EXHIBIT 10.74
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made on October 31, 2008,
between United American Healthcare Corporation, a Michigan corporation
("Corporation"), and __________________ ("Director").
RECITALS
A. Director is a member of Corporation's Board of Directors and Corporation
desires Director to continue in such capacity. Director is willing to continue
to serve on Corporation's Board of Directors if Director receives the
protections provided by this Agreement.
B. Corporation's Bylaws obligate it to indemnify its directors and
officers.
C. Corporation has furnished, at its expense, directors and officers
liability insurance ("D&O Insurance") protecting its directors in connection
with their performance of services for Corporation.
D. Corporation believes that (1) litigation against corporate directors,
regardless of whether meritorious, is expensive and time-consuming for the
director to defend; (2) there is a substantial risk of a large judgment or
settlement in litigation in which a corporate director was neither culpable nor
profited personally to the detriment of the corporation; (3) it is increasingly
difficult to attract and keep qualified directors because of such potential
liabilities; (4) it is important for a director to have assurance that
indemnification will be available if the director acts in accordance with
reasonable business standards; and (5) because available D&O Insurance and the
indemnification available from Corporation are not adequate to fully protect
Corporation's directors against the problems discussed above, it is in the best
interests of Corporation and its shareholders for Corporation to contractually
obligate itself to indemnify its directors and to set forth the details of the
indemnification process.
E. Based upon the conclusions stated in Recital D above, to induce Director
to continue to serve on Corporation's Board of Directors and in consideration of
Director's continued service as a director, Corporation wishes to enter into
this Agreement with Director.
Therefore, Corporation and Director agree as follows:
1. AGREEMENT TO SERVE. Director will serve as a member of the Board of Directors
of Corporation so long as Director is duly elected and qualified to so serve or
until Director resigns or is removed from Corporation's Board of Directors.
2. INDEMNIFICATION.
(a) Corporation will indemnify Director to the fullest extent permitted
under applicable law if Director was or is a party or threatened to be made a
party to any threatened, pending or completed action, suit or proceeding of any
kind, whether civil, criminal, administrative or investigative and whether
formal or informal (including actions by or in the right of Corporation and any
preliminary
inquiry or claim by any person or authority), by reason of the fact
that Director is or was a director, officer, partner, trustee, employee or agent
of Corporation or is or was serving at Corporation's request as a director,
officer, employee or agent of another corporation (including a Subsidiary),
limited liability company, partnership, joint venture, trust, employee benefit
plan or other enterprise, whether or not for profit, or by reason of anything
done or not done by Director in any such capacity (collectively, "Covered
Matters"). Such indemnification will cover all Expenses (as defined in paragraph
5(a) below), liabilities, judgments (including punitive and exemplary damages),
penalties, fines (including excise taxes relating to employee benefit plans and
civil penalties) and amounts paid in settlement which are incurred or imposed
upon Director in connection with a Covered Matter (collectively, "Indemnified
Amounts").
(b) Director will be indemnified for all Indemnified Amounts and
Corporation will defend Director against claims (including threatened claims and
investigations) in any way related to Director's service as a director including
claims brought by or on behalf of Corporation or any Subsidiary, except if it is
finally determined by the court of last resort (or by a lower court if not
timely appealed) that (1) the payment is prohibited by applicable law or (2)
Director engaged in intentional misconduct for the primary purpose of
significant personal financial benefit through actions adverse to Corporation's
and its shareholders' best interests. As used in this Agreement, (1)
"intentional misconduct" will not include violations of disclosure or reporting
requirements of federal securities laws or a breach of fiduciary duties
(including duties of loyalty or care) if Director relied on advice of counsel to
Corporation, or otherwise reasonably believed that there was no violation of
such requirements or breach of fiduciary duty; and (2) "significant personal
financial benefit" will not include compensation or employee benefits for past
or prospective services to Corporation or Corporation's successor or in
connection with an agreement not to compete or similar agreement, or any benefit
received by directors or officers or shareholders of Corporation generally.
(c) If Director is entitled under this Agreement to indemnification for
less than all of the amounts incurred by Director in connection with a Covered
Matter, Corporation will indemnify Director for the indemnifiable amount.
3. CLAIMS FOR INDEMNIFICATION. Director will give Corporation written notice of
any claim for indemnification under this Agreement. Payment requests will
include a schedule setting forth in reasonable detail the amount requested and
will be accompanied (or, if necessary, followed) by copies of the relevant
invoices or other documentation. Upon Corporation's request, Director will
provide Corporation with a copy of the document or pleading, if any, notifying
Director of the Covered Matter. To the extent practicable, Corporation will pay
Indemnified Amounts directly without requiring Director to make any prior
payment.
4. DETERMINATION OF RIGHT TO INDEMNIFICATION.
(a) Director will be presumed to be entitled to indemnification under this
Agreement and will receive such indemnification, subject to paragraph 4(b)
below, irrespective of whether the Covered Matter involves allegations of
intentional misconduct, alleged violations of Section 16(b) of the Securities
Exchange Act of 1934, alleged violations of Section 10(b) of the Securities
Exchange Act of 1934 (including Rule 10b-5 thereunder), breach of Director's
fiduciary duties (including duties of loyalty or care) or any other claim.
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(b) If, in the opinion of counsel to Corporation, because of a change in
law, applicable law permits indemnification in a Covered Matter only as
authorized in the specific case upon a determination that indemnification is
proper in the circumstances because Director has met a standard of conduct
established by applicable law, and upon an evaluation of Indemnified Amounts to
be paid in connection with such Covered Matter, the following will apply:
(1) Corporation will give Director notice that a determination and
evaluation will be made under this paragraph 4(b); such notice will be
given immediately after receipt of counsel's opinion that such a
determination and evaluation is necessary and will include a copy of such
opinion.
(2) Such determination and evaluation will be made in good faith, as
follows:
(A) by a majority vote of a quorum of Corporation's Board of
Directors who are not parties or threatened to be made parties to the
Covered Matter in question ("Disinterested Directors") or, if such a
quorum is not obtainable, by a majority vote of a committee of
Disinterested Directors who are selected by the Board; or
(B) by an attorney or firm of attorneys, having no previous
relationship with Corporation or Director, which is selected by
Corporation and Director; or
(C) by all independent directors of Corporation (as defined in
the Michigan Business Corporation Act) who are not parties or
threatened to be made parties to the Covered Matter.
(3) Director will be entitled to a hearing before the entire Board of
Directors of Corporation and any other person or persons making the
determination and evaluation under clause (2) above. Director will be
entitled to be represented by counsel at such hearing.
(4) The cost of a determination and evaluation under this paragraph
4(b) (including reasonable attorneys' fees and other expenses incurred by
Director in preparing for and attending the hearing contemplated by clause
(3) above and otherwise in connection with the determination and evaluation
under this paragraph 4(b)) will be borne by Corporation.
(5) The determination will be made as promptly as possible after final
adjudication of the Covered Matter.
(6) Director will be presumed to have met the required standard of
conduct under this Section 4(b) unless it is clearly demonstrated to the
determining body that Director has not met the required standard of
conduct.
5. ADVANCE OF EXPENSES.
(a) Before final adjudication of a Covered Matter, upon Director's request
pursuant to paragraph 3 above, Corporation within 30 days after the request is
received, will either advance Expenses directly or reimburse Director for all
Expenses. As used in this Agreement, "Expenses" means all reasonable costs and
expenses (including attorneys' fees, expert fees, other professional fees
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and court costs) incurred by Director in connection with a Covered Matter other
than judgments, penalties, fines and settlement amounts.
(b) If, in the opinion of counsel to Corporation, because of a change in
law, applicable law permits advancement of Expenses only as authorized in the
specific case upon a determination that Director has met a standard of conduct
established by applicable law, the determination will be made at Corporation's
cost, in good faith and promptly as possible after Director's request, in
accordance with clauses (1) through (4) and (6) of paragraph 4(b) above. Because
of the difficulties inherent in making any such determination before final
disposition of the Covered Matter, to the extent permitted by law such advance
will be made if (1) the facts then known to those persons making the
determination, without conducting a formal independent investigation, would not
preclude advancement of Expenses under applicable law and (2) Director submits
to Corporation a written affirmation of Director's belief that Director has met
the standard of conduct necessary for advancement of Expenses under the
circumstances.
(c) Director will repay any Expenses that are advanced under this paragraph
5 if it is ultimately determined, in a final, non-appealable judgment rendered
by the court of last resort (or by a lower court if not timely appealed), that
Director is not entitled to be indemnified against such Expenses. This
undertaking by Director is an unlimited general undertaking but no security for
such undertaking will be required.
6. DEFENSE OF CLAIM.
(a) Except as provided in paragraph 6(c) below, Corporation, jointly with
any other indemnifying party, will be entitled to assume the defense of any
Covered Matter as to which Director requests indemnification.
(b) Counsel selected by Corporation to defend any Covered Matter will be
subject to Director's advance written approval, which will not be unreasonably
withheld.
(c) Director may employ Director's own counsel in a Covered Matter and be
fully reimbursed therefore if (1) Corporation approves, in writing, the
employment of such counsel or (2) either (A) Director has reasonably concluded
that there may be a conflict of interest between Corporation and Director or
between Director and other parties represented by counsel employed by
Corporation to represent Director in such action or (B) Corporation has not
employed counsel reasonably satisfactory to Director to assume the defense of
such Covered Matter promptly after Director's request.
(d) Neither Corporation nor Director will settle any Covered Matter without
the other's written consent, which will not be unreasonably withheld.
(e) If Director is required to testify (in court proceedings, depositions,
informal interviews or otherwise), consult with counsel, furnish documents or
take any other reasonable action in connection with a Covered Matter,
Corporation will pay Director a fee for Director's efforts at a rate equal to
the amount payable to Director for attending Board and Board committee meetings,
plus reimbursement for all reasonable expenses incurred by Director in
connection therewith.
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7. DISPUTES; ENFORCEMENT.
(a) If there is a dispute relating to the validity or enforceability of
this Agreement or a denial of indemnification, advance of Expenses or payment of
any other amounts due under this Agreement or Corporation's Articles of
Incorporation or Bylaws, Corporation will provide such indemnification, advance
of Expenses or other payment until a final, non-appealable judgment that
Director is not entitled to such indemnification, advance of Expenses or other
payment has been rendered by the court of last resort (or by a lower court if
not timely appealed). Director will repay such amounts if such final,
non-appealable judgment so requires.
(b) Corporation will reimburse all of Director's reasonable expenses
(including attorneys' fees) in pursuing an action to enforce Director's rights
under this Agreement unless a final, non-appealable judgment against Director
has been rendered in such action by the court of last resort (or by a lower
court if not timely appealed). At Director's request, such expenses will be
advanced by Corporation to Director as incurred before final resolution of such
action by the court of last resort; such expenses will be repaid by Director if
a final, non-appealable judgment in Corporation's favor is rendered in such
action by the court of last resort (or by a lower court if not timely appealed).
8. D&O INSURANCE.
(a) [Intentionally Omitted.]
(b) Except as provided in paragraph 8(c) below, Corporation will purchase
and maintain D&O Insurance with a policy limit of at least $10,000,000.00,
insuring Director against any liability arising out of Director's status as a
director of Corporation, regardless of whether Corporation has the power to
indemnify Director against such liability under applicable law.
(c) Corporation will not be required to purchase and maintain D&O Insurance
if the Board of Directors of Corporation determines, after diligent inquiry,
that (1) such insurance is not available; or (2) the premiums for available
insurance are disproportionate to the amount of coverage and to the premiums
paid by other corporations similarly situated. The Board of Directors of
Corporation will, at least twice annually, in good faith review its decision not
to maintain D&O Insurance and will purchase such insurance at any time that the
conditions of this paragraph 8(c) cease to apply.
(d) The parties will cooperate to obtain advances of Expenses,
indemnification payments and consents from D&O Insurance carriers in any Covered
Matter to the full extent of applicable D&O Insurance. The existence of D&O
Insurance coverage will not diminish or limit Corporation's obligation to make
indemnification payments to Director. Amounts paid directly to Director with
respect to a Covered Matter by Corporation's D&O Insurance carriers will be
credited to the amounts payable by Corporation to Director under this Agreement.
9. LIMITATION OF ACTIONS. No action will be brought by or on behalf of
Corporation against Director or Director's heirs or personal representatives
relating to Director's service as a director, after the expiration of one year
from the date Director ceases (for any reason) to serve as a director of
Corporation, and any claim or cause of action of Corporation will be
extinguished and deemed released unless asserted by the filing of a legal action
before the expiration of such period.
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10. RIGHTS NOT EXCLUSIVE. The indemnification provided to Director under this
Agreement will be in addition to any indemnification provided to Director by any
law, agreement, Board resolution, provision of the Articles of Incorporation or
Bylaws of Corporation or otherwise.
11. SUBROGATION. Upon payment of any Indemnified Amount under this Agreement,
Corporation will be subrogated to the extent of such payment to all of
Director's rights of recovery therefore and Director will take all reasonable
actions requested by Corporation (at no cost or penalty to Director) to secure
Corporation's rights under this paragraph 11 including executing documents.
12. CONTINUATION OF INDEMNITY. All of Corporation's obligations under this
Agreement will continue as long as Director is subject to any actual or possible
Covered Matter, notwithstanding Director's termination of service as a director.
13. AMENDMENTS. Neither Corporation's Articles of Incorporation nor its Bylaws
will be changed to increase liability of directors or to limit Director's
indemnification. Any repeal or modification of Corporation's Articles of
Incorporation or Bylaws or any repeal or modification of the relevant provisions
of any applicable law will not in any way diminish any of Director's rights or
Corporation's obligations under this Agreement. This Agreement cannot be amended
except with the written consent of Corporation and Director.
14. GOVERNING LAW. This Agreement will be governed by Michigan law.
15. SUCCESSORS.
(a) This Agreement will be binding upon and inure to the benefit of the
parties and their respective heirs, legal representatives and assigns.
(b) Corporation will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of the Corporation to assume all of Corporation's obligations
under this Agreement. Such assumption will not release Corporation from its
obligations under this Agreement.
16. SEVERABILITY. The provisions of this Agreement will be deemed severable, and
if any part of any provision is held illegal, void or invalid under applicable
law, such provision may be changed to the extent reasonably necessary to make
the provision, as so changed, legal, valid and binding. If any provision of this
Agreement is held illegal, void or invalid in its entirety, the remaining
provisions of this Agreement will not in any way be affected or impaired but
will remain binding in accordance with their terms.
17. NOTICES. All notices given under this Agreement will be in writing and
delivered either personally, by registered or certified mail (return receipt
requested, postage prepaid), by recognized overnight courier or by telecopy (if
promptly followed by a copy delivered personally, by registered or certified
mail or overnight courier), as follows:
If to Director:
[____________________________________]
[____________________________________]
[____________________________________]
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If to Corporation:
United American Healthcare Corporation
000 Xxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Secretary
or to such other address as either party furnishes to the other in writing.
18. COUNTERPARTS. This Agreement may be signed in counterpart.
19. SUBSIDIARIES. As used in this Agreement, the term "Subsidiary" means any
corporation or other business entity in which Corporation owns a majority
interest.
The parties have executed this Agreement on the date written above.
United American Healthcare Corporation
a Michigan corporation
By:
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Its:
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[_________________________]
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