Exhibit 10.4

 

INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement (“Agreement”) is made and entered into as of
December [●], 2017 by and among Eloxx Pharmaceuticals, Inc., a Delaware
corporation (the “Company”), Eloxx Pharmaceuticals Ltd., an Israeli company,
Eloxx Pharmaceuticals U.S. Sub, Inc., a Delaware corporation (together with the
Company and Eloxx Pharmaceuticals Ltd., the “Eloxx Companies” and each an “Eloxx
Company”), and [●] (“Indemnitee”).

 

WHEREAS, in light of the litigation costs and risks to directors and officers
resulting from their service to companies, and the desire of the Eloxx Companies
to attract and retain qualified individuals to serve as directors and officers,
it is reasonable, prudent and necessary for each of the Eloxx Companies to
indemnify and advance expenses on behalf of its and the other Eloxx Companies’
directors and officers to the fullest extent permitted under Applicable Law so
that they will serve or continue to serve the Eloxx Companies free from undue
concern regarding such risks;

 

WHEREAS, the Eloxx Companies have requested that Indemnitee serve or continue to
serve as a director and/or an officer of one or more of the Eloxx Companies or
may in the future request that Indemnitee serve one or more of the Eloxx
Companies (as hereinafter defined) as a director or an officer or in other
capacities;

 

WHEREAS, one of the conditions that Indemnitee requires in order to serve as a
director and/or an officer of one or more of the Eloxx Companies is that
Indemnitee be so indemnified; and

 

WHEREAS, Indemnitee may have certain rights to indemnification, advancement of
expenses and/or insurance provided by one or more of the Designating
Stockholders (as hereinafter defined) (or their affiliates) and/or any insurer
providing insurance coverage under any policy purchased or maintained by such
Designating Stockholders (or their affiliates), which Indemnitee, the Eloxx
Companies and the Designating Stockholders (or their affiliates) intend to be
secondary to the primary obligation of the Eloxx Companies to indemnify
Indemnitee as provided herein, with the Eloxx Companies’ acknowledgement of and
agreement to the foregoing being a material condition to Indemnitee’s
willingness to serve as a director and/or officer of one or more of the Eloxx
Companies.

 

NOW, THEREFORE, in consideration of the premises and the covenants contained
herein, the Eloxx Companies and Indemnitee do hereby covenant and agree as
follows:

 

1.                  Services by Indemnitee. Indemnitee agrees to serve as a
director and/or an officer of one or more of the Eloxx Companies. Indemnitee may
at any time and for any reason resign from such position (subject to any
contractual obligation the Indemnitee may have under any other agreement).

 

 

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2.                  Indemnification - General. On the terms and subject to the
conditions of this Agreement, the Eloxx Companies shall, to the fullest extent
permitted under Applicable Law, indemnify Indemnitee with respect to, and hold
Indemnitee harmless from and against, all losses, damages, liabilities,
judgments, fines, penalties, costs, amounts paid in settlement, Expenses (as
hereinafter defined) and other amounts that Indemnitee reasonably incurs and
that result from, arise in connection with or are by reason of Indemnitee’s
Corporate Status (as hereinafter defined), including all interest, assessments
and other charges paid or payable in connection therewith, and shall advance
Expenses to Indemnitee. The obligations of the Eloxx Companies under this
Agreement (a) are joint and several obligations of each Eloxx Company, (b) shall
continue after such time as Indemnitee ceases to serve as a director or an
officer of the Eloxx Companies or in any other Corporate Status and (c) include,
without limitation, claims for monetary damages against Indemnitee in respect of
any actual or alleged liability or other loss of Indemnitee, to the fullest
extent permitted under Applicable Law. A limitation under law of any Eloxx
Company on providing indemnification or an advance of expenses to Indemnitee
shall not limit the indemnification and advancement obligations of any Eloxx
Company not so limited.

 

3.                  Proceedings Other Than Proceedings by or in the Right of the
Eloxx Companies. If in connection with or by reason of Indemnitee’s Corporate
Status, Indemnitee was, is, or is threatened to be made, a party to or a
participant in any Proceeding (as hereinafter defined) other than a Proceeding
by or in the right of any of the Eloxx Companies to procure a judgment in its
favor, the Eloxx Companies shall, to the fullest extent permitted under
Applicable Law, indemnify Indemnitee with respect to, and hold Indemnitee
harmless from and against, all losses, damages, liabilities, judgments, fines,
penalties, costs, amounts paid in settlement, Expenses and other amounts that
Indemnitee reasonably incurs in connection with such Proceeding or any claim,
issue or matter therein, including all interest, assessments and other charges
paid or payable in connection therewith.

 

4.                  Proceedings by or in the Right of the Eloxx Companies. If in
connection with or by reason of Indemnitee’s Corporate Status, Indemnitee was,
is, or is threatened to be made, a party to or a participant in any Proceeding
by or in the right of any of the Eloxx Companies to procure a judgment in such
Eloxx Company’s favor, the Eloxx Companies shall, to the fullest extent
permitted under Applicable Law, indemnify Indemnitee with respect to, and hold
Indemnitee harmless from and against, all Expenses reasonably incurred by
Indemnitee or on behalf of Indemnitee in connection with such Proceeding or any
claim, issue or matter therein.

 

5.                  Mandatory Indemnification in Case of Successful Defense.
Notwithstanding any other provision of this Agreement, to the extent that
Indemnitee is, by reason of Indemnitee’s Corporate Status, a party to (or a
participant in) and is successful, on the merits or otherwise, in defense of any
Proceeding (including, without limitation, any Proceeding brought by or in the
right of any Eloxx Company), the Eloxx Companies shall, to the fullest extent
permitted under Applicable Law, indemnify Indemnitee with respect to, and hold
Indemnitee harmless from and against, all Expenses reasonably incurred by
Indemnitee or on behalf of Indemnitee in connection therewith. If Indemnitee is
not wholly successful in defense of such Proceeding but is successful, on the
merits or otherwise, as to one or more but less than all claims, issues or
matters in such Proceeding, the Eloxx Companies shall, to the fullest extent
permitted under Applicable Law, indemnify Indemnitee against all Expenses
reasonably incurred by Indemnitee or on behalf of Indemnitee in connection with
each successfully resolved claim, issue or matter.

 

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For purposes of this Section 5 and without limitation, the termination of any
claim, issue or matter in such a Proceeding by dismissal, with or without
prejudice, on substantive or procedural grounds, or settlement of any such claim
prior to a final judgment by a court of competent jurisdiction with respect to
such Proceeding, shall be deemed to be a successful result as to such claim,
issue or matter; provided, however, that any settlement of any claim, issue or
matter in such a Proceeding shall not be deemed to be a successful result as to
such claim, issue or matter if such settlement is effected by Indemnitee without
the Eloxx Companies’ prior written consent, which consent shall not be
unreasonably withheld, delayed or conditioned.

 

6.                  Partial Indemnification. If Indemnitee is entitled under any
provision of this Agreement or otherwise to indemnification by any of the Eloxx
Companies for some or a portion of the losses, damages, liabilities, judgments,
fines, penalties, costs, amounts paid in settlement, and Expenses, including all
interest, assessments and other charges paid or payable in connection therewith,
incurred by Indemnitee or on behalf of Indemnitee in connection with a
Proceeding or any claim, issue or matter therein, in whole or in part, the Eloxx
Companies shall, to the fullest extent permitted under Applicable Law, indemnify
Indemnitee to the fullest extent to which Indemnitee is entitled to such
indemnification.

 

7.                  Indemnification for Additional Expenses Incurred to Secure
Recovery or as Witness.

 

(a)               The Eloxx Companies shall, to the fullest extent permitted
under Applicable Law, indemnify Indemnitee with respect to, and hold Indemnitee
harmless from and against, any and all Expenses and, if requested by Indemnitee,
shall advance on an as-incurred basis (as provided in Section 8 of this
Agreement) such Expenses to Indemnitee, which are incurred by Indemnitee in
connection with any action or proceeding or part thereof brought by Indemnitee
for (i) indemnification or advance payment of Expenses by the Eloxx Companies
under this Agreement, any other agreement, the Certificate of Incorporation,
By-laws, limited liability company agreement or other governing document of the
applicable Eloxx Company as now or hereafter in effect; or (ii) recovery under
any director and officer liability insurance policy maintained by any Eloxx
Company.

 

(b)               To the extent that Indemnitee is, by reason of Indemnitee’s
Corporate Status, a witness (or is forced or asked to respond to discovery
requests) in any Proceeding to which Indemnitee is not a party, the Eloxx
Companies shall, to the fullest extent permitted under Applicable Law, indemnify
Indemnitee with respect to, and hold Indemnitee harmless from and against, and
the Eloxx Companies shall advance on an as-incurred basis (as provided in
Section 8 of this Agreement), all Expenses reasonably incurred by Indemnitee or
on behalf of Indemnitee in connection therewith.

 

8.                  Advancement of Expenses. The Eloxx Companies shall, to the
fullest extent permitted under Applicable Law, pay on a current and as-incurred
basis all Expenses incurred by Indemnitee in connection with any Proceeding in
any way connected with, resulting from or relating to Indemnitee’s Corporate
Status. Such Expenses shall be paid in advance of the final disposition of such
Proceeding, without regard to whether Indemnitee will ultimately be entitled to
be indemnified for such Expenses and without regard to whether an Adverse
Determination (as hereinafter defined) has been or may be made. Upon submission
of a request for

 

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advancement of Expenses pursuant to Section 9(c) of this Agreement, Indemnitee
shall be entitled to advancement of Expenses as provided in this Section 8, and
such advancement of Expenses shall continue until such time (if any) as there is
a final non-appealable judicial determination that Indemnitee is not entitled to
indemnification. Indemnitee shall repay such amounts advanced if and to the
extent that it shall ultimately be determined in a decision by a court of
competent jurisdiction from which no appeal can be taken that Indemnitee is not
entitled to be indemnified by the Eloxx Companies for such Expenses. Such
repayment obligation shall be unsecured and shall not bear interest. The Eloxx
Companies shall not impose on Indemnitee additional conditions to advancement or
require from Indemnitee additional undertakings regarding repayment. Indemnitee
shall, in all events, be entitled to advancement of Expenses, without regard to
Indemnitee’s ultimate entitlement to indemnification, until the final
determination of the Proceeding.

 

9.                  Indemnification Procedures.

 

(a)               Notice of Proceeding. Indemnitee agrees to notify the Eloxx
Companies promptly upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
hereunder. Any failure by Indemnitee to notify any Eloxx Company will not
relieve the Eloxx Companies of their advancement or indemnification obligations
under this Agreement unless, and only to the extent that, the Eloxx Companies
can establish that such omission to notify resulted in actual and material
prejudice to them, which prejudice cannot be reversed or otherwise eliminated
without any material negative effect on the Eloxx Companies, and the omission to
notify the Eloxx Companies will, in any event, not relieve any Eloxx Company
from any liability which it may have to indemnify Indemnitee otherwise than
under this Agreement. If, at the time of receipt of any such notice, the Eloxx
Companies have director and officer liability insurance policies in effect, the
Eloxx Companies will promptly notify the relevant insurers in accordance with
the procedures and requirements of such policies.

 

(b)               Defense; Settlement. Indemnitee shall have the sole right and
obligation to control the defense or conduct of any claim or Proceeding with
respect to Indemnitee. The Eloxx Companies shall not, without the prior written
consent of Indemnitee, which may be provided or withheld in Indemnitee’s sole
discretion, effect any settlement of any Proceeding against Indemnitee or which,
in the reasonable opinion of Independent Counsel (as hereinafter defined), could
have been brought against Indemnitee or which potentially or actually imposes
any cost, liability, exposure or burden on Indemnitee unless (i) such settlement
solely involves the payment of money or performance of any obligation by persons
other than Indemnitee and includes an unconditional, full release of Indemnitee
by all relevant parties from all liability on any matters that are the subject
of such Proceeding and an acknowledgment that Indemnitee denies all wrongdoing
in connection with such matters and (ii) the Eloxx Companies have fully
indemnified the Indemnitee with respect to, and held Indemnitee harmless from
and against, all Expenses and other amounts incurred by Indemnitee or on behalf
of Indemnitee in connection with such Proceeding. The Eloxx Companies shall not
be obligated to indemnify Indemnitee against amounts paid in settlement of a
Proceeding against Indemnitee if such settlement is effected by Indemnitee
without the Eloxx Companies’ prior written consent, which consent shall not be
unreasonably withheld, delayed or conditioned, unless such settlement solely
involves the

 

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payment of money or performance of any obligation by persons other than the
Eloxx Companies and includes an unconditional release of the Eloxx Companies by
any party to such Proceeding other than the Indemnitee from all liability on any
matters that are the subject of such Proceeding and an acknowledgment that the
Eloxx Companies deny all wrongdoing in connection with such matters.

 

(c)               Request for Advancement; Request for Indemnification.

 

(i)                 To obtain advancement of Expenses under this Agreement,
Indemnitee shall submit to the Eloxx Companies a written request therefor,
together with such invoices or other supporting information as may be reasonably
requested by the Eloxx Companies and reasonably available to Indemnitee, and an
unsecured written undertaking to repay amounts advanced only to the extent that
it is ultimately determined that Indemnitee is not entitled to be indemnified by
any of the Eloxx Companies. The Eloxx Companies shall make advance payment of
Expenses to Indemnitee no later than five (5) business days after receipt of the
written request for advancement (and each subsequent request for advancement) by
Indemnitee. If, at the time of receipt of any such written request for
advancement of Expenses, the Eloxx Companies have director and officer insurance
policies in effect, the Eloxx Companies shall promptly notify the relevant
insurers in accordance with the procedures and requirements of such policies.
The Eloxx Companies shall thereafter keep such director and officer insurers
informed of the status of the Proceeding or other claim (with assistance from
the Indemnitee as reasonably required) and take such other actions, as
appropriate to secure coverage of Indemnitee for such claim.

 

(ii)       To obtain indemnification under this Agreement, at any time before or
after submission of a request for advancement pursuant to Section 9(c)(i) of
this Agreement, Indemnitee may submit a written request for indemnification
hereunder. The time at which Indemnitee submits a written request for
indemnification shall be determined by the Indemnitee in the Indemnitee’s sole
discretion. Once Indemnitee submits such a written request for indemnification
(and only at such time that Indemnitee submits such a written request for
indemnification), a Determination (as hereinafter defined) shall thereafter be
made, as provided in and only to the extent required by Section 9(d) of this
Agreement. In no event shall a Determination be made, or required to be made, as
a condition to or otherwise in connection with any advancement of Expenses
pursuant to Section 8 and Section 9(c)(i) of this Agreement. If, at the time of
receipt of any such request for indemnification, the Eloxx Companies have
director and officer insurance policies in effect, the Eloxx Companies shall
promptly notify the relevant insurers and take such other actions as necessary
or appropriate to secure coverage of Indemnitee for such claim in accordance
with the procedures and requirements of such policies.

 

(d)               Determination. The Eloxx Companies agree that Indemnitee shall
be indemnified to the fullest extent permitted under Applicable Law and that no
Determination shall be required in connection with such indemnification unless
specifically required by Applicable Law which cannot be waived. In no event
shall a Determination be required in connection with indemnification for
Expenses pursuant to Section 7 of this Agreement or incurred in connection with
any Proceeding or portion thereof with respect to which Indemnitee has been
successful on the merits or otherwise. Any decision that a Determination is
required by Applicable Law in connection with any other indemnification of
Indemnitee, and any such Determination, shall be

 

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made within twenty (20) days after receipt of Indemnitee’s written request for
indemnification pursuant to Section 9(c)(ii) of this Agreement and such
Determination shall be made either (i) by the Disinterested Directors (as
hereinafter defined), even though less than a quorum, so long as Indemnitee does
not request that such Determination be made by Independent Counsel (as
hereinafter defined), or (ii) if so requested by Indemnitee, in Indemnitee’s
sole discretion, by Independent Counsel in a written opinion to the Eloxx
Companies and Indemnitee. If a Determination is made that Indemnitee is entitled
to indemnification, payment to Indemnitee shall be made within five (5) business
days after such Determination. Indemnitee shall reasonably cooperate with the
person, persons or entity making such determination with respect to Indemnitee’s
entitlement to indemnification, including providing to such person, persons or
entity upon reasonable advance request any documentation or information which is
not privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such Determination. Any
Expenses incurred by Indemnitee in so cooperating with the Disinterested
Directors or Independent Counsel, as the case may be, making such determination
shall be advanced and borne by the Eloxx Companies (irrespective of the
Determination as to Indemnitee’s entitlement to indemnification) and each Eloxx
Company is liable to indemnify and hold Indemnitee harmless therefrom. If the
person, persons or entity empowered or selected under this Section 9(d) to
determine whether Indemnitee is entitled to indemnification shall not have made
a determination within twenty (20) days after receipt by the Eloxx Companies of
the request therefor, the requisite determination of entitlement to
indemnification shall, to the fullest extent not prohibited by Applicable Law,
be deemed to have been made and Indemnitee shall be entitled to such
indemnification, absent (i) a misstatement by Indemnitee of a material fact or
an omission of a material fact necessary to make Indemnitee’s statement not
materially misleading in connection with the request for indemnification that
actually prejudices the Eloxx Companies, or (ii) a prohibition of such
indemnification under Applicable Law; provided, however, that such twenty (20)
day period may be extended for a reasonable time, not to exceed an additional
twenty (20) days, if the person, persons or entity making the determination with
respect to entitlement to indemnification in good faith requires such additional
time for the obtaining or evaluating of documentation and/or information
relating thereto; and provided, further, that the foregoing provisions of this
Section 9(d) shall not apply if the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Section 9(e) of
this Agreement.

 

(e)               Independent Counsel. In the event Indemnitee requests that the
Determination be made by Independent Counsel pursuant to Section 9(d) of this
Agreement, the Independent Counsel shall be selected as provided in this Section
9(e). The Independent Counsel shall be selected by Indemnitee (unless Indemnitee
shall request that such selection be made by the Board of Directors, in which
event the Board of Directors shall make such selection on behalf of the Eloxx
Companies, subject to the remaining provisions of this Section 9(e)), and
Indemnitee or the Eloxx Companies, as the case may be, shall give written notice
to the other, advising the Eloxx Companies or Indemnitee of the identity of the
Independent Counsel so selected. The Eloxx Companies or Indemnitee, as the case
may be, may, within five (5) days after such written notice of selection shall
have been received, deliver to Indemnitee or the Eloxx Companies, as the case
may be, a written objection to such selection; provided, however, that such
objection may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of “Independent Counsel” as defined in
Section 15 of this Agreement,

 

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and the objection shall set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the person so selected shall
act as Independent Counsel. If a written objection is so made and substantiated,
the Independent Counsel so selected may not serve as Independent Counsel unless
and until such objection is withdrawn or a court of competent jurisdiction has
determined that such objection is without merit. If, within ten (10) days after
submission by Indemnitee of a written request for indemnification pursuant to
Section 9(c)(ii) of this Agreement and after a request for the appointment of
Independent Counsel has been made, no Independent Counsel shall have been
selected and not objected to, either the Eloxx Companies or Indemnitee may
petition a court of competent jurisdiction for resolution of any objection which
shall have been made by the Eloxx Companies or Indemnitee to the other’s
selection of Independent Counsel and/or for the appointment as Independent
Counsel of a person selected by the court or by such other person as the court
shall designate, and the person with respect to whom all objections are so
resolved or the person so appointed shall act as Independent Counsel under
Section 9(d) of this Agreement. Upon the due commencement of any judicial
proceeding or arbitration pursuant to Section 9(f) of this Agreement,
Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing). Any expenses incurred by or in connection
with the appointment of Independent Counsel shall be borne by the Eloxx
Companies (irrespective of the Determination of Indemnitee’s entitlement to
indemnification) and not by Indemnitee.

 

(f)                Consequences of Determination; Remedies of Indemnitee. The
Eloxx Companies shall be bound by and shall have no right to challenge a
Favorable Determination. If an Adverse Determination is made, or if for any
other reason the Eloxx Companies do not make timely indemnification payments or
advances of Expenses, Indemnitee shall have the right to commence a Proceeding
before a court of competent jurisdiction to challenge such Adverse Determination
and/or to require the Eloxx Companies to make such payments or advances (and the
Company shall have the right to defend its position in such Proceeding and to
appeal any adverse judgment in such Proceeding). Indemnitee shall be entitled to
be indemnified for all Expenses incurred in connection with such a Proceeding
and to have such Expenses advanced by the Company in accordance with Section 8
of this Agreement. If Indemnitee fails to challenge an Adverse Determination
within twenty (20) business days, or if Indemnitee challenges an Adverse
Determination and such Adverse Determination has been upheld by a final judgment
of a court of competent jurisdiction from which no appeal can be taken, then, to
the extent and only to the extent required by such Adverse Determination or
final judgment, the Eloxx Companies shall not be obligated to indemnify
Indemnitee under this Agreement.

 

(g)               Presumptions; Burden and Standard of Proof. The parties intend
and agree that, to the extent permitted under Applicable Law, in connection with
any Determination with respect to Indemnitee’s entitlement to indemnification
hereunder by any person, including a court:

 

(i)                 it will be presumed that Indemnitee is entitled to
indemnification under this Agreement (notwithstanding any Adverse
Determination), and the Eloxx Companies or any other person or entity
challenging such right will have the burden of proof to overcome that
presumption in connection with the making by any person, persons or entity of
any determination contrary to that presumption;

 

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(ii)              the termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that Indemnitee did not
act in good faith and in a manner which Indemnitee reasonably believed to be in
or not opposed to the best interests of the applicable Eloxx Company, and, with
respect to any criminal action or proceeding, had reasonable cause to believe
that Indemnitee’s conduct was unlawful;

 

(iii)            Indemnitee will be deemed to have acted in good faith if
Indemnitee’s action is based on the records or books of account of the
applicable Eloxx Company, including financial statements, or on information
supplied to Indemnitee by the officers, employees or committees of the board of
directors of the applicable Eloxx Company, or on the advice of legal counsel or
other advisors (including financial advisors and accountants) for the applicable
Eloxx Company or on information or records given in reports made to the
applicable Eloxx Company by an independent certified public accountant or by an
appraiser or other expert or advisor selected by the applicable Eloxx Company;
and

 

(iv)             the knowledge and/or actions, or failure to act, of any
director, officer, agent or employee of any of the Eloxx Companies or relevant
enterprises will not be imputed to Indemnitee in a manner that limits or
otherwise adversely affects Indemnitee’s rights hereunder.

 

The provisions of this Section 9(g) shall not be deemed to be exclusive or to
limit in any way the other circumstances in which Indemnitee may be deemed to
have met the applicable standard of conduct set forth in this Agreement.

 

10.              Remedies of Indemnitee.

 

(a)               In the event that (i) a determination is made pursuant to
Section 9(d) of this Agreement that Indemnitee is not entitled to
indemnification under this Agreement, (ii) advancement of Expenses is not timely
made pursuant to Section 8 and Section 9(c)(i) of this Agreement, (iii) no
determination of entitlement to indemnification shall have been made pursuant to
Section 9(d) of this Agreement within twenty (20) days after receipt by the
Eloxx Companies of the request for indemnification, (iv) payment of
indemnification is not made pursuant to Section 5, 6 or 7 of this Agreement
within five (5) business days after receipt by the Eloxx Companies of a written
request therefor, (v) payment of indemnification pursuant to Section 3, 4 or 7
of this Agreement is not made within five (5) business days after a
determination has been made that Indemnitee is entitled to indemnification or
(vi) the Eloxx Companies or any other person takes or threatens to take any
action to declare this Agreement void or unenforceable, or institutes any
litigation or other action or Proceeding designed to deny, or to recover from,
the Indemnitee the benefits provided or intended to be provided to the
Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court
of his entitlement to such indemnification or advancement of Expenses.
Alternatively, Indemnitee, at his 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. The Eloxx Companies shall not oppose
Indemnitee’s right to seek any such adjudication or award in arbitration.

 

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(b)               In the event that a determination shall have been made
pursuant to Section 9(d) of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration commenced pursuant to
this Section 10 shall be conducted in all respects as a de novo trial, or
arbitration, on the merits, in which (i) Indemnitee shall not be prejudiced by
reason of that adverse determination, and (ii) the Eloxx Companies shall bear
the burden of establishing that Indemnitee is not entitled to indemnification.

 

(c)               If a determination shall have been made pursuant to Section
9(d) of this Agreement that Indemnitee is entitled to indemnification, the Eloxx
Companies shall be bound by such determination in any judicial proceeding or
arbitration commenced pursuant to this Section 10, absent (i) a misstatement by
Indemnitee of a material fact or an omission of a material fact necessary to
make Indemnitee’s statement not materially misleading in connection with the
request for indemnification that actually prejudices the Eloxx Companies, or
(ii) a prohibition of such indemnification under Applicable Law.

 

(d)               The Eloxx Companies shall, to the fullest extent not
prohibited by Applicable Law, be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 10 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Eloxx Companies are bound by all the provisions of this Agreement.

 

11.              Insurance; Subrogation; Other Rights of Recovery, etc.

 

(a)               Each Eloxx Company shall use its reasonable best efforts to
purchase and maintain a policy or policies of insurance with reputable insurance
companies with A.M. Best ratings of “A” or better, providing Indemnitee with
coverage for any liability asserted against, and incurred by, Indemnitee or on
Indemnitee’s behalf by reason of Indemnitee’s Corporate Status, or arising out
of Indemnitee’s status as such, whether or not any such Eloxx Company would have
the power to indemnify Indemnitee against such liability. Such insurance
policies shall have coverage terms and policy limits at least as favorable to
Indemnitee as the insurance coverage provided to any other director or officer
of the Eloxx Companies. If any Eloxx Company has such insurance in effect at the
time it receives from Indemnitee any notice of the commencement of an action,
suit, proceeding or other claim, such Eloxx Company shall give prompt notice of
the commencement of such action, suit, proceeding or other claim to the insurers
and take such other actions in accordance with the procedures set forth in the
policy as required or appropriate to secure coverage of Indemnitee for such
action, suit, proceeding or other claim. Such Eloxx Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of Indemnitee, all amounts payable as a result of such action, suit, proceeding
or other claim in accordance with the terms of such policy. Such Eloxx Company
shall continue to provide such insurance coverage to Indemnitee for a period of
at least ten (10) years after Indemnitee ceases to serve as a director or an
officer or in any other Corporate Status.

 

(b)               In the event of any payment by any Eloxx Company under this
Agreement, such Eloxx Company shall be subrogated to the extent of such payment
to all of the rights of recovery of Indemnitee against any other Eloxx Company,
and Indemnitee hereby agrees, as a condition to obtaining any advancement or
indemnification from the Eloxx Companies, to assign to such Eloxx Company all of
Indemnitee’s rights to obtain from such other Eloxx Company such

 

 9 

 

amounts to the extent that they have been paid by such Eloxx Company to or for
the benefit of Indemnitee as advancement or indemnification under this Agreement
and are adequate to indemnify Indemnitee with respect to the costs, Expenses or
other items to the full extent that Indemnitee is entitled to indemnification or
other payment hereunder; and Indemnitee will (upon request by the Eloxx
Companies) execute all papers required and use reasonable best efforts to take
all action reasonably necessary to secure such rights, including execution of
such documents as are necessary to enable such Eloxx Company to bring suit or
enforce such rights.

 

(c)               Each of the Eloxx Companies hereby unconditionally and
irrevocably waives, relinquishes and releases, and covenants and agrees not to
exercise (and to cause each of the other Eloxx Companies not to exercise), any
rights that such Eloxx Company may now have or hereafter acquire against any
Designating Stockholder (or former Designating Stockholder), insurer of such
Designating Stockholder (or former Designating Stockholder) or Indemnitee that
arise from or relate to the existence, payment, performance or enforcement of
the Eloxx Companies’ obligations under this Agreement or under any other
indemnification agreement (whether pursuant to contract, by-laws or charter)
with any person or entity, including, without limitation, any right of
subrogation (whether pursuant to contract or common law), reimbursement,
exoneration, contribution or indemnification, or to be held harmless, and any
right to participate in any claim or remedy of Indemnitee against any
Designating Stockholder (or former Designating Stockholder) or Indemnitee,
whether or not such claim, remedy or right arises in equity or under contract,
statute or common law, including, without limitation, the right to take or
receive from any Designating Stockholder (or former Designating Stockholder),
insurer of such Designating Stockholder (or former Designating Stockholder) or
Indemnitee, directly or indirectly, in cash or other property or by set-off or
in any other manner, payment or security on account of such claim, remedy or
right.

 

(d)               The Eloxx Companies shall not be liable to pay or advance to
Indemnitee any amounts otherwise indemnifiable under this Agreement or under any
other indemnification agreement if, and to the extent that, Indemnitee has
otherwise actually received such payment under any insurance policy, contract,
agreement or otherwise; provided, however, that (i) the Eloxx Companies hereby
agree that they are the indemnitors of first resort under this Agreement and
under any other indemnification agreement (i.e., their obligations to Indemnitee
under this Agreement or any other agreement or undertaking to provide
advancement and/or indemnification to Indemnitee are primary and any obligation
of any Designating Stockholder (or any affiliate thereof other than any Eloxx
Company) and/or any obligation of any insurer providing insurance coverage under
any policy purchased or maintained by such Designating Stockholders (or by any
affiliate thereof, other than any Eloxx Company) to provide advancement or
indemnification for the same Expenses, liabilities, judgments, penalties, fines
and amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect of such Expenses,
liabilities, judgments, penalties, fines and amounts paid in settlement)
incurred by Indemnitee are secondary), (ii) the Eloxx Companies shall be
required to advance the full amount of expenses incurred by any such Indemnitee
and shall be liable for the full amount of all liability and loss suffered by
such Indemnitee (including, but not limited to, Expenses, judgments, fines and
amounts paid in

 

 10 

 

settlement actually and reasonably incurred by such Indemnitee in connection
with such Proceeding), without regard to any rights any such Indemnitee may have
against any Designating Stockholder or against any insurance carrier providing
insurance coverage to Indemnitee under any insurance policy issued to a
Designating Stockholder and (iii) if any Designating Stockholder (or any
affiliate thereof other than any Eloxx Company) pays or causes to be paid, for
any reason, any amounts otherwise indemnifiable hereunder or under any other
indemnification agreement (whether pursuant to contract, by-laws or charter)
with Indemnitee, then (x) such Designating Stockholder (or such affiliate, as
the case may be) shall be fully subrogated to all rights of Indemnitee with
respect to such payment and (y) the Eloxx Companies shall fully indemnify,
reimburse and hold harmless such Designating Stockholder (or such other
affiliate) for all such payments actually made by such Designating Stockholder
(or such other affiliate).

 

(e)               The Eloxx Companies’ obligation to indemnify or advance
Expenses hereunder to Indemnitee in respect of or relating to Indemnitee’s
service at the request of any of the Eloxx Companies as a director, officer,
employee, fiduciary, trustee, representative, partner or agent of any other
Eloxx Company shall be reduced by any amount Indemnitee has actually received as
payment of indemnification or advancement of Expenses from such other Eloxx
Company, except to the extent that such indemnification payments and advance
payment of Expenses when taken together with any such amount actually received
from other Eloxx Companies or under director and officer insurance policies
maintained by one or more Eloxx Companies are inadequate to fully pay all costs,
Expenses or other items to the full extent that Indemnitee is otherwise entitled
to indemnification or other payment hereunder.

 

(f)                Except as provided in Sections 11(c), 11(d) and 11(e) of this
Agreement, the rights to indemnification and advancement of Expenses as provided
by this Agreement shall not be deemed exclusive of, and shall be considered
supplemental to, any other rights to which Indemnitee may at any time, whenever
conferred or arising, be entitled under Applicable Law, under the Eloxx
Companies’ Certificates of Incorporation or By-Laws, or under any other
agreement, vote of stockholders or resolution of directors of any Eloxx Company,
or otherwise. Indemnitee’s rights under this Agreement are present contractual
rights that fully vest upon Indemnitee’s first service as a director or an
officer of any of the Eloxx Companies. The Parties hereby agree that Sections
11(c), 11(d) and 11(e) of this Agreement shall be deemed exclusive and shall be
deemed to modify, amend and clarify any right to indemnification or advancement
provided to Indemnitee under any other contract, agreement or document with any
Eloxx Company.

 

(g)               No amendment, alteration or repeal of this Agreement or of any
provision hereof shall limit or restrict any right of Indemnitee under this
Agreement in respect of any action taken or omitted by such Indemnitee in
Indemnitee’s Corporate Status prior to such amendment, alteration or repeal. To
the extent that a change in the General Corporation Law of the State of Delaware
(or other Applicable Law), whether by statute or judicial decision, permits
greater indemnification or advancement of Expenses than would be afforded
currently under the Eloxx Companies’ Certificates of Incorporation or By-Laws
and this Agreement, it is the intent of the

 

 11 

 

parties hereto that Indemnitee enjoy by this Agreement the greater benefits so
afforded by such change. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.

 

12.              Employment Rights; Successors; Third Party Beneficiaries.

 

(a)               This Agreement shall not be deemed an employment contract
between the Eloxx Companies and Indemnitee. This Agreement shall continue in
force as provided above after Indemnitee has ceased to serve as a director or an
officer of the Eloxx Companies or any other Corporate Status.

 

(b)               This Agreement shall be binding upon each of the Eloxx
Companies and their successors and assigns and shall inure to the benefit of
Indemnitee and Indemnitee’s heirs, executors and administrators. If any of the
Eloxx Companies or any of their respective successors or assigns shall (i)
consolidate with or merge into any other corporation or entity and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger or (ii) transfer all or substantially all of its properties and assets to
any individual, corporation or other entity, then, and in each such case, proper
provisions shall be made so that the successors and assigns of the Eloxx
Companies shall assume all of the obligations set forth in this Agreement.

 

(c)               The Designating Stockholders are express third party
beneficiaries of this Agreement, are entitled to rely upon this Agreement, and
may specifically enforce the Eloxx Companies’ obligations hereunder (including
but not limited to the obligations specified in Section 11 of this Agreement) as
though a party hereunder.

 

13.              Severability. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable for any reason whatsoever:
(i) the validity, legality and enforceability of the remaining provisions of
this Agreement (including without limitation, each portion of any Section of
this Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby; (ii) such provision or provisions
shall be deemed reformed to the extent necessary to conform to Applicable Law
and to give the maximum effect to the intent of the parties hereto; and (iii) to
the fullest extent possible, the provisions of this Agreement (including,
without limitation, each portion of any Section of this Agreement containing any
such provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall be construed so as to give effect to
the intent manifested thereby.

 

14.              Exception to Right of Indemnification or Advancement of
Expenses. Notwithstanding any other provision of this Agreement and except as
provided in Section 7(a) of this Agreement or as may otherwise be agreed by any
Eloxx Company, Indemnitee shall not be entitled to indemnification or
advancement of Expenses under this Agreement with respect to any Proceeding
brought by Indemnitee (other than a Proceeding by Indemnitee (i) by way of
defense or counterclaim or other similar portion of a Proceeding, (ii) to
enforce Indemnitee’s

 

 12 

 

rights under this Agreement or (iii) to enforce any other rights of Indemnitee
to indemnification, advancement or contribution from the Eloxx Companies under
any other contract, by-laws or charter or under statute or other law, including
any rights under Section 145 of the Delaware General Corporation Law), unless
the bringing of such Proceeding or making of such claim shall have been approved
by the board of directors of the applicable Eloxx Company.

 

15.              Definitions. For purposes of this Agreement:

 

(a)               “Applicable Law” means, as applied to each Eloxx Company, any
law applicable to such Eloxx Company as in existence on the date hereof and as
amended from time to time; provided, however, that under all circumstances
Applicable Law shall be construed assuming that Indemnitee is a director or
officer of the indemnifying corporation for purposes of determining the
availability and scope of any indemnification right afforded to Indemnitee under
this Agreement; provided, further, that as applied to Eloxx Pharmaceuticals
Ltd., Applicable Law shall be construed to treat Section 145 of the Delaware
General Corporation Law (as in existence on the date hereof and as amended from
time to time, including any successor provision thereto) as if it was applicable
to Eloxx Pharmaceuticals Ltd.

 

(b)               “Board of Directors” means the board of directors of the
Company.

 

(c)               “By-laws” means, in each case, the bylaws or similar governing
document of the relevant company as amended from time to time.

 

(d)               “Certificate of Incorporation” means, in each case, the
certificate of incorporation, articles of incorporation or similar constituting
document of the relevant company as amended from time to time.

 

(e)               “Corporate Status” describes the status of a person by reason
of such person’s past, present or future service as a director, officer,
employee, fiduciary, trustee, or agent of any of the Eloxx Companies (including,
without limitation, one who serves at the request of any of the Eloxx Companies
as a director, officer, employee, fiduciary, trustee or agent of any other Eloxx
Company).

 

(f)                “Designating Stockholder” means any of the
[____________________] , in each case so long as an individual designated
(directly or indirectly) by the [____________________] or any of their
respective affiliates serves or has served as a director and/or officer of any
Eloxx Company.

 

(g)               “Determination” means a determination that either (i) there is
a reasonable basis for the conclusion that indemnification of Indemnitee is
proper in the circumstances because Indemnitee met a/the particular standard(s)
of conduct (a “Favorable Determination”) or (ii)

 

 13 

 

there is no reasonable basis for the conclusion that indemnification of
Indemnitee is proper in the circumstances because Indemnitee met a/the
particular standard(s) of conduct (an “Adverse Determination”). An Adverse
Determination shall include the decision that a Determination was required in
connection with indemnification and the decision as to the applicable standard
of conduct.

 

(h)               “Disinterested Director” means a director of the Company (or,
if a Determination is necessary with respect to a Eloxx Company other than the
Company, a director of such Eloxx Company) who is not and was not a party to the
Proceeding in respect of which indemnification is sought by Indemnitee and does
not otherwise have an interest materially adverse to any interest of the
Indemnitee.

 

(i)                 “Expenses” shall mean all direct and indirect costs, fees
and expenses of any type or nature whatsoever and shall specifically include,
without limitation, all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees and costs of experts, witness fees and costs, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, any federal, state, local or foreign taxes
imposed on Indemnitee as a result of the actual or deemed receipt of any
payments under this Agreement, ERISA excise taxes and penalties, and all other
disbursements or expenses of the types customarily incurred in connection with
prosecuting, defending, preparing to prosecute or defend, investigating, being
or preparing to be a witness, in, or otherwise participating in, a Proceeding or
an appeal resulting from a Proceeding, including, but not limited to, the
premium for appeal bonds, attachment bonds or similar bonds and all interest,
assessments and other charges paid or payable in connection with or in respect
of any such Expenses, and shall also specifically include, without limitation,
all reasonable attorneys’ fees and all other expenses incurred by or on behalf
of Indemnitee in connection with preparing and submitting any requests or
statements for indemnification, advancement, contribution or any other right
provided by this Agreement. Expenses, however, shall not include amounts of
judgments or fines against Indemnitee.

 

(j)                 “Independent Counsel” means, at any time, any law firm, or a
member of a law firm, that (a) is experienced in matters of corporation law and
(b) is not, at such time, or has not been in the five years prior to such time,
retained to represent: (i) any Eloxx Company or Indemnitee in any matter
material to either such party (other than with respect to matters concerning
Indemnitee under this Agreement, or of other indemnities under similar
indemnification agreements), or (ii) any other party to the Proceeding giving
rise to a claim for indemnification hereunder. Notwithstanding the foregoing,
the term “Independent 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 the Eloxx Companies or Indemnitee in
an action to determine Indemnitee’s rights under this Agreement. The Eloxx
Companies agree to pay the reasonable fees and expenses of the Independent
Counsel referred to above and to fully indemnify such counsel against any and
all Expenses, claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto and to be jointly and severally
liable therefor.

 

(k)               “Eloxx Company” means any Eloxx Company, any of their
respective subsidiaries and any other corporation, partnership, limited
liability company, joint venture, trust, employee benefit plan or other
enterprise with respect to which Indemnitee serves as a director,

 

 14 

 

officer, employee, partner, representative, fiduciary, trustee or agent, or in
any similar capacity, at the request of any Eloxx Company.

 

(l)                 “Proceeding” includes any actual, threatened, pending or
completed action, suit, arbitration, alternate dispute resolution mechanism,
investigation (formal or informal), inquiry, administrative hearing or any other
actual, threatened, pending or completed proceeding, whether brought by or in
the right of any Eloxx Company or otherwise and whether civil, criminal,
administrative or investigative in nature, in which Indemnitee was, is, may be
or will be involved as a party, witness or otherwise, by reason of Indemnitee’s
Corporate Status or by reason of any action taken by Indemnitee or of any
inaction on Indemnitee’s part while acting as director, officer, employee,
fiduciary, trustee or agent of any Eloxx Company (in each case whether or not
Indemnitee is acting or serving in any such capacity or has such status at the
time any liability or expense is incurred for which indemnification or
advancement of Expenses can be provided under this Agreement). If Indemnitee
believes in good faith that a given situation may lead to or culminate in the
institution of a Proceeding, this shall be considered a Proceeding under this
paragraph.

 

16.              Construction. Whenever required by the context, as used in this
Agreement the singular number shall include the plural, the plural shall include
the singular, and all words herein in any gender shall be deemed to include (as
appropriate) the masculine, feminine and neuter genders.

 

17.              Reliance. The Eloxx Companies expressly confirm and agree that
they have entered into this Agreement and assumed the obligations imposed on
each of them hereby in order to induce Indemnitee to serve as a director and/or
an officer of one or more of the Eloxx Companies, and the Eloxx Companies
acknowledge that Indemnitee is relying upon this Agreement in serving as a
director and/or an officer of one or more of the Eloxx Companies.

 

18.              Modification and Waiver. No supplement, modification or
amendment of this Agreement shall be binding unless executed in a writing
identified as such by all of the parties hereto. Except as otherwise expressly
provided herein, the rights of a party hereunder (including the right to enforce
the obligations hereunder of the other parties) may be waived only with the
written consent of such party, and no waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.

 

19.              Notice Mechanics. All notices, requests, demands or other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed, or (ii) mailed by
certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:

 

(a)               If to Indemnitee to:

 

[●]

 

(b)               If to any Eloxx Company, to:

 

 15 

 

c/o Eloxx Pharmaceuticals, Inc.

950 Winter Street,

Waltham, MA 02451

Attn: Gregory Weaver

 

with a copy to: Ropes & Gray LLP

1211 6th Avenue

New York, NY 10036

Attn: Carl Marcellino

 

or to such other address as may have been furnished (in the manner prescribed
above) as follows: (a) in the case of a change in address for notices to
Indemnitee, furnished by Indemnitee to the Eloxx Companies and (b) in the case
of a change in address for notices to any Eloxx Company, furnished by the Eloxx
Companies to Indemnitee.

 

20.              Contribution. To the fullest extent permissible under
Applicable Law, if the indemnification provided for in this Agreement is
unavailable to Indemnitee for any reason whatsoever, the Eloxx Companies, in
lieu of indemnifying Indemnitee, shall contribute to the amount incurred by
Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid
or to be paid in settlement and/or for reasonably incurred Expenses, in
connection with any claim relating to an indemnifiable event under this
Agreement, in such proportion as is deemed fair and reasonable in light of all
of the circumstances of such Proceeding in order to reflect (i) the relative
benefits received by the Eloxx Companies and Indemnitee as a result of the
event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the
relative fault of the Eloxx Companies (and their other directors, officers,
employees and agents) and Indemnitee in connection with such event(s) and/or
transaction(s).

 

21.              Governing Law; Submission to Jurisdiction; Appointment of Agent
for Service of Process. This Agreement and the legal relations among the parties
shall, to the fullest extent permitted under Applicable Law, be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware,
without regard to its conflict of laws rules. The Eloxx Companies and Indemnitee
hereby irrevocably and unconditionally (i) agree that any action or proceeding
arising out of or in connection with this Agreement shall be brought only in the
Court of Chancery of the State of Delaware (the “Delaware Court”), and not in
any other state or federal court in the United States of America or any court in
any other country, (ii) consent to submit to the exclusive jurisdiction of the
Delaware Court for purposes of any action or proceeding arising out of or in
connection with this Agreement, (iii) waive any objection to the laying of venue
of any such action or proceeding in the Delaware Court, and (iv) waive, and
agree not to plead or to make, any claim that any such action or proceeding
brought in the Delaware Court has been brought in an improper or otherwise
inconvenient forum.

 

22.              Headings. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.

 

 16 

 

23.              Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute one and the same Agreement.

 

[Remainder of Page Intentionally Blank]

 17 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above written.

 

The Company: ELOXX PHARMACEUTICALS, INC.      

By:___________________________________

Name:

Title:

        [Additional Subsidiaries] [TBD]                             Indemnitee:

______________________________________

Name: [NAME OF DIRECTOR]

       

 

 

[Signature Page to Indemnification Agreement]