BASIC CARE NETWORKS, INC. DIRECTORS AND OFFICERS INDEMNIFICATION AGREEMENT
EXHIBIT
10.1
BASIC
CARE NETWORKS, INC.
THIS
DIRECTORS AND OFFICERS INDEMNIFICATION AGREEMENT is entered into, effective
as
of February __, 2006 by and between Basic Care Networks, Inc., a Delaware
corporation (the "Company"), and ___________________
("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; and
WHEREAS,
in recognition of Indemnitee's need for substantial protection against personal
liability in order to enhance Indemnitee's continued and effective service
to
the Company, and in order to induce Indemnitee to provide services to the
Company as a director and/or officer, the Company wishes to provide in this
Agreement for the indemnification of and the advancing of expenses to Indemnitee
to the fullest extent (whether partial or complete) permitted by Delaware law
and as set forth in this Agreement, and, to the extent insurance is maintained,
for the coverage of Indemnitee under the Company's directors' and officers'
liability insurance policies.
NOW,
THEREFORE, in consideration of the above premises and of Indemnitee's continuing
to serve the Company directly or, at its request, with another enterprise,
and
intending to be legally bound hereby, the parties agree as follows:
1.
Certain
Definitions.
(a) “Board”
shall mean the Board of Directors of the Company.
(b) “Change
In Control” shall be deemed to have occurred if (i) any "person" (as such term
is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as
amended (the "Act")), other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or a corporation owned directly
or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company (collectively "excluded
persons"), is or becomes the "Beneficial Owner" (as defined in Rule 13d-3 under
the Act), directly or indirectly, of securities of the Company representing
30%
or more of the total voting power represented by the Company's then outstanding
Voting Securities, or (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board and any
new
director whose election by the Board or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds (2/3) 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 majority of the Board, or (iii) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation that would
result in the Voting
Securities of the Company outstanding immediately prior thereto continuing
to
represent (either by remaining outstanding or by being converted into Voting
Securities of the surviving entity) at least 50% of the total voting power
represented by the Voting Securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or (iv) the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company (in one
transaction or a series of transactions) of all or substantially all of the
Company's assets.
(c) “Expenses”
shall mean any expense, liability, or loss, including attorneys' fees,
judgments, fines, ERISA excise taxes and penalties, amounts paid or to be paid
in settlement, any interest, assessments, or other charges imposed thereon,
and
any federal, state, local, or foreign taxes imposes as a result of the actual
or
deemed receipt of any payments under this Agreement, paid or incurred in
connection with investigating, defending, being a witness in, or participating
in (including on appeal), or preparing for any of the foregoing in, any
Proceeding relating to any Indemnifiable Event.
(d)
“Indemnifiable
Event” shall mean any event or occurrence that takes place either prior to or
after the effective date of this Agreement, related to the fact that Indemnitee
is or was a director or an officer of the Company, or while a director or
officer is or was serving at the request of the Company as a director, officer,
employee, trustee, agent, or fiduciary of another foreign or domestic
corporation, partnership, joint venture, employee benefit plan, trust, or other
enterprise, or was a director, officer, employee, or agent of a foreign or
domestic corporation that was a predecessor corporation of the Company or of
another enterprise at the request of such predecessor corporation, or related
to
anything done or not done by Indemnitee in any such capacity.
(e) “Independent
Counsel” shall mean the person or body appointed in connection with Section 3 of
this Agreement.
(f) “Potential
Change In Control” shall be deemed to have occurred if (i) the Company enters
into an agreement or arrangement, the consummation of which would result in
the
occurrence of a Change in Control, (ii) any person (including the Company)
publicly announces an intention to take or to consider taking actions that,
if
consummated, would constitute a Change in Control, (iii) any person (other
than
an Excluded Person) who is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing 10% or more of the
combined voting power of the Company's then outstanding Voting Securities,
increases his beneficial ownership of such securities by 5% or more over the
percentage so owned by such person on the date hereof, or (iv) the Board adopts
a resolution to the effect that, for purposes of this Agreement, a Potential
Change in Control has occurred.
(g)
“Proceeding”
shall mean (i) any threatened, pending, or complete action, suit, or proceeding,
whether civil, criminal, administrative, investigative, or other, or (ii) any
inquiry, hearing, or investigation, whether conducted by the Company or any
other party, that Indemnitee in good faith believes might lead to the
institution of any such action, or proceeding.
(h) “Reviewing
Party” shall mean the person or body appointed in accordance with Section 3 of
this Agreement.
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(i) “Voting
Securities” shall mean any securities of the Company that vote generally in the
election of directors.
2.
Agreement
to Indemnify.
(a)
General
Agreement.
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
Proceeding by reason of (or arising in part out of) an Indemnifiable Event,
the
Company shall indemnify Indemnitee from and against any and all Expenses to
the
fullest extent permitted by law, as the same exists or may hereafter be amended
or interpreted (but in the case of any such amendment or interpretation, only
to
the extent that such amendment or interpretation permits the Company to provide
broader indemnification rights than were permitted prior thereto).
(b)
Initiation
Of Proceeding.
Notwithstanding anything in this Agreement to the contrary, Indemnitee shall
not
be entitled to indemnification pursuant to this Agreement in connection with
any
Proceeding initiated by Indemnitee against the Company or any director or
officer of the Company unless (i) the Company has joined in or the Board has
consented to the initiation of such Proceeding, (ii) the Proceeding is one
to
enforce indemnification rights under Section 4, or (iii) the Proceeding is
instituted after a Change in Control and Independent Counsel has approved its
initiation.
(c)
Expense
Advances.
If so
requested by Indemnitee, the Company shall advance (within ten business days
of
such request) any and all Expenses to Indemnitee (an "Expense Advance");
provided that such request shall be accompanied by reasonable evidence of the
expenses incurred by Indemnitee and that, if 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. If Indemnitee has commenced legal proceedings in a court
of
competent jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, as provided in Section 4, 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 have lapsed).
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(d) Mandatory
Indemnification.
Notwithstanding any other provision of this Agreement (other than Section 2(f)
below), to the extent that Indemnitee has been successful on the merits in
defense of any Proceeding relating in whole or in part to an Indemnifiable
Event
or in defense of any issue or matter therein, Indemnitee shall be indemnified
against all Expenses incurred in connection therewith.
(e)
Partial
Indemnification.
If
Indemnitee is entitled under any provision of this Agreement to indemnification
by the Company for some or a portion of Expenses, but not, however, for the
total amount thereof, the Company shall nevertheless indemnify Indemnitee for
the portion thereof to which Indemnitee is entitled.
(f) Prohibited
Indemnification.
No
indemnification pursuant to this Agreement shall be paid by the Company on
account of any Proceeding 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
Act
or similar provisions of any federal, state or local laws.
3.
Reviewing
Party.
Prior
to
any Change in Control, the Reviewing Party shall be any appropriate person
or
body consisting of a member or members of the Board or any other person or
body
appointed by the Board who is not a party to the particular Proceeding with
respect to which Indemnitee is seeking indemnification; after a Change in
Control, the Reviewing Party shall be the Independent Counsel referred to below.
With respect to all matters arising after a Change in Control (other than a
Change in Control approved by a majority of the directors on the Board who
were
directors immediately prior to such Change in Control) concerning the rights
of
Indemnitee to indemnity payments and Expense Advances under this Agreement
or
any other agreement or under applicable law or the Company's Amended and
Restated Certificate of Incorporation or bylaws now or hereafter in effect
relating to indemnification for Indemnifiable Events, the Company shall seek
legal advice only from Independent Counsel selected by Indemnitee and approved
by the Company and who has not otherwise performed services for the Company
or
the Indemnitee (other than in connection with indemnification matters) within
the last five years. The Independent Counsel shall not include any person 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. Such counsel,
among other things, shall render its written opinion to the Company and
Indemnitee as to whether and to what extent the Indemnitee should be permitted
to be indemnified under applicable law. The Company agrees to pay the reasonable
fees of the Independent Counsel and to indemnify fully such counsel against
any
and all expenses (including attorney's fees), claims, liabilities, loss, and
damages arising out of or relating to this Agreement or the engagement of
Independent Counsel pursuant hereto.
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4.
Indemnification
Process and Appeal.
(a) Suit
to Enforce Rights.
Regardless of any action by the Reviewing Party, if Indemnitee has not received
full indemnification within 60 days after making a request in accordance with
Section 2(c), Indemnitee shall have the right to enforce its indemnification
rights under this Agreement by commencing litigation, in any appropriate court
having subject matter jurisdiction thereof and in which venue is proper, seeking
an initial determination by the court or challenging any determination by the
Reviewing Party or any aspect thereof, provided, however, that such 60-day
period shall be extended for reasonable time, not to exceed another 60 days,
if
the reviewing party in good faith requires additional time for the obtaining
or
evaluating of documentation and information relating thereto. The Company hereby
consents to service of process and to appear in any such proceeding. Any
determination by the Reviewing Party not challenged by the Indemnitee shall
be
binding on the Company and Indemnitee. The remedy provided for in this Section
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shall be in addition to any other remedies available to Indemnitee in law or
equity.
(b) Defense
to Indemnification, Burden of Proof, and Presumptions.
It
shall be a defense to any action brought by Indemnitee against the Company
to
enforce this Agreement (other than an action brought to enforce a claim for
Expenses incurred in defending a Proceeding in advance of its final disposition
where the required undertaking has been tendered to the Company) that is not
permissible under applicable law for the Company to indemnify Indemnitee for
the
amount claimed. In connection with any such action or any determination by
the
Reviewing Party or otherwise as to whether Indemnitee is entitled to be
indemnified hereunder, the burden of proving such a defense or determination
shall be on the Company. Neither the failure of the Reviewing Party or the
Company (including its Board, independent legal counsel, or its stockholders)
to
have made a determination prior to the commencement of such action by Indemnitee
that indemnification of the claimant is proper under the circumstances because
Indemnitee has met the standard of conduct set forth in applicable law, nor
an
actual determination by the Reviewing Party or Company (including its Board,
independent legal counsel, or its stockholders) that the Indemnitee had not
met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that the Indemnitee has not met the applicable standard of
conduct. For purposes of this Agreement, the termination of any claim, action,
suit, or proceeding, by judgment, order, settlement (whether with or without
court approval), 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.
5. Indemnification
For Expenses Incurred In Enforcing Rights.
The
Company shall indemnify Indemnitee against any and all Expenses and, if
requested by Indemnitee, shall (within ten business days of such request),
advance such Expenses to Indemnitee, that are incurred by Indemnitee in
connection with any claim asserted against or covered action brought by
Indemnitee for (i) indemnification of Expenses or Expense Advances by the
Company under this Agreement or any other agreement or under applicable law
or
the Company's Amended and Restated Certificate of Incorporation or bylaws now
or
hereafter in effect relating to indemnification for Indemnifiable Events, and
or
(ii) recovery under directors' and officers' liability insurance policies
maintained by the Company, regardless of whether Indemnitee ultimately is
determined to be entitled to such indemnification, Expense Advances,
or
insurance
recovery, as the case may be.
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6.
Notification
And Defense Of Proceeding.
(a) Notice.
Promptly after receipt by Indemnitee of notice of the commencement of any
Proceeding, Indemnitee shall, if a claim in respect thereof is to be made
against the Company under this Agreement, notify the Company of the commencement
thereof, but the omission so to notify the Company will not relieve the Company
from any liability that it may have to Indemnitee, except as provided in Section
6(c).
(b)
Defense.
With
respect to any Proceeding as to which Indemnitee notifies the Company of the
commencement thereof, the Company shall be entitled to participate in the
Proceeding at its own expense and except as otherwise provided below, to the
extent the Company so wishes, it may assume the defense thereof with counsel
reasonably satisfactory to Indemnitee. After notice from the Company to
Indemnitee of its election to assume the defense of any Proceeding, the Company
shall not be liable to Indemnitee under this Agreement or otherwise for any
Expenses subsequently incurred by Indemnitee in connection with the defense
of
such Proceeding other than reasonable costs of investigation or as otherwise
provided below. Indemnitee shall have the right to employ his or her own legal
counsel in such Proceeding, but all Expenses related thereto incurred after
notice from the Company of its assumption of the defense shall be at
Indemnitee's expense unless: (i) the employment of legal counsel by Indemnitee
has been authorized by the Company, (ii) Indemnitee has reasonably determined
that there may be a conflict of interest between Indemnitee and the Company
in
the defense of the Proceeding, (iii) after a Change in Control, the employment
of counsel by Indemnitee has been approved by the Independent Counsel, or (iv)
the Company shall not in fact have employed counsel to assume the defense of
such Proceeding, in each of which case all Expenses of the Proceeding shall
be
borne by the Company. The Company shall not be entitled to assume the defense
of
any Proceeding brought by or on behalf of the Company or as to which Indemnitee
shall have made the determination provided for in (ii) above.
(c) Settlement
of Claims.
The
Company shall not be liable to indemnify Indemnitee under this Agreement or
otherwise for any amounts paid in settlement of any Proceeding effected without
the Company's written consent, provided, however, that if a Change in Control
has occurred, the Company shall be liable for indemnification of Indemnitee
for
amounts paid in settlement if the Independent Counsel has approved the
settlement. The Company shall not settle any Proceeding in any manner that
would
impose any penalty or limitation on Indemnitee without Indemnitee's written
consent. The Company shall not be liable to indemnify the Indemnitee under
this
Agreement with regard to any judicial award if the Company was not given a
reasonable and timely opportunity, at its expense, to participate in the defense
of such action; the Company's liability hereunder shall not be excused if
participation in the Proceeding by the Company was barred by this
Agreement.
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7. Non-Exclusivity.
The
rights of Indemnitee hereunder shall be in addition to any other rights
Indemnitee may have under the Company's Amended and Restated Certificate of
Incorporation, bylaws, applicable law, or otherwise. To the extent that a change
in applicable law (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under the
Company's Amended and Restated Certificate of Incorporation, bylaws, applicable
law, or this Agreement, it is the intent of the parties that Indemnitee enjoy
by
this Agreement the greater benefits so afforded by such change.
8. 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.
9.
Amendment
of this Agreement.
No
supplement, modification, or amendment of this Agreement shall be binding unless
executed in writing by both of the parties hereto. No waiver of any of the
provisions of this Agreement shall operate as a waiver of any other provisions
hereof (whether or not similar), nor shall such waiver constitute a continuing
waiver. Except as specifically provided herein, no failure to exercise or any
delay in exercising any right or remedy hereunder shall constitute a waiver
thereof.
10.
Subrogation.
In
the
event of payment under this 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.
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11.
No
Duplication Of Payments.
The
Company shall not be liable under this Agreement to make any payment in
connection with any claim made against Indemnitee to the extent Indemnitee
has
otherwise received payment (under any insurance policy, bylaw, or otherwise)
of
the amounts otherwise indemnifiable hereunder.
12. Binding
Effect.
This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective successors (including any direct
or
indirect successor by purchase, merger, consolidation, or otherwise to all
or
substantially all of the business and/or assets of the Company), assigns,
spouses, heirs, and personal and legal representatives. The indemnification
provided under this Agreement shall continue as to Indemnitee for any action
taken or not taken while serving in an indemnified capacity pertaining to an
Indemnifiable Event even though he or she may have ceased to serve in such
capacity at the time of any Proceeding.
13. Severability.
If
any
provision (or portion thereof) of this Agreement shall be held by a court of
competent jurisdiction to be invalid, void, or otherwise unenforceable, the
remaining provisions shall remain enforceable to the fullest extent permitted
by
law. Furthermore, to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of this Agreement
containing any provision held to be invalid, void, or otherwise unenforceable,
that is not itself invalid, void, or unenforceable) shall be construed so as
to
give effect to the intent manifested by the provision held invalid, void, or
unenforceable.
14.
Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of Delaware applicable to contracts made and to be performed
in such state without giving effect to the principles of conflicts of
laws.
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15. Notices.
All
notices, demands, and other communications required or permitted hereunder
shall
be made in writing and shall be deemed to have been duly given if delivered
by
hand, against receipt, or mailed, postage prepaid, certified or registered
mail,
return receipt requested, and addressed to the Company at:
Basic
Care Networks, Inc.
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Attn:
Chief Executive Officer
Fax:
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Notice
of
change of address shall be effective only when given in accordance with this
Section. All notices complying with this Section shall be deemed to have been
received on the date of delivery or on the third business day after
mailing.
16. Counterparts;
Facsimile Signatures.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of
the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile signature page were an original
thereof.
IN
WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Indemnification Agreement as of the day specified above.
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Chief
Executive Officer
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| INDEMNITEE: | ||
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