EXHIBIT 10.73
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made on October 31, 2008,
between United American Healthcare Corporation, a Michigan corporation
("Corporation"), and Xxxxxxxxx Xxxxxx ("Officer").
RECITALS
A. Officer is an officer of Corporation and Corporation desires Officer to
continue in such capacity. Officer is willing to continue to serve as an officer
of Corporation if Officer 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 and officers in
connection with their performance of services for Corporation.
D. Corporation believes that (1) litigation against corporate directors and
officers, regardless of whether meritorious, is expensive and time-consuming for
the director or officer to defend; (2) there is a substantial risk of a large
judgment or settlement in litigation in which a corporate director or officer
was neither culpable nor profited personally to the detriment of the
corporation; (3) it is increasingly difficult to attract and keep qualified
directors and officers because of such potential liabilities; (4) it is
important for a director or officer to have assurance that indemnification will
be available if the director or officer 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 and officers 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 officers and to set
forth the details of the indemnification process.
E. Based upon the conclusions stated in Recital D above, to induce Officer
to continue to serve as an officer of Corporation, Corporation wishes to enter
into this Agreement with Officer.
Therefore, Corporation and Officer agree as follows:
1. AGREEMENT TO SERVE. Officer will continue to serve as an officer pursuant to
Officer's employment arrangements made prior to this Agreement.
2. INDEMNIFICATION.
(a) Corporation will indemnify Officer to the fullest extent permitted
under applicable law if Officer 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 Officer 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 Officer 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 Officer in connection with a
Covered Matter (collectively, "Indemnified Amounts").
(b) Officer will be indemnified for all Indemnified Amounts and Corporation
will defend Officer against claims (including threatened claims and
investigations) in any way related to Officer's service as an officer 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)
Officer 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 Officer 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 Officer is entitled under this Agreement to indemnification for less
than all of the amounts incurred by Officer in connection with a Covered Matter,
Corporation will indemnify Officer for the indemnifiable amount.
3. CLAIMS FOR INDEMNIFICATION. Officer 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, Officer will
provide Corporation with a copy of the document or pleading, if any, notifying
Officer of the Covered Matter. To the extent practicable, Corporation will pay
Indemnified Amounts directly without requiring Officer to make any prior
payment.
4. DETERMINATION OF RIGHT TO INDEMNIFICATION.
(a) Officer 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 Officer'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 Officer 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 Officer 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 Officer, which is selected by
Corporation and Officer; 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) Officer 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. Officer 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
Officer 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) Officer 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 Officer has not met the required standard of conduct.
5. ADVANCE OF EXPENSES.
(a) Before final adjudication of a Covered Matter, upon Officer's request
pursuant to paragraph 3 above, Corporation within 30 days after the request is
received, will either advance Expenses directly or reimburse Officer for all
Expenses. As used in this Agreement, "Expenses" means all reasonable costs and
expenses (including attorneys' fees, expert fees, other professional fees and
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court costs) incurred by Officer 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 Officer 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 Officer'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) Officer submits to
Corporation a written affirmation of Officer's belief that Officer has met the
standard of conduct necessary for advancement of Expenses under the
circumstances.
(c) Officer will repay any Expenses that are advanced under this paragraph
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by the court of last resort (or by a lower court if not timely appealed), that
Officer is not entitled to be indemnified against such Expenses. This
undertaking by Officer 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 Officer requests indemnification.
(b) Counsel selected by Corporation to defend any Covered Matter will be
subject to Officer's advance written approval, which will not be unreasonably
withheld.
(c) Officer may employ Officer'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) Officer has reasonably concluded
that there may be a conflict of interest between Corporation and Officer or
between Officer and other parties represented by counsel employed by Corporation
to represent Officer in such action or (B) Corporation has not employed counsel
reasonably satisfactory to Officer to assume the defense of such Covered Matter
promptly after Officer's request.
(d) Neither Corporation nor Officer will settle any Covered Matter without
the other's written consent, which will not be unreasonably withheld.
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 Officer
is not entitled to such indemnification, advance of Expenses or other payment
has been
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rendered by the court of last resort (or by a lower court if not timely
appealed). Officer will repay such amounts if such final, non-appealable
judgment so requires.
(b) Corporation will reimburse all of Officer's reasonable expenses
(including attorneys' fees) in pursuing an action to enforce Officer's rights
under this Agreement unless a final, non-appealable judgment against Officer has
been rendered in such action by the court of last resort (or by a lower court if
not timely appealed). At Officer's request, such expenses will be advanced by
Corporation to Officer as incurred before final resolution of such action by the
court of last resort; such expenses will be repaid by Officer 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 Officer against any liability arising out of Officer's status as an
officer of Corporation, regardless of whether Corporation has the power to
indemnify Officer 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 Officer. Amounts paid directly to Officer with
respect to a Covered Matter by Corporation's D&O Insurance carriers will be
credited to the amounts payable by Corporation to Officer under this Agreement.
9. LIMITATION OF ACTIONS. No action will be brought by or on behalf of
Corporation against Officer or Officer's heirs or personal representatives
relating to Officer's service as an officer, after the expiration of one year
from the date Officer ceases (for any reason) to serve as an officer 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.
10. RIGHTS NOT EXCLUSIVE. The indemnification provided to Officer under this
Agreement will be in addition to any indemnification provided to Officer 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 Officer's
rights of recovery therefore and Officer will take all reasonable actions
requested by Corporation (at no cost or penalty to Officer) to secure
Corporation's rights under this paragraph 11 including executing documents.
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12. CONTINUATION OF INDEMNITY. All of Corporation's obligations under this
Agreement will continue as long as Officer is subject to any actual or possible
Covered Matter, notwithstanding Officer's termination of service as an officer.
13. AMENDMENTS. Neither Corporation's Articles of Incorporation nor its Bylaws
will be changed to increase liability of directors or officers or to limit
Officer'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 Officer's
rights or Corporation's obligations under this Agreement. This Agreement cannot
be amended except with the written consent of Corporation and Officer.
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 Officer:
Xxxxxxxxx Xxxxxx
0000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
If to Corporation:
United American Healthcare Corporation
000 Xxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Secretary
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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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Xxxxxxxxx Xxxxxx
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