DIRECTOR INDEMNIFICATION AGREEMENT
This
Agreement, dated as of ,
is
entered into between OPKO Health, Inc., a corporation organized under the laws
of the State of Delaware (the "Company"), and «name» (the
"Director").
Recitals
A. Highly
competent persons are becoming more reluctant to serve publicly-held
corporations as directors or as executive officers unless they are provided
with
adequate protection through insurance or adequate indemnification against
inordinate risks of claims and actions against them arising out of their service
to, and activities on behalf of, the corporation.
B. The
current impracticability of obtaining adequate insurance and the uncertainties
relating to indemnification have increased the difficulty of attracting and
retaining such persons.
C. The
Bylaws of the Company presently provide, among other things, that the Company
shall indemnify its directors and officers to the full extent permitted by
law.
D. The
Board
has determined that the difficulty in attracting and retaining highly competent
persons is detrimental to the best interests of the Company's stockholders
and
that the Company should act to assure such persons that there will be increased
certainty of protection against risks of such claims and actions against them
in
the future.
E. It
is
reasonable, prudent, and necessary for the Company contractually to obligate
itself to indemnify such persons to the fullest extent permitted by applicable
law so that they will serve or continue to serve the Company free from undue
concern that they will not be so indemnified.
F. The
Director is willing to serve or continue to serve as a director of the Company
on the condition that the Director be so indemnified.
Agreement
In
consideration of the recitals and the covenants contained herein, the Company
and the Director covenant and agree as follows:
1. Definitions.
As used
in this Agreement the following terms shall have the meanings indicated
below:
(a) "Related
Party" shall refer to (i) any other corporation in which the Company has an
equity interest of at least fifty percent (50%) and (ii) any other corporation
or any limited liability company, partnership, joint venture, trust, employee
benefit plan or any other enterprise or association in which the Director has
served in any Indemnified Position, at the request of the Company or for the
convenience of the Company or to represent the Company's interest.
(b) "Indemnified
Position" shall refer to any position held by the Director, or pursuant to
which
the Director acts, as an officer, director, employee, partner, trustee,
fiduciary, administrator or agent of the Company or a Related
Party.
(c) "Indemnified
Event" shall mean any claim asserted against the Director, whether civil,
criminal, administrative or investigative in nature, for monetary or other
relief; or any Proceeding to which the Director is named as a party or is a
subject of or witness in, or with respect to which he or she is threatened
to be
named as a party, subject or witness, brought against the Director by reason
of
his or her serving or acting in any Indemnified Position or arising or allegedly
arising directly or indirectly out of, or otherwise relating to, any action,
omission, occurrence or event involving the Director in any Indemnified
Position, including any Proceeding, formal or informal or otherwise, conducted
or brought by the Securities and Exchange Commission or other governmental
agency, or The National Association of Securities Dealers, Inc., a national
stock exchange or similar organization.
(d) "Proceeding"
shall mean any pending, threatened or completed action, suit, investigation,
inquiry, arbitration, alternative dispute resolution mechanism or any other
proceeding (or any appeals therefrom), whether civil, criminal, administrative
or investigative in nature and whether in a court or arbitration, or before
or
involving a governmental, administrative or private entity (including, but
not
limited to, an investigation initiated by the Company, any Related Party or
any
affiliate thereof, or the board of directors, fiduciaries or partners of any
thereof).
(e) "Indemnification
Amount" shall refer to the amount of losses, claims, demands, costs, damages,
liabilities (joint and several), judgments, fines (including any excise tax
assessed with respect to an employee benefit plan), settlements, and other
amounts (including Witness Liabilities), including interest on any of the
foregoing, which the Director is liable to pay or has paid in connection with
an
Indemnified Event and amounts proposed to be paid in settlement by the Director
in connection with any Indemnified Event.
(f) "Witness
Liabilities" shall mean all Indemnification Amounts incurred by the Director
in
connection with his or her preparation to serve or service as a witness in
any
Proceeding in any way relating to the Company, any Related Party or any
affiliate (as defined in Rule 405 under the Securities Act of 1933, as amended)
of any of them (a "Securities Act Affiliate"), any associate (as defined in
such
Rule 405) of any of them or of any Securities Act Affiliate, or any Indemnified
Event (including, but not limited to, the investigation, defense or appeal
in
connection with any such Proceeding).
(g) "Expenses"
shall refer to all disbursements, costs or expenses of any nature reasonably
incurred by the Director directly or indirectly in connection with any
Indemnified Event, or Witness Liabilities, including, but not limited to, fees
and disbursements of counsel, accountants or other experts employed by the
Director in connection with any Indemnified Event, including all such expenses,
disbursements and costs of investigation in connection with or prior to the
initiation of any Proceeding relating to an Indemnified Event.
–2–
(h) "Indemnify"
or "Indemnification" shall refer to the obligation of the Company herein to
pay
Expenses or Indemnification Amounts.
(i) "Change
of Control" shall be deemed to have occurred if (A) any "Person" (as that term
is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as
amended), but excluding the Company and any of its wholly-owned subsidiaries,
is
or becomes (except in a transaction approved in advance by the Board) the
beneficial owner (as defined in Rule 13d-3 under such Act), directly or
indirectly, of securities of the Company representing 20% or more of the
combined voting power of the Company's then outstanding securities or (B) during
any period of two consecutive years, individuals who at the beginning of such
period constitute the Board cease for any reason to constitute at least a
majority thereof unless the election, or the nomination for election by the
Company's stockholders, of each new director was approved by a vote of at least
two-thirds of the directors still in office who were directors at the beginning
of the period, or (C) the stockholders of the Company should approve any one
of
the following transactions: (x) any consolidation or merger of the Company
in
which the Company is not the surviving corporation, other than a merger of
the
Company in which the holders of the Company's common stock immediately prior
to
the merger have the same proportionate ownership of the surviving corporation
immediately after the merger; or (y) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all, or
substantially all, the assets of the Company.
(j)
"Final Disposition" shall refer to any judgment, order or award rendered in
any
Proceeding after the expiration of all rights of appeal.
2. Services
to the Company.
The
Director will serve, and/or continue to serve, as a director of the Company,
so
long as he or she is duly elected and qualified in accordance with the
provisions of the Certificate of Incorporation and Bylaws of the Company, or
in
any other Indemnified Position, at the will of the Company (or under separate
contract, if any); provided that the Director may at any time and for any reason
resign from such Indemnified Position (subject to any contractual obligations
which the Director shall have assumed apart from this Agreement) but the
obligations provided for herein shall continue after such
termination.
3. Indemnity.
The
Company hereby agrees to indemnify the Director and hold the Director harmless
to the full extent permitted or authorized by applicable law. Without limiting
the generality of the foregoing, the Company agrees to indemnify the Director
and hold the Director harmless from and against, and pay any and all, Expenses
and Indemnification Amounts, including Witness Liabilities.
Notwithstanding
the foregoing, except with respect to the indemnification specified in the
second and third sentences of Section 7 or in Section 10 or Section 13(b) of
this Agreement, the Company shall indemnify the Director in connection with
a
Proceeding (or part thereof) initiated by the Director only if authorization
for
the Proceeding (or part thereof) was not denied by the Board of Directors of
the
Company prior to the earlier of (i) 60 days after receipt of notice thereof
from
the Director and (ii) a Change of Control.
–3–
4. Payment
of Expenses.
The
Company shall advance all Expenses within thirty (30) days after the receipt
by
the Company of a statement or statements from the Director requesting such
advance payment or payments from time to time. Such statement or statements
shall identify the nature and amount of the Expenses to be advanced with
reasonable specificity. The Director shall also agree to undertake to repay
any
Expenses advanced if it shall ultimately be determined (which shall only be
made
after the Final Disposition of the Proceeding related to an Indemnified Event,
as hereinafter provided) that the Director was not entitled to reimbursement
of
Expenses in connection with the Indemnified Event for which such Expenses were
made.
5. Interval
Protection.
During
the interval between the Company's receipt of the Director's request for
indemnification or advances and the latest to occur of (a) payment in full
to
the Director of the indemnification or advances to which he or she is entitled
hereunder, or (b) a final adjudication that the Director is not entitled to
indemnification hereunder, the Company shall provide "Interval Protection"
which, for purposes of this Agreement, shall mean the taking of the necessary
steps (whether or not such steps require expenditures to be made by the Company
at that time) to stay, pending a final determination of the Director's
entitlement to indemnification (and, if the Director is so entitled, the payment
thereof), the execution, enforcement or collection of any Indemnified Amount
or
Expenses or any other amounts for which the Director may be liable (and as
to
which the Director has requested indemnification hereunder) in order to avoid
the Director's being or becoming in default with respect to any such amounts.
6. Indemnification
by Court.
Notwithstanding any other provision of this Agreement including without
limitation the fourth sentence of Section 7, indemnification and advances shall
also be made to the extent a court of competent jurisdiction, or the court
in
which a Proceeding was brought, shall determine that the Director, in view
of
all the circumstances of the case, is fairly and reasonably entitled to
indemnification and/or advances for such Expenses as such court shall deem
proper.
7. Indemnification
Procedure.
Any
Indemnification or advance under this Agreement (other than Interval Protection)
shall be made promptly and in any event within thirty (30) days upon the written
request of the Director delivered to the Company. The right to Indemnification
or advances as granted under this Agreement shall be enforceable by the Director
in any court of competent jurisdiction if the Company denies such request,
in
whole or in part, or if no disposition thereof is made within thirty (30) days.
The Director's costs and expenses incurred in connection with successfully
establishing his or her right to indemnification or advances, in whole or in
part, in any such action shall also be indemnified by the Company. It shall
be a
defense to any such action that there has been a judgment or other final
adjudication adverse to the Director which established that the Director failed
to meet the standard of conduct, if any, required for indemnification by
applicable law, but the burden of proving such defense shall be on the Company.
Neither the failure of the Company (including the Board or any committee
thereof, its independent counsel and its stockholders) to have made a
determination prior to the commencement of such action that indemnification
of
the Director is proper in the circumstances because he or she has met the
applicable standard of conduct described in the preceding sentence, if any,
nor
the fact that there has been an actual determination by the Company (including
the Board or any committee thereof, its independent counsel and its
stockholders) that the Director has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant
has
not met the applicable standard of conduct.
–4–
8. Presumptions
and Effect of Certain Proceedings.
(a) The
Director shall be presumed entitled to Indemnification hereunder unless clearly
not entitled to such Indemnification by clear and convincing proof that such
payment shall be unlawful.
(b) If
the
Company shall not have responded to the Director's request for Indemnification
pursuant to Section 7 hereof within thirty (30) days after receipt by the
Company of such request therefor, the Director shall be deemed to be entitled
to
such Indemnification.
(c) The
termination of any Proceeding relating to an Indemnified Event or of any claim,
issue, or matter therein by judgment, order, settlement, or conviction, or
upon
a plea of nolo contendere or its equivalent, shall not of itself adversely
affect the right of the Director to Indemnification or create a presumption
that
the Director did not meet any applicable standard of conduct.
(d) Notwithstanding
any other provision of this Agreement, the Director shall in no event be
required to repay any Expense payments advanced to the Director and no defense
can or shall be raised by the Company to a request for Indemnification pursuant
to Section 7 to the extent the Director has been successful on the merits or
otherwise in defense of any Proceeding related to an Indemnified Event, or
in
defense of any claim, issue or matter involved in any Indemnified Event therein,
whether as a result of the initial adjudication or on appeal or the abandonment
thereof by a party.
9. Non-Exclusivity:
Duration of Agreement; Insurance; Subrogation.
(a) The
rights of Indemnification and to receive advancement of Expenses as provided
by
this Agreement shall not be deemed exclusive of any other rights to which the
Director may at any time be entitled under applicable law, the Certificate
of
Incorporation, the By-laws, any other agreement, or any vote or consent of
directors or stockholders or otherwise.
(b) This
Agreement shall continue until and terminate upon the later of: (i) ten (10)
years after the date that the Director shall have ceased to serve in any
Indemnified Position; or (ii) the Final Disposition of all Indemnified
Events.
(c) This
Agreement shall be binding upon the Company and its successors and assigns
and
shall inure to the benefit of the Director and his or her heirs, devisees,
executors, and administrators or other legal representatives.
(d) To
the
extent that the Company maintains an insurance policy or policies providing
liability insurance for directors or executive officers of the Company or for
any person serving in any other Indemnified Position, the Director shall be
covered by such policy or policies in accordance with its or their terms to
the
maximum extent of the coverage available for any such director or executive
officer or person serving in such position under such policy or
policies.
–5–
10. Proceedings.
(a) The
parties hereto agree that except as otherwise provided for herein, any disputes
arising with respect to the interpretation or enforcement of any provision
hereof shall be submitted, at the sole election of the Director, either to
arbitration or to judicial determination. Any arbitration shall be conducted
in
the City of Miami, Florida in accordance with the then existing rules of the
American Arbitration Association ("AAA"). In any arbitration pursuant to this
Agreement, the award or decision shall be rendered by a majority of the members
of an arbitration panel consisting of three members chosen in accordance with
the then existing rules of the AAA. The award or decision of the arbitration
panel pursuant to this Section 10 shall be binding and conclusive on the
parties, provided that enforcement of such award or decision may be obtained
in
any court having jurisdiction over the party against whom such enforcement
is
sought. The Company hereby agrees to bear all fees, costs and expenses imposed
by the AAA, in connection with the arbitration, irrespective of the
determination thereof. The provisions of Section 10(c) shall govern with respect
to the proceedings referred to therein.
(b) In
the
event that, for any reason, the Company fails to pay any Indemnification or
advance demanded, or the Company requests repayment of any Expenses advanced,
the Director shall nevertheless be entitled, at his or her sole option, to
a
final judicial determination or may seek arbitration of his or her entitlement
to Indemnification hereunder in respect of such claim. In the event the Director
seeks a judicial determination, the Director shall commence an action in a
court
of the State of Florida. In the event the Director seeks an award in
arbitration, (i) such arbitration shall be conducted in Miami, Florida pursuant
to Section 10(a), and (ii) the arbitrator shall notify the parties of his or
her
decision within sixty (60) days following the initiation of such arbitration
(or
such other period proscribed by the rules of AAA). The Company further agrees
that its execution of this Agreement shall constitute a stipulation by which
it
shall be bound in any court or arbitration in which such proceeding shall have
been commenced, continued or appealed that (i) it shall not oppose the
Director's right to seek any such adjudication or award in arbitration or any
other claim by reason of any prior determination made by the Company with
respect to the Director's right to Indemnification under this Agreement on
such
claim or any other claim, or, except in good faith, raise any objections not
specifically relating to the merits of the Director's claim; and (ii) for
purposes of this Agreement any such adjudication or arbitration shall be
conducted de novo and without prejudice by reason of any prior determination
that the Director is not entitled to Indemnification.
(c) Whether
or not the court or arbitrators shall determine that the Director is entitled
to
payment of Indemnification Amounts or has to return the payment of Expenses
or
otherwise finds against the Director, the Company shall within thirty (30)
days
after written request therefor (and submission of reasonable evidence of the
nature and amount thereof), and unless there is a specific judicial finding
that
the Director's suit or arbitration was frivolous, pay all Expenses incurred
by
the Director in connection with such adjudication or arbitration (including,
but
not limited to, any appellate proceedings).
–6–
11. Severability.
If any
provision or provisions of this Agreement shall be held to be invalid, illegal,
or unenforceable for any reason whatsoever: (a) the validity, legality, and
enforceability of the remaining provisions of this Agreement (including without
limitation, each portion of any Section, paragraph or clause 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; and (b) to the fullest extent possible, the
provisions of this Agreement (including, without limitation, each portion of
any
Section, paragraph or clause of this Agreement containing any such provision
held to be invalid, illegal, or unenforceable, that is not itself invalid,
illegal, or unenforceable) shall be deemed revised, and shall be construed,
so
as to give effect to the intent manifested by this Agreement (including the
provision held invalid, illegal, or unenforceable).
12. Merger
or Consolidation of the Company.
In the
event that the Company shall be a constituent corporation in a consolidation
or
merger, whether or not the Company is the resulting or surviving corporation,
the Director shall stand in the same position under this Agreement with respect
to the Company if its separate existence had continued.
13. Enforcement.
(a) The
Company unconditionally and irrevocably stipulates and agrees that its execution
of this Agreement shall also constitute a stipulation by which it shall be
bound
in any court or arbitration in which a proceeding by the Director for
enforcement of his or her rights shall have been commenced, continued or
appealed, that the obligations of the Company set forth herein are unique and
special, and that failure of the Company to comply with the provisions of this
Agreement will cause irreparable and irremediable injury to the Director, for
which a remedy at law will be inadequate. As a result, in addition to any other
right or remedy he or she may have at law or in equity with respect to a
violation of this Agreement, the Director shall be entitled to injunctive or
mandatory relief directing specific performance by the Company of its
obligations under this Agreement.
(b) In
the
event that the Director is subject to or intervenes in any legal action in
which
the validity or enforceability of this Agreement is at issue or institutes
any
legal action, for specific performance or otherwise, to enforce his or her
rights under, or to recover damages for breach of, this Agreement, the Director
shall, within thirty (30) days after written request to the Company therefor
(and submission of reasonable evidence of the amount thereof), and unless there
is a specific judicial finding that the Director's suit was frivolous, be
indemnified by the Company against all Expenses incurred by him or her in
connection therewith.
–7–
14. Notification
and Defense of Claim.
The
Director agrees to promptly notify the Company in writing upon being served
with
any summons, citation, subpoena, complaint, indictment, information or other
document relating to any Proceeding involving an Indemnification Event;
provided, however, that the failure of the Director to give such notice to
the
Company shall not adversely affect the Director's rights under this Agreement
except to the extent the Company shall have been materially prejudiced by such
failure. Nothing in this Agreement shall constitute a waiver of the Company's
right to seek participation, at its own expense, in any Proceeding which may
give rise to Indemnification hereunder.
15. Headings.
The
headings of the Sections and 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. Modification
and Waiver.
No
supplement, modification, or amendment of this Agreement shall be binding unless
executed in writing by both of the parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of
any
other provision hereof (whether or not similar) nor shall such waiver constitute
a continuing waiver.
17. Notices.
All
notices, requests, demands, and other communications hereunder shall be in
writing and shall be deemed to have been duly given if (i) delivered by hand,
or
sent via telecopy or facsimile transmission, in each case receipted for by
the
party to whom said notice or other communication shall have been directed or
transmitted, 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,
or
(iii) delivered by overnight courier service:
| (a) |
If
to the Director, to:
|
«name»
«address»
| (b) |
If
to the Company, to:
|
0000
Xxxxxxxx Xxxxxxxxx Xxxxx 0000
Xxxxx,
XX
00000
Attention:
Deputy General Counsel
or
to
such other address as may have been furnished to either party by the other
party.
–8–
18. Entire
Agreement.
All
prior and contemporaneous agreements and understandings between the parties
with
respect to the subject matter of this Agreement are superseded by this
Agreement, and this Agreement constitutes the entire understanding between
the
parties. This Agreement may not be modified, amended, changed or discharged
except by a writing signed by the parties hereto, and then only to the extent
therein set forth.
19. Nonassignment.
This
Agreement may not be assigned by either of the parties hereto.
20. Governing
Law.
This
Agreement, including its validity, interpretation and effect, and the
relationship of the parties shall be governed by, and construed in accordance
with, the laws of the State of Florida.
IN
WITNESS WHEREOF, each of the parties hereto has executed this Agreement as
of
the day and year first above written.
| OPKO HEALTH, INC. | |
|
By:
|
|
| DIRECTOR | |
|
By:
|
|
–9–
