Exhibit 10.14
AMENDED AND RESTATED
INDEMNIFICATION AGREEMENT
THIS AMENDED AND RESTATED
INDEMNIFICATION AGREEMENT (the “ Agreement
”) is made on this day
of
,
2007, by and between MEDecision, Inc., a Pennsylvania corporation
(the “ Company ”), and
(“ Indemnitee ”).
WHEREAS, the Company and Indemnitee
recognize the increasing difficulty in obtaining directors’
and officers’ liability insurance, the significant increases
in the cost of such insurance and the general reduction in the
coverage of such insurance; and
WHEREAS, the Company and Indemnitee
further recognize the substantial increase in corporate litigation,
in general, subjecting officers and directors to expensive
litigation risks at the same time as liability insurance has been
severely limited; and
WHEREAS, Indemnitee does not regard
the current protection available as adequate given the present
circumstances, and Indemnitee and other officers and directors of
the Company may not be willing to serve as officers and directors
without adequate protection; and
WHEREAS, the Company desires to
attract and retain the services of highly qualified individuals,
such as Indemnitee, to serve as officers and directors of the
Company and to indemnify its officers and directors so as to
provide them with the maximum protection permitted by law;
and
WHEREAS, the Company and Indemnitee
acknowledge that this Agreement is intended to amend, restate and
supercede the Indemnification Agreement, dated
,
by and between the Company and Indemnitee (the “ Prior
Agreement ”), which heretofore has been in
effect.
NOW, THEREFORE, in consideration of
the premises and covenants contained herein, the Company and
Indemnitee, intending to be legally bound, hereby agree as
follows:
1.
Indemnification
.
a.
Third Party Proceedings . The Company shall indemnify
Indemnitee if Indemnitee is or was 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
Company) by reason of the fact that Indemnitee is or was a
director, officer, trustee, fiduciary, employee or agent of the
Company, or any affiliate of the Company, by reason of any action
or inaction on the part of Indemnitee while an officer or director,
or by reason of the fact that Indemnitee is or was serving at the
request of the Company as a director, officer, trustee, fiduciary,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including
attorneys’ fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection with such action, suit or
proceeding if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe
Indemnitee’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, in and of itself, create a presumption that
(i) 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, and, (ii) with respect to any criminal
action or proceeding, Indemnitee did not have reasonable cause to
believe his conduct was lawful.
b.
Proceedings By or in the Right of the Company . The Company
shall indemnify Indemnitee if Indemnitee 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 Company or any
subsidiary of the Company to procure a judgment in its favor by
reason of the fact that Indemnitee is or was a director, officer,
trustee, fiduciary, employee or agent of the Company, or any
affiliate of the Company, by reason of any action or inaction on
the part of Indemnitee while an officer or director or by reason of
the fact that Indemnitee is or was serving at the request of the
Company as a director, officer, trustee, fiduciary, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys’
fees) and amounts paid in settlement actually and reasonably
incurred by Indemnitee in connection with the defense or settlement
of such action or suit if Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in or not opposed to
the best interests of the Company, except that no indemnification
shall be made in respect of any claim, issue or matter as to which
Indemnitee shall have been adjudged to be liable to the Company
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, Indemnitee is fairly and reasonably entitled to
indemnity for such expenses which the court shall deem
proper.
c.
Mandatory Indemnification . To the extent that Indemnitee
has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections 1(a) and
1(b) or in defense of any claim, issue or matter therein,
Indemnitee shall be indemnified against all expenses (including
attorneys’ fees) actually and reasonably incurred by
Indemnitee in connection therewith. If Indemnitee is not wholly
successful in any such action, suit or proceeding referred to in
Sections 1(a) and 1(b) but is successful on the
merits or otherwise, as to one or more but less than all claims,
issues or matters in such action suit or proceeding, the Company
shall indemnify Indemnitee against all expenses actually and
reasonably incurred by him or on his behalf in connection with each
successfully resolved claim, issue or matter. For purposes of
this Section 1(c) , the term “ successful on the merits or otherwise
” shall
include, but not be limited to, (i) any termination, withdrawal, or
dismissal (with or without prejudice) of any claim, action, suit or
proceeding against Indemnitee without any express finding of
liability or guilt against him, or (ii) the expiration of a
reasonable period of time after the making of any claim or threat
of an action, suit or proceeding without the institution of the
same and without any promise or payment made to induce a
settlement.
d.
Indemnification for Expenses of a Witness .
Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee is, by reason of the fact that Indemnitee is
or was a director, officer, trustee, fiduciary, employee or agent
of the Company, or any affiliate of the Company, by reason of any
action or inaction on the part of Indemnitee while an officer or
director or by reason of the fact that Indemnitee is or was serving
at the request of the Company as a director, officer, trustee,
fiduciary, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, a witness in any
threatened, pending or
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completed action,
suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
Company) to which Indemnitee is not a party, Indemnitee shall be
indemnified against all expenses actually and reasonably incurred
by Indemnitee or on Indemnitee’s behalf in connection
therewith.
2.
Expenses and Indemnification
Procedure .
a.
Advancement of Expenses . The Company shall advance all
expenses incurred by or on behalf of Indemnitee in connection with
any civil or criminal action, suit or proceeding referenced in
Section 1(a) or Section 1(b) , subject to the terms
and in accordance with the procedures set forth in this Section
2 .
b.
Presumptions Regarding Advances . For purposes of any
advancement hereunder, the Indemnitee shall be deemed to have acted
(i) in good faith and in a manner he reasonably believed to be in
or not opposed to the best interest of the Company, and (ii) with
respect to any criminal action or procedure, to have had no
reasonable cause to believe his conduct was unlawful if, under
either (i) or (ii), his action is based on the records or books of
account of the Company, or the records or books of account of
another corporation, partnership, joint venture, trust or other
enterprise (collectively, the “ other enterprises ”), including financial
statements, or on information supplied to him by the officers of
the Company or other enterprises in the course of their duties, or
on the advice of legal counsel for the Company or other enterprises
or on information or records given or reports made to the Company
or other enterprises by an independent certified public accountant
or by an appraiser or other expert selected with reasonable care by
the Company or other enterprises. Indemnitee hereby undertakes to
repay such amounts advanced only if, and to the extent that, it
shall ultimately be determined that Indemnitee is not entitled to
be indemnified by the Company as authorized hereby.
c.
Procedure for Obtaining Advances . Any indemnification and
advances provided for in Section 1 and this Section 2
shall be made no later than 30 days after receipt of the written
request of Indemnitee, coupled with appropriate documentation to
support the requested payment.
d.
Determination of Entitlement to Indemnification . The
parties agree that the following procedures and presumptions shall
apply in the event of any question as to whether Indemnitee is
entitled to indemnification under this Agreement:
(1)
Upon written request by Indemnitee for indemnification, a
determination with respect to Indemnitee’s entitlement
thereto shall be made in the specific case by one of the following
four methods, which shall be at the election of the Board of
Directors: (i) by a majority vote of the disinterested
directors, even though less than a quorum, (ii) by a committee of
disinterested directors designated by a majority vote of the
disinterested directors, even though less than a quorum, (iii) if
there are no disinterested directors, if the disinterested
directors so direct or if there has been a Change in Control (as
defined in Section 2(h) ), by independent legal counsel in a
written opinion to the Board of Directors, a copy of which shall be
delivered to the Indemnitee, or (iv) if so directed by the Board of
Directors, by the shareholders of the Company. For purposes
hereof, disinterested directors are those members of the Board
of
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Directors of the Company who are
not parties to the action, suit or proceeding in respect of which
indemnification is sought by Indemnitee.
(2)
If the determination of entitlement to indemnification is to be
made by independent legal counsel pursuant to Section
2(d)(1) hereof, the independent legal counsel shall be selected
as provided in this Section 2(d)(2) . The independent
legal counsel shall be mutually agreed upon by the parties or
failing such agreement, as determined by the Chief Judge of the
Federal District Court for the Eastern District of
Pennsylvania.
(3)
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. Anyone seeking to
overcome this presumption shall have the burden of proof and the
burden of persuasion by clear and convincing evidence.
Neither the failure of the Company (including by its directors or
independent legal 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 its directors or
independent legal 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.
e.
Notice/Cooperation by Indemnitee . Indemnitee shall, as a
condition precedent to his right to be indemnified under this
Agreement, give the Company notice in writing as soon as
practicable of any claim made against Indemnitee for which
indemnification will or could be sought under this Agreement.
Notice to the Company shall be directed to MEDecision, Inc., 601
Lee Road, Wayne, Pennsylvania 19087, Facsimile: (610) 540-0272,
Attention: Carl E. Smith (or such other address as the Company may
from time to time designate in writing to Indemnitee); provided,
however , that the failure to so notify the Company shall not
relieve the Company of any obligation which it may have to
Indemnitee under this Agreement or otherwise unless and only to the
extent that such failure or delay materially prejudices the
Company. Notice shall be deemed received on the third
business day after the date postmarked if sent by domestic
certified or registered mail, properly addressed; otherwise, notice
shall be deemed received when such notice shall actually be
received by the Company. In addition, Indemnitee shall give the
Company such information and cooperation as it may reasonably
require and as shall be within Indemnitee’s
power.
f.
Notice to Insurers . If, at the time of the receipt of a
notice of claim pursuant to Section 2(e) , the Company has
directors’ and officers’ liability insurance in effect,
the Company shall give prompt notice of the commencement 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.
g.
Selection of Counsel . If the Company shall be obligated
under Section 1 or Section 2 to pay the expenses of
any proceeding against Indemnitee, the Company, if appropriate,
shall be entitled to assume the defense of such proceeding, with
counsel approved
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by Indemnitee,
upon the delivery to Indemnitee of written notice of its election
to do so. After delivery of such notice, approval of such counsel
by Indemnitee and the retention of such counsel by the Company, the
Company will not be liable to Indemnitee under this Agreement for
any fees of counsel subsequently incurred by Indemnitee with
respect to the same proceeding; provided that (i) Indemnitee shall
have the right to employ separate counsel in any such proceeding at
Indemnitee’s expense; and (ii) if (A) the employment of
counsel by Indemnitee has been previously authorized by the
Company, (B) Indemnitee shall have reasonably concluded that there
may be a conflict of interest between the Company and Indemnitee in
the conduct of any such defense, or (C) the Company shall not, in
fact, have employed counsel to assume the defense of such
proceeding, then the reasonable fees and expenses of
Indemnitee’s counsel shall be at the expense of the
Company.
h.
Settlements . The Company shall not be liable to Indemnitee
under the Agreement for any amounts paid in settlement of any
action or claim effected without its written consent. The
Company shall not settle any action or claim in any manner which
would impose any penalty or limitation on Indemnit
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