Careview 8-K [crvw-8k_123113.htm]

Exhibit 10.5

 

 

CAREVIEW COMMUNICATIONS, INC.

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION AGREEMENT is entered into and is effective as of June 21,
2010, by and between CareView Communications, Inc., a Nevada corporation (the
“Company”), and Samuel A. Greco (“Indemnitee”).

 

WHEREAS, it is essential to the Company to retain and attract as directors and
officers the most capable persons available;

 

WHEREAS, Indemnitee is a director and/or officer of the Company;

 

WHEREAS, both the Company and Indemnitee recognize the increased risk of
litigation that may be asserted against directors and officers of corporations;

 

WHEREAS, the Company’s Articles of Incorporation permits, and Bylaws of the
Company require, the Company to indemnify and advance expenses to its directors
and officers to the fullest extent permitted under Nevada law, and the
Indemnitee has been serving and continues to serve as a director and/or officer
of the Company in part in reliance on the Company’s Articles of Incorporation
and Bylaws;

 

WHEREAS, in recognition of Indemnitee’s need for substantial protection against
personal liability in order to enhance the Indemnitee’s continued and effective
service to the Company and, specific contractual assurance that the protection
promised by the Articles of Incorporation and Bylaws will be available to
Indemnitee (regardless of, among other things, any amendment to or revocation of
the Articles of Incorporation and Bylaws or any change in the composition of the
Company’s Board of Directors or acquisition transaction relating to the
Company), and in order to induce Indemnitee to provide effective services to the
Company as a director and/or officer, the Company wishes to provide in this
Agreement for the indemnification of and the advancing of expenses to Indemnitee
to the fullest extent (whether partial or complete) permitted under Nevada law
and as set forth in this Agreement, and, to the extent insurance is maintained
which includes Indemnitee as a covered party, to provide for the continued
coverage of Indemnitee under the Company’s directors’ and officers’ liability
insurance policies;

 

NOW, THEREFORE, in consideration of the above premises and of Indemnitee
continuing to serve the Company directly or, at its request, with another
enterprise, and intending to be legally bound hereby, the parties agree as
follows:

 

1. Certain Definitions.

 

(a) “Board” shall mean the Board of Directors of the Company.

 

(b) “Change in Control” shall be deemed to have occurred if (i) any ‘person’ (as
such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the ‘Exchange Act’)), other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or a
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company,
is or becomes the ‘beneficial owner’ (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
50% or more of the total voting power represented by the Company’s then
outstanding Voting Securities, or (ii) during any period of two consecutive
years, individuals who at the beginning of such period constitute the Board and
any new director whose election by the Board or nomination for election by the
Company’s stockholders 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 of the Board, or
(iii) the stockholders of the Company approve a merger or consolidation of the
Company with any other entity, other than a merger or consolidation that would
result in the

 

 

 

Voting Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into Voting Securities of the surviving entity) at least 80% of the total voting
power represented by the Voting Securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation, or (iv) the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company (in one
transaction or a series of transactions) of all or substantially all of the
Company’s assets.

 

(c) “Expenses” shall mean any expense, liability, or loss, including attorneys’
fees, judgments, fines, ERISA excise taxes and penalties, amounts paid or to be
paid in settlement, any interest, assessments, or other charges imposed thereon,
any federal, state, local, or foreign taxes imposed as a result of the actual or
deemed receipt of any payments under this Agreement, and all other costs and
obligations, paid or incurred in connection with investigating, defending, being
a witness in, participating in (including on appeal), or preparing for any of
the foregoing in, any Proceeding relating to any Indemnifiable Event.

 

(d) “Indemnifiable Event” shall mean any event or occurrence that takes place
either prior to or after the execution of this Agreement, related to the fact
that Indemnitee is or was a director and/or officer of the Company, or while a
director or officer is or was serving at the request of the Company as a
director, officer, employee, trustee, agent, or fiduciary of a subsidiary of the
Company or of any other foreign or domestic corporation, partnership, joint
venture, employee benefit plan, trust, or other enterprise, or was a director,
officer, employee, or agent of a foreign or domestic corporation that was a
predecessor corporation of the Company or of another enterprise at the request
of such predecessor corporation, or related to anything done or not done by
Indemnitee in any such capacity, whether or not the basis of the Proceeding is
alleged action in an official capacity as a director, officer, employee, or
agent or in any other capacity while serving as a director, officer, employee,
or agent of the Company, as described above.

 

(e) “Independent Counsel” shall mean 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 or the Indemnitee (other than
in connection with indemnification matters) within the last three years.

 

(f) “Proceeding” shall mean any threatened, pending, or completed action, suit,
or proceeding or any alternative dispute resolution mechanism (including an
action by or in the right of the Company), or any inquiry, hearing, or
investigation, whether conducted by the Company or any other party, that
Indemnitee in good faith believes might lead to the institution of any such
action, suit, or proceeding, whether civil, criminal, administrative,
investigative, or other.

 

(g) “Voting Securities” shall mean any securities of the Company that vote
generally in the election of directors.

 

2. Agreement to Indemnify.

 

(a) General Agreement. In the event Indemnitee was, is, or becomes a party to or
witness or other participant in, or is threatened to be made a party to or
witness or other participant in, a Proceeding by reason of (or arising in part
out of) an Indemnifiable Event, the Company shall indemnify Indemnitee from and
against any and all Expenses to the fullest extent permitted by law, as the same
exists or may hereafter be amended or interpreted. The parties hereto intend
that this Agreement shall provide for indemnification in excess of that
expressly permitted by statute, including, without limitation, any
indemnification provided by the Company’s Articles of Incorporation, its Bylaws,
vote of its stockholders or disinterested directors, or applicable law. The only
limitation that shall exist upon the Company’s obligations pursuant to this
Section 2 shall be that the Company shall not be obligated to make any payment
to Indemnitee that is finally determined by a court of competent jurisdiction in
a final judgment, not subject to appeal, to be unlawful.

 

(b) Initiation of Proceeding. Notwithstanding anything in this Agreement to the
contrary, Indemnitee shall not be entitled to indemnification pursuant to this
Agreement in connection with any Proceeding or part thereof initiated by
Indemnitee against the Company or any director or officer of the Company unless
(i) the Company has joined in or the Board has consented to the initiation of
such Proceeding or part thereof; (ii) the Proceeding or part thereof is one to
enforce indemnification rights under Section 4; or (iii) the Proceeding or part
thereof is instituted

 

 

after a Change in Control (other than a Change in Control approved by a majority
of the directors on the Board who were directors immediately prior to such
Change in Control) and Independent Counsel has approved its initiation.

 

(c) Expense Advances. If so requested by Indemnitee, the Company shall advance
(within thirty business days of such request) any and all Expenses incurred by
Indemnitee (an “Expense Advance”). The Indemnitee shall qualify for such Expense
Advances upon the execution and delivery to the Company of this Agreement which
shall constitute an undertaking providing that the Indemnitee undertakes to
repay such Expense Advances if and to the extent that it is ultimately
determined by a court of competent jurisdiction in a final judgment, not subject
to appeal, that Indemnitee is not entitled to be indemnified by the Company.
Until it is so finally determined by the court that Indemnitee is not entitled
to indemnification, Indemnitee shall not be required to repay such Expense
Advances to the Company and Indemnitee shall continue to receive Expense
Advances pursuant to this Section 2(c). Indemnitee’s obligation to reimburse the
Company for Expense Advances shall be unsecured and no interest shall be charged
thereon. To the extent permissible under third party policies, the Company
agrees that invoices for Expense Advances shall be billed in the name of and be
payable directly by the Company.

 

(d) Mandatory Indemnification. Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee has been successful on the merits or
otherwise in defense of any Proceeding relating in whole or in part to an
Indemnifiable Event or in defense of any issue or matter therein, Indemnitee
shall be indemnified against all Expenses incurred in connection therewith.

 

(e) Partial Indemnification. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of
Expenses, but not, however, for the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is
entitled. Attorneys’ fees and expenses shall not be prorated but shall be deemed
to apply to the portion of indemnification to which Indemnitee is entitled.

 

(f) Prohibited Indemnification. No indemnification pursuant to this Agreement
shall be paid by the Company on account of any Proceeding in which judgment is
rendered against Indemnitee for an accounting of profits made from the purchase
or sale by Indemnitee of securities of the Company pursuant to the provisions of
Section 16(b) of the Exchange Act, or similar provisions of any federal, state,
or local laws.

 

3. Indemnification Process and Appeal.

 

(a) Indemnification Payment. Indemnitee shall be entitled to indemnification of
Expenses, and shall receive payment thereof, from the Company in accordance with
this Agreement as soon as practicable after Indemnitee has made written demand
on the Company for indemnification, unless indemnification of such Expenses is
prohibited under Section 2(f) of this Agreement.

 

(b) Suit to Enforce Rights. If Indemnitee has not received full advancement
within thirty (30) days or full indemnification within ninety (90) days after
making a demand in accordance with Section 3(a), Indemnitee shall have the right
to enforce its indemnification rights under this Agreement by commencing
litigation in the State of Texas, County of Denton, seeking an initial
determination by the court or challenging any determination by the Company or
any aspect thereof. The Company hereby consents to service of process and to
appear in any such proceeding. The remedy provided for in this Section 3 shall
be in addition to any other remedies available to Indemnitee at law or in
equity. The Company shall be precluded from asserting in any judicial proceeding
commenced pursuant to this Section 3(b) that the procedures and presumptions of
this Agreement are not valid, binding and enforceable and shall stipulate that
the Company is bound by all the provisions of this Agreement.

 

(c) Defense to Indemnification, Burden of Proof, and Presumptions. It shall be a
defense to any action brought by Indemnitee against the Company to enforce this
Agreement (other than an action brought to enforce a claim for Expenses incurred
in defending a Proceeding in advance of its final disposition) that it is not
permissible under applicable law for the Company to indemnify Indemnitee for the
amount claimed. In connection with any such action to whether Indemnitee is
entitled to be indemnified hereunder, the burden of proving such a defense or
determination shall be on the Company to establish by clear and convincing
evidence that Indemnitee is not so

 

 

entitled to indemnification. It is the parties’ intention that if Indemnitee
commences legal proceedings to secure a judicial determination that Indemnitee
should be indemnified under this Agreement or applicable law, the question of
Indemnitee’s right to indemnification shall be for the court to decide, as a de
novo trial on the merits.

 

(d) To the maximum extent permitted by applicable law in making a determination
with respect to entitlement to indemnification (or advancement of expenses)
hereunder, the Company shall presume that Indemnitee is entitled to
indemnification (or advancement of expenses) under this Agreement if Indemnitee
has submitted a request for advancement under Section 2(c) of this Agreement for
indemnification in accordance with Section 3(a) of this Agreement, and the
Company shall have the burden of proof to overcome that assumption by clear and
convincing evidence in connection with the making of any determination contrary
to that presumption.

 

(e) The Company acknowledges that a settlement or other disposition of a
Proceeding short of final judgment may constitute success by Indemnitee if it
permits a party to avoid expense, delay, distraction, disruption and
uncertainty. In the event that any Proceeding to which Indemnitee is a party is
resolved in any manner other than by adverse judgment against Indemnitee
(including, without limitation, settlement of such Proceeding without payment of
money or other consideration) it shall be presumed (unless there is clear and
convincing evidence to the contrary) that Indemnitee has been successful on the
merits or otherwise in such Proceeding. Anyone seeking to overcome this
presumption shall have the burden of proof and the burden of persuasion, by
clear and convincing evidence.

 

4. Indemnification for Expenses Incurred in Enforcing Rights. The Company shall
indemnify Indemnitee against any and all Expenses that are incurred by
Indemnitee in connection with any action brought by Indemnitee for:

 

(a) indemnification or advance payment of Expenses by the Company under this
Agreement or any other agreement or under applicable law or the Company’s
Articles of Incorporation or Bylaws now or hereafter in effect relating to
indemnification for Indemnifiable Events, and/or

 

(b) recovery under directors’ and officers’ liability insurance policies
maintained by the Company, but only in the event that Indemnitee ultimately is
determined to be entitled to such indemnification or insurance recovery, as the
case may be.

 

In addition, the Company shall, if so requested by Indemnitee, advance the
foregoing Expenses to Indemnitee, subject to and in accordance with
Section 2(c).

 

5. Notification and Defense of Proceeding.

 

(a) Notice. Promptly after receipt by Indemnitee of notice of the commencement
of any Proceeding, Indemnitee shall, if a claim in respect thereof is to be made
against the Company under this Agreement, notify the Company of the commencement
thereof; but the omission so to notify the Company will not relieve the Company
from any liability that it may have to Indemnitee, except as provided in
Section 5(c).

 

(b) Defense. With respect to any Proceeding as to which Indemnitee notifies the
Company of the commencement thereof, the Company will be entitled to participate
in the Proceeding at its own expense and except as otherwise provided below, to
the extent the Company so wishes, it may assume the defense thereof with counsel
reasonably satisfactory to Indemnitee. After notice from the Company to
Indemnitee of its election to assume the defense of any Proceeding, the Company
shall not be liable to Indemnitee under this Agreement or otherwise for any
Expenses subsequently incurred by Indemnitee in connection with the defense of
such Proceeding other than reasonable costs of investigation, transition costs
associated with the Company’s assumption of the defense, or as otherwise
provided below. Indemnitee shall have the right to employ legal counsel in such
Proceeding, but all Expenses related thereto incurred after notice from the
Company of its assumption of the defense shall be at Indemnitee’s expense
unless: (i) the employment of legal counsel by Indemnitee has been authorized by
the Company, (ii) Indemnitee has reasonably determined that there may be a
conflict of interest between Indemnitee and the Company in the defense of the
Proceeding, (iii) after a Change in Control (other than a Change in Control
approved by a majority of the directors on the Board who were directors
immediately prior to such Change in

 

 

Control), the employment of counsel by Indemnitee that has been approved by
Independent Counsel, or (iv) the Company shall not in fact have employed counsel
to assume the defense of such Proceeding, in each of which cases all Expenses of
the Proceeding shall be borne by the Company. The Company shall not be entitled
to assume the defense of any Proceeding brought by or on behalf of the Company
or as to which Indemnitee shall have made the determination provided for in
(ii), (iii) and (iv) above.

 

(c) Settlement of Claims. The Company shall not be liable to indemnify
Indemnitee under this Agreement or otherwise for any amounts paid in settlement
of any Proceeding effected without the Company’s written consent, such consent
not to be unreasonably withheld; provided, however, that if a Change in Control
has occurred (other than a Change in Control approved by a majority of the
directors on the Board who were directors immediately prior to such Change in
Control), the Company shall be liable for indemnification of Indemnitee for
amounts paid in settlement if the Independent Counsel has approved the
settlement. The Company shall not settle any Proceeding in any manner that would
impose any penalty or limitation on Indemnitee without Indemnitee’s prior
written consent. The Company shall promptly notify Indemnitee once the Company
has received an offer or intends to make an offer to settle any such Proceeding
and the Company shall provide Indemnitee as much time as reasonably practicable
to consider such offer; provided, however Indemnitee shall have no less than
three (3) business days to consider the offer. The Company shall not be liable
to indemnify the Indemnitee under this Agreement with regard to any judicial
award if the Company was not given a reasonable and timely opportunity, at its
expense, to participate in the defense of such action; the Company’s liability
hereunder shall not be excused if participation in the Proceeding by the Company
was barred by this Agreement.

 

6. Non-Exclusivity. Except with regard to the Company’s primary obligations, as
set forth in Section 10 hereof, the rights of Indemnitee hereunder shall be in
addition to any other rights Indemnitee may have under the Company’s Articles of
Incorporation, Bylaws, applicable law, or otherwise; provided, however, that
this Agreement shall supersede any prior indemnification agreement between the
Company and the Indemnitee. To the extent that a change in applicable law
(whether by statute or judicial decision) permits greater indemnification than
would be afforded currently under the Company’s Certificate of Incorporation,
Bylaws, applicable law, or this Agreement, it is the intent of the parties that
Indemnitee enjoy by this Agreement the greater benefits so afforded by such
change without any further action by the parties hereto.

 

7. Liability Insurance.

 

(a) The Company hereby covenants and agrees that, so long as the Indemnitee
shall continue to serve as an agent of the Company and thereafter so long as the
Indemnitee shall be subject to any possible proceeding by reason of the fact
that the Indemnitee was an agent of the Company, the Company, subject to
Section 7(b), shall use reasonable efforts to obtain and maintain in full force
and effect directors’ and officers’ liability insurance (“D&O Insurance”) in
reasonable amounts from established and reputable insurers and Indemnitee shall
be a covered party under such insurance to the maximum extent of the coverage
available for any director or officer of the Company.

 

(b) Notwithstanding the foregoing, the Company shall have no obligation to
obtain or maintain D&O Insurance if the Company determines in good faith that
such insurance is not reasonably available, the premium costs for such insurance
are disproportionate to the amount of coverage provided, or the coverage is
reduced by exclusions so as to provide an insufficient benefit.

 

8. Amendment of this Agreement. No supplement, modification, or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
binding unless in the form of a writing signed by the party against whom
enforcement of the waiver is sought, and no such waiver shall operate as a
waiver of any other provisions hereof (whether or not similar), nor shall such
waiver constitute a continuing waiver. Except as specifically provided herein,
no failure to exercise or any delay in exercising any right or remedy hereunder
shall constitute a waiver thereof.

 

9. Subrogation. Except with regard to the Company’s primary obligations, as set
forth in Section 10 hereof, in the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all papers required and shall do
everything that may be

 

 

necessary to secure such rights, including the execution of such documents
necessary to enable the Company effectively to bring suit to enforce such
rights.

 

10. No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any claim made against
Indemnitee to the extent Indemnitee has otherwise received payment (under any
insurance policy, Bylaw, or otherwise) of the amounts otherwise indemnifiable
hereunder; provided, however, that (a) the Company hereby agrees that its
obligations to Indemnitee under this Agreement or any other agreement or
undertaking to provide advancement, indemnification or both to Indemnitee are
primary. In addition, the Company hereby unconditionally and irrevocably waives,
relinquishes, releases, and covenants and agrees not to exercise, any rights
that the Company may now have or hereafter acquires against the Indemnitee that
arise from or relate to contribution, subrogation or any other recovery of any
kind under this Agreement or any other indemnification agreement (whether
pursuant to the Bylaws or Articles or another contract). The Company and
Indemnitee hereby agree that this Section 10 shall be deemed exclusive and shall
be deemed to modify, amend and clarify any right to indemnification or
advancement provided to Indemnitee under any other contract, agreement or
document with the Company.

 

11. Binding Effect. This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof. This Agreement shall
be binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors (including any direct or indirect
successor by purchase, merger, consolidation, or otherwise to all or
substantially all of the business and/or assets of the Company), assigns,
spouses, heirs, and personal and legal representatives. The indemnification
provided under this Agreement shall continue as to Indemnitee for any action
taken or not taken while serving in an indemnified capacity pertaining to an
Indemnifiable Event even though he may have ceased to serve in such capacity at
the time of any Proceeding.

 

12. Severability. If any provision (or portion thereof) of this Agreement shall
be held by a court of competent jurisdiction to be invalid, void, or otherwise
unenforceable, the remaining provisions shall remain enforceable to the fullest
extent permitted by law. Furthermore, to the fullest extent possible, the
provisions of this Agreement (including, without limitation, each portion of
this Agreement containing any provision held to be invalid, void, or otherwise
unenforceable, that is not itself invalid, void, or unenforceable) shall be
construed so as to give effect to the intent manifested by the provision held
invalid, void, or unenforceable.

 

13. Third-Party Beneficiary. Independent Counsel is express third-party
beneficiaries of this Agreement, and may specifically enforce the Company’s
obligations hereunder (including, but not limited to, the obligations specified
in Section 10 hereof) as though a party hereunder.

 

14. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Texas applicable to
contracts made and to be performed in such state without giving effect to its
principles of conflicts of laws.

 

15. Consent to Jurisdiction. The Company and Indemnitee hereby irrevocably
(i) agree that any action or proceeding arising out of or in connection with
this Agreement shall be brought only in the State of Texas, County of Denton,
(ii) consent to submit to the exclusive jurisdiction of the State of Texas,
County of Denton, for purposes of any action or proceeding arising out of or in
connection with this Agreement, and (iii) waive any objection to the venue of
any such action or proceeding in the State of Texas, County of Denton.

 

16. Notices. All notices, demands and other communications required or permitted
hereunder shall be made in writing and shall be deemed to have been duly given
if delivered by hand, against receipt or mailed, postage prepaid, certified or
registered mail, return receipt requested and addressed to the Company at:

 

 

 

 

CareView Communications, Inc.

Attn: Steven G. Johnson, President

405 State Highway 121, Suite B-240

Lewisville, TX 75067

 

and to Indemnitee at:

 

Samuel A. Greco

4405 Dade Drive

Flower Mound, TX 75028

 

Notice of change of address shall be effective only when given in accordance
with this Section. All notices complying with this Section shall be deemed to
have been received on the date of hand delivery or on the third business day
after mailing.

 

17. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

(Signature page follows)

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Agreement as of the day specified above.

 

 

     CAREVIEW COMMUNICATIONS, INC.         By: /s/ Steven G. Johnson      Steven
G. Johnson         President            /s/ Samuel A. Greco      Samuel A.
Greco, an individual