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EXHIBIT 10.18
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT (the "Indemnification
Agreement"), effective as of the _______ day of _______________, is made and
entered into by and between VISION 21, INC., a Florida corporation (the
"Company"), and _________________, an individual (the "Indemnitee").
WHEREAS, it is essential to the Company to retain and attract
as directors and officers the most capable persons available;
WHEREAS, Indemnitee is a director and/or officer of the
Company;
WHEREAS, both the Company and Indemnitee recognize the
increased risk of litigation and other claims being asserted against directors
and officers of public companies in today's environment;
WHEREAS, the Articles of Incorporation of the Company require
the Company to indemnify and advance expenses to its directors and officers to
the full extent permitted by law, and the Indemnitee has been serving and
continues to serve as a director and/or officer of the Company in part in
reliance of such Articles of Incorporation; and,
WHEREAS, in recognition of Indemnitee's need for substantial
protection against personal liability in order to enhance Indemnitee's
continued service to the Company in an effective manner and Indemnitee's
reliance on the aforesaid Articles of Incorporation, and in part to provide
Indemnitee with specific contractual assurance that the protection promised by
such Articles of Incorporation will be available to Indemnitee (regardless of,
among other things, any amendment to or revocation of such Articles of
Incorporation or any changes in the composition of the Company's Board of
Directors or acquisition transaction relating to the Company, the Company
wishes to provide in this Indemnification Agreement for the indemnification of
and the advancing of expenses to Indemnitee to the fullest extent (whether
partial or complete) permitted by law and as set forth in this Indemnification
Agreement and, to the extent insurance is obtained, for the continued coverage
of Indemnitee under the Company's directors' and officers' liability insurance
policies.
NOW, THEREFORE, in consideration of the premises, the mutual
promises, covenants and conditions herein contained, Indemnitee continuing to
serve the Company directly, or at its request, another enterprise and for other
good and valuable considerations, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto intending to be legally bound hereby
agree as follows:
1. CERTAIN DEFINITIONS. In addition to the words and
terms elsewhere defined in this Indemnification Agreement, certain capitalized
words and terms used in this Indemnification Agreement shall have the meanings
given to them by the definitions and descriptions in this Section 1 unless the
context or use indicates another or different meaning or intent, and such
definitions shall be equally applicable to both the singular and plural forms
of any of the capitalized words and terms herein defined. The following words
and terms are defined terms under this Indemnification Agreement:
1.1 Change in Control. "Change in Control" shall mean
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 30% or more of either (i) the then outstanding shares
of common stock of the Company (the "Outstanding Company Common
Stock") or (ii) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting Securities");
provided, however, that the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly from the
Company (excluding an acquisition by virtue of
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the exercise of a conversion privilege), (ii) any acquisition by the
Company, (iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (iv) any acquisition by any
corporation pursuant to a reorganization, merger or consolidation, if,
following such reorganization, merger or consolidation, the conditions
described in clauses (i), (ii) and (iii) of subsection (c) of this
Section 2 are satisfied; or
(b) Individuals who, as of the date hereof, constitute
the Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's shareholders,
was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest
(as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board;
or
(c) Approval by the shareholders of the Company of a
reorganization, merger or consolidation, in each case, unless,
following such reorganization, merger or consolidation, (i) more than
60% of, respectively, the then outstanding shares of common stock of
the corporation resulting from such reorganization, merger or
consolidation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such reorganization, merger or
consolidation in substantially the same proportions, as their
ownership, immediately prior to such reorganization, merger or
consolidation, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (ii) no Person
(excluding the Company, any employee benefit plan (or related trust)
of the Company or such corporation resulting from such reorganization,
merger or consolidation and any Person beneficially owning,
immediately prior to such reorganization, merger or consolidation,
directly or indirectly, 30% or more of the Outstanding Company Common
Stock or Outstanding Company Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 30% or more of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger or
consolidation or the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in
the election of directors and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such
reorganization, merger or consolidation were members of the Incumbent
Board at the time of the execution of the initial agreement providing
for such reorganization, merger or consolidation; or
(d) Approval by the shareholders of the Company of (i) a
complete liquidation or dissolution of the Company or (ii) the sale or
other disposition of all or substantially all of the assets of the
Company, other than to a corporation, with respect to which following
such sale or other disposition, (A) more than 60% of, respectively,
the then outstanding shares of common stock of such corporation and
the combined voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all
or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to
such sale or other disposition in substantially the same proportion as
their ownership, immediately prior to such sale or other disposition,
of the Outstanding Company Common Stock and Outstanding Voting
Securities, as the case may be, (B) no Person (excluding the Company
and any employee benefit plan (or related trust) of the Company or
such corporation and any Person beneficially owning, immediately prior
to such sale or other disposition, directly or indirectly, 30% or more
of the Outstanding Company Common Stock or Outstanding Voting
Securities,
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as the case may be) beneficially owns, directly or indirectly, 30% or
more of, respectively, the then outstanding shares of common stock of
such corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in
the election of directors and (C) at least a majority of the members
of the board of directors of such corporation were members of the
Incumbent Board at the time of the execution of the initial agreement
or action of the Board providing for such sale or other disposition of
assets of the Company.
For purposes of this Agreement, common stock shall mean
ordinary shares of the Company as the case may be.
1.2 Claim. "Claim" shall mean any threatened, pending or
completed action, suit or proceeding, or any inquiry or investigation,
whether instituted by the Company or any other party, that Indemnitee
in good faith believes might lead to the institution of any such
action, suit or proceeding, whether civil, criminal, administrative,
investigative or other.
1.3 Expenses. "Expenses" shall mean attorneys' fees and
all other costs, expenses and obligations paid or incurred in
connection with investigating, defending, being a witness in or
participating in (including on appeal), or preparing to defend, be a
witness in or participate in any Claim relating to any Indemnifiable
Event.
1.4 Indemnifiable Event. "Indemnifiable Event" shall
mean any event or occurrence related to the fact that Indemnitee is or
was a director, officer, employee or agent of the Company, or is or
was serving at the request of the Company as a director, officer,
employee, trustee, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust or other
enterprise, or by reason of any anything done or not done by
Indemnitee in any such capacity.
1.5 Independent Legal Counsel. "Independent Legal
Counsel" shall mean an attorney or firm of attorneys, selected in
accordance with the provisions of Section 3, who shall not have
otherwise been retained by or performed services for the Company or
Indemnitee within the last five years (other than with respect to
matters concerning the rights of Indemnitee under this Indemnification
Agreement or of other indemnities under similar indemnity agreements).
1.6 Reviewing Party. "Reviewing Party" shall mean (i)
the Board of Directors of the Company by a quorum consisting of
directors who were not parties to such Claim or (ii) if such a quorum
is not obtainable, or, even if obtainable, a quorum of disinterested
directors so directs, by Independent Legal Counsel.
1.7 Voting Securities. "Voting Securities" shall mean
any securities of the Company which vote generally in the election of
directors.
2. BASIC INDEMNIFICATION ARRANGEMENT. In the event
Indemnitee was, is or becomes a party to or witness or other participant in, or
is threatened to be made a party to or witness or other participant in, a Claim
by reason of (or arising in part out of) an Indemnifiable Event, the Company
shall indemnify Indemnitee to the fullest extent permitted by law as soon as
practicable but in any event no later than thirty days after written demand is
presented to the Company, against any and 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 or amounts paid in settlement) of such
Claim. If so requested by Indemnitee, the Company shall advance (within two
business days of such request) any and all Expenses to Indemnitee (an "Expense
Advance"). Notwithstanding the foregoing, (i) the obligations of the Company
under this Section 2 shall be subject to the condition that the Reviewing Party
shall not have determined (in a written opinion in any case in which the
Independent Legal Counsel is involved) that Indemnitee would not be permitted
to be indemnified under applicable law and (ii) the obligation of the Company
to make an Expense Advance pursuant to this Section 2 shall
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be subject to the condition that, if, when and to the extent that the Reviewing
Party determines that Indemnitee would not be permitted to be so indemnified
under applicable law, the Company shall be entitled to be reimbursed by
Indemnitee (who hereby agrees to reimburse the Company) for all such amounts
theretofore paid; provided, however, that if Indemnitee has commenced or
thereafter commences legal proceedings in a court of competent jurisdiction to
secure a determination that, Indemnitee should be indemnified under applicable
law, any determination made by the Reviewing Party that Indemnitee would not be
permitted to be indemnified under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any Expense
Advance until a final judicial determination is made with respect thereto (as
to which all rights of appeal therefrom have been exhausted or lapsed). If
there has not be a Change in Control, the Reviewing Party shall be selected by
the Board of Directors and if there has been such a Change in Control (other
than a Change in Control which has been approved by a majority of the Company's
Board of Directors who were directors immediately prior to such Change in
Control), the Reviewing Party shall be the Independent Legal Counsel referred
to in Section 3 hereof. If there has been no determination by the Reviewing
Party or if the Reviewing Party determines that Indemnitee substantively would
not be permitted to be indemnified in whole or in part under applicable law,
Indemnitee shall have the right to commence litigation in any court in the
State of Florida having subject matter jurisdiction thereof and in which venue
is proper seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, including the legal
or factual bases therefor, and the Company hereby consents to service of
process and to appear in any such proceeding. Any determination by the
Reviewing Party otherwise shall be conclusive and binding on the Company and
Indemnitee.
3. CHANGE IN CONTROL. The Company agrees that if there
is a Change in Control of the Company (other than a Change in Control which has
been approved by a majority of the Company's Board of Directors who were
directors immediately prior to such Change in Control) then with respect to all
matters thereafter arising concerning the rights of Indemnitee to indemnity
payments and Expense Advances under this Agreement or any other agreement or
Company By-law now or hereafter in effect relating to Claims for Indemnifiable
Events, the Company shall seek legal advice only from Independent Legal Counsel
selected by Indemnitee and approved by the Company (which approval shall not be
unreasonably withheld). Such counsel, among other things, shall render its
written opinion to the Company and Indemnitee as to whether and to what extent
the Indemnitee would be permitted to be indemnified under applicable law. The
Company agrees to pay the reasonable fees of the Independent Legal Counsel
referred to above and to fully indemnify such counsel against any and all
expenses (including attorneys' fees), claims, liabilities and damages arising
out of or relating to this Agreement or its engagement pursuant hereto.
4. INDEMNIFICATION FOR ADDITIONAL EXPENSES. The Company
shall indemnify Indemnitee against any and all expenses (including attorneys'
fees) and, if requested by Indemnitee, shall (within two business days of such
request) advance such expenses to Indemnitee which are incurred by Indemnitee
in connection with any action brought by Indemnitee for (i) indemnification or
advance payment of Expenses by the Company under this Indemnification Agreement
or any other agreement or the Company's Articles of Incorporation now or
hereafter in effect relating to Claims for Indemnifiable Events and/or (ii)
recovery under any directors' and officers' liability insurance policies
maintained by the Company regardless of whether Indemnitee ultimately is
determined to be entitled to such indemnification, advance expense payment or
insurance recovery, as the case may be.
5. PARTIAL INDEMNITY, ETC. If Indemnitee is entitled
under any provision of this Indemnification Agreement to indemnification by the
Company for some or a portion of the Expenses, judgments, fines, penalties and
amounts paid in settlement of a Claim but not, however, for all of the total
amount thereof, the Company shall nevertheless indemnify Indemnitee for the
portion thereof to which Indemnitee is entitled. Moreover, notwithstanding any
other provision of this Indemnification Agreement, to the extent that
Indemnitee has been successful on the merits or otherwise in defense of any or
all Claims relating in whole or in part to an Indemnifiable Event or in defense
of any issue or matter therein, including dismissal without prejudice,
Indemnitee shall be indemnified against all Expenses incurred in connection
therewith.
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6. BURDEN OF PROOF. In connection with any
determination by the Reviewing Party or otherwise as to whether Indemnitee is
entitled to be indemnified hereunder, the burden of proof shall be on the
Company to establish that Indemnitee is not so entitled.
7. NO PRESUMPTIONS. For purposes of this
Indemnification Agreement, the termination of any claim, action, suit or
proceeding, by judgment, order, settlement (whether with or without court
approval) or conviction, or upon a plea of nolo contendere, or its equivalent,
shall not create a presumption that Indemnitee did not meet any particular
standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by applicable law. In
addition, neither the failure of the Reviewing Party to have made a
determination as to whether Indemnitee has met any particular standard of
conduct or had any particular belief, nor an actual determination by the
Reviewing Party that Indemnitee has not met such standard of conduct or did not
have such belief, prior to the commencement of legal proceedings by Indemnitee
to secure a judicial determination that Indemnitee should be indemnified under
applicable law shall be a defense to Indemnitee's claim or create a presumption
that Indemnitee has not met any particular standard of conduct or did not have
any particular belief.
8. NONEXCLUSIVITY, ETC. The rights of the Indemnitee
hereunder shall be in addition to any other rights Indemnitee may have under
the Company's Articles of Incorporation or otherwise. To the extent that a
change in the Florida Business Corporation Act and every statutory modification
or re-enactment thereof (whether by statute or judicial decision) permits
greater indemnification by agreement than would be afforded currently under the
Company's Articles of Incorporation and this Indemnification Agreement, it is
the intent of the parties hereto that Indemnitee shall enjoy by this
Indemnification Agreement the greater benefits so afforded by such change.
9. LIABILITY INSURANCE. To the extent the Company
maintains an insurance policy or policies providing directors' and officers'
liability insurance, Indemnitee shall be covered by such policy or policies, in
accordance with its or their terms, to the maximum extent of the coverage
available for any Company director or officer.
10. PERIOD OF LIMITATIONS. No legal action shall be
brought and no cause of action shall be asserted by or in the right of the
Company against Indemnitee or Indemnitee's spouse, heirs, executors or personal
or legal representatives after the expiration of two (2) years from the date of
accrual of such cause of action, and any claim or cause of action of the
Company shall be extinguished and deemed released unless asserted by the timely
filing of a legal action within such two (2) year period; provided, however,
that if any shorter period of limitations is otherwise applicable to any such
cause of action, such shorter period shall govern.
11. AMENDMENTS, ETC. No supplement, modification or
amendment of this Indemnification Agreement shall be binding unless executed in
writing by both of the parties hereto. No waiver of any of the provisions of
this Indemnification Agreement shall be deemed or shall constitute a waiver of
any other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.
12. SUBROGATION. In the event of payment under this
Indemnification Agreement, the Company shall be subrogated to the extent of
such payment to all of the rights of recovery of Indemnitee, who shall execute
all papers required and shall do everything that may be necessary to secure
such rights, including the execution of such documents necessary to enable the
Company effectively to bring suit to enforce such rights.
13. NO DUPLICATION OF PAYMENTS. The Company shall not be
liable under this Indemnification Agreement to make any payment in connection
with any Claim made against Indemnitee to the extent Indemnitee has otherwise
actually received payment (under any insurance policy, the Company's Articles
of Incorporation or otherwise) of the amounts otherwise indemnifiable
hereunder.
14. BINDING EFFECT, ETC. This Indemnification Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
parties hereto and their respective successors; assigns, including any direct
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or indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company; spouses; heirs;
executors and personal and legal representatives. This Indemnification
Agreement shall continue in effect regardless of whether Indemnitee continues
to serve as an officer or director of the Company or of any other enterprise at
the Company's request.
15. SEVERABILITY. The provisions of this Indemnification
Agreement shall be severable in the event that any of the provisions hereof
(including any provision within a single section, paragraph or sentence) is
held by a court of competent jurisdiction to be invalid, void or otherwise
unenforceable in any respect, and the validity and enforceability of any such
provision in every other respect and of the remaining provisions hereof shall
not be in any way impaired and shall remain enforceable to the fullest extent
permitted by law.
16. GOVERNING LAW. This Indemnification Agreement shall
be governed by and construed and enforced in accordance with the laws of the
State of Florida applicable to contracts made and to be performed in such state
without giving effect to the principles of conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have executed this
Indemnification Agreement this ______ day of March, 1997.
VISION 21, INC.
By:_____________________________________
Xxxxxxx X. Xxxxxxx
Vice President
And:____________________________________
Xxxxxxx X. Xxxxxxx
Secretary
________________________________________
______________________________
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