U.S. WIRELESS DATA, INC.
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made and entered
into as of this 3rd day of May, 1999, by and between U.S. WIRELESS DATA, INC., a
Colorado corporation (the "Company"), and Xxxx Xxxxxxx Xxxxxxx ("Indemnitee").
WHEREAS, Indemnitee, to be a member of the Board of Directors and an
officer as of the next Board meeting and to be an employee of the
Company as of this date, performs a valuable service in such capacity
for the Company;
WHEREAS, the stockholders of the Company have adopted Bylaws, as
amended (the "Bylaws") providing for the indemnification of the
officers, directors, employees and agents of the Company to the maximum
extent authorized by the Colorado Corporation Code, as amended (the
"CCC");
WHEREAS, the Bylaws, the Articles of Incorporation of the Company, as
amended (the "Articles of Incorporation") and the CCC, by their
non-exclusive nature, permit contracts between the Company and the
members of its Board of Directors, officers, employees and/or agents
with respect to indemnification of such directors, officers, employees
or agents;
WHEREAS, in accordance with the authorization as provided by the CCC,
the Company has purchased and presently maintains a policy or policies
of Directors and Officers Liability Insurance (as modified in
accordance with this Agreement, the "D&O insurance") covering certain
liabilities which may be incurred by its [directors and officers] in
the performance of their duties as directors and officers of the
Company;
WHEREAS, in order to induce Indemnitee to agree to serve as a member of
the Board of Directors and officer and employee of the Company, and to
enter into the Company's Employment Agreement with Indemnitee, the
Company has determined and agreed to enter into this contract with
Indemnitee.
NOW, THEREFORE, in consideration of Indemnitee's service as a director,
officer, employee or agent after the date hereof, and for other good
and valid consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
1. Indemnification of Indemnitee. Without regard to any limitations,
restrictions or standards in this Agreement or any document or any other matter
relating to this Agreement, the Company hereby agrees and hereby reiterates and
confirms its obligation to hold harmless and indemnify Indemnitee and to advance
expenses to or on behalf of Indemnitee to the fullest extent authorized or
permitted by the provisions of the CCC, as now or hereinafter amended from time
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to time, and/or the Bylaws, as now or as may hereinafter be amended from time to
time in accordance with this Agreement. All indemnification and the advancement
of expenses in favor of Indemnitee authorized or permitted by the By-Laws, as
now or as hereinafter may be amended in accordance with this Agreement, and the
CCC, as now or hereinafter amended, is mandatory and not permissive. This
Agreement has no adverse effect on the Indemnitee's right to indemnification or
the advancement of expenses under the CCC, as now or hereinafter amended from
time to time, and/or the Bylaws, as now or as may hereinafter be amended from
time to time in accordance with this Agreement, and/or the D&O insurance, and
this Agreement is not necessary to create or enforce such rights, although it
can, in the discretion of Indemnitee, be used for such purpose. An intent of
this Agreement is to encourage and induce Indemnitee to become a director,
officer and employee of the Company by providing Indemnitee with the maximum
rights and remedies permitted by applicable law with respect to indemnification
and the advancement of expenses, it being understood that Indemnitee believes
that serving in such capacities involves certain risks and he would not agree to
serve in any such capacities absent such protections.
2. Additional Indemnity.
(a) Subject only to the exclusions set forth in Section 3
hereof, the Company hereby further agrees, as an obligation which is independent
and separate from its obligations with respect to indemnification and the
advancement of expenses under the D&O insurance, the CCC and other applicable
law, as now or hereinafter amended, Section 1 hereof and the Bylaws, as now or
hereinafter may be amended from time to time in accordance with this Agreement,
as the case may be, to promptly hold harmless and indemnify Indemnitee against
any and all costs, expenses (including, without limitation, attorneys' and other
professionals' fees and expenses, costs of investigation and costs of
attachments and bonds), witness fees, disbursements, decrees, judgments, fines,
penalties, assessments, losses, liabilities, charges, claims, damages, interest,
and amounts paid in settlement or otherwise actually incurred by Indemnitee and
all acts, omissions, neglect, breaches of duties, including, without limitation,
any actual or alleged error or misstatement, in connection with any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative or by way of arbitration or other dispute
resolution mechanism (including, without limitation, an action by or in the
right of the Company and any appeal) to which Indemnitee is, was or at any time
becomes a party, a witness or otherwise involved with, or is threatened to be
made a party, a witness or otherwise involved with, in connection with, arising
from or by reason of or relating to the fact that, Indemnitee is, was or at any
time becomes a director, officer, employee or agent of the Company or any
subsidiary of the Company, or is or was serving or at any time serves at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise or is, was or at any becomes involved with the Company (for purposes
of clarification, the above indemnification covers Indemnitee's involvement in
actions, suits or proceedings commenced prior to May 3, 1999 or arising out of
events occurring prior to May 3, 1999); and
(b) The Company hereby further agrees that it shall not amend,
modify or restate, directly or indirectly, its Articles of Incorporation or
Bylaws, without Indemnitee's prior
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written consent, in any way which would have the effect of limiting
indemnification or the advancement of expenses for officers, directors,
employees and/or agents provided for in the Bylaws or the CCC, as now or
hereinafter amended.
(c) The Company hereby further agrees that it shall not amend
or change its existing or future D&O insurance or permit it to expire or lapse
or not be in effect or fail to pay premiums without Indemnitee's prior written
consent, and shall provide Indemnitee evidence of such D&O insurance coverage
and payment of its premiums promptly, from time to time, upon request of
Indemnitee.
3. Limitations on Additional Indemnity.
No indemnity created pursuant to Section 2(a) hereof shall be
paid by the Company:
i) As a direct result of any suit in which final
judgment (not subject to appeal) is rendered by a court of competent
jurisdiction 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 Securities Exchange Act of 1934 and
amendments to such Section;
ii) As a direct result of Indemnitee's conduct on
behalf of the Company which is finally adjudged by a court of competent
jurisdiction (not subject to appeal) to have been knowingly fraudulent or to
constitute willful misconduct;
iii) If a final decision (not subject to appeal) by a
court having jurisdiction in the matter shall determine that such
indemnification is not lawful; and
iv) To the extent such indemnity would result in a
double recovery with respect to such losses. Failure to receive or pursue any
amounts or recoveries under any insurance, the CCC, the Bylaws or otherwise
shall not reduce or limit or constitute a defense, offset or set-off in respect
of Indemnitee's rights under this Agreement and failure to receive or pursue any
amounts or recoveries under this Agreement shall not reduce or limit or
constitute a defense, offset or set-off in respect of Indemnitee's rights under
the CCC, the By-Laws or otherwise.
4. Contribution. If the indemnification provided in Sections 1 and 2
hereof and/or the CCC, as now or hereinafter amended, the Bylaws, as now or
hereinafter may be amended from time to time in accordance with this Agreement,
and/or the D&O insurance or otherwise, is unavailable in part or in whole by
reason of a Court decision described in Section 3(a)(iii) hereof based on
grounds other than any of those set forth in paragraphs (i) and (ii) of Section
3(a) hereof, then in respect of any threatened, pending or completed action,
suit or proceeding or other indemnifiable matter, the Company shall contribute
to the amount of costs, expenses (including, without limitation, attorneys' and
other professionals' fees and expenses, costs of investigation and costs of
attachments and bonds), witness fees, disbursements, decrees,
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judgments, fines, penalties, assessments, losses, liabilities, charges, claims,
damages, interest, and amounts paid in settlement or otherwise actually incurred
and paid or payable by Indemnitee in such proportion as is appropriate to
reflect (i) the relative benefits received by the Company on the one hand and
Indemnitee on the other hand from the transaction or matter from which such
action, suit or proceeding or other indemnifiable matter arose, and (ii) the
relative fault of the Company and all other directors, officers, agents and
employees on the one hand and of Indemnitee on the other in connection with the
events which resulted in such costs, expenses (including, without limitation,
attorneys' and other professionals' fees and expenses, costs of investigation
and costs of attachments and bonds), witness fees, disbursements, decrees,
judgments, fines, penalties, assessments, losses, liabilities, charges, claims,
damages, interest, and amounts paid in settlement or otherwise, as well as any
other relevant equitable considerations. The relative fault of the Company and
all other officers, directors, agents and employees on the one hand and of
Indemnitee on the other shall be determined by reference to, among other things,
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent the circumstances resulting in such costs, expenses,
(including, without limitation, attorneys' and other professionals' fees and
expenses and costs of investigation and costs of attachments and bonds), witness
fees, disbursements, decrees, judgments, fines, penalties, assessments, losses,
liabilities, charges, claims, damages, interest, settlement or other amounts.
The Company agrees that it would not be just and equitable if contribution
pursuant to this Section 4 were determined by pro rata allocation or any other
method of allocation which does not take account of the foregoing equitable
considerations.
5. Notification and Defense of Claim. Not later than thirty (30) days
after receipt by Indemnitee of notice of the commencement of any action, suit or
proceeding, Indemnitee shall, only if a claim in respect thereof is to be made
against the Company under Section 2(a) of this Agreement, notify the Company of
the commencement thereof; but Indemnitee's omission to notify or delay in
notifying the Company will not relieve the Company from any liability which it
may have to Indemnitee under Section 2(a) of this Agreement if the Company is
not materially prejudiced by the failure to notify or delay in notifying the
Company and shall have no effect on Company's indemnification obligations under
Section 1 of this Agreement, the CCC, the By-Laws or other than under this
Agreement. Notices under this Section 5 shall be deemed given upon dispatch. The
Company shall promptly acknowledge the notice from the Indemnitee. With respect
to any such action, suit or proceeding as to which Indemnitee notifies the
Company of the commencement thereof:
(a) The Company will be entitled to participate therein at its
own expense subject to Indemnitee's control where Indemnitee is also involved in
the defense of any action, suit or proceeding.
(b) Except as otherwise provided below, upon request by
Indemnitee, the Company shall, and otherwise the Company may, assume the defense
thereof with counsel reasonably satisfactory to Indemnitee. After the Company
has assumed the defense thereof, the Company will not be liable to Indemnitee
under this Agreement for any legal or other expenses subsequently incurred by
Indemnitee in connection with the defense thereof, other than reasonable costs
of investigation or as otherwise provided below. Indemnitee shall have the right
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to employ its own counsel in such action, suit or proceeding, but the fees and
expenses of such counsel incurred after the Company's assumption of the defense
thereof shall be at the expense of Indemnitee unless (i) the employment of
counsel by Indemnitee has been authorized by the Company; (ii) Indemnitee shall
have reasonably concluded that there may be a conflict of interest between the
Company and Indemnitee in the conduct of the defense of such action; (iii) the
Company shall not in fact have employed counsel to assume the defense of such
action or such counsel does not at any time diligently conduct such defense; or
(iv) the Company's counsel is not reasonably satisfactory to Indemnitee, in each
of which cases (i.e. (i) through (iv) above) the fees and expenses of Indemnitee
and Indemnitee's separate counsel shall be paid by the Company. The Company
shall not be entitled to assume the defense of any action, suit or proceeding
brought by or on behalf of the Company or as to which Indemnitee shall have made
the conclusion provided for in (ii), (iii) or (iv) above.
(c) The Company shall not be liable to indemnify Indemnitee
under Section 2(a) of this Agreement for any amounts paid in settlement of any
action or claim effected without its written consent which shall be deemed given
if any request for consent is not responded to in writing within five days after
notice from Indemnitee to Company; provided, however, that no such consent shall
be required if 5(b)(i), (ii), (iii) or (iv) applies. The Company shall be
permitted to settle any action except that it shall not settle any action or
claim in any manner which would impose any penalty, sanctions, fines or
criminal, monetary or other penalties or limitation on Indemnitee without
Indemnitee's written consent or to the effect any of 5(b)(i) through (iv)
applies. Neither the Company nor Indemnitee will unreasonably withhold its
consent to any proposed settlement.
6. Advancement and Repayment of Expenses. Without limiting any rights
of Indemnitee under law or the Bylaws, as now or hereinafter may be amended from
time to time in accordance with this Agreement, or the D&O insurance:
(a) In the event that Indemnitee employs his or her own
counsel pursuant to Sections 5(b)(i) through (iv) above, the Company shall
advance to Indemnitee, prior to any final disposition of any threatened or
pending action, suit or proceeding, whether civil, criminal, administrative or
investigative or by way of arbitration or other dispute resolution mechanism,
any and all reasonable expenses (including, without limitation, legal and other
professionals' fees and expenses) incurred in investigating or defending any
such action, suit or proceeding within ten (10) days after receiving from
Indemnitee copies of invoices or other reasonable evidence of such expenses
presented to Indemnitee for such expenses.
(b) Indemnitee agrees that Indemnitee will reimburse the
Company for all reasonable expenses advanced by the Company to Indemnitee in
investigating or defending any civil or criminal action, suit or proceeding
against Indemnitee in the event and only to the extent it shall be ultimately
determined by a final judicial decision (from which there is no right of appeal)
that Indemnitee is not entitled, under the provisions of this Agreement, the
CCC, the Bylaws or otherwise to be indemnified by the Company for such expenses.
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7. Enforcement.
(a) The Company expressly confirms and agrees that it has
entered into this Agreement and assumed the obligations imposed on the Company
hereby in order to induce Indemnitee to continue as a director, officer and
employee of the Company, and acknowledges that Indemnitee is relying upon this
Agreement in continuing in such capacity, although continuing in any such
capacity is not necessary for the indemnifications herein to be relied upon as
set forth in this Agreement. There are no conditions to the enforcement by
Indemnitee of this Agreement. Company's obligations under this Agreement are not
subject to offset or set-off for any reason.
(b) In the event Indemnitee brings any action to enforce
rights or to collect moneys due under this Agreement and is successful in such
action, the Company shall reimburse Indemnitee for all Indemnitee's expenses and
reasonable fees, including, without limitation, attorneys' and other
professionals' fees and expenses, in bringing and pursuing such action.
8. Subrogation. Only in the event of full payment by Company in respect
of any claim under this Agreement, the Company shall be subrogated to the extent
of such full payment to all of the rights of recovery of Indemnitee in respect
of such claim, who, at the Company's expense, shall execute all documents
required and shall do all acts that may be necessary to secure such rights and
to enable the Company effectively to bring suit to enforce such rights.
9. Continuation of Obligations; Retroactivity. All agreements and
obligations of the Company contained in this Agreement shall continue
indefinitely. Without suggestion that Indemnitee could have any liability
therefore, notwithstanding anything contained in this Agreement, the agreements
and obligations of the Company contained herein shall extend not only during and
after Indemnitee's service for the Company but also to any and all activities
undertaken by the Company and its directors, officers, agents and employees
before Indemnitee's tenure with the Company from the Corporation's date of
incorporation through and including the date hereof.
10. Survival of Rights. The rights conferred on Indemnitee by this
Agreement shall continue after Indemnitee has ceased to be a director, officer,
employee or other agent of the Company, and continue indefinitely.
11. Non-Exclusivity of Rights. The rights conferred on Indemnitee by
this Agreement shall not be exclusive of any other right which Indemnitee may
have or hereafter acquire under any statute, provision of the Company's Articles
of Incorporation or Bylaws, agreement, vote of stockholders or directors, or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding office. Indemnitee may exercise any and all of
such rights as frequently as he desires and in any order he chooses, all such
rights being cumulative and may be executed concurrently, successively, or
otherwise. For purposes of clarification, the parties agree that if the CCC is
amended to enhance rights of indemnitees and/or directors, officers, employees
and/or agents with respect to indemnification and/or the advancement of
expenses, that Indemnitee shall, without further action, be entitled to such
enhanced rights and the Company shall, without further action, be bound to such
increased obligations.
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12. Presumptions. For purposes of this Agreement, to the fullest extent
permitted by applicable law, the termination of any claim, action, suit or
proceeding, by judgment, order, settlement (whether with or without court
approval) or conviction, or upon a plea of nolo contendere, or its equivalent,
shall not create a presumption that Indemnitee did not meet any particular
standard of conduct or have any particular belief or that a court has determined
that indemnification is not permitted by applicable law.
13. Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws, such provision
shall be fully severable, and this Agreement shall be construed and enforced as
if such illegal, invalid or unenforceable provisions had never comprised a part
hereof, and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance therefrom. Furthermore, in lieu of
such illegal, invalid or unenforceable provision there shall be added
automatically as a part of this Agreement a provision as similar in terms to the
illegal, invalid or unenforceable provision as may be possible which is legal,
valid and enforceable.
14. Governing Law. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Colorado without giving effect to
conflict of laws principles.
15. Binding Effect. This Agreement shall be binding upon Indemnitee and
upon the Company, its successors and assigns (including, without limitation, any
transferee of all or substantially all of the Company's assets or any successor
by merger or operation of law), and shall inure to the benefit of Indemnitee,
and his heirs, personal representatives, successors, estates and assigns and to
the benefit of the Company, its successors and assigns. The Company shall cause
any successor or assign to adopt at least as favorable protection as Company in
favor of Indemnitee with regard to indemnification and the advancement of
expenses.
16. Indemnitee was not Member of Board on Date of Agreement; Indemnitee
did not Authorize Agreement. The parties agree that Indemnitee is not a member
of the Company's Board of Directors on the date of this Agreement and did not in
any respect authorize or participate in the decision of the Board of Directors
of the Company to authorize the execution or delivery or substance or any aspect
of this Agreement.
17. Amendment and Termination. No amendment, modification, termination
or cancellation of this Agreement shall be effective unless it is in writing and
is signed by both parties hereto.
18. Further Assurances. Each of the parties shall cooperate and take
such actions and execute all further instruments and documents at any time, as
any party may reasonably request to effect the terms and purposes of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on and as of the day and year first above written.
U.S. WIRELESS DATA, INC.
a Colorado corporation
By: /s/ Xxx Xxxxxxxxx
-------------------------------
Xxx Xxxxxxxxx
President
INDEMNITEE
/s/ Xxxx X. Xxxxxxx
---------------------------------
Xxxx Xxxxxxx Xxxxxxx
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