Document:

EX-10.2

 

Exhibit 10.2

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as
of September 27, 2004 by and among Ludo Reynders, an individual residing in
Cary, North Carolina (“Employee”), and aaiPharma Inc., a Delaware
corporation (the “Company”).

Background Statement

     Employee wishes to accept employment with the Company, and the Company
wishes to employ Employee, on the terms and conditions set forth herein.

Statement of Agreement

     In consideration of the mutual covenants herein, Employee and the Company
agree as follows:

     1. Employment. The Company agrees to employ Employee, and Employee agrees
to serve the Company, upon the terms and conditions set forth in this
Agreement.

     2. Position and Responsibilities. During the period of Employee’s
employment hereunder, the Company shall employ Employee with such
responsibilities, duties and authorities as may be set by from time to time by
the Board of Directors of the Company (the “Board”).

     3. Term of Employment. Subject to Section 6 of this Agreement, the term
of Employee’s employment hereunder shall commence immediately and shall
continue for two years; provided that this Agreement shall renew for successive
one-year periods unless notice of termination of this Agreement is provided by
Employee to the Company, or by the Company to Employee, within 90 days prior to
the date such one-year renewal period would be scheduled to begin (the term of
Employee’s employment pursuant to this Agreement being referred to herein as
the “Period of Employment”).

     4. Duties. During the Period of Employment, Employee shall devote all of
his business time, attention, skills and efforts to the business of the Company
and the faithful performance of his duties hereunder; provided, however, that
with the approval of the Board, Employee may engage in such other activities
that, in the Board’s judgment, will not present any conflict of interest with
the Company or any affiliate of the Company (a “Company Affiliate”) or
adversely affect the performance of Employee’s duties pursuant to this
Agreement. In the performance of his duties, Employee shall at all times be
subject to the control and supervision of the Board or such individual or
individuals as shall be designated by the Board.

     5. Compensation and Benefits. For all services rendered by the Employee
to the Company in any capacity under this Agreement, the Company shall
compensate Employee during the Period of Employment as follows:

 

     (a) Base Salary. The Company shall pay Employee an annual salary that is
no less than a base salary (the “Base Salary”) of Five Hundred Fifty Thousand
($550,000) per year, subject to applicable federal and state income and social
security tax withholding requirements. During the Period of Employment, the
Base Salary may be increased as determined by the Board or its Compensation
Committee. Employee’s salary shall be payable in accordance with the Company’s
customary payroll practices.

     (b) Incentive Compensation. Employee shall be eligible to participate in
such incentive compensation plans, including cash bonus plans and stock option
plans, as the Board or its Compensation Committee may from time to time
determine.

     (c) Employee Benefit Plans or Arrangements. Employee shall be eligible to
participate in such other employee benefit plans of the Company, as presently
in effect or as they may be modified or added to from time to time, including,
without limitation, plans providing retirement benefits, medical insurance,
life insurance, disability insurance, and accidental death or dismemberment insurance, subject to satisfaction of
minimum term of service or other requirements set forth in such plans.

     (d) Vacation and Sick Leave. Employee shall be entitled to four weeks
paid vacation per year and sick leave in accordance with the Company’s policies
as adopted from time to time.

     (e) Reimbursement of Expenses. The Company shall pay or reimburse
Employee for all reasonable travel and other business expenses incurred by him
in performing his duties under this Agreement. Such expenses shall be
appropriately documented and submitted to the Company in accordance with the
Company’s policies in effect from time to time.

     (f) Tax Preparation and Financial Planning. The Company shall reimburse
the Employee for all expenses up to a maximum Ten Thousand Dollars ($10,000)
incurred by Employee in any calendar year during the Period of Employment for
services performed by third parties in assisting Employee with the preparation
of tax returns and provision of financial planning services.

     (g) Excise Tax. If a Change of Control occurs and if any payments
received or to be received by Employee in connection with a Change of Control
of the Company (the “Total Payments”) will be subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code (“the Code”), the Company will pay
to Employee (or, to the extent required, withhold and pay to the applicable
taxing authorities), within thirty days of any payments giving rise to the
excise tax, an additional amount (the “gross-up payment”) such that the net
amount retained or to be retained by Employee, after deduction of any excise
tax on the Total Payments and any Federal and state and local income tax and
excise tax on the gross-up payment provided for by this Section, will equal the
Total Payments.

     For purposes of determining the amount of the additional payment, Employee
will be deemed to pay Federal income taxes at the highest marginal rate of
Federal income taxation in the calendar year that the payment is to be made,
and state and local incomes taxes at the highest marginal rate of taxation in
the state and locality of the Employee’s residence on the date of

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termination
or the date that excise tax is withheld by the Company, net of the maximum
reduction in Federal income taxes that could be obtained by deducting such
state and local taxes.

     For purposes of determining whether any of the Total Payments would not be
deductible by the Company and would be subject to the excise tax and the amount
of such excise tax, (1) the Total Payments will be treated as “parachute
payments” within the meaning of Section 280G(b)(2) of the Code, and all
parachute payments in excess of the base amount within the meaning of Section
280G(b)(3) will be treated as subject to the excise tax unless, in the opinion
of the Company’s tax counsel, such Total Payments (in whole or in part) are not
parachute payments, or such parachute payments in excess of the Base Amount (as
defined in Section 280G(b)(3) of the Code), whether in whole or in part, are
otherwise not subject to the excise tax, and (2) the value of any non-cash
benefits or any deferred payment or benefit will be determined by the Company’s
independent auditors in accordance with Sections 280G(d)(3) and (4) of the
Code.

     If the excise tax is subsequently determined to be less than the amount
originally taken into account hereunder, Employee will repay to the Company,
when such reduction in excise tax is finally determined, the portion of the
additional payment attributable to such reduction plus interest on the
repayment at the rate provided in Section 1274(d) of the Code. If the excise
tax is determined to exceed the amount originally taken into account hereunder
(including by reason of any payment the existence or amount of which cannot be
determined at the time of the additional payment), the Company will make an
additional payment, determined in accordance with the principles set forth
above, in respect of such excess (plus any interest payable with respect to
such excess) when such excess is finally determined.

     6. Termination of Employment.

     (a) Termination by Company. The Company shall have the right to terminate
Employee’s employment under this Agreement upon the death or Disability (as
defined below) of Employee or for Cause (as defined below) without any further
obligation to Employee under this Agreement. Termination for Disability or for
Cause will be effective upon delivery of written notice of such termination to
Employee.

	(i)	 	“Disability” means any impairment of mind or body that
renders Employee unable to perform his normal duties and
functions hereunder for a continuous period of at least three
months or is likely to prevent Employee from performing such
duties and functions for more than six months during any 18-month
period, as determined in good faith by a physician selected by
the Board. Any refusal by Employee to submit to a medical
examination for the purpose of certifying Disability under this
Section shall be deemed conclusively to constitute evidence of
Employee’s Disability.
	 
	(ii)	 	“Cause” means (A) the repeated failure of Employee to
perform his duties hereunder in a competent and professional
manner; (B) the commission of an act by Employee constituting
financial dishonesty against the Company or any Company
Affiliate; (C) any knowing falsification of information to be
submitted

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	 	 	by or on behalf of the Company or any Company Affiliate
to the Food and Drug Administration or other governmental
authority; (D) the failure to cooperate in any investigation by
the Food and Drug Administration or other governmental authority
of the Company or any Company Affiliate or any internal
investigation by the Company, including by the Board or any
committee of the Board; (E) the commission of an act by Employee
involving a felony; (F) the commission of an act by Employee
involving moral turpitude that brings the Company or any Company
Affiliate into public disrepute or disgrace or causes material
harm to the customer relations, operations or business prospects
of the Company or any Company Affiliate.

     (b) Termination Without Cause. The Company shall have the right to
terminate Employee’s employment hereunder at any time for any reason subject to
the provisions of this Section 6(b). In the event the Company shall terminate
the Employee for any reason other than as provided in Section 6(a) (which the
Company may do at anytime in its sole discretion), the Company shall pay to
Employee an amount equal to his Base Salary, less applicable withholding for
taxes. The Company, at its option, may pay such amounts either (i) in
installments in the amounts and on the payment dates on which such Base Salary
would have been paid if Employee had continued as an employee of the Company or
(ii) as a single payment not later than 60 days after the date of termination,
in which event the single payment shall be in an amount equal to the net
present value (at an 8% discount rate) of the total amount of such payments.
Such payments shall be Employee’s only remedy with respect to such termination.

     (c) Termination by Employee. Employee shall have the right to terminate
his employment under this Agreement at any time for any reason upon delivery of
written notice to the Company. In the event that, at any time within twelve
months following a Change in Control (as defined below), Employee terminates
his employment under this agreement for Good Reason (as defined below), as
specified in the written notice of termination given by Employee to the
Company, the Company shall pay to Employee his Base Salary, less applicable
withholding for taxes, until the end of the twelve-month period following the
Change of Control. The Company, at its option, may pay such amounts either (i)
in installments in the amounts and on the payment dates on which such Base
Salary would have been paid if Employee had continued as an employee of the
Company or (ii) as a single payment not later than 60 days after the date of
termination, in which event the single payment shall be in an amount equal to
the net present value (at an 8% discount rate) of the total amount of such
payments. A termination by Employee for Good Reason in accordance with the
second sentence of this Section 6(d) shall not be deemed a voluntary
termination of employment by Employee for the purpose of this Agreement or any
plan or practice of the Company or its affiliates.

     (d) Definition
of “Change in Control”. “Change in Control” shall mean:

	(i)	 	An acquisition of any common stock, par value $0.001
per share, of the Company (“Common Stock”) or other Voting
Securities (as defined below) by any “Person” (as the term person
is used for purposes of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)),
immediately after which such Person has “Beneficial Ownership”
(within the

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	 	 	meaning of Rule 13d-3 promulgated under the Exchange
Act) of fifty percent (50%) or more of either (A) the
then-outstanding Common Stock or (B) the combined voting power of
the Company’s then-outstanding voting securities entitled to vote
for the election of directors (the “Voting Securities”);
provided, however, in determining whether a Change in Control has
occurred, Common Stock or Voting Securities which are acquired in
a “Non-Control Acquisition” (as defined below) shall not
constitute an acquisition which would cause a Change in Control.
A “Non-Control Acquisition” shall mean an acquisition of Common
Stock (A) directly from the Company, (B) by an employee benefit
plan (or a trust forming a part thereof)
maintained by (x) the Company or (y) any corporation or other
Person of which a majority of its voting power or its voting
equity securities or equity interest is owned, directly or
indirectly, by the Company (for purposes of this definition, a
“Related Entity”), (C) by the Company or any Related Entity, or
(D) by any Person in connection with a “Non-Control Transaction”
(as defined below);

	(ii)	 	The individuals who, as of the date hereof, are members
of the Board (the “Incumbent Board”), cease for any reason to
constitute at least a two-thirds of the members of the Board, or
following a Merger (as defined below), the board of directors of
the ultimate Parent Corporation (as defined below); provided,
however, that if the election, or nomination for election by the
Company’s common stockholders, of any new director was approved
by a vote of at least two-thirds of the Incumbent Board, such new
director shall, for purposes of this Agreement, be considered as
a member of the Incumbent Board; provided, further, however, that
no individual shall be considered a member of the Incumbent Board
if such individual initially assumed office as a result of an
actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board (a “Proxy Contest”),
including by reason of any agreement intended to avoid or settle
any Proxy Contest; or
	 
	(iii)	 	The consummation of:

	(A)	 	A merger, consolidation or reorganization with
or into the Company, or in which securities of the Company
are issued (a “Merger”), unless the Merger is a “Non-Control
Transaction.” A “Non-Control Transaction” shall mean a Merger
in which:

	(1)	 	the stockholders of the Company
immediately before such Merger own directly or indirectly
immediately following the Merger at least fifty percent
(50%) of the outstanding common stock and the combined
voting power of the outstanding voting securities of (x)
the corporation resulting from such Merger (the
“Surviving Corporation”), if fifty percent (50%) or more
of the combined voting power of the then outstanding
voting securities of the Surviving Corporation is not
Beneficially Owned, directly or indirectly by another
corporation (a

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	 	 	“Parent Corporation”), or (y) if there is
one or more Parent Corporations, the ultimate Parent
Corporation;

	(2)	 	the individuals who were members of the
Incumbent Board immediately prior to the execution of the
agreement providing for the Merger, constitute at least
two-thirds of the members of the board of directors of,
(x) the Surviving Corporation, if fifty percent (50%) or
more of the combined voting power of the then outstanding
voting securities of the Surviving Corporation is not
Beneficially Owned, directly or indirectly by a Parent
Corporation, or (y) if there is one or more Parent
Corporations, the ultimate Parent Corporation; and
	 
	(3)	 	no Person other than the Company, any
Related Entity, or any employee benefit plan (or any
trust forming a part thereof) that, immediately prior to
the Merger, was maintained by the Company or any Related
Entity, or any Person who, immediately prior to the
Merger had Beneficial Ownership of thirty percent (30%)
or more of the then outstanding Common Stock or Voting
Securities, has Beneficial Ownership, directly or
indirectly, of thirty percent (30%) or more of the
combined voting power of the outstanding voting
securities or common stock of (x) the Surviving
Corporation, if fifty percent (50%) or more of the
combined voting power of the then outstanding voting
securities of the Surviving Corporation is not
Beneficially Owned, directly or indirectly by a Parent
Corporation, or (y) if there is one or more Parent
Corporations, the ultimate Parent Corporation; or

	(B)	 	A complete liquidation or dissolution of the
Company; or
	 
	(C)	 	The direct or indirect sale or other
disposition of all or substantially all of the assets of the
Company to any Person (other than a transfer to a Related
Entity or under conditions that would constitute a
Non-Control Transaction (with the disposition of assets being
regarded as a Merger for this purpose) or the distribution to
the Company’s stockholders of the stock of a Related Entity
or any other assets).

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any Person (the “Subject Person”) acquired Beneficial Ownership
of more than the permitted amount of the then outstanding Common Stock or
Voting Securities as a result of the acquisition of Common Stock or Voting
Securities by the Company which, by reducing the number of Common Stock or
Voting Securities then outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Persons, provided that if a Change in Control
would occur (but for the operation of this sentence) as a result of the
acquisition of Common Stock or Voting Securities by the Company, and after such
share acquisition by the Company, the Subject Person becomes the Beneficial
Owner of any additional Common Stock or Voting Securities which increases the
percentage of the then outstanding Common Stock or Voting Securities
Beneficially Owned by the Subject Person, then a Change in Control shall occur.

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     (e) Definition
of “Good Reason”. “Good Reason” shall mean:

	(i)	 	without Employee’s consent, (A) the assignment to
Employee of any new duties or responsibilities substantially
inconsistent in character with Employee’s duties and
responsibilities within the Company immediately prior to a Change
in Control, (B) any substantial adverse change in Employee’s
duties and responsibilities as in effect immediately prior to a
Change in Control, including, but not limited to, a reduction in
duties or responsibilities that occurs because the Company is no
longer an independent publicly-held entity, (C) a change in any
annual or long term incentive plan in which Employee participated
immediately prior to the Change in Control such that Employee’s
opportunity, in the aggregate, to earn incentive compensation is
materially impaired, (D) a material reduction in the aggregate
value of Company perquisites made available to Employee, (E) an
elimination or material impairment of Employee’s ability to
participate in retirement plans comparable to those in which
Employee participated immediately prior to the Change in Control,
(F) any substantial increase in Employee’s obligation to travel
on the Company’s business over Employee’s business travel
obligations during the year prior to the Change in Control;
	 
	(ii)	 	the failure of the Company to comply with any of its
obligations under Section 5 of this Agreement;
	 
	(iii)	 	without Employee’s consent, the relocation of
Employee’s work site to a location that is more than fifty (50)
miles from the offices of the Company at which Employee was
employed immediately prior to the Change in Control, or the
failure of the Company to pay or reimburse Employee, in
accordance with the Company’s relocation policy for its employees
in existence immediately prior to a Change in Control, for all
reasonable costs and expenses, plus “gross ups,” if any, referred
to in such policy incurred by Employee relating to a change of
Employee’s principal residence in connection with any such
relocation to which Employee consents.

     7. Severability. If any provision contained in this Agreement shall for
any reason be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement, but this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein. If a court
determines that this Agreement or any covenant contained herein is
unreasonable, void or unenforceable, for any reason whatsoever, then in such
event the parties hereto agree that the duration, geographical or other
limitation imposed herein should be such as the court, or jury, as the case may
be, determines to be fair and reasonable, it being the intent of each of the
parties hereto to be subject to an agreement that is necessary for the
protection of the legitimate interest of the Company and its successors or
assigns and that is not unduly harsh in curtailing the legitimate rights of the
Employee.

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     8. Employee’s Representation. Employee represents that his experience and
capabilities are such that the provisions of Section 9(a) will not unreasonably
limit him in earning a livelihood.

     9. General Provisions.

     (a) Entire Agreement. This Agreement, the offer letter agreement executed
by the Employee and the Company dated September 27, 2004, and the Covenant Not
to Compete and the Assignment of Invention Agreements, each dated as of the
date hereof between the Employee and the Company, contain the entire
understanding between the parties hereto relating to the employment of Employee
by the Company and supersedes any and all prior employment, compensation or
retirement agreements between the Company and Employee.

     (b) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Company and its affiliates and their successors and
assigns, and shall be binding upon and inure to the benefit of Employee and his
estate, legal representatives and assigns, provided, however, that in no event
shall Employee’s obligations to perform services for the Company be delegated
or transferred by Employee.

     (c) Amendment of Agreement. No amendment, modification, waiver,
termination or cancellation of this Agreement shall be binding or effective for
any purpose unless it is made in writing signed by the party against whom
enforcement of such amendment, modification, waiver, termination or
cancellation is sought. No course of dealing between the parties to this
Agreement shall be deemed to affect, modify, amend or discharge any provision
or term of this Agreement. No delay on the part of the Company or Employee in
the exercise of any of their respective rights or remedies shall operate as a
waiver thereof, and no single or partial exercise by the Company or Employee of
any such right or remedy shall preclude other or further exercise thereof. A
waiver of right or remedy on any one occasion shall not be construed as a bar
to or waiver of any such right or remedy on any other occasion.

     (d) Insurance. The Company, at its discretion, may apply for and procure
in its own name and for its own benefit, life insurance on Employee in any
amount or amounts considered advisable; and Employee shall have no right, title
or interest therein. Employee agrees to submit to any medical or other
examination and to execute and deliver any applications or other instruments in
writing as may be reasonably necessary to obtain such insurance.

     (e) Notices. All notices under this Agreement shall be in writing and
shall be deemed effective when delivered in person (in the Company’s case, to
its Secretary) or when mailed, if mailed by certified mail, return receipt
requested. Notices mailed shall be addressed, in the case of Employee, to him
at his residential address, and in the case of Company, to its corporate
headquarters, attention of the Secretary, or to such other address as Employee
or the Company may designate in writing at any time or from time to time to the
other party in accordance with this Section.

     (f) Governing Law. This agreement shall be governed and construed in
accordance with the laws of the State of North Carolina.

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     (g) Counterparts. This Agreement may be executed on separate counterparts
each of which is deemed to be an original and all of which taken together
constitute one and the same agreement.

     (h) Headings. The headings in the sections of this Agreement are for
convenience only and shall not be deemed to constitute a part thereof and shall
not affect the constructions or interpretation of this Agreement.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by its duly authorized officer, and Employee has signed this Agreement, all as
of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	aaiPHARMA INC.
	 
	 	 	 	 	 	 
	

	 	By:	 	/s/ James G. Martin
	 	 	 	 	

	

	 	 	 	Name:	 	James G. Martin
	

	 	 	 	 	 	

	

	 	 	 	Title:	 	Chairman, Compensation Committee
	

	 	 	 	 	 	

	 
	 	 	 	 	 	 
	 	 	EMPLOYEE
	 

	 
	 	/s/ Ludo Reynders
	 	 	

	 	 	LUDO REYNDERS

9<PAGE>

                                                                   EXHIBIT 10.8

                            INDEMNIFICATION AGREEMENT

                  AGREEMENT, effective as of ______, 2004, between IASIS
Healthcare Corporation, a Delaware corporation (the "Company"), and
_______________ ("Indemnitee").

                  WHEREAS, it is essential to the Company to retain and attract
as [directors/executive officers] the most capable persons available;

                  WHEREAS, Indemnitee is a [director/executive officer] of the
Company;

                  WHEREAS, both the Company and Indemnitee recognize the
increased risk of litigation and other claims being asserted against
[directors/executive officers] of public companies in today's environment;

                  WHEREAS, the Amended and Restated Certificate of Incorporation
of the Company (the "Charter") and the By-laws of the Company (the "By-Laws")
require the Company to indemnify its [directors/executive officers] to the
fullest extent permitted by law and Indemnitee has agreed to serve as a
[director/executive officer] of the Company in part in reliance on such Charter
and By-Laws;

                  WHEREAS, in recognition of Indemnitee's need for substantial
protection against personal liability in order to enhance Indemnitee's service
to the Company in an effective manner, the increasing difficulty in obtaining
satisfactory director and executive officer liability insurance coverage and
Indemnitee's reliance on the aforesaid Charter and By-Laws, and in part to
provide Indemnitee with specific contractual assurance that the protection
afforded by such Charter and By-Laws will be available to Indemnitee (regardless
of, among other things, any amendment to or revocation of the Charter and
By-Laws or any change in the composition of the Company's Board of Directors or
acquisition transaction relating to the Company), 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 law
and as set forth in this Agreement, and, to the extent insurance is maintained,
for the continued coverage of Indemnitee under the Company's directors' and
executive officers' liability insurance policies;

                  NOW, THEREFORE, in consideration of the premises and of
Indemnitee continuing to serve the Company directly or, at its request, another
enterprise, and intending to be legally bound hereby, the parties hereto agree
as follows:

         1.       Certain Definitions:

                  (a)      Change in Control: shall be deemed to have occurred
(i) at such time as the Members, directly or indirectly, shall fail to own an
aggregate of at least 50% of the outstanding Voting Securities, and any other
Person or "group" of Persons (within the meaning of Section 13(d) of the
Securities Exchange Act of 1934, as amended) shall

<PAGE>

acquire, beneficially or of record, a greater percentage of the outstanding
Voting Securities than the percentage of the outstanding Voting Securities
owned, directly or indirectly, by the Members, in the aggregate or (ii) upon a
sale of all or substantially all of the assets of the Company.

                  (b)      Claim: 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.

                  (c)      Expenses: include reasonable attorneys' fees and all
other reason able 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.

                  (d)      Indemnifiable Event: any event or occurrence related
to the fact that Indemnitee is or was a director, officer, employee, agent or
fiduciary 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 anything done or not done by Indemnitee in any such
capacity.

                  (e)      Independent Legal Counsel: an attorney or firm of
attorneys, selected in accordance with the provisions of Section 3, who shall
not have otherwise performed services for the Company, any of its subsidiaries
or Indemnitee within the last two years (other than with respect to matters
concerning the rights of Indemnitee under this Agreement, or of other
indemnitees under similar indemnity agreements).

                  (f)      Members: shall have the meaning ascribed to such term
in the Amended and Restated Limited Liability Company Operating Agreement of
IASIS Investment LLC, dated June 22, 2004.

                  (g)      Person: any individual, firm, corporation,
partnership, limited liability company, trust or other entity, and any successor
(by merger or otherwise) of such entity.

                  (h)      Reviewing Party: any appropriate person or body
consisting of a member or members of the Company's Board of Directors or any
other person or body appointed by the Board who is not a party to the particular
Claim for which Indemnitee is seeking indemnification, or Independent Legal
Counsel.

                  (i)      Voting Securities: any equity securities of the
Company which vote generally in the election of directors.

                                      -2-
<PAGE>

         2.       Basic Indemnification Arrangement. (a) 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 anything in this Agreement to the contrary, except as
provided in Section 3 and Section 4 hereof, prior to a Change in Control,
Indemnitee shall not be entitled to indemnification or Expense Advances pursuant
to this Agreement in connection with any Claim initiated by Indemnitee unless
the Board of Directors has authorized or consented to the initiation of such
Claim.

                  (b)      Notwithstanding the foregoing, (i) the obligations of
the Company under Section 2(a) 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 referred to in Section 3 hereof 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
Section 2(a) shall 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 been 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 Delaware 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

                                      -3-
<PAGE>

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 Charter or
By-Law provision 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
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 reasonable 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
Agreement or any other agreement or Charter or By-Law provision now or hereafter
in effect relating to Claims for Indemnifiable Events and/or (ii) recovery under
any directors' and executive 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 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
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.

         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.

                                      -4-
<PAGE>

         7.       No Presumptions. For purposes of this 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 Indemnitee hereunder shall
be in addition to any other rights Indemnitee may have under the Charter,
By-Laws or the Delaware General Corporation Law or otherwise. To the extent that
a change in the Delaware General Corporation Law (whether by statute or judicial
decision) permits greater indemnification by agreement than would be afforded
currently under the Charter, By-Laws and this Agreement, it is the intent of the
parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits so afforded by such change.

         9.       Liability Insurance. The Company shall maintain an insurance
policy or policies providing directors' and executive officers' liability
insurance in an amount deemed reasonably satisfactory by a majority of the
Company's Board of Directors. 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/executive officer]. Upon request of
the Indemnitee, the Company shall provide satisfactory proof of its compliance
with this Section 9.

         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, Indemnitee's spouse, heirs, executors or personal or legal
representatives after the expiration of eighteen months 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 eighteen month 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 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 be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.

                                      -5-
<PAGE>

         12.      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.

         13.      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 actually received
payment (under any insurance policy, Charter or By-law provision or otherwise)
of the amounts otherwise indemnifiable hereunder.

         14.      Binding Effect, Etc. This 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 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 Agreement shall continue in effect regardless of
whether Indemnitee continues to serve as a [director/executive officer] of the
Company or of any other enterprise at the Company's request.

         15.      Severability. The provisions of this 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 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.

                         [Signatures On Following Page]

                                      -6-
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement this ____ day of ___________, 2004.

                                         IASIS HEALTHCARE CORPORATION

                                         By:
                                             ----------------------------------
                                             Name: Frank A. Coyle
                                             Title: Secretary & General Counsel

                                             ----------------------------------
                                             Name:

                                      -7-

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