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Exhibit 10.83
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made as of
,
20 by and between Prospect Medical
Holdings, Inc., a Delaware corporation (the "Company"), and
("Indemnitee").
RECITALS
WHEREAS, highly competent persons have become more reluctant to
serve corporations as directors or in other capacities 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;
WHEREAS, the General Corporation Law of the State of Delaware
("DGCL") empowers the Company to indemnify by agreement its
officers, directors, employees and agents, and persons who serve,
at the request of the Company, as directors, managers, officers,
employees or agents of other corporations, limited liability
companies, partnerships, joint ventures, or other enterprises, and
expressly provides that the indemnification provided thereby is not
exclusive;
WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify, and to advance
expenses on behalf of, persons serving the Company and/or an
Enterprise (as defined below) to the fullest extent permitted by
applicable law (as described in Section 7(b) hereof) so
that they will serve or continue to serve the Company and/or the
Enterprise free from undue concern that they will not be so
indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of
the certificate of incorporation and bylaws of the Company and any
resolutions adopted pursuant thereto and shall not be deemed a
substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder; and
NOW, THEREFORE, in consideration of the promises and the
covenants contained herein, the Company and Indemnitee do hereby
covenant and agree as follows:
1.
Services to the Company . Indemnitee will serve or
continue to serve as an officer, director, manager or key employee
of the Company or an Enterprise for so long as Indemnitee is duly
elected or appointed or until Indemnitee tenders his or her
resignation, subject to the terms of any employment agreement
between Indemnitee and the Company.
2.
Definitions . As used in this Agreement:
(a)
"Change in Control" shall be deemed to have occurred if
(i) any Person (other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or
a corporation owned directly or indirectly by the stockholders of
the Company in substantially the same proportions as their
ownership of stock of the Company, and other than
any person holding shares of the Company on the date that the
Company first registers under the Act or any transferee of such
individual if such transferee is a spouse or lineal descendant of
the transferee or a trust for the benefit of the individual, his
spouse or lineal descendants), is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 30% or more
of the total voting power represented by the Company’s then
outstanding voting securities, or (ii) during any period of
two consecutive years, individuals who at the beginning of such
period constitute the Board of Directors of the Company (the
"Board") and any new director whose election by the Board or
nomination for election by the Company’s stockholders was
approved by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors at the beginning of
the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a
majority of the Board, or (iii) the stockholders of the
Company approve a merger or consolidation of the Company with any
other corporation, other than a merger or consolidation that would
result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving entity) at least 80% of the total voting power
represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or (iv) the stockholders of the Company approve
a plan of complete liquidation of the Company or an agreement for
the sale or disposition by the Company (in one transaction or a
series of transactions) of all or substantially all of the
Company’s assets.
(b)
"Corporate Status" describes the status of a person who is or was a
director, officer, trustee, general partner, managing member,
fiduciary, employee or agent of the Company or of any other
Enterprise which such person is or was serving at the request of
the Company.
(c)
"Disinterested Director" means a director of the Company who is not
and was not a party to the Proceeding in respect of which
indemnification is sought by Indemnitee.
(d)
"Enterprise" shall mean the Company and any other corporation,
limited liability company, partnership, joint venture, trust or
other enterprise in respect of which Indemnitee is or was or will
be serving as a director, officer, trustee, manager, member,
partner, employee, agent, attorney, consultant, member of the
entity’s governing body (whether constituted as a board of
directors, board of managers, general partner or otherwise),
fiduciary, or in any other similar capacity at the request,
election or direction of the Company.
(e)
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(f)
"Expenses" shall include all reasonable attorneys’ fees,
retainers, court costs, transcript costs, fees of experts, witness
fees, travel expenses, duplicating costs, printing and binding
costs, telephone charges, postage, delivery service fees and all
other disbursements or expenses of the type 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. Expenses also shall
include expenses incurred in connection with any appeal resulting
from any Proceeding, including, without limitation, the premium,
security for and other costs relating to any cost bond, supersedeas
bond or other appeal bond or its
equivalent. Expenses shall not include amounts paid in
settlement by Indemnitee or the amount of judgments or fines
against Indemnitee.
(g)
"Independent Counsel" means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to
represent: (i) the 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 indemnitees
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 Company or
Indemnitee in an action to determine Indemnitee’s rights
under this Agreement.
(h)
"Person" shall have the meaning set forth in Sections
13(d) and 14(d) of the Exchange Act; provided, however,
that Person shall exclude (i) the Company or any Enterprise,
(ii) any trustee or other fiduciary holding securities under
an employee benefit plan of the Company and (iii) any
corporation owned, directly or indirectly, by the stockholders of
the Company in substantially the same proportions as their
ownership of stock of the Company.
(i)
The term "Proceeding" shall include any threatened, pending or
completed action, suit, arbitration, alternate dispute resolution
mechanism, investigation, inquiry, administrative hearing or any
other actual, threatened or completed proceeding, whether brought
in the right of the Company or otherwise and whether of a civil,
criminal, administrative or investigative nature, in which
Indemnitee was, is or will be involved as a party or otherwise by
reason of the fact that Indemnitee is or was a director or officer
of the Company, by reason of any action taken (or failure to act)
by him or her or of any action (or failure to act) on his or her
part while acting as a director or officer of the Company, or by
reason of the fact that he or she is or was serving as a director,
officer, trustee, general partner, managing member, fiduciary,
employee or agent of any other Enterprise, in each case whether or
not serving in such capacity at the time any liability or expense
is incurred for which indemnification, reimbursement or advancement
of expenses can be provided under this Agreement.
(j)
References to "other enterprise" shall include employee benefit
plans; references to "fines" shall include any excise tax assessed
with respect to any employee benefit plan; references to "serving
at the request of the Company" shall include any service as a
director, officer, employee or agent of the Company which imposes
duties on, or involves services by, such director, officer,
employee or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith
and in a manner he or she reasonably believed to be in the best
interests of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner "not opposed
to the best interests of the Company" as referred to in this
Agreement.
3.
Indemnity in Third-Party Proceedings . The Company
shall indemnify Indemnitee in accordance with the provisions of
this Section 3 if Indemnitee is, or is threatened to be made,
a party to or a participant (as a witness or otherwise) in any
Proceeding, other than a Proceeding by or in the right of the
Company to procure a judgment in its favor. Pursuant to this
Section 3,
Indemnitee shall be indemnified against all Expenses, judgments,
fines, penalties and amounts paid in settlement (including all
interest, assessments or other charges imposed thereon, ERISA
excise taxes and penalties, any federal, state, local, or foreign
taxes imposed as a result of the actual or deemed receipt of any
payments under this Agreement, and other charges paid or payable in
connection with or in respect of such Expenses, judgments, fines,
penalties and amounts paid in settlement) actually and reasonably
incurred by Indemnitee or on his or her behalf in connection with
such Proceeding or any claim, issue or matter therein, if
Indemnitee acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the
Company or an Enterprise and, in the case of a criminal proceeding,
he or she had no reasonable cause to believe that his or her
conduct was unlawful.
4.
Indemnity in Proceedings by or in the Right of the Company
. The Company shall indemnify Indemnitee in accordance with
the provisions of this Section 4 if Indemnitee is, or is
threatened to be made, a party to or a participant (as a witness or
otherwise) in any Proceeding by or in the right of the Company to
procure a judgment in its favor. Pursuant to this Section 4,
Indemnitee shall be indemnified against all Expenses actually and
reasonably incurred by Indemnitee or on his or her behalf in
connection with such Proceeding or any claim, issue or matter
therein, if Indemnitee acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best
interests of the Company or an Enterprise. No indemnification for
Expenses shall be made under this Section 4 in respect of any
claim, issue or matter as to which Indemnitee shall have been
finally adjudged by a court to be liable to the Company or an
Enterprise, unless and only to the extent that any court in which
the Proceeding was brought or the Delaware Court of Chancery shall
determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to such
indemnification.
5.
Indemnification for Expenses of a Party Who is Wholly or Partly
Successful . Notwithstanding any other provisions of this
Agreement, to the extent that Indemnitee is a party to (or a
participant in) and is successful, on the merits or otherwise, in
any Proceeding or in defense of any claim, issue or matter therein,
in whole or in part, the Company shall indemnify Indemnitee against
all Expenses actually and reasonably incurred by him or her in
connection therewith. If Indemnitee is not wholly successful in
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 Company shall indemnify Indemnitee against all
Expenses actually and reasonably incurred by him or her or on his
or her behalf in connection with each successfully resolved claim,
issue or matter. If Indemnitee is not wholly successful in such
Proceeding, the Company also shall indemnify Indemnitee against all
Expenses reasonably incurred in connection with a claim, issue or
matter related to any claim, issue or matter on which Indemnitee
was successful. For purposes of this Section and without
limitation, the termination of any claim, issue or matter in such a
Proceeding by dismissal, with or without prejudice, shall be deemed
to be a successful result as to such claim, issue or matter.
6.
Indemnification For Expenses of a Witness .
Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee is, by reason of his Corporate Status, a
witness in any Proceeding to which Indemnitee is not a party, he
shall be indemnified against all Expenses
actually and reasonably incurred by him or her or on his or her
behalf in connection therewith in accordance with the procedures
set forth in Section 9 hereof.
7.
Additional Indemnification .
(a)
Notwithstanding any limitation in Sections 3, 4 or 5, the Company
shall indemnify Indemnitee to the fullest extent permitted by law
if Indemnitee is a party to or threatened to be made a party to any
Proceeding (including a Proceeding by or in the right of the
Company to procure a judgment in its favor) against all Expenses,
judgments, fines, penalties and amounts paid in settlement
(including all interest, assessments and other charges paid or
payable in connection with or in respect of such Expenses,
judgments, fines, penalties and amounts paid in settlement)
actually and reasonably incurred by Indemnitee in connection with
the Proceeding. No indemnity shall be made under this
Section 7(a) on account of Indemnitee’s conduct
which constitutes a breach of Indemnitee’s duty of loyalty to
the Company or its stockholders or to an Enterprise or is an act or
omission not in good faith or which involves intentional misconduct
or a knowing violation of the law.
(b)
For purposes of Section 7(a), the meaning of the phrase "to
the fullest extent permitted by law" shall include, but not be
limited to:
(i)
the fullest extent permitted by the provision of the DGCL that
authorizes or contemplates additional indemnification by agreement
or the corresponding provision of any amendment to or replacement
of the DGCL; and
(ii)
the fullest extent authorized or permitted by any amendments to or
replacements of the DGCL adopted after the date of this Agreement
that increase the extent to which a corporation may indemnify its
officers and directors.
8.
Exclusions . Notwithstanding any other provision in
this Agreement, the Company shall not be obligated under this
Agreement to indemnify Indemnitee in connection with any claim made
against Indemnitee:
(a)
for which payment has actually been received by or on behalf of
Indemnitee under any insurance policy or other indemnity provision,
except with respect to any excess beyond the amount actually
received under any insurance policy or other indemnity
provision;
(b)
for an accounting of profits made from the purchase and sale (or
sale and purchase) by Indemnitee of securities of the Company
within the meaning of Section 16(b) of the Exchange Act
or similar provisions of state statutory law or common law; or
(c)
except as otherwise provided in Sections 13(d)-(f) hereof, in
connection with any Proceeding (or any part of any Proceeding)
initiated by Indemnitee, including any Proceeding (or any part of
any Proceeding) initiated by Indemnitee against the Company or its
directors, officers, employees or other indemnitees, unless
(i) the Board of Directors of the Company authorized the
Proceeding (or any part of any Proceeding) prior to its initiation,
(ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the
Company under applicable law, or (iii) the Proceeding is
instituted after a Change in Control (other than a Change in
Control approved by a majority of the directors on the Board who
were directors immediately prior to such Change in Control) and
Independent Counsel has approved its initiation.
9.
Advances of Expenses; Defense of Claim .
(a)
Notwithstanding any provision of this Agreement to the contrary,
the Company shall advance the expenses incurred by Indemnitee in
connection with any Proceeding within ten (10) days after the
receipt by the Company of a statement or statements requesting such
advances from time to time, whether prior to or after final
disposition of any Proceeding. Advances shall be unsecured and
interest free. Advances shall be made without regard to
Indemnitee’s ability to repay the expenses and without regard
to Indemnitee’s ultimate entitlement to indemnification under
the other provisions of this Agreement. Advances shall include any
and all reasonable Expenses incurred pursuing an action to enforce
this right of advancement, including Expenses incurred preparing
and forwarding statements to the Company to support the advances
claimed. Indemnitee shall qualify for advances solely upon the
execution and delivery to the Company of an undertaking providing
that Indemnitee undertakes to repay the advance to the extent that
it is ultimately determined that Indemnitee is not entitled to be
indemnified by the Company, in which case the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to
reimburse the Company) for all such amounts theretofore paid.
Any such obligation of Indemnitee to so reimburse the Company shall
be unsecured and no
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