ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145(a) of the General Corporation Law of the State of Delaware (the "DGCL") provides, in general, that a
corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, other than an action by or in the right of the corporation, because the person is or was a director or officer of the corporation. Such indemnity may be
against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding, if the
person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and if, with respect to any criminal action or proceeding,
the person did not have reasonable cause to believe the person's conduct was unlawful.
Section 145(b)
of the DGCL provides, in general, that a corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor because the person is or was a director or officer of the corporation, against
any expenses (including attorneys' fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a
manner the person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to be indemnified for such
expenses which the Court of Chancery or such other court shall deem proper.
Section 145(g)
of the DGCL provides, in general, that a corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director or
officer of the corporation against any liability asserted against the person in any such capacity, or arising out of the person's status as such, whether or not the corporation would have the power to
indemnify the person against such liability under the provisions of the law.
Article
Thirteenth of LifePoint's restated certificate of incorporation will require indemnification to the fullest extent permitted under the DGCL, as may be amended, of any person who
is or was a director or officer of LifePoint who is or was involved or threatened to be made so involved in any proceeding, whether civil, criminal, administrative or investigative, by reason of the
fact that such person is or was serving as a director, officer, employee or agent of LifePoint or was serving at the request of LifePoint as a director, officer, employee or agent of any other
enterprise.
The
foregoing statements are subject to the detailed provisions of Section 145 of the DGCL and Article Thirteenth of LifePoint's restated certificate of incorporation.
The
Company maintains a director and officer liability insurance policy for the benefit of its directors and certain officers and the directors and certain officers of its subsidiaries
covering certain liabilities that may be incurred in the performance of these duties, which may include liability or related losses under the Securities Act or the Securities Exchange Act of 1934, as
amended. In addition, the Company has entered into indemnification agreements with its directors and certain officers of the company indemnifying such persons to the fullest extent permitted under the
laws of the State of Delaware.
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Arizona Registrants
(a) PHC-Fort Mohave, Inc. and PHC-Lake Havasu, Inc. are incorporated under the laws of Arizona.
Sections 10-850
through 10-858 of the Arizona Revised Statutes (the "A.R.S.") permit indemnification of present and former directors, officers, employees or agents of an Arizona
corporation, whether or not authority for such indemnification is contained in the indemnifying corporation's articles of incorporation or bylaws.
Sections 10-852
and 10-856 of the A.R.S. require an Arizona corporation, unless limited by its articles of incorporation, to indemnify an officer or director who has prevailed, on
the merits or otherwise, in defending any proceeding brought against the officer or director because such person is or was an officer or director of the corporation. The corporation must indemnify the
officer or director for reasonable expenses, including attorneys' fees and all other costs and expenses reasonably related to a proceeding. A "proceeding" includes any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or investigative and whether formal or informal.
Section 10-851
of the A.R.S. permits an Arizona corporation to indemnify an officer or director made a party to a proceeding because such person is or was an officer or director
of the corporation. The corporation may indemnify the officer or director against liability incurred in the proceeding if all of the following conditions exist: (i) the officer or director's
conduct was in good faith; (ii) the officer or director reasonably believed that his or her conduct was at least not opposed to the best interests of the corporation, or, where the conduct was
in an official corporate capacity, that the conduct was in the best interest of the corporation; and (iii) in the case of criminal proceedings, the officer or director had no reasonable cause
to believe that the conduct was unlawful.
Before
discretionary indemnification under Section 10-851 of the A.R.S. may be awarded to a director, under Section 10-855 of the A.R.S. the corporation must determine that
it is permissible under the circumstances. This determination may be made either: (i) by majority vote of the directors not at the time parties to the proceedings; (ii) by special legal
counsel selected by majority vote of the disinterested directors, or by majority vote of the board if there are no disinterested directors; or (iii) by the shareholders (but shares owned by or
voted under the control of directors who are at the time parties to the proceeding are not voted).
Section 10-854
of the A.R.S. permits a director of an Arizona corporation who is a party to a proceeding, unless the articles of incorporation provide otherwise, to apply to a
court of competent jurisdiction for indemnification or for an advance of expenses. The court may order indemnification or an advance if it determines that the director is entitled to mandatory
indemnification under Section 10-852 of the A.R.S., or if it determines that indemnification is fair and reasonable, even if the director did not meet the prescribed standard of conduct
described in Section 10-851 of the A.R.S.
Neither
the Articles of Incorporation nor the Bylaws of PHC-Lake Havasu, Inc. specifies the extent to which the corporation may indemnify its officers or directors.
The
Articles of Incorporation of PHC-Fort Mohave, Inc. allow for indemnification to the fullest extent permitted by law, and provide that indemnification shall be mandatory in all
circumstances in which it is permitted.
Colorado Registrants
(a) PHC-Fort Morgan, Inc. is incorporated under the laws of Colorado.
Sections 7-109-102
through 7-109-110 of the Colorado Business Corporation Act (the "Act") grant the registrants' broad powers to indemnify any person in connection with legal
proceedings brought against him by reason of his present or past status as an officer or director of the registrant, provided
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with
respect to conduct in an official capacity with the registrant, the person acted in good faith and in a manner he reasonably believed to be in the best interests of the registrant, with respect
to all other conduct, the person believed the conduct to be at least not opposed to the best interests of the registrant, and with respect to any criminal action or proceeding, the person had no
reasonable cause to believe his conduct was unlawful. Indemnification is limited to reasonable expenses incurred in connection with the proceeding. No indemnification may be made (i) in
connection with a proceeding by or in the right of the registrant in which the person was adjudged liable to the registrant; or (ii) in connection with any other proceedings charging that the
person derived an improper personal benefit,
whether or not involving action in an official capacity, in which proceeding the person was judged liable on the basis that he derived an improper personal benefit, unless and only to the extent the
court in which such action was brought or another court of competent jurisdiction determines upon application that, despite such adjudication, but in view of all relevant circumstances, the person is
fairly and reasonably entitled to indemnity for reasonable expenses as the court deems proper. In addition, to the extent that any such person is successful in the defense of any such legal
proceeding, the registrant is required by the Act to indemnify him against reasonable expenses.
Neither
the articles of incorporation nor the bylaws of PHC-Fort Morgan, Inc. specifies the extent to which the corporation may indemnify its officers or directors.
Delaware Registrants
(a) LifePoint Acquisition Corp., LifePoint RC, Inc., LifePoint VA Holdings, Inc. and LifePoint WV Holdings, Inc. are
incorporated under the laws of Delaware.
Section 145
of the Delaware General Corporation Law (the "DGCL") grants each corporation organized thereunder the power to indemnify any person who is or was a
director, officer, employee or agent of a corporation or enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by
him in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, other than an action by or in the right of the
corporation, by reason of being or having been in any such capacity, if he acted in good faith in a manner reasonably believed to be in, or not opposed to, the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
Section 102(b)(7)
of the DGCL enables a corporation in its certificate of incorporation or an amendment thereto to eliminate or limit the personal liability of a director to the
corporation or its stockholders of monetary damages for violations of the directors' fiduciary duty of care, except (i) for any breach of the directors' duty of loyalty to the corporation or
its stockholders, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the DGCL
(providing for liability of directors for unlawful payment of dividends or unlawful stock purchases or redemptions) or (iv) for any transaction from which a director derived an improper
personal benefit.
The
Certificate of Incorporation of LifePoint WV Holdings, Inc. provides that the corporation shall, to the fullest extent permitted by the provisions of DGCL Section 145,
as the same may be amended and supplemented from time to time, indemnify any and all persons whom it shall have the power to indemnify under said section from and against any and all of the expenses,
liabilities, or other matters referred to in or covered by said section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be
entitled under any By-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.
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The
Bylaws of LifePoint WV Holdings, Inc. provide that the corporation shall indemnify its officers and directors against all reasonable expense incurred by them in defending
claims or suits, irrespective of the time of occurrence of the claims or causes of action in such suits, made or brought against them as officers or directors of the corporation, and against all
liability in such suits, except in such cases as involve gross negligence or willful misconduct in the performance of their duties. Such indemnification shall extend to the payment of judgments
against such officers and directors and to reimbursement of amounts paid in settlement of such claims or actions and may apply to judgments in favor of the corporation or amounts paid in settlement to
the corporation. Such right of indemnification shall not be exclusive of any right to which such officer or director may be entitled as a matter of law and shall extend and apply to the estates of
such deceased officers or directors.
The
Bylaws of each of LifePoint Acquisition Corp., LifePoint RC, Inc. and LifePoint VA Holdings, Inc. provide that the corporations shall indemnify its officers and
directors against all reasonable expense incurred by them in defending claims or suits, irrespective of the time of occurrence of the claims or causes of action in such suits, made or brought against
them as officers or directors of the corporations, and against all liability in such suits, except in such cases as involve gross negligence or willful misconduct in the performance of their duties.
Such indemnification shall extend to the payment of judgments against such officers and directors and to reimbursement of amounts paid in settlement of such claims or actions and may apply to
judgments in favor of the corporations or amounts paid in settlement to the corporations. Such right of indemnification shall not be exclusive of any right to which such officer or director may be
entitled as a matter of law and shall extend and apply to the estates of such deceased officers or directors.
(b) AdvantagePoint Health Alliance, LLC, AdvantagePoint Health Alliance—Blue Ridge, AdvantagePoint Health
Alliance—Fauquier, LLC, AdvantagePoint Health Alliance—Great Lakes, AdvantagePoint Health Alliance—Laurel Highlands, America Management
Companies, LLC, AMG-Crockett, LLC, AMG-Hillside, LLC, AMG-Livingston, LLC, AMG-Logan, LLC, AMG-Southern Tennessee, LLC, AMG-Trinity, LLC, Andalusia
Physician Practices, LLC, Andalusia Professional Services, LLC, Ashland Physician Services, LLC, Ashley Valley Medical Center, LLC, Ashley Valley Physician
Practice, LLC, Athens Physicians Practice, LLC, Athens Regional Medical Center, LLC, Athens Surgery Center Partner, LLC, Bell JV, LLC, Bolivar Physician
Practices, LLC, Bourbon Community Hospital, LLC, Bourbon Physician Practice, LLC, Castleview Hospital, LLC, Castleview Medical, LLC, Castleview Physician
Practice, LLC, Clark Regional Physician Practices, LLC, Clinch Professional Physician Services, LLC, Colorado Plains Physician Practices, LLC, Community Hospital of
Andalusia, LLC, Community Medical, LLC, Community-Based Services, LLC, Crockett Hospital, LLC, Crockett PHO, LLC, Danville Diagnostic Imaging Center, LLC,
Danville Physician Practices, LLC, Danville Regional Medical Center, LLC, Danville Regional Medical Center School of Health Professions, LLC, DLP Partner, LLC, DLP Partner
Central Carolina, LLC, DLP Partner Conemaugh, LLC, DLP Partner Frye, LLC, DLP Partner Marquette, LLC, DLP Partner MedWest, LLC, DLP Partner Twin County, LLC,
DLP Partner Wilson Rutherford, LLC, Fauquier Partner, LLC, Fleming Medical Center, LLC, Georgetown Community Hospital, LLC, Georgetown Rehabilitation, LLC, HCK Logan
Memorial, LLC, HDP Andalusia, LLC, HDP Georgetown, LLC, Hillside Hospital, LLC, Historic LifePoint Hospitals, LLC, Home Health Partner, LLC, HRMC, LLC,
HSC Credentialing Support Services, LLC, HSCGP, LLC, HSC Manager, LLC, Kentucky Hospital, LLC, Kentucky Medserv, LLC, Kentucky MSO, LLC, Lake Cumberland
Cardiology Associates, LLC, Lake Cumberland Physician Practices, LLC, Lake Cumberland Regional Hospital, LLC, Lake Cumberland Regional Physician Hospital Organization, LLC,
Lakeland Community Hospital, LLC, Lakeland Physician Practices, LLC, Lander Valley Physician Practices, LLC, Las Cruces Cardiology Group, LLC, Las Cruces Endoscopy
Partner, LLC, Las Cruces Physician Practices, LLC, LCMC MRI, LLC, LCMC PET, LLC, LHSC, LLC, LifePoint Billing Services, LLC, LifePoint CSLP, LLC,
LifePoint Holdings 2, LLC, LifePoint Hospitals Holdings, LLC, LifePoint NMTC, LLC, LifePoint of Kentucky, LLC, LifePoint of Lake Cumberland, LLC,
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LifePoint PSO, LLC, Livingston Regional Hospital, LLC, Logan General Hospital, LLC, Logan Healthcare Partner, LLC, Logan Medical, LLC, Logan Memorial
Hospital, LLC, Logan Physician Practice, LLC, Los Alamos Physician Practices, LLC, Martinsville Physician Practices, LLC, Meadowview Physician Practice, LLC,
Meadowview Regional Medical Center, LLC, Meadowview Rights, LLC, Memorial Prompt Care, LLC, Mercy Physician Practices, LLC, Minden Physician Practices, LLC, My
HealthPoint, LLC, Nason Medical Center, LLC, Nason Physician Practices, LLC, Northeastern Nevada Physician Practices, LLC, Northwest Medical Center-Winfield, LLC,
Norton Partner, LLC, NWMC-Winfield Hospitalist Physicians, LLC, NWMC-Winfield Physician Practices, LLC, OmniPoint Surgical Associates, LLC, Opelousas Imaging Center
Partner, LLC, Opelousas PET/CT Imaging Center, LLC, PHC-Selma, LLC, Piedmont Partner, LLC, PineLake Physician Practice, LLC, PineLake Regional Hospital, LLC,
Poitras Practice, LLC, Portage Partner, LLC, PRHC-Alabama, LLC, Principal Knox, L.L.C., Professional Billing Services, LLC, Providence Group Practices, LLC,
Providence Group Practices II, LLC, Providence Holding Company, LLC, Providence Hospital, LLC, Providence Physician Practices, LLC, Province Healthcare Company, LLC,
R. Kendall Brown Practice, LLC, River Parishes Hospital, LLC, River Parishes Partner, LLC, River Parishes Physician Practices, LLC, Riverton Memorial Hospital, LLC,
Riverton Oncology Practice, LLC, Riverton Physician Practices, LLC, Riverview
Medical Center, LLC, Riverview Physician Practices, LLC, Russellville Hospital, LLC, Russellville Physician Practices, LLC, Select Healthcare, LLC, Selma Diagnostic
Imaging, LLC, Shared Business Services, LLC, Siletchnik Practice, LLC, Smith County Memorial Hospital, LLC, Somerset Surgery Partner, LLC, Southern Tennessee
EMS, LLC, Southern Tennessee Medical Center, LLC, Southern Tennessee PHO, LLC, Spring View Hospital, LLC, Spring View Physician Practices, LLC, Springhill Medical
Center, LLC, St. Francis Affiliated Services, LLC, St. Francis Health, LLC, St. Francis Physician Practices, LLC, Sumner Physician
Practices, LLC, Sumner Real Estate Holdings, LLC, Sumner Regional Medical Center, LLC, Teche Regional Physician Practices, LLC, THM Physician Practice, LLC,
Trousdale Medical Center, LLC, Trousdale Physician Practices, LLC, Two Rivers Physician Practices, LLC, Valley View Physician Practices, LLC, Vaughan Physician
Practices, LLC, Ville Platte Medical Center, LLC, Watertown Partner, LLC, Western Plains Physician Practices, LLC, Western Plains Regional Hospital, LLC, Woodford
Hospital, LLC, Wythe County Community Hospital, LLC and Wythe County Physician Practices, LLC are registered under the laws of Delaware.
Section 18-108
of the Delaware Limited Liability Company Act empowers a Delaware limited liability company to indemnify and hold harmless any member or manager of the limited
liability company from and against any and all claims and demands whatsoever.
The
Operating Agreements of each of Ashland Physician Services, LLC, HRMC, LLC, PHC-Selma, LLC, PRHC-Alabama, LLC, Principal Knox, L.L.C. and Selma Diagnostic
Imaging, LLC provide:
(a) The
Company shall indemnify, and upon request shall advance expenses to, in the manner and to the full extent permitted by law, any Member, Representative and Manager
(or the estate of any such person) who was or is a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative and whether formal or informal, by reason of the fact that such person is or was a Member, Representative or Manager of the Company, or is or was serving at the
request of the Company as a director, officer, partner, manager, representative, trustee or employee of another corporation, partnership, joint venture, trust or other enterprise (an "indemnitee").
Notwithstanding the foregoing, the Company shall not indemnify any such indemnitee (a) in any proceeding by the Company against such indemnitee; or (b) if a judgment or other final
adjudication adverse to the indemnitee establishes his liability for (i) any breach of the duty of loyalty to the Company or its shareholders, (ii) acts or omissions not in good faith or
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which
involve intentional misconduct or a knowing violation of law, or (iii) unlawful distributions under Section 18 of the Act.
(b) Any
repeal or modification of the provisions of Section 18 of the Act, either directly or by the adoption of an inconsistent provision of this Agreement, shall
not adversely affect any right or protection set forth herein existing in favor of a particular individual at the time of such repeal or modification. In addition, if an amendment to the Act limits or
restricts in any way the indemnification rights permitted by law as of the date hereof, such amendment shall apply only to the extent mandated by law and only to activities of persons subject to
indemnification under Section 18 of the Act which occur subsequent to the effective date of such amendment.
The
Operating Agreements of each of the other Delaware LLC registrants allow for indemnification to the fullest extent permitted by the laws under which they are organized.
(b) LifePoint Corporate Services, General Partnership is registered under the laws of Delaware.
Section 15-110
of the Delaware Revised Uniform Partnership Act provides that subject to such standards and restrictions, if any, as are set forth in its partnership agreement, a
partnership may, and shall have the power to, indemnify and hold harmless any partner or other person from and against any and all claims and demands whatsoever.
The
LifePoint Corporate Services, General Partnership agreement allows for indemnification to the fullest extent permitted by the laws under which it is organized.
Kansas Registrants
(a) Dodge City Healthcare Partner, Inc. and Kansas Healthcare Management Company, Inc. are incorporated under the laws of
Kansas.
Section 17-6305
of the Kansas General Corporation Law authorizes a corporation to indemnify any person who was or is a party, or is threatened to be made a party, to any
threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, other than an action by or in the right of the corporation, by reason of the fact
that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture,
trust or other enterprise, against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding,
including attorney's fees, if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation; and, with respect to any
criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of
nolo contendere
or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner
which such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that
such person's conduct was unlawful.
A
Kansas corporation may also indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action or suit by or in the right
of the corporation to procure a judgment in its favor by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses actually and reasonably incurred by such
person in connection with the defense or settlement of such action or suit, including attorney's fees, if such person acted in good faith and in a manner such person reasonably believed to be in or
not opposed to the best interests of the corporation, except that no indemnification shall be made in respect of any
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claim,
issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses
which the court shall deem proper.
The
Bylaws of Dodge City Healthcare Partner, Inc. provide that the corporation shall indemnify its officers and directors against all reasonable expense incurred by them in
defending claims or suits, irrespective of the time of occurrence of the claims or causes of action in such suits, made or brought against them as officers or directors of the corporation, and against
all liability in such suits, except in such cases as involve gross negligence or willful misconduct in the performance of their duties. Such indemnification shall extend to the payment of judgments
against such officers and directors and to reimbursement of amounts paid in settlement of such claims or actions and may apply to judgments in favor of the corporation or amounts paid in settlement to
the corporation. Such right of indemnification shall not be exclusive of any right to which such officer or director may be entitled as a matter of law and shall extend and apply to the estates of
such deceased officers or directors.
The
Bylaws of Kansas Healthcare Management Company, Inc. provide that when a person is sued, or prosecuted in a criminal action, either alone or with others, because he is or was
a director or officer
of the corporation, or of another corporation serving at the request of this corporation, in any proceeding arising out of his alleged misfeasance or nonfeasance in the performance of his duties or
out of any alleged wrongful act against the corporation or by the corporation, he shall be indemnified for his reasonable expenses, including attorneys' fees incurred in the defense of the
proceedings, if both of the following conditions exist:
(a) The
person sued is successful in whole or in part, or the proceeding against him is settled with the approval of the court.
(b) The
court finds that his conduct fairly and equitably merits such indemnity.
(b) Dodge City Healthcare Group, LLC and Kansas Healthcare Management Services, LLC are registered under the laws of
Kansas.
Section
§17-7670 of the Kansas Revised Limited Liability Company Act provides that subject to such standards and restrictions, if any, as are set forth in its operating
agreement, a limited liability company may, and shall have the power to, indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever.
To the extent that a present or former member, manager, officer, employee or agent of a limited liability company has been successful on the merits or otherwise as a plaintiff in an action to
determine that the plaintiff is a member of a limited liability company or in defense of any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is or was a member, manager, officer, employee or agent of the limited liability company, or is or was serving at the request of the limited
liability company as a member, manager, director, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, or in defense of
any claim, issue or matter therein, such member, manager, officer, employee or agent shall be indemnified by the limited liability company against expenses actually and reasonably incurred by such
person in connection therewith, including attorney fees.
The
Amended and Restated Operating Agreement of Dodge City Healthcare Group, LLC provides that the Company shall indemnify and hold harmless each officer and the Member and its
partners, shareholders, officers, directors, managers, employees, agents and representatives and the partners, shareholders, officers, directors, managers, employees, agents and representatives of
such persons to the fullest extent permitted by the Kansas Revised Limited Liability Company Act.
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The
Operating Agreement of Kansas Healthcare Management Services, LLC provides that the Company shall indemnify each Manager and Executive Manager for any act performed thereby
within the scope of the authority conferred on such Manager or Executive Manager by this Agreement or by the Board of Managers, unless such act constitutes grossly negligent or reckless conduct,
intentional misconduct, or a knowing violation of Law.
Kentucky Registrants
(a) Kentucky Physician Services, Inc. is incorporated under the laws of Kentucky.
Sections 271B.8-500
to 271B.8-580 of the Kentucky Business Corporation Act provides that, subject to restrictions contained in the statute, a corporation may indemnify any person
made or threatened to be made a party to any threatened, pending or completed action, suit or proceeding by reason of the fact that he is or was a director or officer of the corporation. A person who
has been successful on the merits or otherwise in any suit or matter covered by the indemnification statute shall be indemnified against expenses (including attorneys' fees) reasonably incurred by him
in connection therewith. Indemnification is authorized upon a determination that the person to be indemnified has met the applicable standard of conduct required. Expenses incurred in defense may be
paid in advance upon receipt by the corporation of a written affirmation by the director of his good faith belief that he has
met the applicable standard of conduct required, a written undertaking by or on behalf of the director to repay such advance if it is ultimately determined that he did not meet the standard of
conduct, and a determination that the facts then known to those making the determination would not preclude indemnification under the statute. The indemnification provided by statute shall not be
deemed exclusive of any other rights to which those seeking indemnification may be entitled under any by-law, agreement, vote of shareholders or disinterested directors, or otherwise, both as to
action in his official capacity and as to action in another capacity while holding such office. Insurance may be purchased on behalf of any person entitled to indemnification by the corporation
against any liability incurred in an official capacity regardless of whether the person could be indemnified under the statute.
The
Bylaws of Kentucky Physician Services, Inc. provide that the corporation shall, indemnify its officers and directors against all reasonable expense incurred by them in
defending claims or suits, irrespective of the time of occurrence of the claims or causes of action in such suits, made or brought against them as officers or directors of the corporation, and against
all liability in such suits, except in such cases as involve gross negligence or willful misconduct in the performance of their duties. Such indemnification shall extend to the payments of judgments
against such officers and directors and to reimbursement of amounts paid in cash settlement of such claims or actions and may apply to judgments in favor of the corporation or amounts paid in
settlement to the corporation. Such indemnification shall also extend to the payment of counsel fees and expenses of such officers and directors in suits against them where successfully defended by
them or where unsuccessfully defended, if there is no finding or judgment that the claim or action arose from the gross negligence or willful misconduct of such officers or directors. Such right of
indemnification shall not be exclusive of any right to which such officer or director may be entitled as a matter of law and shall extend and apply to the estates of such deceased officers and
directors.
(b) Buffalo Trace Radiation Oncology Associates, LLC is registered under the laws of Kentucky
The
Kentucky Limited Liability Company Act provides that a written operating agreement may: (1) Eliminate or limit the personal liability of a member or manager for monetary
damages for breach of any duty provided for in Kentucky Revised Statutes 275.170 (duty of breach of care and loyalty) and (2) Provide for indemnification of a member or manager for judgments,
settlements, penalties, fines, or expenses incurred in a proceeding to which a person is a party because the person is or was a member or manager.
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The
Operating Agreement of Buffalo Trace Radiation Oncology Associates, LLC provides that the Company shall indemnify Members, Member—Managers, and agents for all
costs, losses, liabilities, and damages paid or accrued by such Member or agent in connection with the business of the Company, to the fullest extent provided or allowed by the laws of the State. The
Operating Agreement neither expressly includes nor expressly excludes damages for breach of the duties provided
for in Kentucky Revised Statutes 275.170 or judgments, settlements, penalties, fines, or expenses incurred in a proceeding to which a person is a party because the person is or was a member or manager
in this indemnification.
Louisiana Registrants
(a) PHC-Lakewood, Inc., PHC-Louisiana, Inc., PHC-Minden G.P., Inc. and PHC-Morgan Lake, Inc. are incorporated
under the laws of Louisiana.
Section 83
of the Louisiana Business Corporation Law provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any action,
suit or proceeding, whether civil, criminal, administrative, or investigative, or in the right of the corporation, by reason of the fact that he is or was a director or officer of the corporation. The
indemnity may include expenses, including attorneys' fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit, or proceeding
if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. Section 83 further provides that a Louisiana corporation may indemnify officers and directors in an action by or in the right of the
corporation under the same conditions except that no indemnification is permitted without judicial approval if the director or officer shall have been adjudged to be liable for willful or intentional
misconduct in the performance of his duty to the corporation. Where an officer or director is successful on the merits or otherwise in any defense of any action referred to above or any claim therein,
the corporation must indemnify him against such expenses that such officer or director actually incurred. Section 83 permits a corporation to pay expenses incurred by the officer or director in
defending an action, suit or proceeding in advance of the final disposition thereof if approved by the board of directors.
Neither
the Articles of Incorporation nor the Bylaws of the Louisiana entities specifies the extent to which the corporations may indemnify its officers or directors.
(b) PHC-Minden, L.P. and PHC-Morgan City, L.P. are registered under the laws of Louisiana.
The
text of the Louisiana statutes on Limited Partnerships does not address indemnification.
The
Agreements of Limited Partnership of PHC-Minden, L.P. and PHC-Morgan City, L.P. allow for indemnification to the fullest extent permitted by the laws under which it is
organized.
Michigan Registrants
(a) Bell Physician Practices, Inc. is a nonprofit corporation organized under the laws of Michigan.
Section 561
of the Michigan Nonprofit Corporation Act (the "MNCA") states that, unless otherwise provided by law or a corporation's articles of incorporation or bylaws, a
corporation has the power to indemnify a person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative and whether formal or informal, other than an action by or in the right of the corporation, by reason of the fact that the person is or was a director or officer of
the corporation. Such indemnity may be against expenses including attorneys' fees, judgments, penalties, fines, and amounts paid in settlement actually and reasonably incurred by the person in
connection with the action, suit, or
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proceeding
if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation or its shareholders or members, and with
respect to any criminal action or proceeding, if the person had no reasonable cause to believe the conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that the director or officer did not act in accordance with the applicable standard
of conduct, as described in the preceding sentence.
Section 562
of the MNCA provides that, unless otherwise provided by law or a corporation's articles of incorporation or bylaws, a corporation has the power to indemnify a person
who was or is a party to or is threatened to be made a party to a threatened, pending, or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of
the fact that the person is or was a director or officer of the corporation. Such indemnity may be against expenses, including actual and reasonable attorneys' fees, and amounts paid in settlement
incurred by the person in connection with the action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the
corporation or its shareholders or
members. However, a corporation shall not indemnify a person for a claim, issue, or matter in which the person has been found liable to the corporation unless and only to the extent that the court in
which the action or suit was brought has determined upon application that, despite the adjudication of liability but in view of all circumstances of the case, the person is fairly and reasonably
entitled to indemnification for expenses which the court deems proper.
Pursuant
to Section 563 of the MNCA, unless otherwise provided by law or a corporation's articles of incorporation or bylaws, to the extent that a director or officer has been
successful on the merits or otherwise in defense of an action, suit, or proceeding, or in defense of a claim, issue, or matter in the action, suit, or proceeding, the successful director or officer
shall be indemnified against expenses, including actual and reasonable attorneys' fees, incurred in connection with the action, suit, or proceeding and in any action, suit, or proceeding brought to
enforce this mandatory indemnification.
Section 564a
of the MNCA provides that an indemnification under Section 561 or 562, unless ordered by a court, shall be made only upon a determination that indemnification
of the director or officer is proper under the circumstances because such director or officer met the applicable standard of conduct provided in such Section. The determination shall be made in one of
the following ways:
(a) By
a majority vote of a quorum of the board of directors of the corporation consisting of directors who were not parties to the action, suit, or proceeding.
(b) If
the quorum described in subsection (a) above is not obtainable, then by a majority vote of a committee of directors who are not parties to the action. The
committee shall consist of not less than two disinterested directors.
(c) By
independent legal counsel in a written opinion.
(d) By
the shareholders or members of the corporation.
Section 565
provides that the indemnification afforded under the foregoing Sections of the MNCA is not exclusive of other rights to which a director or officer seeking
indemnification may be entitled under the articles of incorporation, bylaws, or a contractual agreement, and such indemnification shall inure to the benefit of the heirs, executors and administrators
of the director or officer.
Section 567
of the MNCA permits a corporation to purchase and maintain insurance on behalf of any person who is or was a director or officer of the corporation against any
liability asserted against the person and incurred by the person in any such capacity, or arising out of the person's status as director
or officer, whether or not the corporation would have power to indemnify the person against liability under the above described Sections of the MNCA.
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The
Bylaws of Bell Physician Practices, Inc. require the corporation to indemnify its officers and directors against all reasonable expenses incurred in defending claims or suits
brought against them as officers or directors, and against all liability in such suits, irrespective of the time the claims or causes of action in such suits occurred, except in cases involving the
gross negligence or willful misconduct of the officer or director in the performance of his or her duties as such. Such indemnification shall extend to the payment of judgments against such officers
and directors and to reimbursement of amounts paid in settlement of such claims or actions, and may apply to judgments in favor of the corporation or amounts paid in settlement to the corporation.
Such indemnification shall also extend to the payment of legal fees and expenses of such officers and directors in suits against them, whether defended successfully or unsuccessfully, provided there
is no finding or judgment that the claim or action arose from gross negligence or willful misconduct. Such right of indemnification shall not be exclusive of any rights an officer or director of the
corporation may have under applicable law and shall also apply to the estates of deceased officers and directors.
(b) Acquisition Bell Hospital, LLC is a limited liability company organized under the laws of Michigan.
Section 216
of the Michigan Limited Liability Company Act (the "MLLCA") provides that, except as otherwise provided in an operating agreement, a limited liability company may
indemnify, hold harmless, and defend a member, manager, or other person from and against any and all losses, expenses, claims, and demands sustained by that person, except that the company may not
indemnify the person for liability in connection with the receipt of a financial benefit to which the person is not entitled, voting or assenting to a distribution in violation of the company's
operating agreement or the law, or a knowing violation of the law.
Section 216
further provides that, except as otherwise provided in an operating agreement, a limited liability company may purchase and maintain insurance on behalf of a member,
manager, or other person against any liability or expense asserted against or incurred by that person, whether or not the company may indemnify that person under Section 216.
The
Limited Liability Company Agreement of Acquisition Bell Hospital, LLC provides that the company shall indemnify and hold harmless each officer and the sole Member and manager
of the company (being LifePoint Holdings 2, LLC), and its officers, directors and managers, to the fullest extent permitted by the MLLCA.
Mississippi Registrant
(a) PHC-Cleveland, Inc. is incorporated under the laws of Mississippi.