INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the
"Agreement") is made and entered
into this February ___, 2009 between DIALYSIS CORPORATION OF
AMERICA, a
Florida corporation (the "Company," which term includes all of
its
subsidiaries or affiliated companies), and
______________________
("Indemnitee").
WITNESSETH THAT:
WHEREAS, the Company and Indemnitee
recognize that, directors, officers,
and other persons in service to corporations or business
enterprises are
being increasingly subjected to expensive and time-consuming
litigation
relating to, among other things, matters that traditionally would
have been
brought only against the Company or business enterprise itself, the
result of
which being highly competent persons have become reluctant to join,
and if
already employed or affiliated, to continue to serve corporations
as
directors, officers, or in other capacities unless they are
provided with
adequate protection against inordinate risks of claims and actions
against
them arising out of their service to and activities on behalf of
the
corporation;
WHEREAS, the Company and Indemnitee
recognize the consistently
increasing costs of liability insurance as well as the general
reductions or
exceptions in the coverage of such insurance;
WHEREAS, the uncertainties relating to
such insurance and to
indemnification can increase the difficulty of attracting and
retaining such
persons;
WHEREAS, the Board of Directors of the
Company (the "Board") has
determined that any resulting difficulty in attracting and
retaining such
persons is detrimental to the best interests of the Company and
its
stockholders and that the Company should act to assure such persons
that
there will be increased certainty of such protection in the
future;
WHEREAS, although the certificate of
incorporation and bylaws, as
amended (the "Charter Documents") of the Company require
indemnification of
the persons serving the Company pursuant to the Florida Business
Corporation
Act ("FBCA"), the bylaws and the FBCA expressly provide that
the
indemnification provisions set forth therein are not exclusive, and
thereby
contemplate that contracts may be entered into between the Company
and
members of the Board, officers and other persons with respect
to
indemnification; as a result the Company believes that it is
reasonable,
prudent and necessary for the Company contractually to obligate
itself to
indemnify, and to advance expenses on behalf of, 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;
WHEREAS, this Agreement is a supplement to
and in furtherance of the
Company's Charter Documents and any resolutions adopted pursuant
thereto, and
shall not be deemed a substitute therefor, nor to diminish or
abrogate any
rights of Indemnitee thereunder;
WHEREAS, Indemnitee does not regard the
protection available under the
Company's Charter Documents adequate in the present circumstances,
and is not
willing to serve or continue
<PAGE> 1
to serve as an officer or director of the Company or other
Enterprise (as
defined below) without adequate protection, and the Company
desires
Indemnitee to serve and continue to serve in such capacity(ies);
and
WHEREAS, Indemnitee is willing to serve,
continue to serve and to take
on additional service for or on behalf of the Company on the
condition that
Indemnitee be so indemnified.
NOW, THEREFORE, in consideration of
Indemnitee's agreement to serve or
continue to serve the Company in his or her designated capacity
from and
after the date hereof and in consideration of the covenants
contained herein,
the Company and the Indemnitee agree as follows:
1. Definitions. For purposes of this Agreement:
-----------
(a) "Change in Control" shall mean any one
of the following events to
occur after the date of this Agreement:
(i) Acquisition of
Stock by Third Party. Any Person (as defined
below) or Persons acting as a group that is or becomes the
Beneficial Owner
(as defined below), directly or indirectly, of securities of the
Company
representing twenty-five percent (25%) or more of the combined
voting power
of the Company's then outstanding securities;
(ii) Change in
Board of Directors. During any period of two (2)
consecutive years (not including any period prior to the execution
of this
Agreement), individuals who at the beginning of such period
constitute the
Board, and any new director (other than a director designated by a
person who
has entered into an agreement with the Company to effect a
transaction
described in subsections (i),(iii) or (iv)) whose election by the
Board or
nomination for election by the Company's stockholders was approved
by a vote
of at least two-thirds 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
least a majority of the members of the Board;
(iii) Corporate
Transactions. The effective date of a merger or
consolidation of the Company with any other entity, other than a
merger or
consolidation which would result in the voting securities of the
Company,
which are outstanding immediately prior to such merger or
consolidation,
continuing to represent (either by remaining outstanding or by
being
converted into voting securities of the surviving entity) more than
50% of
the combined voting power of the voting securities of the surviving
entity
outstanding immediately after such merger or consolidation and with
the power
to elect at least a majority of the board of directors or other
governing
body of such surviving entity;
(iv)
Liquidation. The approval by the stockholders of the
Company
of a complete liquidation of the Company or an agreement for the
sale or
disposition by the Company of all or substantially all of the
Company's
assets; and
(v) Other
Events. There occurs any other event of a nature that
would be required to be reported in response to Item 6(e) of
Schedule 14A of
Regulation 14A (or a response to any similar item on any similar
schedule or
form) promulgated under the Exchange
<PAGE> 2
Act (as defined below), whether or not the Company is then subject
to such
reporting requirement.
(b) "Beneficial Owner" shall have the
meaning given to such term in Rule
13d-3 under the Exchange Act; provided, however, that Beneficial
Owner shall
exclude any Person otherwise becoming a Beneficial Owner by reason
of the
stockholders of the Company approving a merger of the Company with
another
entity.
(c) "Corporate Status" describes the
status of a person who is or was a
director, officer, employee or agent of the Company or is or was a
director,
officer, employee or agent of any other Enterprise (as defined
below).
(d) "Disinterested Director" means a
director of the Company who is not
and was not a party to the Proceeding (as defined below) in respect
of which
indemnification is sought by Indemnitee.
(e) "Enterprise" shall mean the Company
and any other corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise
that Indemnitee is or was serving at the express written request of
the
Company as a director, officer, employee or agent.
(f) "Evaluation Date" shall mean, as to
any Indemnification Request (as
defined in Section 9(a)), the date that is forty-five (45) calendar
days
after the date of receipt by the Company of such Indemnification
Request
provided, however, that such 45-day period may be extended for a
reasonable
time, not to exceed an additional thirty (30) days, if the
person(s) making
such determination with respect to entitlement to indemnification
in good
faith requires such additional time to obtain or evaluate
documentation
and/or information relating thereto.
(g) "Exchange Act" shall mean the
Securities Exchange Act of 1934, as
amended.
(h) "Expenses" shall include all
reasonable attorneys' fees, 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 types
customarily incurred in connection with prosecuting, defending,
preparing to
prosecute or defend, investigating, participating, or being or
preparing to
be a witness in a Proceeding, or responding to, or objecting to, a
request to
provide discovery in any Proceeding. Expenses also shall
include Expenses
incurred in connection with any appeal resulting from any
Proceeding and any
federal, state, local or foreign taxes imposed on the Indemnitee as
a result
of the actual or deemed receipt of any payments under this
Agreement,
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, however, shall not include amounts paid
in settlement
by Indemnitee or the amount of judgments, penalties or fines
against
Indemnitee.
(i) "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 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
<PAGE> 3
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. The Company agrees 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.
(j) "Person" shall mean any individual,
corporation, company, general or
limited partnership, limited liability company, joint venture,
trust, or
other entity; provided, however, Person shall exclude (i) the
Company, (ii)
any trustee or other fiduciary holding securities under an employee
benefit
plan of the Company, and (iii) any corporation, partnership, joint
venture,
trust, employment benefit plan or other enterprise owned, directly
or
indirectly, by the stockholders of the Company in substantially the
same
proportions as their ownership of stock of the Company.
(k) "Proceeding" includes 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 by or in the right of the Company or
otherwise
and whether civil, criminal, administrative or investigative, in
which
Indemnitee was, is or will be involved as a party or otherwise, by
reason of
Indemnitee's Corporate Status, by reason of any action taken by
Indemnitee or
of any inaction on Indemnitee's part during Indemnitee's Corporate
Status, or
by reason of Indemnitee's Corporate Status serving another
Enterprise; in
each case whether or not Indemnitee is acting or serving in any
such capacity
at the time any liability or Expense is incurred for which
indemnification,
including advancement of Expenses can be provided under this
Agreement.
(l) "Statute" means Section 607.0850 of
the FBCA or any successor
provisions(s) thereto.
2. Services to the Company. Indemnitee will serve or continue to
serve in
-----------------------
Indemnitee's capacity as a(n) _________________ [insert
Indemnitee's
Corporate Status] of the Company for so long as Indemnitee is duly
elected,
appointed or otherwise has an agreement to so serve or until
Indemnitee
tenders Indemnitee's resignation, Indemnitee's term of service or
agreement
expires, or Indemnitee is otherwise terminated by the Company.
3. Indemnification of Indemnitee. The Company hereby agrees
to hold harmless
-----------------------------
and indemnify Indemnitee and, as part of such indemnification
advance
Expenses to Indemnitee, as provided in this Agreement and to the
fullest
extent permitted by applicable law in effect on the date hereof,
and as such
may be amended from time to time. In furtherance of the
foregoing
indemnification, and without limiting the generality thereof:
(a) Third-Party Proceedings.
Indemnitee shall be entitled to the rights
of indemnification provided in this Section 3(a) if, by reason
of
Indemnitee's Corporate Status, the Indemnitee was or is, or is
threatened to
be made, a party to or participant in any Proceeding other than as
provided
in Section 3(b). Pursuant to this Section 3(a), Indemnitee
shall be
indemnified against all Expenses actually and reasonably incurred,
as well as
any judgments, penalties, fines (including an excise tax assessed
with
respect to any employee benefit plan) and amounts paid in
settlement which
were incurred by Indemnitee, or on Indemnitee's behalf, in
<PAGE> 4
connection with such Proceeding or any matter therein, or appeal
thereof, if
the Indemnitee acted in good faith and in a manner the Indemnitee
reasonably
believed to be in, or not opposed to, the best interests of the
Company or
other Enterprise, and with respect to any criminal Proceeding, had
no
reasonable cause to believe the Indemnitee's conduct was
unlawful.
(b) Derivative Proceedings.
(i) Indemnitee
shall be entitled to the rights of indemnification
provided in this Section 3(b) if, by reason of Indemnitee's
Corporate Status,
the Indemnitee was or is, or is threatened to be made, a party to
or
participant in any Proceeding brought by or in the right of the
Company to
procure a judgment in its favor. Pursuant to this Section
3(b), Indemnitee
shall be indemnified against all Expenses and, subject to the
provisions of
subparagraph (ii) below, amounts paid in settlement not exceeding,
in the
judgment of the Board, the estimated Expense of litigating the
Proceeding to
conclusion, actually and reasonably incurred by the Indemnitee, or
on the
Indemnitee's behalf, in connection with the defense or settlement
of such
Proceeding or any matter therein or appeal thereof. The
indemnification
provided for hereby shall be authorized if the Indemnitee acted in
good faith
and in a manner the Indemnitee reasonably believed to be in, or not
opposed
to, the best interests of the Company. If applicable law so
provides, no
indemnification under this Section 3(b) shall be made in respect of
any
claim, issue or matter as to which Indemnitee shall have been
adjudged to be
liable unless, and only to the extent that the court in which the
Proceeding
was brought, or any other court of competent jurisdiction, shall
determine
upon application by Indemnitee that, despite the adjudication of
liability
but in view of all the circumstances of the case, the Indemnitee is
fairly
and reasonably entitled to indemnification.
(ii)
Indemnification for amounts paid in settlement of the
Proceeding noted in paragraph (i) above shall not exceed, in the
judgment of
the Board, the estimated Expense of litigating the Proceeding to
conclusion;
provided however that to the extent that Indemnitee is not
satisfied with the
amount estimated by the Board, Indemnitee may retain, at
Indemnitee's own
expense, an independent consultant/agent to assess and provide an
amount of
the estimated Expense of litigating the Proceeding to
conclusion. Indemnitee
shall present such independent analyses to the Board and to the
extent of any
discrepancy in the amounts estimated between the Board and the
Indemnitee,
and further to the extent that the Indemnitee and Board cannot
resolve the
differences between them, the parties agree to submit the matter to
binding
arbitration or mediation in accordance with the Commercial
Arbitration Rules
of the American Arbitration Association in or about the county of
Cumberland,
Pennsylvania. The costs associated with any arbitration or
mediation shall
be borne entirely by the Company.
(iii) To the
extent indemnification is not provided to Indemnitee
under this Section 3(b) because Indemnitee was adjudged to be
liable, and
applicable law does not otherwise provide for indemnification, and
provided
further that the court in which the Proceeding was brought, or any
other
court of competent jurisdiction, has not made any prior
determination that
indemnification is available, Indemnitee may apply to the court in
which the
Proceeding was brought, or to any other court of competent
jurisdiction, for
a determination that notwithstanding the adjudication of Indemnitee
as liable
in the Proceeding, Indemnitee is entitled to indemnification in
view of the
circumstances of the Proceeding. To the extent that Indemnitee is
successful
in obtaining a finding by the court that Indemnitee is entitled
to
indemnification irrespective of the adjudication of liability, the
Company
hereby agrees to reimburse Indemnitee
<PAGE> 5
for all reasonable Expenses of Indemnitee incurred by Indemnitee
in
connection with such application for indemnification. The
Company further
agrees to stay any claim or demand for return of any advanced
Expenses to
Indemnitee in connection with the Proceeding during the pendency
of
Indemnitee's application to the court for indemnification per this
paragraph
(iii). A finding by the court in such case that Indemnitee is
entitled to
retain any advanced Expenses per this Agreement shall be considered
as a
determination by such court that Indemnitee was entitled to
indemnification
irrespective of an adjudication of liability and in such case the
Company
shall be responsible for reimbursing Indemnitee for the Expense of
such
application.
(c) Indemnitee Wholly or Partly Successful
on the Merits.
Notwithstanding any other provision of this Agreement, to the
extent that
Indemnitee is, by reason of Indemnitee's Corporate Status, a party
to and is
successful on the merits or otherwise, in defense of any Proceeding
referred
to in Section 3(a) or (b) above, Indemnitee shall be indemnified to
the
maximum extent permitted by law, as such may be amended from time
to time,
against all Expenses actually and reasonably incurred by Indemnitee
or on
Indemnitee's behalf 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 Indemnitee or on Indemnitee's
behalf in
connection with each successfully resolved claim, issue or
matter. The
Company acknowledges that a settlement or other disposition of a
Proceeding
referred to in Sections 3(a) or (b) above short of final judgment,
including,
without limitation, dismissal of the Proceeding or a claim, issue
or matter
therein as against Indemnitee, with or without prejudice, may be
deemed an
otherwise successful defense of such Proceeding or claim, issue or
matter
therein. In the event that any Proceeding referred to in
Sections 3(a) or
(b) above to which Indemnitee is a party, or any claim, issue or
matter
therein, is resolved in any manner other than by adverse judgment
against
Indemnitee, it shall be presumed that Indemnitee has been
successful on the
merits or otherwise in such Proceeding or the particular claim,
issue or
matter therein. Anyone seeking to overcome this presumption
shall have the
burden of proof and the burden of persuasion by clear and
convincing
evidence.
4. Termination of Proceeding Non-conclusive. The termination of
any
----------------------------------------
Proceeding 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 (except as otherwise expressly provided in
this
Agreement) of itself adversely affect the right of Indemnitee
to
indemnification or 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 Company or, with respect to
any
criminal Proceeding, that Indemnitee had reasonable cause to
believe that
Indemnitee's conduct was unlawful.
5. No Employment Rights. Nothing contained in this Agreement
is intended to
--------------------
create in Indemnitee any right to continued employment or to
continue in the
position of Indemnitee's Corporate Status.
6. Additional Indemnification. Notwithstanding any other
provision of this
--------------------------
Agreement, the Company hereby agrees to indemnify the Indemnitee to
the
fullest extent permitted by law, notwithstanding that such
indemnification is
not specifically authorized by the other provisions of this
Agreement, the
Company's Charter Documents or by statute. In the event of
any change,
<PAGE> 6
after the date of this Agreement, in any applicable law, statute or
rule
which expands the right of a Florida corporation, partnership,
joint venture,
trust, employment benefit plan or other enterprise to indemnify a
member of
its board of directors, board of trustees, or similar board, an
officer, an
employee or an agent, such changes shall be, in and of itself,
within the
purview of the Indemnitee's rights and the Company's obligations
under this
Agreement. In the event of any change in any applicable law,
statute or rule
which narrows the right of a Florida corporation, partnership,
joint venture,
trust, employment benefit plan or other enterprise to indemnify a
member of
its board of directors, board of trust