANY.

 

B.            THE COMPANY HAS INVESTIGATED THE AVAILABILITY AND SUFFICIENCY OF
LIABILITY INSURANCE AND DELAWARE STATUTORY INDEMNIFICATION PROVISIONS TO PROVIDE
ITS DIRECTORS AND OFFICERS WITH ADEQUATE PROTECTION AGAINST VARIOUS LEGAL RISKS
AND POTENTIAL LIABILITIES TO WHICH DIRECTORS AND OFFICERS ARE SUBJECT DUE TO
THEIR POSITION WITH THE COMPANY AND HAS CONCLUDED THAT INSURANCE AND STATUTORY
PROVISIONS MAY PROVIDE INADEQUATE AND UNACCEPTABLE PROTECTION TO CERTAIN
INDIVIDUALS REQUESTED TO SERVE AS ITS DIRECTORS AND OFFICERS.

 

C.            IN ORDER TO INDUCE AND ENCOURAGE HIGHLY EXPERIENCED AND CAPABLE
PERSONS SUCH AS THE INDEMNITEE TO CONTINUE TO SERVE AS A DIRECTOR [AND/OR
OFFICER] OF THE COMPANY, THE BOARD OF DIRECTORS HAS DETERMINED, AFTER DUE
CONSIDERATION AND INVESTIGATION OF THE TERMS AND PROVISIONS OF THIS AGREEMENT
AND THE VARIOUS OTHER OPTIONS AVAILABLE TO THE COMPANY AND THE INDEMNITEE IN
LIEU OF THIS AGREEMENT, THAT THIS AGREEMENT IS NOT ONLY REASONABLE AND PRUDENT
BUT NECESSARY TO PROMOTE AND ENSURE THE BEST INTERESTS OF THE COMPANY AND ITS
SHAREHOLDERS.

 

 

NOW, THEREFORE, In consideration of the continued services of the Indemnitee and
in order to induce the Indemnitee to continue to serve as a director [and/or
officer], the Company and the Indemnitee agree as follows:

 

SECTION 1.              DEFINITIONS

 

As used in this Agreement:

 

(a)           A “Change in Control” shall be deemed to have occurred if (i) any
“person” (as that term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), other than a trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or 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, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing

 

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20% or more of the total voting power represented by the Company’s then
outstanding voting securities, or (ii) during any period of two consecutive
years, individuals who at the beginning of the two year 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 stockholders 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 of the Board of Directors, or (iii) the
stockholders 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 to
such a merger or consolidation 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 the surviving entity outstanding immediately after
the merger or consolidation, or the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company (in one transaction or a series of transactions) of
all or substantially all the Company’s assets.

 

(b)           The term “Expenses” includes, without limitation, attorneys’ fees,
disbursements and retainers, accounting and witness fees, travel and deposition
costs, expenses of investigations, judicial or administrative proceedings or
appeals, amounts paid in settlement by or on behalf of Indemnitee, and any
expenses of establishing a right to indemnification, pursuant to this Agreement
or otherwise including reasonable compensation for time spent by the Indemnitee
in connection with the investigation, defense or appeal of a Proceeding or
action for indemnification for which he is not otherwise compensated by the
Company or any third party.  The term “Expenses” does not include the amount of
judgments, fines, penalties or ERISA excise taxes actually levied against the
Indemnitee.

 

(c)           The term “fullest extent permitted by applicable law” shall mean
the fullest extent authorized or permitted by the Fourth Amended and Restated
Certificate of Incorporation of the Company (the “Certificate of
Incorporation”), the Bylaws of the Company, as amended and restated by the Board
of Directors on July 30, 2002 (the “Bylaws”), and any applicable law as each of
the foregoing may be amended from time to time (but, in the case of an
amendment, only to the extent that such amendment permits the Company to provide
broader indemnification rights than the Certificate of Incorporation, the Bylaws
or such law, as applicable, permitted prior to the adoption of such amendment).

 

(d)           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
(including the Company) publicly announces an intention to take or to consider
taking actions which if consummated would constitute a Change in Control; (iii)
any person (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 stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company),
who is or becomes the beneficial owner, directly or indirectly, of securities of
the Company representing 10% or more of the combined voting power of the
Company’s then outstanding voting securities increases his

 

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beneficial ownership of the securities by 5% or more over the percentage so
owned by that person on the date this Agreement is executed; or (iv) the Board
adopts a resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control has occurred.

 

(e)           The term “Proceeding” shall include any threatened, pending or
completed action, suit or proceeding, whether brought by or in the name of the
Company or otherwise and whether of a civil, criminal or administrative or
investigative nature, by reason of the fact that the Indemnitee is or was a
director or officer of the Company, or is or was serving at the request of the
Company as a director, officer, employee or agent of another enterprise, whether
or not he is serving in such capacity at the time any liability or Expense is
incurred for which indemnification or reimbursement is to be provided under this
Agreement, and the term shall expressly include, without limitation, any
proceeding commenced by or on behalf of any Italian tax authority seeking to
hold the Indemnitee personally liable (or jointly liable with the Company or any
subsidiary) for any penalties asserted in connection with any alleged breach of
any Italian tax or fiscal law by the Company or any subsidiary.

 

SECTION 2.              INDEMNIFICATION

 

2.1           Indemnification in Third Party Actions.  The Company shall
indemnify the Indemnitee in accordance with the provisions of this subsection
2.1 if the Indemnitee is a party to or threatened to be made a party to or
otherwise involved in any Proceeding (other than a Proceeding by or in the name
of the Corporation to procure a judgment in its favor), by reason of the fact
that the Indemnitee is or was a director or officer of the Company, or is or was
serving at the request of the Company as a director, officer, employee or agent
of another enterprise against all Expenses, judgments, fines, penalties and
ERISA excise tax actually and reasonably incurred by the Indemnitee in
connection with the defense or settlement of the Proceeding, to the fullest
extent permitted by applicable law; provided that any settlement be approved in
writing by the Company.

 

2.2           Indemnification in Proceedings By or In the Name of the Company. 
The Company shall indemnify the Indemnitee in accordance with the provisions of
this subsection 2.2 if the Indemnitee is a party to or threatened to be made a
party to or otherwise involved in any Proceeding by or in the name of the
Company to procure a judgment in its favor by reason of the fact that Indemnitee
was or is a director or officer of the Company, or is or was serving at the
request of the Company as a director, officer, employee or agent of another
enterprise, against all Expenses actually and reasonably incurred by Indemnitee
in connection with the defense or settlement of the Proceeding, to the fullest
extent permitted by applicable law.

 

2.3           Partial Indemnification.  If the Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of, but not the total amount of, the Expenses, judgments, fines,
penalties or ERISA excise taxes actually and reasonably incurred by him in the
investigation, defense, appeal or settlement of any Proceeding, the Company
shall nevertheless indemnify the Indemnitee for the portion of the Expenses,
judgments, fines, penalties or ERISA excise taxes to which the Indemnitee is
entitled.

 

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2.4           Indemnification Hereunder Not Exclusive.  The indemnification
provided by this Agreement shall not be deemed exclusive of any other rights to
which the Indemnitee may be entitled under the Certificate of Incorporation, as
the same may be amended from time to time, the Bylaws, as may be amended from
time to time, any agreement [including, without limitation, that certain
Indemnity Agreement dated October 29, 1999], any vote of stockholders or
disinterested directors, applicable law, or otherwise, both as to action in his
official capacity and as to action in another capacity on behalf of the Company
while holding office.

 

2.5           Indemnification of Expenses of Successful Party.  Notwithstanding
any other provisions of this Agreement, to the extent that the Indemnitee has
been successful in defense of any Proceeding or in defense of any claim, issue
or matter in the Proceeding, on the merits or otherwise, including the dismissal
of a Proceeding without prejudice , the Indemnitee shall be indemnified against
all Expenses incurred in connection therewith to the fullest extent permitted by
applicable law.

 

SECTION 3.              PRESUMPTIONS

 

3.1           Presumption Regarding Standard of Conduct .  The Indemnitee shall
be conclusively presumed to have met the relevant standards of conduct as
defined by applicable law for indemnification pursuant to this Agreement, unless
a determination that the Indemnitee has not met the relevant standards is made
by (i) the Board of Directors of the Company by a majority vote of a quorum
consisting of directors who were not parties to the Proceedings, (ii) the
stockholders of the Company by majority vote, or (iii) in a written opinion by
independent legal counsel, selection of whom has been approved by the Indemnitee
in writing.

 

3.2           Determination of Right to Indemnification.  If a claim under this
Agreement is not paid by the Company within 30 days of receipt of written
notice, the right to indemnification as provided by this Agreement shall be
enforceable by the Indemnitee in any court of competent jurisdiction.  The
burden of proving by clear and convincing evidence that indemnification or
advances are not appropriate shall be on the Company.  Neither the failure of
the directors or shareholders of the Company or independent legal counsel to
have made a determination prior to the commencement of the action that
indemnification or advances are proper in the circumstances because the
Indemnitee has met the applicable standard of conduct, nor an actual
determination by the directors or shareholders of the Company or independent
legal counsel that the Indemnitee has not met the 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.

 

The Indemnitee’s Expenses incurred in connection with any Proceeding concerning
his right to indemnification or advances in whole or in part pursuant to this
Agreement shall also be indemnified by the Company regardless of the outcome of
the Proceeding, unless a court of competent jurisdiction determines that each of
the material assertions made by the Indemnitee in the Proceeding was not made in
good faith or was frivolous.

 

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SECTION 4.              ADVANCES OF EXPENSES

 

The Expenses incurred by the Indemnitee in any Proceeding shall be paid promptly
by the Company in advance of the final disposition of the Proceeding at the
written request of the Indemnitee to the fullest extent permitted by applicable
law (but only to the extent permissible under Section 402 of the Sarbanes-Oxley
Act of 2002, as may be amended from time to time) provided that if applicable
law requires an undertaking , the Indemnitee shall undertake in writing to repay
the amount advanced to the extent that it is ultimately determined that the
Indemnitee is not entitled to indemnification.

 

SECTION 5.              CHANGE IN CONTROL.

 

The Company agrees that if there is a Change in Control of the Company (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 the Change in
Control) then with respect to all matters thereafter arising concerning the
rights of Indemnitee to indemnity payments and Expense advances under this
Agreement or any other agreement, the Company’s Certificate of Incorporation, or
the Company’s Bylaws in effect relating to claims for indemnifiable events, the
Company shall seek legal advice only from independent counsel selected by
Indemnitee and approved by the Company (which approval shall not be unreasonably
withheld), and who has not otherwise performed services for the Company or
Indemnitee within the last five years (other than in connection with such
matters)(“Special Independent Counsel”).  The Special Independent Counsel, among
other things, shall render its written opinion to the Company and Indemnitee as
to whether and to what extent the Indemnitee would be permitted to be
indemnified under applicable law.  The Company agrees to pay the reasonable fees
of the Special Independent Counsel referred to above and may fully indemnify the
Special Independent Counsel against any and all expenses (including attorneys’
fees), claims, liabilities and damages arising out of or relating to this
Agreement.

 

SECTION 6.              INDEMNIFICATION PROCEDURE

 

6.1           Notice.  Promptly after receipt by the Indemnitee of notice of the
commencement of any Proceeding, the Indemnitee will, if a claim is to be made
against the Company under this Agreement, notify the Company of the commencement
of the Proceeding.  The omission to notify the Company will not relieve it from
any liability which it may have to the Indemnitee otherwise than under this
Agreement.

 

6.2           Company Participation.  With respect to any Proceeding for which
indemnification is requested, the Company will be entitled to participate in the
Proceeding at its own expense and, except as otherwise provided below, to the
extent that it may wish, the Company may assume the defense of the Proceeding,
with counsel satisfactory to the Indemnitee.  After notice from the Company to
the Indemnitee of its election to assume the defense of a Proceeding, during the
Company’s good faith active defense the Company will not be liable to the
Indemnitee under this Agreement for any legal or other expenses subsequently
incurred by the Indemnitee in connection with the defense of the Proceeding,
other than reasonable costs of investigation or as otherwise provided below. 
The Company shall not settle

 

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any Proceeding in any manner which would impose any penalty or limitation on the
Indemnitee without the Indemnitee’s written consent.  The Indemnitee shall have
the right to employ his counsel in any Proceeding but the fees and expenses of
the counsel incurred after notice from the Company of its assumption of the
defense of the Proceeding shall be at the expense of the Indemnitee, unless (i)
the employment of counsel by the Indemnitee has been authorized by the Company,
(ii) the Indemnitee shall have reasonably concluded that there may be a conflict
of interest between the Company and the Indemnitee in the conduct of the defense
of a Proceeding, or (iii) the Company shall not in fact have employed counsel to
assume the defense of a Proceeding, in each of which cases the fees and expenses
of the Indemnitee’s counsel shall be at the expense of the Company.  The Company
shall not be entitled to assume the defense of any Proceeding brought by or on
behalf of the Company or as to which the Indemnitee has made the conclusion that
there may be a conflict of interest between the Company and the Indemnitee.

 

SECTION 7.              LIMITATIONS ON INDEMNIFICATION

 

No payments pursuant to this Agreement shall be made by the Company:

 

(a)  to indemnify or advance Expenses to the Indemnitee with respect to
Proceedings initiated or brought voluntarily by the Indemnitee and not by way of
defense, except with respect to Proceedings brought to establish or enforce a
right to indemnification under this Agreement or any other statute or law or
otherwise as required under applicable law, but the indemnification or
advancement of Expenses may be provided by the Company in specific cases if the
Board of Directors finds it to be appropriate;

 

(b)  to indemnify the Indemnitee for any Expenses, judgments, fines, penalties
or ERISA excise taxes for which payment is actually made to the Indemnitee under
a valid and collectible insurance policy, except in respect of any excess beyond
the amount of payment under the insurance;

 

(c)  to indemnify the Indemnitee for any Expenses, judgments, fines or penalties
sustained in any Proceeding for an accounting of profits made from the purchase
or sale by Indemnitee of securities of the Company pursuant to the provisions of
Section 16(b) of the Securities Exchange Act of 1934, the rules and regulations
promulgated thereunder and amendments thereto or similar provisions of any
federal, state or local statutory law;

 

(d)  to indemnify the Indemnitee for any Expenses, judgments, fines, penalties
or ERISA excise taxes resulting from Indemnitee’s conduct which is finally
adjudged to have been willful misconduct, knowingly fraudulent or deliberately
dishonest; or

 

(e)  if a court of competent jurisdiction shall finally determine that any
indemnification hereunder is unlawful.

 

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SECTION 8.              MAINTENANCE OF LIABILITY INSURANCE

 

8.1           Affirmative Covenant of the Company.  The Company covenants and
agrees that, as long as the Indemnitee shall continue to serve as a director of
the Company and thereafter so long as the Indemnitee shall be subject to any
possible Proceeding, the Company, subject to subsection 8.3 of this Agreement,
shall promptly obtain and maintain in full force and effect directors’ and
officers’ liability insurance (“D&O Insurance”) in reasonable amounts from
established and reputable insurers.

 

8.2           Indemnitee Named as Insured.  In all D&O Insurance policies, the
Indemnitee shall be named as an insured in a manner that provides the Indemnitee
the same rights and benefits as are accorded to the most favorably insured of
the Company’s directors.

 

8.3           Exemption from Maintenance of Insurance.  Notwithstanding the
foregoing, the Company shall have no obligation to obtain or maintain D&O
Insurance if the Company determines in good faith that insurance is not
reasonably available, the premium costs for insurance are disproportionate to
the amount of coverage provided, the coverage provided by insurance is so
limited by exclusions that it provides an insufficient benefit, or the
Indemnitee is covered by similar insurance maintained by a subsidiary of the
Company.

 

SECTION 9.              MISCELLANEOUS

 

9.1           Successors and Assigns.  This Agreement shall be binding upon, and
shall inure to the benefit of the Indemnitee and his heirs, personal
representatives and assigns, and the Company and its successors and assigns.

 

9.2           Separability.  Each provision of this Agreement is a separate and
distinct agreement and independent of the others, so that if any provision of
this Agreement shall be held to be invalid or unenforceable for any reason, the
invalidity or unenforceability shall not affect the validity or enforceability
of the other provisions of this Agreement.  To the extent required, any
provision of this Agreement may be modified by a court of competent jurisdiction
to preserve its validity and to provide the Indemnitee with the broadest
possible indemnification permitted under applicable law.

 

9.3           Savings Clause.  If this Agreement or any portion of it is
invalidated on any ground by any court of competent jurisdiction, then the
Company shall nevertheless indemnify Indemnitee as to Expenses, judgments,
fines, penalties or ERISA excise taxes with respect to any Proceeding to the
full extent permitted by any applicable portion of this Agreement that shall not
have been invalidated or by any other applicable law.

 

9.4           Interpretation; Governing Law.  This Agreement shall be construed
as a whole and in accordance with its fair meaning.  Headings are for
convenience only and shall not be used in construing meaning.  This Agreement
shall be governed and interpreted in accordance with the laws of the State of
Delaware.

 

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9.5           Amendments.  No amendment, waiver, modification, termination or
cancellation of this Agreement shall be effective unless in writing signed by
the party against whom enforcement is sought.  The indemnification rights
afforded to the Indemnitee by this Agreement are contract rights and may not be
diminished, eliminated or otherwise affected by amendments to the Company’s
Certificate of Incorporation, Bylaws or agreements including D&O Insurance
policies.

 

9.6           Counterparts.  This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
party and delivered to the other.

 

9.7           Notices.  Any notice required to be given under this Agreement
shall be directed to the Company at 455 South Gulph Road, Suite 305, King of
Prussia, Pennsylvania 19406, Attention: President, with a copy to Peter T.
Healy, Esq. 275 Battery Street, Suite 2600, San Francisco, CA  94111, and to
Indemnitee at the address set forth below or to another address as either shall
designate in writing.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

 

 

 

 

“Indemnitee”

 

 

 

 

 

 

 

 

[NAME]

 

 

 

 

 

Notice Address:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

“Company”

 

 

 

 

 

VICURON PHARMACEUTICALS INC.,

 

 

a Delaware corporation

 

 

 

 

 

 

 

 

By

 

 

 

 

George F. Horner III

 

 

 

President and Chief Executive Officer

 

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