Exhibit 10.14
POKERTEK, INC.
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT (the
“ Agreement ”) is effective as of the 31st day
of January, 2005, by and between PokerTek, Inc., a North Carolina
corporation (the “ Company ”), and Lyle Berman,
an individual resident of the State of Nevada (the “
Indemnitee ”).
WHEREAS, the Indemnitee is a
director of the Company; and
WHEREAS, in recognition of
Indemnitee’s need for substantial protection against personal
liability in order to enhance Indemnitee’s continued service
to the Company in an effective manner and Indemnitee’s
reliance on the provisions of the Company’s Articles of
Incorporation and Bylaws (the “ charter documents
”) limiting Indemnitee’s liability to the fullest
extent permitted by law, and to provide Indemnitee with specific
contractual indemnification against such liability (regardless of,
among other things, any amendment to or revocation of such charter
documents or any change in the composition of the Company’s
Board of Directors or acquisition transaction relating to the
Company), the Company wishes to provide in this Agreement for the
indemnification of and the advancing of expenses to Indemnitee to
the full extent (whether partial or complete) permitted by law and
as set forth in this Agreement, and, to the extent insurance is
maintained, for the continued coverage of Indemnitee under the
Company’s directors’ and officers’ liability
policies.
NOW THEREFORE, in consideration of
the premises and of Indemnitee agreeing to serve or continuing to
serve the Company directly or, at its request, with another
enterprise, and intending to be legally bound hereby, the parties
hereto agree as follows:
1. Basic Indemnification
Arrangement . (a) In the event Indemnitee was, is or becomes a
party to or other participant in, or is threatened to be made a
party to or other participant in, a claim by reason of (or arising
in part out of) an Indemnifiable Event (a “ Claim
”), the Company shall indemnify Indemnitee to the fullest
extent permitted by law as soon as practicable, but in any event no
later than 30 days after written demand is presented to the
Company, against any and all Expenses, judgments, fines, penalties
and amounts paid in settlement (including all interest, assessments
and other charges paid or payable in connection therewith) of such
Claim and any federal, state, local or foreign taxes imposed on
Indemnitee as a result of the actual or deemed receipt of any
payments under this Agreement. If requested by Indemnitee in
writing, the Company shall advance (within two business days of
such written request) any and all Expenses to Indemnitee (an
“ Expense Advance ”). Notwithstanding anything
in this Agreement to the contrary, and except as provided in
Section 3, prior to a Change in Control, Indemnitee shall not be
entitled to indemnification pursuant to this Agreement in
connection with any Claim initiated by Indemnitee against the
Company or any director or officer of the Company unless the
Company has joined in or consented to the initiation of such
Claim.
(b) Notwithstanding the foregoing,
(i) the obligations of the Company under Section 1(a) shall be
subject to the condition that the Reviewing Party shall not have
determined (in a written opinion, in any case in which the special
independent counsel referred to in Section 2 hereof is involved)
that Indemnitee would not be permitted to be indemnified under
applicable law, and (ii) the obligation of the Company to make an
Expense Advance pursuant to Section 1(a) shall be subject to the
condition that, if, when and to the extent the Reviewing Party
determines that Indemnitee would
not be permitted to be so indemnified under
applicable law, the Company shall be entitled to be reimbursed by
Indemnitee (who hereby agrees to reimburse the Company) for all
such amounts theretofore paid; provided, however, that if
Indemnitee has commenced legal proceedings in a court of competent
jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the
Reviewing Party that the Indemnitee would not be permitted to be
Indemnified under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any
Expense Advance until a final judicial determination is made with
respect thereto (as to which all rights of appeal therefrom have
been exhausted or lapsed). Indemnitee’s obligation to
reimburse the Company for Expense Advances shall be unsecured and
no interest shall be charged thereon. If there has not been a
Change in Control, the Reviewing Party shall be selected by the
Board of Directors, and if there has been a Change in Control, the
Reviewing Party shall be the special independent counsel referred
to in Section 2 hereof. If there has been no determination by the
Reviewing Party or if the Reviewing Party determines that
Indemnitee substantively would not be permitted to be indemnified
in whole or in party under applicable law, Indemnitee shall have
the right to commence litigation in any court in the State of North
Carolina having subject matter jurisdiction thereof and in which
venue is proper seeking an initial determination by the court or
challenging any such determination by the Reviewing Party or any
aspect thereof and the Company hereby consents to service of
process and to appear in any such proceeding. Any determination by
the Reviewing Party otherwise shall be conclusive and binding on
the Company and Indemnitee.
2. Change in Control . The
Company agrees that if there is a Change in Control of the Company
(other than a Change in Control which has been approved by a
majority of the Company’s Board of Directors who were
directors immediately prior to such Change in Control), then with
respect to all matters thereafter arising concerning the rights of
Indemnitee to indemnity payments and Expense Advances under this
Agreement or any other agreement, bylaw or charter document now or
hereafter in effect relating to Claims for Indemnifiable Events,
the Company shall seek legal advice only from special independent
counsel selected by Indemnitee and approved by the Company (which
approval shall not be unreasonably withheld), and who has not
otherwise performed services for the Company within the last two
years (other than in connection with such matters) or for
Indemnitee. In the event Indemnitee and the Company are unable to
agree on the selection of the special independent counsel, such
special independent counsel shall be selected by lot from among at
least five law firms having more than fifty attorneys and having a
rating of “av” or better in the then current
Martindale-Hubbell Law Directory. Such selection shall be made in
the presence of Indemnitee (his legal counsel or either of them, as
Indemnitee may elect). Such counsel, among other things, shall,
within 90 days of its retention, render its written opinion to the
Company and Indemnitee as to whether and to what extent Indemnitee
would be permitted to be indemnified under applicable law. The
Company agrees to pay the reasonable fees of the special
independent counsel referred to above and to fully indemnify such
counsel against any and all expenses (including attorneys’
fees), claims, liabilities and damages arising out of or relating
to this Agreement or its engagement pursuant thereto.
3. Indemnification for Additional
Expenses . The Company shall indemnify Indemnitee against any
and all expenses (including attorneys’ fees) and, if
requested by Indemnitee in writing, shall (within two business days
of such written request) advance such expenses to Indemnitee, which
are incurred by Indemnitee in connection with any Claim asserted
against
