INDEMNIFICATION
AGREEMENT
THIS
AGREEMENT is made this 21st day of November 2006 between
Streamline Health Solutions, Inc., a Delaware corporation
(“Corporation”), and J. Andrew L. Turner
(“Indemnitee”) under the following
circumstances:
A.
Indemnitee is an officer and/or a member of the Board of Directors
of Corporation and in such capacity is performing a valuable
service for Corporation.
B.
The stockholders of Corporation have adopted By-laws
(“By-laws”) providing for the indemnification of the
officers, directors, agents, and employees of Corporation to the
maximum extent authorized by Section 145 of the General
Corporation Law of the State of Delaware, as amended to date
(“State Statute”).
C.
The State Statute specifically provides that the indemnity provided
for thereunder is not exclusive, and thereby contemplates that
contracts may be entered into between Corporation and its officers
and directors with respect to indemnification of such officers and
directors.
D.
In accordance with the authorization provided by the State Statute,
Corporation has purchased and presently maintains a policy or
policies of Directors and Officers Liability Insurance (“D
& O Insurance”) covering certain liabilities which may be
incurred by its directors and officers in the performance of their
services for Corporation.
E.
Recent developments with respect to the terms and availability of D
& O Insurance and with respect to the application, amendment,
and enforcement of statutory and by-law indemnification provisions
generally have raised questions concerning the adequacy and
reliability of the protection afforded thereby to the
Corporation’s officers and directors.
F.
In order to resolve such questions and thereby induce Indemnitee to
continue to serve as an officer and/or director of Corporation,
Corporation has determined and agreed to enter into this contract
with Indemnitee.
Accordingly,
in consideration of Indemnitee’s continued service as an
officer and/or director of Corporation after the date hereof, the
parties hereto agree as follows:
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(a)
Agent . “Agent” means a director or executive
officer of Corporation or a person employed by Corporation who
serves at the written request of the President of the Company as a
director, trustee, officer, employee, or agent of another
corporation, domestic or foreign, non-profit or for profit,
partnership, joint venture, trust or other enterprise.
(b)
Change of Control . “Change in Control” is
deemed to have occurred if the conditions set forth in any one of
the following paragraphs shall have been satisfied:
(i) any Person (as
defined in Section 3(a)(9) of the Securities Exchange Act of
1934 (the “Exchange Act”) and used in Sections 13(d)
and 14(d) thereof, including a “group” as defined in
Section 13(d) thereof) (other than a trustee or other fiduciary
holding securities under an employee benefit plan of Corporation or
any of its Subsidiaries, or a corporation owned directly or
indirectly by the common shareholders of Corporation in
substantially the same proportions as their ownership of stock of
Corporation), is or becomes the beneficial owner, directly or
indirectly, of securities of Corporation representing 20% or more
of the combined voting power of Corporation’s then
outstanding securities, unless arranged by or consummated with the
prior approval of Corporation’s board of directors;
or
(ii) during any
period of two (2) consecutive years (not including any period
prior to the date hereof), individuals who at the beginning of such
period constitute the board of directors and any new director,
whose election by the board or nomination for election by
Corporation’s shareholders, 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 thereof;
or
(iii) the
consummation of (1) the sale or disposition of all or
substantially all Corporation’s assets; or (2) a merger
or consolidation of Corporation with any other corporation, other
than a merger or consolidation which would result in the voting
securities of Corporation outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity), at
least 50% of the combined voting power of the voting securities of
Corporation (or such surviving entity) outstanding immediately
after such merger or consolidation; or
(iv) the
shareholders of Corporation approve a plan of complete liquidation
of the Corporation.
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However, in no
event shall a Change in Control be deemed to have occurred, with
respect to Indemnitee, if the Indemnitee is part of a purchasing
group which consummates the Change in Control transaction. The
Indemnitee shall be deemed “part of a purchasing
group...” for purposes of the preceding sentence if the
Indemnitee is an equity participant or has agreed to become an
equity participant in the purchasing company or group (except for
(i) passive ownership of less than 5% of the voting securities
of the purchasing company or (ii) ownership of equity
participation in the purchasing company or group which is otherwise
not deemed to be significant, as determined prior to the Change in
Control by a majority of the continuing members of the Board who
are not also employees).
(c)
Corporation . “Corporation” means Streamline
Health Solutions, Inc., a Delaware corporation, its successors or
assigns, or any Subsidiary of Corporation.
(d)
Independent Legal Counsel . “Independent Legal
Counsel” means an attorney or firm of attorneys, selected in
accordance with the provisions of Section 11 hereof, other
than an attorney, or a firm having associated with it an attorney,
who has been retained by or who has performed services for
Corporation or any Indemnitee within the last five
(5) years.
(e)
Liabilities . “Liabilities” means losses,
claims, damages, liabilities, obligations, penalties, judgments,
fines, settlement payments, awards, costs, expenses and
disbursements (and any costs, expenses or disbursements in giving
testimony or furnishing documents in response to a subpoena or
otherwise), including, without limitation, all reasonable
attorneys’ fees, costs, expenses and disbursements, as and
when incurred.
(f)
Proceeding . “Proceeding” means any threatened,
pending, or completed action, suit, alternative dispute resolution
mechanism or other proceeding, whether civil, criminal,
administrative or investigative.
(g)
Subsidiary . “Subsidiary” means (i) any
company of which more than thirty percent (30%) of the outstanding
voting securities are owned directly or indirectly by Corporation,
or which is otherwise controlled by Corporation, and (ii) any
partnership, joint venture, trust or other entity of which more
than thirty percent (30%) of the equity interest is owned directly
or indirectly by Corporation, or which is otherwise controlled by
Corporation.
2.
Maintenance of Insurance and Self Insurance .
(a) Corporation represents that it presently has in force and
effect policies of D & O Insurance, evidence of which has been
separately provided to the Indemnitee (“Insurance
Policy”). Subject only to the provisions of Section 2(b)
hereof, Corporation hereby agrees that, so long as Indemnitee shall
continue to serve as an Agent, and thereafter so long as Indemnitee
shall be subject to any Proceeding by reason of the fact that
Indemnitee is or was an Agent of Corporation, Corporation will
purchase and maintain in effect for the benefit of
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Indemnitee one
or more valid, binding, and enforceable policy or policies of D
& O Insurance providing, in all respects, coverage at least
comparable to that presently provided pursuant to the Insurance
Policy.
(b) Corporation
shall not be required to maintain said policy or policies of D
& O Insurance in effect if said insurance is not reasonably
available or if, in the reasonable business judgment of the then
directors of Corporation, either (i) the premium cost for such
insurance is substantially disproportionate to the amount of
coverage or (ii) the coverage provided by such insurance is so
limited by exclusions that there is insufficient benefit from such
insurance.
(c) In
the event Corporation does not purchase and maintain in effect said
policy or policies of D & O Insurance pursuant to the
provisions of Section 2(b) hereof, Corporation agrees to hold
harmless and indemnify Indemnitee to the full extent of the
coverage which would otherwise have been provided for the benefit
of Indemnitee pursuant to the Insurance Policy.
3.
Indemnification of Indemnitee . Corporation hereby agrees to
hold harmless and indemnify Indemnitee to the full extent
authorized or permitted by the provisions of the State Statute, or
by any amendment thereof, or other statutory provisions authorizing
or permitting such indemnification which is adopted after the date
hereof. Subject only to the exclusions set forth in Section 4
hereof, Corporation hereby agrees to hold harmless and indemnify
Indemnitee:
(a) Against
any and all Liabilities actually and reasonably incurred by
Indemnitee in connection with any Proceeding (including an action
by or in the right of Corporation to which Indemnitee is, was, or
at any time becomes a party, or is threatened to be made a party,
by reason of the fact that Indemnitee is, was, or at any time
becomes an Agent of Corporation;
(b) Against
any and all Liabilities actually and reasonably incurred by
Indemnitee to the extent Indemnitee is, by reason of the fact that
Indemnitee was or is an Agent of Corporation, involved in any
investigative Proceeding, including, but not limited to, testifying
as a witness or furnishing documents in response to a subpoena or
otherwise;
(c) If
Indemnitee is a person who was or is a party or is threatened to be
made a party to any Proceeding by reason of the fact that
Indemnitee is or was an Agent of Corporation, or by reason of
anything done or not done by Indemnitee in any such capacity, and
prior to, during the pendency of, or after completion of, such
Proceeding, Indemnitee dies, then Corporation shall hold harmless
and indemnify the heirs, executors and administrators of Indemnitee
against any and all Liabilities incurred by such heirs, executors
or administrators in connection with the investigation, defense,
settlement or appeal of such Proceeding on the same basis as
provided for Indemnitee in this Section 3; and
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(d) Otherwise
to the fullest extent as may be provided to Indemnitee by
Corporation under the non-exclusivity provisions of
Section 145 of the State Statute;.
4.
Limitations on Additional Indemnity . No indemnity pursuant
to Section 4 hereof shall be paid by Corporation:
(a) in
respect to remuneration paid to Indemnitee if it shall be
determined by a final judgment or other final adjudication that
such remuneration was in violation of law;
(b) on
account of any suit in which judgment is rendered against
Indemnitee for an accounting of profits made from the purchase or
sale by Indemnitee of securities of Corporation pursuant to the
provisions of Sectio
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