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EXHIBIT 10.5
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement") dated as of
______________________________ is by and between Private Business, Inc., a
Tennessee corporation (the "Company"), and ____________________ ("Indemnitee").
WHEREAS, it is essential to the Company that it be able to retain and
attract as officers the most capable persons available;
WHEREAS, increased corporate litigation has subjected officers to
litigation risks and expenses and the limitations on the availability of
officers' liability insurance have made it increasingly difficult for the
Company to attract and retain such persons;
WHEREAS, its By-laws permit the Company to enter into indemnification
arrangements and agreements;
WHEREAS, the Company desires to provide Indemnitee with specific
contractual assurance of Indemnitee's rights to full indemnification against
litigation risks and expenses (regardless, among other things, of any amendment
to or revocation of the Company's By-laws or any change in the ownership of the
Company or the composition of its Board of Directors), which indemnification is
intended to be greater than that which is afforded by the Company's Charter and
By-laws and, to the extent insurance is available, the coverage of Indemnitee
under the Company's directors and officers liability insurance policies; and
WHEREAS, Indemnitee is relying upon the rights afforded under this
Agreement in accepting Indemnitee's position as a officer of the Company.
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
1. Definitions.
(a) "Corporate Status" describes the status of a person who is serving
or has served (i) as an officer of the Company, (ii) in any capacity
with respect to any employee benefit plan of the Company.
(b) "Entity" shall mean any corporation, partnership, limited liability
company, joint venture, trust, foundation, association, organization or
other legal entity and any group or division of the Company or any of
its subsidiaries.
(c) "Expenses" shall mean all reasonable fees, costs and expenses
incurred in connection with any Proceeding (as defined below),
including, without limitation, attorneys' fees, disbursements and
retainers (including, without limitation, any such fees, disbursements
and
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retainers incurred by Indemnitee pursuant to Section 10 of this
Agreement), fees and disbursements of expert witnesses, private
investigators and professional advisors (including, without limitation,
accountants and investment bankers), court costs, transcript costs,
fees of experts, travel expenses, duplicating, printing and binding
costs, telephone and fax transmission charges, postage, delivery
services, secretarial services, and other disbursements and expenses.
(d) "Indemnifiable Expenses," "Indemnifiable Liabilities" and
"Indemnifiable Amounts" shall have the meanings ascribed to those terms
in Section 3(a) below.
(e) "Liabilities" shall mean judgments, damages, liabilities, losses,
penalties, excise taxes, fines and amounts paid in settlement.
(f) "Proceeding" shall mean any threatened, pending or completed claim,
action, suit, arbitration, alternate dispute resolution process,
investigation, administrative hearing, appeal, or any other proceeding,
whether civil, criminal, administrative or investigative, whether
formal or informal, including a proceeding initiated by Indemnitee
pursuant to Section 10 of this Agreement to enforce Indemnitee's rights
hereunder.
2. Services of Indemnitee. In consideration of the Company's covenants
and commitments hereunder, Indemnitee agrees to serve or continue to
serve as a officer of the Company. However, this Agreement shall not
impose any obligation on Indemnitee or the Company to continue
Indemnitee's service to the Company beyond any period otherwise
required by law or by other agreements or commitments of the parties,
if any.
3. Agreement to Indemnify. The Company agrees to indemnify Indemnitee
as follows:
(a) Subject to the exceptions contained in Section 4(a) below, if
Indemnitee was or is a party or is threatened to be made a party to any
Proceeding (other than an action by or in the right of the Company) by
reason of Indemnitee's Corporate Status, Indemnitee shall be
indemnified by the Company against all Expenses and Liabilities
incurred or paid by Indemnitee in connection with such Proceeding
(referred to herein as "Indemnifiable Expenses" and "Indemnifiable
Liabilities," respectively, and collectively as "Indemnifiable
Amounts").
(b) Subject to the exceptions contained in Section 4(10) below, if
Indemnitee was or is a party or is threatened to be made a party to any
Proceeding by or in the right of the Company to procure a judgment in
its favor by reason of Indemnitee's Corporate Status, Indemnitee shall
be indemnified by the Company against all Indemnifiable Expenses.
4. Exceptions to Indemnification. Indemnitee shall be entitled to
indemnification under Sections 3(a) and 3(b) above in all circumstances
other than the following:
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(a) If indemnification is requested under Section 3(a) and it has been
adjudicated finally by a court of competent jurisdiction that, in
connection with the subject of the Proceeding out of which the claim
for indemnification has arisen, (i) with respect to conduct in the
Indemnitee's "official capacity" (as such term is defined in T.C.A.
ss.48-18-501) with the Company, Indemnitee failed to act in good faith
and in a manner Indemnitee reasonably believed to be in the best
interests of the Company, (ii) with respect to conduct not in the
individual's "official capacity" with the Company, Indemnitee failed to
act in good faith and in a manner Indemnitee reasonably believed to be
in or not opposed to the best interests of the Company, or, (iii) with
respect to any criminal action or proceeding, Indemnitee had reasonable
cause to believe that Indemnitee's conduct was unlawful, Indemnitee
shall not be entitled to payment of Indemnifiable Amounts hereunder.
(b) If indemnification is requested under Section 3(b) and
(i) it has been adjudicated finally by a court of competent
jurisdiction that, in connection with the subject of the
Proceeding out of which the claim for indemnification has arisen,
Indemnitee failed to act in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests
of the Company, Indemnitee shall not be entitled to payment of
Indemnifiable Expenses hereunder; or
(ii) it has been adjudicated finally by a court of competent
jurisdiction that Indemnitee is liable to the Company with respect
to any claim, issue or matter involved in the Proceeding out of
which the claim for indemnification has arisen, including, without
limitation, a claim that Indemnitee received an improper personal
benefit or improperly took advantage of a corporate opportunity,
Indemnitee shall not be entitled to payment of Indemnifiable
Expenses hereunder with respect to such claim, issue or matter
unless the court in which such Proceeding was brought 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 indemnity for
such Indemnifiable Expenses which such court shall deem proper.
5. Procedure for Payment of Indemnifiable Amounts. Indemnitee shall
submit to the Company a written request specifying the Indemnifiable
Amounts for which Indemnitee seeks payment under Section 3 of this
Agreement and the basis for the claim. The Company shall pay such
Indemnifiable Amounts to Indemnitee within twenty (20) calendar days
of receipt of the request, provided that Indemnitee shall furnish such
documentation and information as are reasonably available to
Indemnitee and necessary to establish that Indemnitee is entitled to
indemnification hereunder and provided further that the Company has
authorized the payment of such Indemnifiable Amounts after a
determination has been made in accordance with T.C.A.ss.00-00-000 that
such payment is not precluded.
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6. Indemnification for Expenses of a Party Who is Wholly or
Partly Successful. Notwithstanding any other provision of this
Agreement, and without limiting any such provision, to the extent that
Indemnitee is, by reason of Indemnitee's Corporate Status, a party to
and is successful, on the merits or otherwise, in any Proceeding,
Indemnitee shall be indemnified against all Expenses reasonably
incurred by Indemnitee or on Indemnitee's behalf 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 reasonably
incurred by Indemnitee or on Indemnitee's behalf in connection with
each successfully resolved claim, issue or matter. For purposes of
this Agreement, 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.
7. Effect of Certain Resolutions. Neither the settlement or
termination of any Proceeding nor the failure of the Company to award
indemnification or to determine that indemnification is payable shall
create an adverse presumption that Indemnitee is not entitled to
indemnification hereunder. In addition, the termination of any
proceeding by judgment, order, settlement, conviction, or upon a plea
of nolo contendere or its equivalent shall not create a presumption
that Indemnitee did not act in good faith and in a manner which
Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company or, with respect to any criminal action or
proceeding, had reasonable cause to believe that Indemnitee's action
was unlawful.
8. Agreement to Advance Interim Expenses: Conditions. The Company
shall pay to Indemnitee all Indemnifiable Expenses incurred by
Indemnitee in connection with any Proceeding, including a Proceeding
by or in the right of the Company, in advance of the final disposition
of such Proceeding if pursuant to T.C.A.ss.00-00-000, (i) the
Indemnitee furnishes the Company a written affirmation of the
Indemnitee's good faith belief that the Indemnitee has met the
standard of conduct described in T.C.A.ss.00-00-000, (ii) the
Indemnitee furnishes the Company with a written undertaking to repay
the amount of such Indemnifiable Expenses advanced to Indemnitee if it
is finally determined by a court of competent jurisdiction that
Indemnitee is not entitled under this Agreement to indemnification
with respect to such Indemnifiable Expenses and (iii) the Company has
authorized the payment of such Indemnifiable Expenses after a
determination has been made in accordance with T.C.A.ss.4818-506 and
such payment is not precluded. Such undertaking shall be an unlimited
general obligation of Indenmitee, shall be accepted by the Company
without regard to the financial ability of Indemnitee to make
repayment, and in no event shall be required to be secured.
9. Procedure for Payment of Interim Expenses. Indemnitee shall
submit to the Company a written request Specifying the Indemnifiable
Expenses for which Indemnitee seeks an advancement under Section 8 of
this Agreement, together with documentation evidencing that Indemnitee
has incurred such Indemnifiable Expenses. Payment of
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Indemnifiable Expenses under Section 8 shall be made no later than
twenty (20) calendar days after the Company's receipt of such request
and the undertaking required by Section 8.
10. Remedies of Indemnitee.
(a) Right to Petition Court. In the event that Indemnitee makes a
request for payment of Indenmifiable Amounts under Sections 3 and 5
above or a request for an advancement of Indemnifiable Expenses under
Sections 8 and 9 above and the Company fails to make such payment or
advancement in a timely manner pursuant to the terms of this Agreement,
Indemnitee may petition the appropriate judicial authority to enforce
the Company's obligations under this Agreement.
(b) Burden of Proof. In any judicial proceeding brought under Section
10(a) above, the Company shall have the burden of proving that
Indemnitee is not entitled to payment of Indemnifiable Amounts
hereunder.
(c) Expenses. The Company agrees to reimburse Indemnitee in full for
any Expenses incurred by Indemnitee in connection with investigating,
preparing for, litigating, defending or settling any action brought by
Indemnitee under Section 10(a) above, or in connection with any claim
or counterclaim brought by the Company in connection therewith.
(d) Validity of Agreement. The Company shall be precluded from
asserting in any Proceeding, including, without limitation, an action
under Section 10(a) above, that the provisions of this Agreement are
not valid, binding and enforceable or that there is insufficient
consideration for this Agreement and shall stipulate in court that the
Company is bound by all the provisions of this Agreement.
(e) Failure to Act Not a Defense. The failure of the Company (including
its Board of Directors or any committee thereof, independent legal
counsel, or stockholders) to make a determination concerning the
permissibility of the payment of Indemnifiable Amounts or the
advancement of Indemnifiable Expenses under this Agreement shall not be
a defense in any action brought under Section 10(a) above, and shall
not create a presumption that such payment or advancement is not
permissible.
11. Representations and Warranties of the Company. The Company hereby
represents and warrants to Indemnitee as follows:
(a) Authority. The Company has al! necessary corporate power and
authority to enter into, and be bound by the terms of, this Agreement,
and the execution, delivery and performance of the undertakings
contemplated by this Agreement have been duly authorized by the
Company.
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(b) Enforceability. This Agreement, when executed and delivered by the
Company in accordance with the provisions hereof, shall be a legal,
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting the enforcement of creditors'
rights generally.
12. Contract Rights Not Exclusive. The rights to payment of
Indemnifiable Amounts and advancement of Indemnifiable Expenses
provided by this Agreement shall be in addition to, but not exclusive
of, any other rights which Indemnitee may have at any time under
applicable law, the Company's By-laws or Charter, or any other
agreement, vote of stockholders or directors, or otherwise, both as to
action in Indemnitee's official capacity and as to action in any other
capacity as a result of Indemnitee's serving as a officer of the
Company.
13. Successors. This Agreement shall be (a) binding upon all successors
and assigns of the Company (including any transferee of all or a
substantial portion of the business, stock and/or assets of the
Company are any direct or indirect successor by merger or consolidation
or otherwise by operation of law) and (b) binding on and shall inure
to the benefit of the heirs, personal representatives, executors and
administrators of Indemnitee. This Agreement shall continue for the
benefit of Indemnitee and such heirs, personal representatives,
executors and administrators after Indemnitee has ceased to have
Corporate Status.
14. Subrogation. In the event of any payment of Indemaifiable Amounts
under this Agreement, the Company shall be subrogated to the extent of
such payment to all of the rights of contribution or recovery of
Indemnitee against other persons, and Indemnitee shall take, at the
request of the Company, all reasonable action necessary to secure such
rights, including the execution of such documents as are necessary to
enable the Company to bring suit to enforce such rights.
15. Change in Law. To the extent that a change in applicable law
(whether by statute or judicial decision) shall permit broader
indemnification than is provided under the terms of the By-laws of the
Company and this Agreement, Indemnitee shall be entitled to such
broader indemnification and this Agreement shall be deemed to be
amended to such extent.
16. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement, or any
clause thereof, shall be determined by a court of competent
jurisdiction to be illegal, invalid or unenforceable, in whole or in
part, such provision or clause shall be limited or modified in its
application to the minimum extent necessary to make such provision or
clause valid, legal and enforceable, and the remaining provisions and
clauses of this Agreement shall remain fully enforceable and binding
on the parties.
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17. Indemnitee as Plaintiff. Except as provided in Section 10(c) of
this Agreement and in the next sentence, Indemnitee shall not be
entitled to payment of Indemnifiable Amounts or advancement of
Indemnifiable Expenses with respect to any Proceeding brought by
Indemnitee against the Company, any Entity which it controls, any
director or officer thereof, or any third party, unless the Company
has consented to the initiation of such Proceeding.
18. Modifications and Waiver. Except as provided in Section 16
above with respect to changes in applicable law which broaden the
right of Indemnitee to be indemnified by the Company, no supplement,
modification or amendment of this Agreement shall be binding unless
executed in writing by each of the parties hereto. No waiver of any of
the provision of this Agreement shall be deemed or shall constitute a
waiver of any other provisions of this Agreement (whether or not
similar), nor shall such waiver constitute a continuing waiver.
19. General Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to
have been duly given (a) when delivered by hand, (b) when transmitted
by facsimile and receipt is acknowledged, or (c) if mailed by certified
or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:
(i) If to Indemnitee, to:
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(ii) If to the Company, to:
Private Business, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
or to such other address as may have been furnished in the same manner
by any party to the others.
20. Governing Law. This Agreement shall be governed by and
construed and enforced under the laws of the State of Tennessee
without giving effect to the provisions thereof relating to conflicts
of law.
21. Agreement Governs. This Agreement is to be deemed consistent
wherever possible with relevant provisions of the Company's By-laws
and Charter; however, in the event of a conflict between this
Agreement and such provisions, the provisions of this Agreement shall
control.
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IN WITNESS WHEREOF, the parties hereto have executed this
Indemnification Agreement as of the day and year first above written.
PRIVATE BUSINESS, INC.
By:
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Name: Xxxxx Cover
Title: President
INDEMNITEE
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