FORM OF INDEMNIFICATION AGREEMENT
Exhibit 10.25
FORM OF
This INDEMNIFICATION AGREEMENT is made on (DATE) between, Rotech Healthcare Inc., a Delaware corporation, the successor to Rotech Medical Corporation, a Florida corporation (collectively the “Company”), and (collectively with such person’s heirs, executors, administrators and other personal representatives, the “Indemnitee”), a of the Company.
1. Indemnification. Indemnitee shall be indemnified and held harmless by the Company from and against any judgments, penalties, fines, amounts paid in settlement and Expenses (as hereinafter defined) incurred in connection with any actual or threatened Proceeding (as hereinafter defined) to the full extent permitted by the Company’s Certificate of Incorporation (the “Certificate”) and bylaws (the “Bylaws”) and the General Corporation Law of the State of Delaware (“Delaware Law”) as in effect on the date hereof and to such greater extent as Delaware Law may hereafter from time to time permit and to advance to Indemnitee Expenses incurred in connection therewith. “Proceeding” includes, without limitation, any action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other actual, threatened or completed proceeding, whether civil, criminal, administrative or investigative, whether by a third party, by or in the right of the Company or by Indemnitee to enforce any rights under this Agreement or otherwise against the Company or its affiliates.
2. Interim Expenses. Expenses (including attorneys’ fees) incurred by Indemnitee in defending any civil, criminal, administrative or investigative action, suit or proceeding for which Indemnitee may be entitled to indemnification hereunder shall be paid by the Company in advance of the final disposition of such action, suit or proceeding; provided that the Company shall be entitled to receive an undertaking by or on behalf of Indemnitee to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the Company hereunder. “Expenses” means all attorneys’ fees and expenses, retainers, court costs, transcript costs, fees of experts, fees of witnesses, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage and delivery fees, service fees, all other costs and expenses of the type customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating or being or preparing to be a witness in a Proceeding.
3. Exceptions to Indemnification. Notwithstanding the foregoing, no indemnity pursuant to Sections 1 or 2 shall be paid by the Company:
(a) on account of any suit in which judgment is rendered against Indemnitee for an accounting of profits made from the purchase or sale by Indemnitee of securities of the Company pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of any federal, state or local statutory law;
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(b) on account of Indemnitee’s conduct which is finally adjudged to have been knowingly fraudulent or deliberately dishonest, or to constitute willful misconduct;
(c) on account of Indemnitee’s conduct which is finally adjudged to have constituted a breach of Indemnitee’s duty of loyalty to the Company or resulted in any personal profit or advantage to which Indemnitee was not legally entitled;
(d) for which payment is actually made to Indemnitee under a valid and collectible insurance policy or under a valid and enforceable indemnity clause, bylaw or agreement, except in respect of any excess beyond payment under such insurance, clause, bylaw or agreement;
(e) if a final decision by a court having jurisdiction in the matter shall determine that such indemnification is not lawful; or
(f) in connection with any proceeding (or part thereof) initiated by Indemnitee, or any proceeding by Indemnitee against the Company or its directors, officers, employees or other indemnities (other than any proceeding brought pursuant to Section 4(a) of this Agreement), unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board of Directors of the Company, (iii) such indemnification is provided by the Company, in its sole discretion, pursuant to the powers vested in the Company under applicable law, or (iv) the proceeding is initiated pursuant to Section 4 hereof.
4. Failure to Indemnify. (a) If a claim under this Agreement, under any statute, or under any provision of the Certificate or Bylaws providing for indemnification, is not paid in full by the Company within 45 days after a written request for payment thereof has first been received by the Company, Indemnitee may, but need not, at any time thereafter bring an action against the Company to recover the unpaid amount of the claim and, if successful in whole or in part, Indemnitee shall also be entitled to be paid for Indemnitee’s reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with successfully establishing the right to indemnification, in whole or in part, in any such action shall also be indemnified by the Company.
(b) It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in connection with any action, suit or proceeding in advance of its final disposition) that Indemnitee has not met the standards of conduct which make it permissible under the Delaware Law for the Company to indemnify Indemnitee for the amount claimed, but the burden of proving such defense shall be on the Company and Indemnitee shall be entitled to receive interim payments of Expenses pursuant to Paragraph 2 unless and until such defense may be finally adjudicated by court order or judgment from which no further right of appeal exists.
5. Certain Agreements of Indemnitee and the Company. (a) Indemnitee agrees to do all things reasonably requested by the Board of Directors of the Company to enable the Company to coordinate Indemnitee’s defense with, if applicable, the Company’s defense; provided, however, that Indemnitee shall not be required to take any action that would in any way prejudice his or her defense or waive any defense, privilege or position available to him or her in connection with any action;
(b) Indemnitee agrees to do all things reasonably requested by the Board of Directors of the Company to subrogate to the Company any rights of recovery (including rights to insurance or indemnification from persons other than the Company) which Indemnitee may have with respect to any action;
(c) Indemnitee agrees to be represented in any action by a law firm mutually acceptable to the Company and Indemnitee, which consent shall not be unreasonably withheld; and
(d) Indemnitee agrees to cooperate with the Company and its counsel and maintain any confidences revealed to him or her by the Company in connection with the Company’s defense of any action. The Company agrees to cooperate with Indemnitee and his or her counsel and maintain any confidences revealed to it by Indemnitee in connection with Indemnitee’s defense of any action.
(e) The Company agrees not to settle any Proceeding without the prior written consent of Indemnitee, which consent shall not be unreasonably withheld, if such settlement would (i) in any way prejudice a
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defense of Indemnitee or waive any defense, privilege or position available to Indemnitee in connection with the Proceeding, or (ii) cause Indemnitee to be liable for any judgments, penalties, fines, amounts paid in settlement or Expenses incurred in connection with the Proceeding, except as provided in Section 3 hereof.
6. Successors. This Agreement establishes contract rights which shall be binding upon, and shall inure to the benefit of, the successors, assigns, heirs and legal representatives of the parties hereto.
7. Contract Rights Not Exclusive. The contract rights conferred by this Agreement shall be in addition to, but not exclusive of, any other rights which Indemnitee may have or may hereafter acquire under any statute, provision of the Certificate or Bylaws, agreement, vote of shareholders or disinterested directors or otherwise.
8. Indemnitee’s Obligations. Indemnitee shall advise the Company in writing of the institution of any investigation, claim, action, suit or proceeding which is or may be subject to this Agreement and generally keep the Company informed of, and consult with the Company with respect to, the status of any such investigation, claim, action, suit or proceeding.
9. Severability. Should any provision or paragraph of this Agreement, or any clause hereof, be held to be invalid, illegal or unenforceable, in whole or in part, the remaining provisions, paragraphs and clauses of this Agreement shall remain fully enforceable and binding on the parties.
10. Choice of Law. The validity, interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Delaware without giving effect to principles of conflict of laws.
11. Continuation of Indemnification. The indemnification under this Agreement shall continue as to Indemnitee even though he or she may have ceased to be a director or officer of the Company and shall inure to the benefit of the heirs and personal representatives of the Indemnitee. The Company acknowledges that, in providing services to the Company, Indemnitee is relying upon this Agreement. Accordingly, the Company agrees that its obligations hereunder will survive (i) any actual or purported termination of this Agreement by the Company or its successors or assigns whether by operation of law or otherwise, (ii) any change in the Company’s Certificate or Bylaws and (iii) termination of the Indemnitee’s services to the Company (whether such services were terminated by the Company or the Indemnitee), whether or not a claim is made or an action or Proceeding is threatened or commenced before or after the actual or purported termination of this Agreement, change in the Certificate or By-Laws or termination of Indemnitee’s services.
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