EXHIBIT 10.1
FORM OF DIRECTOR INDEMNIFICATION AGREEMENT
This Agreement, dated as of _____________, ____, is entered into between
IVAX Diagnostics, Inc., a corporation organized under the laws of the State of
Delaware (the "Company"), and _______________ (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 of Directors of the Company (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) A "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, any of its
wholly-owned subsidiaries, IVAX Corporation 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 twenty percent (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.
(b) "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.
(c) "Final Disposition" shall refer to any judgment, order or award
rendered in any Proceeding after the expiration of all rights of appeal.
(d) "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.
(e) "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
-2-
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.
(f) "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.
(g) "Indemnify" or "Indemnification" shall refer to the obligation of
the Company herein to pay Expenses or Indemnification Amounts.
(h) "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).
(i) "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.
Any entity or plan described in Section l(a)(ii) in which the Company has any
interest or which is established in whole or in part for the benefit of the
Company or any other Related Party or the Company or Related Party's employees
shall be presumed to be a Related Party.
(j) "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).
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
-3-
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 the
provisions of current Delaware legislation (including Section 145 of the
Delaware General Corporation Law) or future Delaware legislation or, if broader
indemnification is available, by current or future judicial or administrative
decisions (but, in the case of any such future legislation or decisions, only to
the extent that it permits the Company to provide broader indemnification rights
than permitted prior to such legislation or decisions), and such Indemnification
shall be made unless prohibited by Delaware 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 prior to the earlier of (i) sixty (60) days after receipt of
notice thereof from the Director and (ii) a Change of Control.
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 agrees 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 (such necessary steps to include, but
-4-
not be limited to, the procurement of a surety bond to achieve such stay or the
loan to the Director (unsecured and with interest payable at the prime rate) of
amounts necessary to satisfy the Indemnified Amount or Expenses or other amounts
for which the Director may be liable and as to which a stay of execution as
aforesaid cannot be obtained, the Company by executing this Agreement having
made the judgment that, in general, such loan or similar assistance may
reasonably be expected to benefit the Company), within three days after receipt
of the Director's written request therefor, together with a written undertaking
by the Director to repay, no later than one hundred twenty (120) days following
receipt of a statement therefor from the Company, amounts (if any) expended by
the Company for such purpose, if it is ultimately determined in a final
adjudication that the Director is not entitled to be indemnified against such
Indemnified Amounts or Expenses or other 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 Delaware Court
of Chancery, or another 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 current legislation or, if
applicable in accordance with Section 3 hereof, future legislation or current or
future judicial or administrative decisions, 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.
-5-
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 Bylaws, 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
-6-
coverage available for any such director or executive officer or person serving
in such position under such policy or policies.
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 located in Miami-Dade County, 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
-7-
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).
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.
-8-
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, then to:
________________
________________
________________
________________
(b) If to the Company, then to:
IVAX Diagnostics, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
or to such other address as may have been furnished to either party by the other
party.
-9-
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.
IVAX DIAGNOSTICS, INC.
By:
---------------------
Name:
---------------------
Title:
---------------------
DIRECTOR
---------------------
-10-