Document:

Exhibit 10.83

 

INDEMNIFICATION AGREEMENT

 

This Indemnification
Agreement (“Agreement”) is made as of
                              ,
20     by and between Prospect Medical Holdings, Inc.,
a Delaware corporation (the “Company”), and
                                                      
(“Indemnitee”).

 

RECITALS

 

WHEREAS, highly competent persons have become more reluctant to serve
corporations as directors or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification  against inordinate risks of claims and
actions against them arising out of their service to and activities on behalf
of the corporation;

 

WHEREAS, the General Corporation Law of the State of Delaware (“DGCL”)
empowers the Company to indemnify by agreement its officers, directors,
employees and agents, and persons who serve, at the request of the Company, as
directors, managers, officers, employees or agents of other corporations,
limited liability companies, partnerships, joint ventures, or other
enterprises, and expressly provides that the indemnification provided thereby
is not exclusive;

 

WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify, and to advance expenses on
behalf of, persons serving the Company and/or an Enterprise (as defined below)
to the fullest extent permitted by applicable law (as described in Section 7(b) hereof)
so that they will serve or continue to serve the Company and/or the Enterprise
free from undue concern that they will not be so indemnified;

 

WHEREAS, this Agreement is a supplement to and in furtherance of the
certificate of incorporation and bylaws of the Company and any resolutions
adopted pursuant thereto and shall not be deemed a substitute therefor, nor to
diminish or abrogate any rights of Indemnitee thereunder; and

 

NOW, THEREFORE, in consideration of the promises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:

 

1.                                       Services
to the Company.  Indemnitee will
serve or continue to serve as an officer, director, manager or key employee of
the Company or an Enterprise for so long as Indemnitee is duly elected or
appointed or until Indemnitee tenders his or her resignation, subject to the
terms of any employment agreement between Indemnitee and the Company.

 

2.                                       Definitions.  As used in this Agreement:

 

(a)                                  “Change
in Control” shall be deemed to have occurred if (i) any Person (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, and other than 

 

 

any person holding shares of the Company on the date that the Company
first registers under the Act or any transferee of such individual if such
transferee is a spouse or lineal descendant of the transferee or a trust for
the benefit of the individual, his spouse or lineal descendants), is or becomes
the “beneficial owner” (as defined in Rule 13d-3 under the Exchange 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 of
Directors of the Company (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 80% 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.

 

(b)                                 “Corporate
Status” describes the status of a person who is or was a director, officer,
trustee, general partner, managing member, fiduciary, employee or agent of the
Company or of any other Enterprise which such person is or was serving at the
request of the Company.

 

(c)                                  “Disinterested
Director” means a director of the Company who is not and was not a party to the
Proceeding in respect of which indemnification is sought by Indemnitee.

 

(d)                                 “Enterprise”
shall mean the Company and any other corporation, limited liability company,
partnership, joint venture, trust or other enterprise in respect of which
Indemnitee is or was or will be serving as a director, officer, trustee,
manager, member, partner, employee, agent, attorney, consultant, member of the
entity’s governing body (whether constituted as a board of directors, board of
managers, general partner or otherwise), fiduciary, or in any other similar
capacity at the request, election or direction of the Company.

 

(e)                                  “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.

 

(f)                                    “Expenses”
shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service
fees and all other disbursements or expenses of the type customarily incurred
in connection with prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in, or otherwise
participating in, a Proceeding. Expenses also shall include expenses incurred
in connection with any appeal resulting from any Proceeding, including, without
limitation, the premium, security for and other costs relating to any cost
bond, supersedeas bond or other appeal bond or its 

 

 

equivalent. Expenses shall not include amounts paid in settlement by
Indemnitee or the amount of judgments or fines against Indemnitee.

 

(g)                                 “Independent
Counsel” means a law firm, or a member of a law firm, that is experienced in
matters of corporation law and neither presently is, nor in the past five years
has been, retained to represent: (i) the Company or Indemnitee in any
matter material to either such party (other than with respect to matters
concerning Indemnitee under this Agreement, or of other indemnitees under
similar indemnification agreements), or (ii) any other party to the
Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding
the foregoing, the term “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.

 

(h)                                 “Person”
shall have the meaning set forth in Sections 13(d) and 14(d) of the
Exchange Act; provided, however, that Person shall exclude (i) the Company
or any Enterprise, (ii) any trustee or other fiduciary holding securities
under an employee benefit plan of the Company and (iii) any corporation
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company.

 

(i)                                     The
term “Proceeding” shall include any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or completed
proceeding, whether brought in the right of the Company or otherwise and
whether of a civil, criminal, administrative or investigative nature, in which
Indemnitee was, is or will be involved as a party or otherwise by reason of the
fact that Indemnitee is or was a director or officer of the Company, by reason
of any action taken (or failure to act) by him or her or of any action (or
failure to act) on his or her part while acting as a director or officer of the
Company, or by reason of the fact that he or she is or was serving as a director,
officer, trustee, general partner, managing member, fiduciary, employee or
agent of any other Enterprise, in each case whether or not serving in such
capacity at the time any liability or expense is incurred for which
indemnification, reimbursement or advancement of expenses can be provided under
this Agreement.

 

(j)                                     References
to “other enterprise” shall include employee benefit plans; references to “fines”
shall include any excise tax assessed with respect to any employee benefit
plan; references to “serving at the request of the Company” shall include any
service as a director, officer, employee or agent of the Company which imposes
duties on, or involves services by, such director, officer, employee or agent
with respect to an employee benefit plan, its participants or beneficiaries;
and a person who acted in good faith and in a manner he or she reasonably
believed to be in the best interests of the participants and beneficiaries of
an employee benefit plan shall be deemed to have acted in a manner “not opposed
to the best interests of the Company” as referred to in this Agreement.

 

3.                                       Indemnity
in Third-Party Proceedings.  The
Company shall indemnify Indemnitee in accordance with the provisions of this Section 3
if Indemnitee is, or is threatened to be made, a party to or a participant (as
a witness or otherwise) in any Proceeding, other than a Proceeding by or in the
right of the Company to procure a judgment in its favor. Pursuant to this Section 3,

 

 

Indemnitee shall be indemnified against all Expenses, judgments, fines,
penalties and amounts paid in settlement (including all interest, assessments
or other charges imposed thereon, ERISA excise taxes and penalties, any
federal, state, local, or foreign taxes imposed as a result of the actual or deemed
receipt of any payments under this Agreement, and other charges paid or payable
in connection with or in respect of such Expenses, judgments, fines, penalties
and amounts paid in settlement) actually and reasonably incurred by Indemnitee
or on his or her behalf in connection with such Proceeding or any claim, issue
or matter therein, if Indemnitee acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
Company or an Enterprise and, in the case of a criminal proceeding, he or she
had no reasonable cause to believe that his or her conduct was unlawful.

 

4.                                       Indemnity
in Proceedings by or in the Right of the Company.  The Company shall indemnify Indemnitee in
accordance with the provisions of this Section 4 if Indemnitee is, or is
threatened to be made, a party to or a participant (as a witness or otherwise)
in any Proceeding by or in the right of the Company to procure a judgment in
its favor. Pursuant to this Section 4, Indemnitee shall be indemnified
against all Expenses actually and reasonably incurred by Indemnitee or on his
or her behalf in connection with such Proceeding or any claim, issue or matter
therein, if Indemnitee acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the Company or an
Enterprise. No indemnification for Expenses shall be made under this Section 4
in respect of any claim, issue or matter as to which Indemnitee shall have been
finally adjudged by a court to be liable to the Company or an Enterprise,
unless and only to the extent that any court in which the Proceeding was
brought or the Delaware Court of Chancery shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, Indemnitee is fairly and reasonably entitled to such
indemnification.

 

5.                                       Indemnification
for Expenses of a Party Who is Wholly or Partly Successful.  Notwithstanding any other provisions of this
Agreement, to the extent that Indemnitee is a party to (or a participant in)
and is successful, on the merits or otherwise, in any Proceeding or in defense
of any claim, issue or matter therein, in whole or in part, the Company shall
indemnify Indemnitee against all Expenses actually and reasonably incurred by
him or her in connection therewith. If Indemnitee is not wholly successful in
such Proceeding but is successful, on the merits or otherwise, as to one or
more but less than all claims, issues or matters in such Proceeding, the Company
shall indemnify Indemnitee against all Expenses actually and reasonably
incurred by him or her or on his or her behalf in connection with each
successfully resolved claim, issue or matter. If Indemnitee is not wholly
successful in such Proceeding, the Company also shall indemnify Indemnitee
against all Expenses reasonably incurred in connection with a claim, issue or
matter related to any claim, issue or matter on which Indemnitee was
successful. For purposes of this Section and without limitation, the termination
of any claim, issue or matter in such a Proceeding by dismissal, with or
without prejudice, shall be deemed to be a successful result as to such claim,
issue or matter.

 

6.                                       Indemnification
For Expenses of a Witness. 
Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee is, by reason of his Corporate Status, a witness in any
Proceeding to which Indemnitee is not a party, he shall be indemnified against
all Expenses 

 

 

actually and reasonably incurred by him or her or on his or her behalf
in connection therewith in accordance with the procedures set forth in Section 9
hereof.

 

7.                                       Additional
Indemnification.

 

(a)                                  Notwithstanding
any limitation in Sections 3, 4 or 5, the Company shall indemnify Indemnitee to
the fullest extent permitted by law if Indemnitee is a party to or threatened
to be made a party to any Proceeding (including a Proceeding by or in the right
of the Company to procure a judgment in its favor) against 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 and amounts paid in
settlement) actually and reasonably incurred by Indemnitee in connection with
the Proceeding. No indemnity shall be made under this Section 7(a) on
account of Indemnitee’s conduct which constitutes a breach of Indemnitee’s duty
of loyalty to the Company or its stockholders or to an Enterprise or is an act
or omission not in good faith or which involves intentional misconduct or a
knowing violation of the law.

 

(b)                                 For
purposes of Section 7(a), the meaning of the phrase “to the fullest extent
permitted by law” shall include, but not be limited to:

 

(i)                                     the fullest extent
permitted by the provision of the DGCL that authorizes or contemplates
additional indemnification by agreement or the corresponding provision of any
amendment to or replacement of the DGCL; and

 

(ii)                                  the fullest extent
authorized or permitted by any amendments to or replacements of the DGCL
adopted after the date of this Agreement that increase the extent to which a
corporation may indemnify its officers and directors.

 

8.                                       Exclusions.  Notwithstanding any other provision in this
Agreement, the Company shall not be obligated under this Agreement to indemnify
Indemnitee in connection with any claim made against Indemnitee:

 

(a)                                  for
which payment has actually been received by or on behalf of Indemnitee under
any insurance policy or other indemnity provision, except with respect to any
excess beyond the amount actually received under any insurance policy or other
indemnity provision;

 

(b)                                 for
an accounting of profits made from the purchase and sale (or sale and purchase)
by Indemnitee of securities of the Company within the meaning of Section 16(b) of
the Exchange Act or similar provisions of state statutory law or common law; or

 

(c)                                  except
as otherwise provided in Sections 13(d)-(f) hereof, in connection with any
Proceeding (or any part of any Proceeding) initiated by Indemnitee, including
any Proceeding (or any part of any Proceeding) initiated by Indemnitee against
the Company or its directors, officers, employees or other indemnitees, unless (i) the
Board of Directors of the Company authorized the Proceeding (or any part of any
Proceeding) prior to its initiation, (ii) the Company provides the
indemnification, in its sole discretion, pursuant to the powers vested in the 

 

 

Company under applicable law, or (iii) the Proceeding is
instituted 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) and Independent Counsel has approved its
initiation.

 

9.                                       Advances
of Expenses; Defense of Claim.

 

(a)                                  Notwithstanding
any provision of this Agreement to the contrary, the Company shall advance the
expenses incurred by Indemnitee in connection with any Proceeding within ten (10) days
after the receipt by the Company of a statement or statements requesting such
advances from time to time, whether prior to or after final disposition of any
Proceeding. Advances shall be unsecured and interest free. Advances shall be
made without regard to Indemnitee’s ability to repay the expenses and without
regard to Indemnitee’s ultimate entitlement to indemnification under the other
provisions of this Agreement. Advances shall include any and all reasonable
Expenses incurred pursuing an action to enforce this right of advancement,
including Expenses incurred preparing and forwarding statements to the Company
to support the advances claimed. Indemnitee shall qualify for advances solely
upon the execution and delivery to the Company of an undertaking providing that
Indemnitee undertakes to repay the advance to the extent that it is ultimately
determined that Indemnitee is not entitled to be indemnified by the Company, in
which case the Company shall be entitled to be reimbursed by Indemnitee (who
hereby agrees to reimburse the Company) for all such amounts theretofore paid.  Any such obligation of Indemnitee to so
reimburse the Company shall be unsecured and no interest shall be charged
thereon.  This Section 9(a) shall
not apply to any claim made by Indemnitee for which indemnity is excluded
pursuant to Section 8.

 

(b)                                 The
Company will be entitled to participate in any Proceeding at its own
expense.  Subject to the last sentence of
this Section 9(b), the Company may assume the defense of any Proceeding
with counsel reasonably satisfactory to Indemnitee by providing prompt written
notice thereof to Indemnitee.  After
receipt of such notice, Indemnitee shall have the right to employ legal counsel
in such Proceeding, but all of his or her Expenses related thereto shall be
borne by Indemnitee 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 (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), 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 or provided written notice
thereof to Indemnitee as aforesaid, in each of which cases all Expenses of the
Proceeding shall be borne by the Company. 
Notwithstanding anything herein to the contrary, 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 clauses (ii) and (iv) above and provided written
notice to the Company that Indemnitee shall assume the defense thereof.

 

 

(c)                                  The Company
shall not settle any action, claim or Proceeding (in whole or in part) which
would impose any Expense, judgment, fine, penalty or limitation  on Indemnitee without Indemnitee’s prior
written consent.

 

10.                                 Procedure for
Notification and Application for Indemnification.

 

(a)                                  Within sixty
(60) days after the actual receipt by Indemnitee of notice that he or she is a
party to or a participant (as a witness or otherwise) in any Proceeding,
Indemnitee shall submit to the Company a written notice identifying the
Proceeding. The omission by Indemnitee to notify the Company will not relieve
the Company from any liability which it may have to Indemnitee

 

(i)                                     otherwise than
under this Agreement and (ii) under this Agreement except to the extent
the Company can establish that such omission to notify resulted in actual
prejudice to the Company.

 

(b)                                 Indemnitee
shall thereafter deliver to the Company a written application to indemnify
Indemnitee in accordance with this Agreement. Such application(s) may be
delivered from time to time and at such time(s) as Indemnitee deems
appropriate in his or her sole discretion. Following such a written application
for indemnification by Indemnitee, Indemnitee’s entitlement to indemnification
shall be determined in accordance with Section 11(a) of this
Agreement.

 

11.                                 Procedure Upon
Application for Indemnification.

 

(a)                                  Upon written
request by Indemnitee for indemnification pursuant to Section 10(b), a
determination, if required by applicable law, with respect to Indemnitee’s
entitlement thereto shall be made in the specific case: (i) by a majority
vote of the Disinterested Directors, even if constituting less than a quorum of
the Board; or (ii) if so requested by Indemnitee, in his or her sole
discretion, by Independent Counsel in a written opinion to the Board, a copy of
which shall be delivered to Indemnitee. If it is so determined that Indemnitee
is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days
after such determination. Indemnitee shall reasonably cooperate with the
person, persons or entity making such determination with respect to Indemnitee’s
entitlement to indemnification, including providing to such person, persons or
entity upon reasonable advance request any documentation or information which
is not privileged or otherwise protected from disclosure and which is
reasonably available to Indemnitee and reasonably necessary to such
determination. Any costs or expenses (including attorneys’ fees and
disbursements) incurred by Indemnitee in so cooperating with the person,
persons or entity making such determination shall be borne by the Company
(irrespective of the determination as to Indemnitee’s entitlement to
indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee
harmless therefrom.

 

(b)                                 In the event
the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 11(a) hereof, the Independent
Counsel shall be selected as provided in this Section 11(b). The Independent
Counsel shall be selected by the Board of Directors, and the Company shall give
written notice to Indemnitee advising him of the identity 

 

 

of
the Independent Counsel so selected. 
Indemnitee may, within 10 days after such written notice of selection
shall have been received, deliver to the Company a written objection to such
selection; provided, however, that such objection may be asserted only on the
ground that the Independent Counsel so selected does not meet the requirements
of “Independent Counsel” as defined in Section 2 of this Agreement, and
the objection shall set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the person so selected shall
act as Independent Counsel. If such written objection is so made and
substantiated, the Independent Counsel so selected may not serve as
Independent  Counsel unless and until
such objection is withdrawn or a court of competent jurisdiction has determined
that such objection is without merit. If, within 20 days after submission by
Indemnitee of a written request for indemnification pursuant to Section 10(b) hereof,
no Independent Counsel shall have been selected and not objected to, either the
Company or Indemnitee may petition a court of competent jurisdiction (the “Court”)
for resolution of any objection which shall have been made by the Indemnitee to
the Company’s selection of Independent Counsel and/or for the appointment as
Independent Counsel of a person selected by the Court or by such other person
as the Court shall designate, and the person with respect to whom all
objections are so resolved or the person so appointed shall act as Independent
Counsel under Section 11(a) hereof. Upon the due commencement of any
judicial proceeding or arbitration pursuant to Section 13(a) of this
Agreement, Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).

 

(c)                                  The Company
agrees to pay the reasonable fees of Independent Counsel and to fully indemnify
such Independent Counsel against any and all Expenses, claims, liabilities and
damages arising out of or relating to this Agreement or its engagement pursuant
hereto.

 

12.                                 Presumptions
and Effect of Certain Proceedings.

 

(a)                                  In making a
determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall presume that
Indemnitee is entitled to indemnification under this Agreement if Indemnitee
has submitted a request for indemnification in accordance with Section 10(b) of
this Agreement, and the Company shall have the burden of proof to overcome that
presumption in connection with the making by any person, persons or entity of
any determination contrary to that presumption. Neither the failure of the
Company (including by the Board or Independent Counsel) to have made a
determination prior to the commencement of any action pursuant to this
Agreement that indemnification is proper in the circumstances because
Indemnitee has met the applicable standard of conduct, nor an actual
determination by the Company (including by the Board or Independent Counsel)
that Indemnitee has not met such applicable standard of conduct, shall be a
defense to the action or create a presumption that Indemnitee has not met the
applicable standard of conduct.

 

(b)                                 If the person,
persons or entity empowered or selected under Section 11 of this Agreement
to determine whether Indemnitee is entitled to indemnification shall not have
made a determination within sixty (60) days after receipt by the Company of the
request therefor, the requisite determination of entitlement to indemnification
shall be deemed to have been made and Indemnitee shall be entitled to such indemnification,
absent (i) a misstatement by Indemnitee of 

 

 

a
material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for
indemnification or (ii) a prohibition of such indemnification under
applicable law; provided, however, that such 60-day period shall be extended
for a reasonable time, not to exceed an additional thirty (30) days, if the
person, persons or entity making the determination with respect to entitlement
to indemnification in good faith requires such additional time for the
obtaining or evaluating of documentation and/or information relating thereto.

 

(c)                                  The termination
of any Proceeding or of any claim, issue or matter therein, by judgment, order,
settlement or conviction, or upon a plea of nolo contendere or its equivalent,
shall not (except as otherwise expressly provided in this Agreement) of itself
adversely affect the right of Indemnitee to indemnification or create a
presumption that Indemnitee did not act in good faith and in a manner which he
or she reasonably believed to be in or not opposed to the best interests of the
Company or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his or her conduct was unlawful.

 

(d)                                 For purposes of
any determination of good faith, Indemnitee shall be deemed to have acted in
good faith if Indemnitee’s action is based on the records or  books of account of the Enterprise, including
financial statements, or on information supplied to Indemnitee by the officers
of the Enterprise in the course of their duties, or on the advice of legal
counsel for the Enterprise or on information or records given or reports made
to the Enterprise by an independent certified public accountant or by an
appraiser or other expert selected by the Enterprise. The provisions of this Section 12(d) shall
not be deemed to be exclusive or to limit in any way the other circumstances in
which Indemnitee may be deemed or found to have met the applicable standard of
conduct set forth in this Agreement.

 

(e)                                  The knowledge
and/or actions, or failure to act, of any other director, trustee, partner,
managing member, fiduciary, officer, agent or employee of the Enterprise shall
not be imputed to Indemnitee for purposes of determining the right to
indemnification under this Agreement.

 

(f)                                    In the event
that any action, claim or Proceeding to which Indemnitee is a party is resolved
in any manner other than by adverse judgment against Indemnitee (including, without
limitation, settlement of such action, claim or Proceeding with or without
payment of money or other consideration), it shall be presumed that Indemnitee
has been successful on the merits or otherwise in such action, suit or
Proceeding.

 

13.                                 Remedies of
Indemnitee.

 

(a)                                  In the event
that (i) a determination is made pursuant to Section 11 of this
Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 9
of this Agreement, (iii) no determination of entitlement to
indemnification shall have been made pursuant to Section 11(a) of
this Agreement within the time period specified in Section 12(b) of
this Agreement, (iv) payment of indemnification is not made pursuant to Section 5,
6, 7 or the last sentence of Section 11(a) of this Agreement within
ten (10) days after receipt by the Company of a written request 

 

 

therefor
or (v) payment of indemnification pursuant to Section 3 or Section 4
of this Agreement is not made within ten (10) days after a determination
has been made that Indemnitee is entitled to indemnification, Indemnitee shall
be entitled to an adjudication by a court of his or her entitlement to such
indemnification or advancement of Expenses. Alternatively, Indemnitee, at his
or her option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. The Company shall not oppose Indemnitee’s right to
seek any such adjudication or award in arbitration.

 

(b)                                 In the event
that a determination shall have been made pursuant to Section 11(a) of
this Agreement that Indemnitee is not entitled to indemnification, any judicial
proceeding or arbitration commenced pursuant to this Section 13 shall be
conducted in all respects as a de novo trial or arbitration on the merits, and
Indemnitee shall not be prejudiced by reason of that adverse determination. In
any judicial proceeding or arbitration commenced pursuant to this Section 13,
the Company shall have the burden of proving Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be, and the Company
may not refer to or introduce into evidence any determination pursuant to Section 11(a) of
this Agreement adverse to Indemnitee for any purpose. If Indemnitee commences a
judicial proceeding or arbitration pursuant to this Section 13, Indemnitee
shall not be required to reimburse the Company for any advances pursuant to Section 9
until a final determination is made with respect to Indemnitee’s entitlement to
indemnification (as to which all rights of appeal have been exhausted or
lapsed).

 

(c)                                  If a
determination shall have been made pursuant to Section 11(a) of this
Agreement that Indemnitee is entitled to indemnification, the Company shall be
bound by such determination in any judicial proceeding or arbitration commenced
pursuant to this Section 13, absent (i) a misstatement by Indemnitee
of a material fact, or an omission of a material fact necessary to make
Indemnitee’s statement not materially misleading, in connection with the
request for indemnification or (ii) a prohibition of such indemnification
under applicable law.

 

(d)                                 In the event
that Indemnitee, pursuant to this Section 13, seeks a judicial
adjudication of or an award in arbitration to enforce his or her rights under,
or to recover damages for breach of, this Agreement, Indemnitee shall be
entitled to recover from the Company, and shall be indemnified by the Company
against, any and all Expenses actually and reasonably incurred by him or her in
such judicial adjudication or arbitration. If it shall be determined in said
judicial adjudication or arbitration that Indemnitee is entitled to receive
part but not all of the indemnification or advancement of Expenses sought,
Indemnitee shall be entitled to recover from the Company, and shall be
indemnified by the Company against, any and all Expenses reasonably incurred by
Indemnitee in connection with such judicial adjudication or arbitration.

 

(e)                                  The Company
shall be precluded from asserting in any judicial proceeding or arbitration
commenced pursuant to this Section 13 that the procedures and presumptions
of this Agreement are not valid, binding and enforceable and shall stipulate in
any such court or before any such arbitrator that the Company is bound by all
the provisions of this Agreement.

 

(f)                                    The Company
shall indemnify Indemnitee to the fullest extent permitted by law against all
Expenses and, if requested by Indemnitee, shall (within ten (10) days
after the 

 

 

Company’s
receipt of such written request) advance such Expenses to Indemnitee, which are
incurred by Indemnitee in connection with any judicial proceeding or
arbitration brought by Indemnitee for (i) indemnification or advances of
Expenses by the Company under this Agreement or any other agreement or
provision of the Company’s certificate of incorporation or bylaws now or
hereafter in effect or (ii) recovery or advances under any insurance
policy maintained by any person for the benefit of Indemnitee, regardless of
whether Indemnitee ultimately is determined to be entitled to such
indemnification, advance or insurance recovery, as the case may be.

 

14.                                 Non-exclusivity;
Survival of Rights; Insurance; Subrogation.

 

(a)                                  The rights of
indemnification and to receive advancement of Expenses as provided by this
Agreement shall not be deemed exclusive of any other rights to which Indemnitee
may at any time be entitled under applicable law, the Company’s certificate of
incorporation, the Company’s bylaws, the equivalent charter documents of any
Enterprise, any agreement, a vote of stockholders, a resolution of directors or
otherwise. No amendment, alteration or repeal of this Agreement or of any
provision hereof shall limit or restrict any right of Indemnitee under this
Agreement in respect of any action taken or omitted by such Indemnitee in his
Corporate Status prior to such amendment, alteration or repeal. The parties
hereto intend that, to the extent that a change in Delaware law, whether by
statute or judicial decision, permits greater indemnification or advancement of
Expenses than would be afforded currently under the Company’s bylaws and this
Agreement, the Indemnitee shall enjoy by this Agreement the greater benefits so
afforded by such change. No right or remedy herein conferred is intended to be
exclusive of any other right or remedy, and every other right and remedy shall
be cumulative and in addition to every other right and remedy given hereunder
or now or hereafter existing at law, in equity or otherwise. The assertion or
employment of any right or remedy hereunder or otherwise, shall not prevent the
concurrent assertion or employment of any other right or remedy.

 

(b)                                 To the extent
that the Company maintains an insurance policy or policies providing liability
insurance for directors, officers, trustees, partners, managing members,
fiduciaries, employees or agents of the Company or of any other Enterprise
which such person serves at the request of the Company, 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 such director, trustee,
partner, managing member, fiduciary, officer, employee or agent under such
policy or policies. If, at the time the Company receives notice from any source
of a Proceeding as to which Indemnitee is a party or a participant (as a
witness or otherwise), the Company has director and officer liability insurance
in effect, the Company shall give prompt notice of such Proceeding to the
insurers in accordance with the procedures set forth in the respective
policies. The Company shall thereafter take all necessary or desirable action
to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as
a result of such Proceeding in accordance with the terms of such policies.

 

(c)                                  In the event of
any 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 take all action necessary to secure such
rights, including 

 

 

execution
of such documents as are necessary to enable the Company to bring suit to
enforce such rights.

 

(d)                                 The Company
shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder (or for which advancement is provided
hereunder) if and to the extent that Indemnitee has otherwise actually received
such payment under any insurance policy, contract, agreement or otherwise.

 

(e)                                  The Company’s
obligation to indemnify or advance Expenses hereunder to Indemnitee who is or
was serving at the request of the Company as a director, officer, trustee,
partner, managing member, fiduciary, employee or agent of any other Enterprise
shall be reduced by any amount Indemnitee has actually received as
indemnification or advancement of expenses from such Enterprise.

 

15.                                 Duration of
Agreement.  This
Agreement shall continue until and terminate upon the later of: (a) ten (10) years
after the date that Indemnitee shall have ceased to serve as a director or
officer of the Company or as a director, officer, trustee, partner, managing
member, fiduciary, employee or agent of any other corporation, limited
liability company, partnership, joint venture, trust, employee benefit plan or
other enterprise which Indemnitee served at the request of the Company; or (b) one
(1) year after the final termination of any Proceeding (including any
rights of appeal thereto) then pending in respect of which Indemnitee is granted
rights of indemnification or advancement of Expenses hereunder and of any
Proceeding commenced by Indemnitee pursuant to Section 13 of this
Agreement relating thereto (including any rights of appeal of any Section 13
Proceeding).

 

16.                                 Severability.  If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever: (a) the validity, legality and enforceability of the remaining
provisions of this Agreement (including, without limitation, each portion of
any Section of this Agreement containing any such provision held to be
invalid, illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby and shall
remain enforceable to the fullest extent permitted by law; (b) such
provision or provisions shall be deemed reformed to the extent necessary to
conform to applicable law and to give the maximum effect to the intent of the
parties hereto; and (c) to the fullest extent possible, the provisions of
this Agreement (including, without limitation, each portion of any Section of
this Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed
so as to give effect to the intent manifested thereby.

 

17.                                 Enforcement and
Binding Effect.

 

(a)                                  The Company
expressly confirms and agrees that it has entered into this Agreement and
assumed the obligations imposed on it hereby in order to induce Indemnitee to
serve as a director, manager or officer of the Company or an Enterprise, and
the Company acknowledges that Indemnitee is relying upon this Agreement in
serving as a director, manager or officer of the Company or an Enterprise.

 

 

(b)                                 This Agreement
constitutes the entire agreement between the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
oral, written and implied, between the parties hereto with respect to the
subject matter hereof.

 

(c)                                  The
indemnification and advancement of expenses provided by or granted pursuant to
this Agreement shall apply to Indemnitee’s service as an officer, director,
manager or key employee of the Company or an Enterprise prior to the date of
this Agreement.

 

(d)                                 The
indemnification and advancement of expenses provided by or granted pursuant to
this Agreement shall continue as to a person who has ceased to be a director,
manager, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.

 

(e)                                  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 Company shall require and cause any
successor (whether direct or indirect by purchase, merger, consolidation, or
otherwise) to all, substantially all, or a substantial part, of the business
and/or assets of the Company, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to
perform if no such succession had taken place.

 

18.                                 Modification
and Waiver.  No
supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by 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 of this Agreement nor shall any waiver constitute a continuing
waiver.

 

19.                                 Notice by
Indemnitee.  Indemnitee
agrees promptly to notify the Company in writing upon being served with any
summons, citation, subpoena, complaint, indictment, information or other
document relating to any Proceeding or matter which may be subject to
indemnification or advancement of Expenses covered hereunder. The failure of
Indemnitee to so notify the Company shall not relieve the Company of any
obligation which it may have to Indemnitee under this Agreement or otherwise,
except as provided in Section 10(a).

 

20.                                 Notices.  All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given (a) if delivered by hand and if receipt is
acknowledged in writing by the party to whom said notice or other communication
shall have been directed or (b) if mailed by certified or registered mail
with postage prepaid, on the third business day after the date on which it is
so mailed:

 

(a)                                  If to
Indemnitee, at the address indicated on the signature page of this
Agreement, or such other address as Indemnitee shall provide in writing to the
Company.

 

 

(b)                                 If to the
Company to:

 

Prospect Medical Holdings, Inc.

10780
Santa Monica Boulevard

Suite 400

Los
Angeles, California 90025

 

Attn.:
Chief Financial Officer

 

or
to any other address as may have been furnished to Indemnitee in writing by the
Company.

 

21.                                 Contribution.  To the fullest extent permissible under
applicable law, if the indemnification  provided for in this Agreement is
unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of
indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee,
whether for judgments, fines, penalties, excise taxes, amounts paid or to be
paid in settlement and/or for Expenses, in connection with any claim relating
to an indemnifiable event under this Agreement, in such proportion as is deemed
fair and reasonable in light of all of the circumstances of such Proceeding in
order to reflect: (i) the relative benefits received by the Company and
Indemnitee as a result of the event(s) and/or transaction(s) giving
rise to such Proceeding; and/or (ii) the relative fault of the Company
(and its directors, officers, employees and agents) and Indemnitee in
connection with such event(s) and/or transaction(s).

 

22.                                 Applicable Law.  This Agreement and the legal relations among
the parties shall be governed by, and construed and enforced in accordance
with, the laws of the State of Delaware, without regard to its conflict of laws
rules.

 

23.                                 Identical
Counterparts.  This
Agreement may be executed in one or more counterparts, each of which shall for
all purposes be deemed to be an original but all of which together shall
constitute one and the same Agreement. Only one such counterpart signed by the
party against whom enforceability is sought needs to be produced to evidence
the existence of this Agreement.

 

24.                                 Miscellaneous.  Use of the masculine pronoun shall be deemed
to include usage of the feminine pronoun where appropriate. The headings of the
sections and paragraphs of this Agreement are inserted for convenience only and
shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.

 

 

IN
WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the
day and year first above written.

 

 

	
  PROSPECT
  MEDICAL HOLDINGS, INC.

  	
   

  	
  INDEMNITEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Its:Exhibit 10.84

 

INDEMNIFICATION AGREEMENT

 

This
Indemnification
Agreement (“Agreement”) is made as of November 26, 2008 by and between
Prospect Medical Holdings, Inc., a Delaware corporation (the “Company”),
and Arthur Lipper, M.D. (“Indemnitee”).

 

RECITALS

 

WHEREAS,
highly competent persons have become more reluctant to serve corporations as
directors or in other capacities unless they are provided with adequate
protection through insurance or adequate indemnification  against inordinate risks of claims and actions
against them arising out of their service to and activities on behalf of the
corporation;

 

WHEREAS,
the General Corporation Law of the State of Delaware (“DGCL”) empowers the
Company to indemnify by agreement its officers, directors, employees and agents,
and persons who serve, at the request of the Company, as directors, managers,
officers, employees or agents of other corporations, limited liability
companies, partnerships, joint ventures, or other enterprises, and expressly
provides that the indemnification provided thereby is not exclusive;

 

WHEREAS,
it is reasonable, prudent and necessary for the Company contractually to
obligate itself to indemnify, and to advance expenses on behalf of, persons
serving the Company and/or an Enterprise (as defined below) to the fullest
extent permitted by applicable law (as described in Section 7(b) hereof)
so that they will serve or continue to serve the Company and/or the Enterprise
free from undue concern that they will not be so indemnified;

 

WHEREAS,
this Agreement is a supplement to and in furtherance of the certificate of
incorporation and bylaws of the Company and any resolutions adopted pursuant
thereto and shall not be deemed a substitute therefor, nor to diminish or
abrogate any rights of Indemnitee thereunder; and

 

NOW,
THEREFORE, in consideration of the promises and the covenants contained herein,
the Company and Indemnitee do hereby covenant and agree as follows:

 

1.             Services to the Company.  Indemnitee will serve or continue to serve as
an officer, director, manager or key employee of the Company or an Enterprise
for so long as Indemnitee is duly elected or appointed or until Indemnitee
tenders his or her resignation, subject to the terms of any employment
agreement between Indemnitee and the Company.

 

2.             Definitions.  As used in this Agreement:

 

 

(a)           “Change in Control” shall be
deemed to have occurred if (i) any Person (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,
and other than any person holding shares of the Company on the date that the
Company first registers under the Act or any transferee of such individual if
such transferee is a spouse or lineal descendant of the transferee or a trust
for the benefit of the individual, his spouse or lineal descendants), is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange 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 of Directors of the Company (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 80% 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.

 

(b)           “Corporate Status” describes
the status of a person who is or was a director, officer, trustee, general
partner, managing member, fiduciary, employee or agent of the Company or of any
other Enterprise which such person is or was serving at the request of the
Company.

 

(c)           “Disinterested Director”
means a director of the Company who is not and was not a party to the
Proceeding in respect of which indemnification is sought by Indemnitee.

 

(d)           “Enterprise” shall mean the
Company and any other corporation, limited liability company, partnership,
joint venture, trust or other enterprise in respect of which Indemnitee is or
was or will be serving as a director, officer, trustee, manager, member,
partner, employee, agent, attorney, consultant, member of the entity’s
governing body (whether constituted as a board of directors, board of managers,
general partner or otherwise), fiduciary, or in any other similar capacity at
the request, election or direction of the Company, including acting as a
shareholder, director, officer, trustee, manager, member, partner, employee,
agent, attorney or consultant of the Company’s direct or indirect subsidiaries
or its affiliated professional corporations.

 

 

(e)           “Exchange Act” shall mean
the Securities Exchange Act of 1934, as amended.

 

(f)            “Expenses” shall include all
reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of
experts, witness fees, travel expenses, duplicating costs, printing and binding
costs, telephone charges, postage, delivery service fees and all other
disbursements or expenses of the type customarily incurred in connection with
prosecuting, defending, preparing to prosecute or defend, investigating, being
or preparing to be a witness in, or otherwise participating in, a Proceeding.
Expenses also shall include expenses incurred in connection with any appeal
resulting from any Proceeding, including, without limitation, the premium,
security for and other costs relating to any cost bond, supersedeas bond or
other appeal bond or its equivalent. Expenses shall not include amounts paid in
settlement by Indemnitee or the amount of judgments or fines against
Indemnitee.

 

(g)           “Independent Counsel” means
a law firm, or a member of a law firm, that is experienced in matters of
corporation law and neither presently is, nor in the past five years has been,
retained to represent: (i) the Company or Indemnitee in any matter
material to either such party (other than with respect to matters concerning
Indemnitee under this Agreement, or of other indemnitees under similar
indemnification agreements), or (ii) any other party to the Proceeding
giving rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term “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.

 

(h)           “Person” shall have the
meaning set forth in Sections 13(d) and 14(d) of the Exchange Act;
provided, however, that Person shall exclude (i) the Company or any
Enterprise, (ii) any trustee or other fiduciary holding securities under
an employee benefit plan of the Company and (iii) any corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company.

 

(i)            The term “Proceeding” shall
include any threatened, pending or completed action, suit, arbitration, alternate
dispute resolution mechanism, investigation, inquiry, administrative hearing or
any other actual, threatened or completed proceeding, whether brought in the
right of the Company or otherwise and whether of a civil, criminal,
administrative or investigative nature, in which Indemnitee was, is or will be
involved as a party or otherwise by reason of the fact that Indemnitee is or
was a director or officer of the Company, by reason of any action taken (or
failure to act) by him or her or of any action (or failure to act) on his or
her part while acting as a director or officer of the Company, or by reason of
the fact that he or she is or was serving as a director, officer, trustee,
general partner, managing member, fiduciary, employee or agent of any other
Enterprise, in each case whether or not serving in such capacity at the time
any liability 

 

 

or
expense is incurred for which indemnification, reimbursement or advancement of
expenses can be provided under this Agreement.

 

(j)            References to “other
enterprise” shall include employee benefit plans; references to “fines” shall
include any excise tax assessed with respect to any employee benefit plan;
references to “serving at the request of the Company” shall include any service
as a director, officer, employee or agent of the Company which imposes duties
on, or involves services by, such director, officer, employee or agent with
respect to an employee benefit plan, its participants or beneficiaries; and a
person who acted in good faith and in a manner he or she reasonably believed to
be in the best interests of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner “not opposed to the best
interests of the Company” as referred to in this Agreement.

 

3.             Indemnity in Third-Party
Proceedings.  The Company
shall indemnify Indemnitee in accordance with the provisions of this Section 3
if Indemnitee is, or is threatened to be made, a party to or a participant (as
a witness or otherwise) in any Proceeding, other than a Proceeding by or in the
right of the Company to procure a judgment in its favor. Pursuant to this Section 3,
Indemnitee shall be indemnified against all Expenses, judgments, fines,
penalties and amounts paid in settlement (including all interest, assessments
or other charges imposed thereon, ERISA excise taxes and penalties, any
federal, state, local, or foreign taxes imposed as a result of the actual or
deemed receipt of any payments under this Agreement, and other charges paid or
payable in connection with or in respect of such Expenses, judgments, fines,
penalties and amounts paid in settlement) actually and reasonably incurred by
Indemnitee or on his or her behalf in connection with such Proceeding or any
claim, issue or matter therein, if Indemnitee acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the Company or an Enterprise and, in the case of a criminal
proceeding, he or she had no reasonable cause to believe that his or her conduct
was unlawful.

 

4.             Indemnity in Proceedings by
or in the Right of the Company.  The Company shall indemnify Indemnitee in
accordance with the provisions of this Section 4 if Indemnitee is, or is
threatened to be made, a party to or a participant (as a witness or otherwise)
in any Proceeding by or in the right of the Company to procure a judgment in
its favor. Pursuant to this Section 4, Indemnitee shall be indemnified
against all Expenses actually and reasonably incurred by Indemnitee or on his
or her behalf in connection with such Proceeding or any claim, issue or matter
therein, if Indemnitee acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the Company or an
Enterprise. No indemnification for Expenses shall be made under this Section 4
in respect of any claim, issue or matter as to which Indemnitee shall have been
finally adjudged by a court to be liable to the Company or an Enterprise,
unless and only to the extent that any court in which the Proceeding was
brought or the Delaware Court of Chancery shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, Indemnitee is fairly and reasonably entitled to such
indemnification.

 

 

5.             Indemnification for Expenses
of a Party Who is Wholly or Partly Successful.  Notwithstanding any other provisions of this
Agreement, to the extent that Indemnitee is a party to (or a participant in)
and is successful, on the merits or otherwise, in any Proceeding or in defense
of any claim, issue or matter therein, in whole or in part, the Company shall
indemnify Indemnitee against all Expenses actually and reasonably incurred by
him or her in connection therewith. If Indemnitee is not wholly successful in
such Proceeding but is successful, on the merits or otherwise, as to one or
more but less than all claims, issues or matters in such Proceeding, the
Company shall indemnify Indemnitee against all Expenses actually and reasonably
incurred by him or her or on his or her behalf in connection with each
successfully resolved claim, issue or matter. If Indemnitee is not wholly
successful in such Proceeding, the Company also shall indemnify Indemnitee
against all Expenses reasonably incurred in connection with a claim, issue or
matter related to any claim, issue or matter on which Indemnitee was
successful. For purposes of this Section and without limitation, the
termination of any claim, issue or matter in such a Proceeding by dismissal,
with or without prejudice, shall be deemed to be a successful result as to such
claim, issue or matter.

 

6.             Indemnification For Expenses
of a Witness. 
Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee is, by reason of his Corporate Status, a witness in any
Proceeding to which Indemnitee is not a party, he shall be indemnified against
all Expenses actually and reasonably incurred by him or her or on his or her
behalf in connection therewith in accordance with the procedures set forth in Section 9
hereof.

 

7.             Additional Indemnification.

 

(a)           Notwithstanding any
limitation in Sections 3, 4 or 5, the Company shall indemnify Indemnitee to the
fullest extent permitted by law if Indemnitee is a party to or threatened to be
made a party to any Proceeding (including a Proceeding by or in the right of
the Company to procure a judgment in its favor) against 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 and amounts paid in
settlement) actually and reasonably incurred by Indemnitee in connection with
the Proceeding. No indemnity shall be made under this Section 7(a) on
account of Indemnitee’s conduct which constitutes a breach of Indemnitee’s duty
of loyalty to the Company or its stockholders or to an Enterprise or is an act
or omission not in good faith or which involves intentional misconduct or a
knowing violation of the law.

 

(b)           For purposes of Section 7(a),
the meaning of the phrase “to the fullest extent permitted by law” shall
include, but not be limited to:

 

(i)            the fullest
extent permitted by the provision of the DGCL that authorizes or contemplates
additional indemnification by agreement or the corresponding provision of any
amendment to or replacement of the DGCL; and

 

 

(ii)           the fullest
extent authorized or permitted by any amendments to or replacements of the DGCL
adopted after the date of this Agreement that increase the extent to which a
corporation may indemnify its officers and directors.

 

8.             Exclusions.  Notwithstanding any other provision in this
Agreement, the Company shall not be obligated under this Agreement to indemnify
Indemnitee in connection with any claim made against Indemnitee:

 

(a)           for which payment has
actually been received by or on behalf of Indemnitee under any insurance policy
or other indemnity provision, except with respect to any excess beyond the
amount actually received under any insurance policy or other indemnity
provision;

 

(b)           for an accounting of profits
made from the purchase and sale (or sale and purchase) by Indemnitee of
securities of the Company within the meaning of Section 16(b) of the
Exchange Act or similar provisions of state statutory law or common law; or

 

(c)           except as otherwise provided
in Sections 13(d)-(f) hereof, in connection with any Proceeding (or any
part of any Proceeding) initiated by Indemnitee, including any Proceeding (or
any part of any Proceeding) initiated by Indemnitee against the Company or its
directors, officers, employees or other indemnitees, unless (i) the Board
of Directors of the Company authorized the Proceeding (or any part of any
Proceeding) prior to its initiation, (ii) the Company provides the indemnification,
in its sole discretion, pursuant to the powers vested in the Company under
applicable law, or (iii) the Proceeding is instituted 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)
and Independent Counsel has approved its initiation.

 

9.             Advances of Expenses;
Defense of Claim.

 

(a)           Notwithstanding any
provision of this Agreement to the contrary, the Company shall advance the
expenses incurred by Indemnitee in connection with any Proceeding within ten (10) days
after the receipt by the Company of a statement or statements requesting such
advances from time to time, whether prior to or after final disposition of any
Proceeding. Advances shall be unsecured and interest free. Advances shall be
made without regard to Indemnitee’s ability to repay the expenses and without
regard to Indemnitee’s ultimate entitlement to indemnification under the other
provisions of this Agreement. Advances shall include any and all reasonable
Expenses incurred pursuing an action to enforce this right of advancement,
including Expenses incurred preparing and forwarding statements to the Company
to support the advances claimed. Indemnitee shall qualify for advances solely
upon the execution and delivery to the Company of an undertaking providing that
Indemnitee undertakes to repay the advance to the extent that it is ultimately
determined that Indemnitee is not entitled to be indemnified by the Company, in
which case the Company shall be entitled to be reimbursed by Indemnitee (who
hereby agrees to reimburse the Company) for all such amounts 

 

 

theretofore
paid.  Any such obligation of Indemnitee
to so reimburse the Company shall be unsecured and no interest shall be charged
thereon.  This Section 9(a) shall
not apply to any claim made by Indemnitee for which indemnity is excluded
pursuant to Section 8.

 

(b)           The Company will be entitled
to participate in any Proceeding at its own expense.  Subject to the last sentence of this Section 9(b),
the Company may assume the defense of any Proceeding with counsel reasonably
satisfactory to Indemnitee by providing prompt written notice thereof to
Indemnitee.  After receipt of such
notice, Indemnitee shall have the right to employ legal counsel in such
Proceeding, but all of his or her Expenses related thereto shall be borne by
Indemnitee 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 (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), 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 or provided written notice thereof to Indemnitee as aforesaid, in
each of which cases all Expenses of the Proceeding shall be borne by the
Company.  Notwithstanding anything herein
to the contrary, 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 clauses (ii) and (iv) above
and provided written notice to the Company that Indemnitee shall assume the
defense thereof.

 

(c)           The Company shall not settle
any action, claim or Proceeding (in whole or in part) which would impose any
Expense, judgment, fine, penalty or limitation 
on Indemnitee without Indemnitee’s prior written consent.

 

10.           Procedure for Notification
and Application for Indemnification.

 

(a)           Within sixty (60) days after
the actual receipt by Indemnitee of notice that he or she is a party to or a
participant (as a witness or otherwise) in any Proceeding, Indemnitee shall
submit to the Company a written notice identifying the Proceeding. The omission
by Indemnitee to notify the Company will not relieve the Company from any
liability which it may have to Indemnitee

 

(i)            otherwise than
under this Agreement and (ii) under this Agreement except to the extent
the Company can establish that such omission to notify resulted in actual
prejudice to the Company.

 

(b)           Indemnitee shall thereafter
deliver to the Company a written application to indemnify Indemnitee in
accordance with this Agreement. Such application(s) may be delivered from
time to time and at such time(s) as Indemnitee deems appropriate in his or
her sole discretion. Following such a written application for indemnification
by Indemnitee, Indemnitee’s entitlement to indemnification shall be determined
in accordance with Section 11(a) of this Agreement.

 

 

11.           Procedure Upon Application
for Indemnification.

 

(a)           Upon written request by
Indemnitee for indemnification pursuant to Section 10(b), a determination,
if required by applicable law, with respect to Indemnitee’s entitlement thereto
shall be made in the specific case: (i) by a majority vote of the
Disinterested Directors, even if constituting less than a quorum of the Board;
or (ii) if so requested by Indemnitee, in his or her sole discretion, by
Independent Counsel in a written opinion to the Board, a copy of which shall be
delivered to Indemnitee. If it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within ten (10) days
after such determination. Indemnitee shall reasonably cooperate with the
person, persons or entity making such determination with respect to Indemnitee’s
entitlement to indemnification, including providing to such person, persons or
entity upon reasonable advance request any documentation or information which
is not privileged or otherwise protected from disclosure and which is
reasonably available to Indemnitee and reasonably necessary to such
determination. Any costs or expenses (including attorneys’ fees and
disbursements) incurred by Indemnitee in so cooperating with the person, persons
or entity making such determination shall be borne by the Company (irrespective
of the determination as to Indemnitee’s entitlement to indemnification) and the
Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

 

(b)           In the event the
determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 11(a) hereof, the Independent Counsel
shall be selected as provided in this Section 11(b). The Independent
Counsel shall be selected by the Board of Directors, and the Company shall give
written notice to Indemnitee advising him of the identity of the Independent
Counsel so selected.  Indemnitee may,
within 10 days after such written notice of selection shall have been received,
deliver to the Company a written objection to such selection; provided,
however, that such objection may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirements of “Independent
Counsel” as defined in Section 2 of this Agreement, and the objection
shall set forth with particularity the factual basis of such assertion. Absent
a proper and timely objection, the person so selected shall act as Independent
Counsel. If such written objection is so made and substantiated, the Independent
Counsel so selected may not serve as Independent  Counsel unless and until such objection is
withdrawn or a court of competent jurisdiction has determined that such
objection is without merit. If, within 20 days after submission by Indemnitee
of a written request for indemnification pursuant to Section 10(b) hereof,
no Independent Counsel shall have been selected and not objected to, either the
Company or Indemnitee may petition a court of competent jurisdiction (the “Court”)
for resolution of any objection which shall have been made by the Indemnitee to
the Company’s selection of Independent Counsel and/or for the appointment as
Independent Counsel of a person selected by the Court or by such other person
as the Court shall designate, and the person with respect to whom all
objections are so resolved or the person so appointed shall act as Independent
Counsel under Section 11(a) hereof. Upon the due commencement of any
judicial proceeding or arbitration pursuant to Section 13(a) of this 

 

 

Agreement,
Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).

 

(c)           The Company agrees to pay
the reasonable fees of Independent Counsel and to fully indemnify such
Independent Counsel against any and all Expenses, claims, liabilities and
damages arising out of or relating to this Agreement or its engagement pursuant
hereto.

 

12.           Presumptions and Effect of
Certain Proceedings.

 

(a)           In making a determination
with respect to entitlement to indemnification hereunder, the person or persons
or entity making such determination shall presume that Indemnitee is entitled
to indemnification under this Agreement if Indemnitee has submitted a request
for indemnification in accordance with Section 10(b) of this
Agreement, and the Company shall have the burden of proof to overcome that
presumption in connection with the making by any person, persons or entity of
any determination contrary to that presumption. Neither the failure of the
Company (including by the Board or Independent Counsel) to have made a
determination prior to the commencement of any action pursuant to this
Agreement that indemnification is proper in the circumstances because
Indemnitee has met the applicable standard of conduct, nor an actual
determination by the Company (including by the Board or Independent Counsel)
that Indemnitee has not met such applicable standard of conduct, shall be a
defense to the action or create a presumption that Indemnitee has not met the
applicable standard of conduct.

 

(b)           If the person, persons or
entity empowered or selected under Section 11 of this Agreement to
determine whether Indemnitee is entitled to indemnification shall not have made
a determination within sixty (60) days after receipt by the Company of the
request therefor, the requisite determination of entitlement to indemnification
shall be deemed to have been made and Indemnitee shall be entitled to such
indemnification, absent (i) a misstatement by Indemnitee of a material
fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for
indemnification or (ii) a prohibition of such indemnification under
applicable law; provided, however, that such 60-day period shall be extended
for a reasonable time, not to exceed an additional thirty (30) days, if the
person, persons or entity making the determination with respect to entitlement
to indemnification in good faith requires such additional time for the
obtaining or evaluating of documentation and/or information relating thereto.

 

(c)           The termination of any
Proceeding or of any claim, issue or matter therein, by judgment, order,
settlement or conviction, or upon a plea of nolo contendere or its equivalent,
shall not (except as otherwise expressly provided in this Agreement) of itself
adversely affect the right of Indemnitee to indemnification or create a
presumption that Indemnitee did not act in good faith and in a manner which he
or she reasonably believed to be in or not opposed to the best interests of the
Company or, with respect to any 

 

 

criminal
Proceeding, that Indemnitee had reasonable cause to believe that his or her
conduct was unlawful.

 

(d)           For purposes of any determination
of good faith, Indemnitee shall be deemed to have acted in good faith if
Indemnitee’s action is based on the records or 
books of account of the Enterprise, including financial statements, or
on information supplied to Indemnitee by the officers of the Enterprise in the
course of their duties, or on the advice of legal counsel for the Enterprise or
on information or records given or reports made to the Enterprise by an
independent certified public accountant or by an appraiser or other expert selected
by the Enterprise. The provisions of this Section 12(d) shall not be
deemed to be exclusive or to limit in any way the other circumstances in which
Indemnitee may be deemed or found to have met the applicable standard of
conduct set forth in this Agreement.

 

(c)           The knowledge and/or
actions, or failure to act, of any other director, trustee, partner, managing
member, fiduciary, officer, agent or employee of the Enterprise shall not be
imputed to Indemnitee for purposes of determining the right to indemnification
under this Agreement.

 

(f)            In the event that any
action, claim or Proceeding to which Indemnitee is a party is resolved in any
manner other than by adverse judgment against Indemnitee (including, without
limitation, settlement of such action, claim or Proceeding with or without
payment of money or other consideration), it shall be presumed that Indemnitee
has been successful on the merits or otherwise in such action, suit or
Proceeding.

 

13.           Remedies of Indemnitee.

 

(a)           In the event that (i) a
determination is made pursuant to Section 11 of this Agreement that
Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement
of Expenses is not timely made pursuant to Section 9 of this Agreement, (iii) no
determination of entitlement to indemnification shall have been made pursuant
to Section 11(a) of this Agreement within the time period specified
in Section 12(b) of this Agreement, (iv) payment of
indemnification is not made pursuant to Section 5, 6, 7 or the last
sentence of Section 11(a) of this Agreement within ten (10) days
after receipt by the Company of a written request therefor or (v) payment
of indemnification pursuant to Section 3 or Section 4 of this
Agreement is not made within ten (10) days after a determination has been
made that Indemnitee is entitled to indemnification, Indemnitee shall be
entitled to an adjudication by a court of his or her entitlement to such
indemnification or advancement of Expenses. Alternatively, Indemnitee, at his
or her option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. The Company shall not oppose Indemnitee’s right to
seek any such adjudication or award in arbitration.

 

(b)           In the event that a
determination shall have been made pursuant to Section 11(a) of this
Agreement that Indemnitee is not entitled to indemnification, any judicial 

 

 

proceeding
or arbitration commenced pursuant to this Section 13 shall be conducted in
all respects as a de novo trial or arbitration on the merits, and Indemnitee
shall not be prejudiced by reason of that adverse determination. In any
judicial proceeding or arbitration commenced pursuant to this Section 13,
the Company shall have the burden of proving Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be, and the Company
may not refer to or introduce into evidence any determination pursuant to Section 11(a) of
this Agreement adverse to Indemnitee for any purpose. If Indemnitee commences a
judicial proceeding or arbitration pursuant to this Section 13, Indemnitee
shall not be required to reimburse the Company for any advances pursuant to Section 9
until a final determination is made with respect to Indemnitee’s entitlement to
indemnification (as to which all rights of appeal have been exhausted or
lapsed).

 

(c)           If a determination shall
have been made pursuant to Section 11(a) of this Agreement that
Indemnitee is entitled to indemnification, the Company shall be bound by such
determination in any judicial proceeding or arbitration commenced pursuant to
this Section 13, absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for
indemnification or (ii) a prohibition of such indemnification under
applicable law.

 

(d)           In the event that
Indemnitee, pursuant to this Section 13, seeks a judicial adjudication of
or an award in arbitration to enforce his or her rights under, or to recover
damages for breach of, this Agreement, Indemnitee shall be entitled to recover
from the Company, and shall be indemnified by the Company against, any and all
Expenses actually and reasonably incurred by him or her in such judicial
adjudication or arbitration. If it shall be determined in said judicial
adjudication or arbitration that Indemnitee is entitled to receive part but not
all of the indemnification or advancement of Expenses sought, Indemnitee shall
be entitled to recover from the Company, and shall be indemnified by the
Company against, any and all Expenses reasonably incurred by Indemnitee in
connection with such judicial adjudication or arbitration.

 

(c)           The Company shall be
precluded from asserting in any judicial proceeding or arbitration commenced
pursuant to this Section 13 that the procedures and presumptions of this
Agreement are not valid, binding and enforceable and shall stipulate in any
such court or before any such arbitrator that the Company is bound by all the
provisions of this Agreement.

 

(f)            The Company shall indemnify
Indemnitee to the fullest extent permitted by law against all Expenses and, if
requested by Indemnitee, shall (within ten (10) days after the Company’s
receipt of such written request) advance such Expenses to Indemnitee, which are
incurred by Indemnitee in connection with any judicial proceeding or
arbitration brought by Indemnitee for (i) indemnification or advances of
Expenses by the Company under this Agreement or any other agreement or
provision of the Company’s certificate of incorporation or bylaws now or
hereafter in effect or (ii) recovery or advances under any insurance
policy maintained by any person for the 

 

 

benefit
of Indemnitee, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advance or insurance recovery, as the case
may be.

 

14.           Non-exclusivity; Survival of
Rights; Insurance; Subrogation.

 

(a)           The rights of
indemnification and to receive advancement of Expenses as provided by this
Agreement shall not be deemed exclusive of any other rights to which Indemnitee
may at any time be entitled under applicable law, the Company’s certificate of
incorporation, the Company’s bylaws, the equivalent charter documents of any
Enterprise, any agreement, a vote of stockholders, a resolution of directors or
otherwise. No amendment, alteration or repeal of this Agreement or of any
provision hereof shall limit or restrict any right of Indemnitee under this
Agreement in respect of any action taken or omitted by such Indemnitee in his
Corporate Status prior to such amendment, alteration or repeal. The parties
hereto intend that, to the extent that a change in Delaware law, whether by
statute or judicial decision, permits greater indemnification or advancement of
Expenses than would be afforded currently under the Company’s bylaws and this
Agreement, the Indemnitee shall enjoy by this Agreement the greater benefits so
afforded by such change. No right or remedy herein conferred is intended to be
exclusive of any other right or remedy, and every other right and remedy shall
be cumulative and in addition to every other right and remedy given hereunder
or now or hereafter existing at law, in equity or otherwise. The assertion or
employment of any right or remedy hereunder or otherwise, shall not prevent the
concurrent assertion or employment of any other right or remedy.

 

(b)           To the extent that the
Company maintains an insurance policy or policies providing liability insurance
for directors, officers, trustees, partners, managing members, fiduciaries,
employees or agents of the Company or of any other Enterprise which such person
serves at the request of the Company, 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 such director, trustee, partner, managing
member, fiduciary, officer, employee or agent under such policy or policies.
If, at the time the Company receives notice from any source of a Proceeding as
to which Indemnitee is a party or a participant (as a witness or otherwise),
the Company has director and officer liability insurance in effect, the Company
shall give prompt notice of such Proceeding to the insurers in accordance with
the procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to
pay, on behalf of Indemnitee, all amounts payable as a result of such
Proceeding in accordance with the terms of such policies.

 

(c)           In the event of any 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 take all action necessary to secure such rights, including
execution of such documents as are necessary to enable the Company to bring
suit to enforce such rights.

 

 

(d)           The Company shall not be
liable under this Agreement to make any payment of amounts otherwise
indemnifiable hereunder (or for which advancement is provided hereunder) if and
to the extent that Indemnitee has otherwise actually received such payment
under any insurance policy, contract, agreement or otherwise.

 

(c)           The Company’s obligation to
indemnify or advance Expenses hereunder to Indemnitee who is or was serving at
the request of the Company as a director, officer, trustee, partner, managing
member, fiduciary, employee or agent of any other Enterprise shall be reduced
by any amount Indemnitee has actually received as indemnification or
advancement of expenses from such Enterprise.

 

15.           Duration of Agreement.  This Agreement shall continue until and
terminate upon the later of: (a) ten (10) years after the date that
Indemnitee shall have ceased to serve as a director or officer of the Company
or as a director, officer, trustee, partner, managing member, fiduciary,
employee or agent of any other corporation, limited liability company,
partnership, joint venture, trust, employee benefit plan or other enterprise
which Indemnitee served at the request of the Company; or (b) one (1) year
after the final termination of any Proceeding (including any rights of appeal
thereto) then pending in respect of which Indemnitee is granted rights of
indemnification or advancement of Expenses hereunder and of any Proceeding
commenced by Indemnitee pursuant to Section 13 of this Agreement relating
thereto (including any rights of appeal of any Section 13 Proceeding).

 

16.           Severability.  If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable for any reason
whatsoever: (a) the validity, legality and enforceability of the remaining
provisions of this Agreement (including, without limitation, each portion of
any Section of this Agreement containing any such provision held to be
invalid, illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby and shall
remain enforceable to the fullest extent permitted by law; (b) such
provision or provisions shall be deemed reformed to the extent necessary to
conform to applicable law and to give the maximum effect to the intent of the
parties hereto; and (c) to the fullest extent possible, the provisions of
this Agreement (including, without limitation, each portion of any Section of
this Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall be
construed so as to give effect to the intent manifested thereby.

 

17.           Enforcement and Binding
Effect.

 

(a)           The Company expressly
confirms and agrees that it has entered into this Agreement and assumed the
obligations imposed on it hereby in order to induce Indemnitee to serve as a
director, manager or officer of the Company or an Enterprise, and the Company
acknowledges that Indemnitee is relying upon this Agreement in serving as a
director, manager or officer of the Company or an Enterprise.

 

 

(b)           This Agreement constitutes
the entire agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and understandings, oral,
written and implied, between the parties hereto with respect to the subject
matter hereof.

 

(c)           The indemnification and
advancement of expenses provided by or granted pursuant to this Agreement shall
apply to Indemnitee’s service as an officer, director, manager or key employee
of the Company or an Enterprise prior to the date of this Agreement.

 

(d)           The indemnification and
advancement of expenses provided by or granted pursuant to this Agreement shall
continue as to a person who has ceased to be a director, manager, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.

 

(e)           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
Company shall require and cause any successor (whether direct or indirect by
purchase, merger, consolidation, or otherwise) to all, substantially all, or a
substantial part, of the business and/or assets of the Company, by written
agreement in form and substance satisfactory to Indemnitee, expressly to assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform if no such succession had taken
place.

 

18.           Modification and Waiver.  No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by 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 of this Agreement nor shall
any waiver constitute a continuing waiver.

 

19.           Notice by Indemnitee.  Indemnitee agrees promptly to notify the
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
covered hereunder. The failure of Indemnitee to so notify the Company shall not
relieve the Company of any obligation which it may have to Indemnitee under
this Agreement or otherwise, except as provided in Section 10(a).

 

20.           Notices.  All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given (a) if delivered by hand and if receipt is
acknowledged in writing by the party to whom said notice or other communication
shall have been directed or (b) if mailed by certified or registered mail
with postage prepaid, on the third business day after the date on which it is
so mailed:

 

 

(a)           If to Indemnitee, at the
address indicated on the signature page of this Agreement, or such other
address as Indemnitee shall provide in writing to the Company.

 

(b)           If to the Company to:

 

Prospect Medical Holdings, Inc.

10780
Santa Monica Boulevard

Suite 400

Los
Angeles, California 90025

 

Attn.:
Chief Financial Officer

 

or
to any other address as may have been furnished to Indemnitee in writing by the
Company.

 

21.           Contribution.  To the fullest extent permissible under
applicable law, if the indemnification  provided for in this Agreement is
unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of
indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee,
whether for judgments, fines, penalties, excise taxes, amounts paid or to be
paid in settlement and/or for Expenses, in connection with any claim relating
to an indemnifiable event under this Agreement, in such proportion as is deemed
fair and reasonable in light of all of the circumstances of such Proceeding in
order to reflect: (i) the relative benefits received by the Company and
Indemnitee as a result of the event(s) and/or transaction(s) giving
rise to such Proceeding; and/or (ii) the relative fault of the Company
(and its directors, officers, employees and agents) and Indemnitee in
connection with such event(s) and/or transaction(s).

 

22.           Applicable Law.  This Agreement and the legal relations among
the parties shall be governed by, and construed and enforced in accordance
with, the laws of the State of Delaware, without regard to its conflict of laws
rules.

 

23.           Identical Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute one and the same Agreement. Only one
such counterpart signed by the party against whom enforceability is sought
needs to be produced to evidence the existence of this Agreement.

 

24.           Miscellaneous.  Use of the masculine pronoun shall be deemed
to include usage of the feminine pronoun where appropriate. The headings of the
sections and paragraphs of this Agreement are inserted for convenience only and
shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.

 

 

IN
WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the
day and year first above written.

 

 

	
  PROSPECT
  MEDICAL HOLDINGS, INC.

  	
  INDEMNITEE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/
  Samuel S. Lee

  	
   

  	
    /s/
  Arthur Lipper, M.D.

  
	
   

  	
   

  	
   

  
	
  Its:

  	
    Chief
  Executive Officer

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