INDEMNIFICATION AGREEMENT
This Indemnification Agreement is entered into as of April --, 1999,
between Cavion Technologies, Inc. (the "Company"), and ------------------
("Indemnitee").
The Company has determined that, due to the legal risks incurred by
persons serving as officers and directors of corporations in the present
business environment, it is in the best interest of the Company to offer
contractual protection against such risks to its officers and directors,
in order to attract the most qualified individuals to serve as officers
and directors. In order to induce Indemnitee to serve as ---------------
of the Company, the Company has agreed to provide Indemnitee with the
protections set forth in this agreement. Indemnitee has agreed to serve
the Company as -------------------------- on the condition that the
Company provide Indemnitee with such protections. Therefore, in
consideration of the foregoing and the terms of this agreement, the
Company and Indemnitee hereby agree as follows:
1. DEFINITIONS. For purposes of this agreement, the following terms
shall have the following meanings:
"AGENT OF THE COMPANY" means any person who (1) is or was a director,
officer, employee, fiduciary or other agent of the Company or a
Subsidiary, or (2) is or was serving at the request of, for the
convenience of or to represent the interest of the Company or a
Subsidiary as a director, officer, employee, fiduciary or other agent
of another foreign or domestic corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise.
"CHANGE OF CONTROL" means any of the following events: (1) the
acquisition by a third person, including a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, of shares of
the Company having (together with any shares of the Company held by
such person at the time of such acquisition) 30% or more of the total
number of votes that may be cast for the election of directors of the
Company, (2) shareholder approval of the acquisition of the Company,
or substantially all of its assets, by another entity or of a merger,
reorganization, consolidation or other business combination to which
the Company is a party or (3) the election during any period of
twelve months or less of 33% or more of the directors of the Company
where such directors were not in office immediately prior to such
period.
"CORPORATE STATUS" means the status of an Agent of the Company, and
includes anything done or not done by an Agent of the Company in any
such capacity.
"DISINTERESTED DIRECTOR" means a director of the Company who is not
and was not a party to the Proceeding in respect of which
indemnification is sought by Indemnitee.
"EXPENSES" includes all direct and indirect costs of any type or
nature whatsoever (including, without limitation, all attorneys' fees
and related disbursements, other out-of-pocket costs and reasonable
compensation for time spent by Indemnitee for which Indemnitee is not
otherwise specifically compensated by the Company or any third party)
actually and reasonably incurred by Indemnitee either in connection
with the investigation, defense, adjudication, settlement or appeal
of a Proceeding or in connection with establishing or enforcing a
right to indemnification or advancement of Expenses under this
agreement, the Articles of Incorporation or Bylaws of the Company,
applicable law or otherwise; provided, however, that Expenses shall
not include judgments, fines, penalties or amounts paid in settlement
of a Proceeding.
"GOOD FAITH" means in good faith and (1) with respect to actions
taken in the capacity of a director of the Company, in a manner
Indemnitee reasonably believed to be in the best interests of the
Company, (2) with respect to all other actions, in a manner
Indemnitee reasonably believed to be not opposed to the best
interests of the Company, and (3) with respect to any criminal
Proceeding, with no reasonable cause to believe Indemnitee's conduct
was unlawful. A director of the Company shall be deemed not to have
acted in Good Faith with respect to a Proceeding charging improper
personal benefit to the director if he or she is finally adjudged in
such Proceeding to be liable on the basis that personal benefit was
improperly received by him or her.
"INDEPENDENT COUNSEL" means a lawyer or law firm that is experienced
in matters of corporation law and neither presently is, nor in the
past three years has been, retained to represent (1) the Company or
Indemnitee in any matter material to either such party (except
representation as Independent Counsel under this agreement or any
similar agreement), or (2) any other party to the Proceeding giving
rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term "Independent Counsel" shall not include any
person who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine
Indemnitee's rights under this agreement.
"PROCEEDING" means any threatened, pending or completed action, suit
or other proceeding whether civil, criminal, administrative,
investigative or of any other type whatsoever.
"SUBSIDIARY" means any corporation of which more than 50% of the
outstanding voting securities is owned directly or indirectly by the
Company, by the Company and one or more other Subsidiaries, or by one
or more other Subsidiaries.
2. INDEMNIFICATION.
(a) GENERAL. In connection with any Proceeding, the Company shall
indemnify and advance Expenses to Indemnitee to the fullest
extent permitted by applicable law in effect on the date hereof
and to such greater extent as applicable law may thereafter from
time to time permit. Without limiting the generality of the
foregoing, the Company shall indemnify and advance Expenses to
Indemnitee as provided in this agreement.
(b) PROCEEDINGS OTHER THAN PROCEEDINGS BY OR IN THE RIGHT OF THE
COMPANY. If, by reason of Indemnitee's Corporate Status,
Indemnitee is, or is threatened to be made, a party to any
Proceeding, other than a Proceeding by or in the right of the
Company, Indemnitee shall be indemnified against Expenses,
judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by Indemnitee or on
Indemnitee's behalf in connection with such Proceeding or any
claim, issue or matter therein, if Indemnitee acted in Good
Faith.
(c) PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. If, by reason of
Indemnitee's Corporate Status, Indemnitee is, or is threatened
to be made, a party to any Proceeding brought by or in the right
of the Company to procure a judgment in its favor, Indemnitee
shall be indemnified against Expenses actually and reasonably
incurred by Indemnitee or on Indemnitee's behalf in connection
with such Proceeding if Indemnitee acted in Good Faith.
Notwithstanding the foregoing, no such indemnification shall be
made in respect of any claim, issue or matter in such Proceeding
as to which Indemnitee shall have been adjudged to be liable to
the Company if applicable law prohibits such indemnification;
provided, however, that indemnification shall nevertheless be
made in such event to the extent that the court in which such
Proceeding shall have been brought or is pending shall
determine.
(d) INDEMNIFICATION OF A PARTY WHO IS WHOLLY OR PARTLY SUCCESSFUL.
If Indemnitee is, by reason of Indemnitee's Corporate Status, a
party to and is successful, on the merits or otherwise, in any
Proceeding, Indemnitee shall be indemnified to the maximum
extent permitted by law, against all Expenses, judgments,
penalties, fines, and amounts paid in settlement, actually and
reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection therewith. For purposes of this Section 2(d) and
without limitation, the termination of any claim, issue or
matter in such a Proceeding by dismissal, with or without
prejudice, shall be deemed to be a successful result as to such
claim, issue or matter, so long as there has been no finding
(either adjudicated or pursuant to Section 4) that Indemnitee
did not act in Good Faith.
(e) INDEMNIFICATION FOR EXPENSES OF A WITNESS. If Indemnitee is, by
reason of Indemnitee's Corporate Status, a witness in any
Proceeding, Indemnitee shall be indemnified against all expenses
actually and reasonably incurred by Indemnitee or on
Indemnitee's behalf in connection therewith.
3. ADVANCEMENT OF EXPENSES. The Company shall advance all reasonable
Expenses which, by reason of Indemnitee's Corporate Status, were
incurred by or on behalf of Indemnitee in connection with any
Proceeding, within twenty days after the receipt by the Company of a
statement or statements from Indemnitee requesting such advance or
advances, whether prior to or after final disposition of such
Proceeding. Such statement or statements shall reasonably detail the
Expenses incurred by Indemnitee and shall be accompanied by an
undertaking by or on behalf of Indemnitee to repay any Expenses if it
is ultimately determined that Indemnitee is not entitled to be
indemnified against such Expense. Any undertaking to repay pursuant
to this Section 3 shall be unsecured and interest free.
4. PROCEDURES FOR DETERMINATION OF GOOD FAITH.
(a) METHOD OF DETERMINATION. If required by Colorado Revised
Statutes Section 0-000-000, a determination with respect to
Indemnitee's Good Faith shall be made as follows:
(1) If a Change of Control has occurred, unless Indemnitee
shall request in writing that such determination be made in
accordance with Section 4(a)(2) below, the determination
shall be made by Independent Counsel in a written opinion
to the Board, a copy of which shall be delivered to
Indemnitee.
(2) If a Change of Control has not occurred, the determination
shall be made by the Board by a majority vote of a quorum
consisting of Disinterested Directors. In the event that a
quorum of the Board consisting of Disinterested Directors
is not obtainable or such quorum of Disinterested Directors
so directs, the determination shall be made by Independent
Counsel in a written opinion to the Board, a copy of which
shall be delivered to Indemnitee.
(b) SELECTION AND PAYMENT OF INDEPENDENT COUNSEL. In the event that
the determination of Good Faith is to be made by Independent
Counsel pursuant to Section 4(a), the Independent Counsel shall
be selected by Indemnitee (unless Indemnitee shall request that
such selection be made by the Board), and Indemnitee shall give
written notice to the Company advising it of the identity of the
Independent Counsel so selected. The Company shall pay any and
all reasonable fees and expenses of Independent Counsel incurred
by such Independent Counsel in connection with acting pursuant
to this agreement.
(c) AUTHORIZATION OF INDEMNIFICATION. In the event that a
determination is made by Independent Counsel that Indemnitee
acted in Good Faith, the Board shall, within fifteen (15) days
after receipt of such determination, evaluate the reasonableness
of the Expenses as to which indemnification is sought, and shall
authorize payment of such Expenses as it determines are
reasonable, and of all other amounts as to which indemnification
is sought. The evaluation of Expenses shall be made in the
Board's reasonable good faith judgment, and shall be subject to
de novo review pursuant to Section 7(b).
(d) FAILURE TO MAKE DETERMINATION. In the event that the Board
fails or refuses to make a determination pursuant to Section
4(a)(2), or fails or refuses to authorize indemnification
following a determination by Independent Counsel that Indemnitee
has acted in Good Faith, within fifteen (15) days after receipt
by the Company of the request for indemnification or the
determination of Independent Counsel, as applicable, such
failure or refusal shall be treated as a determination that
Indemnitee is entitled to the indemnification sought.
(e) PAYMENT. If the Board determines that Indemnitee has acted in
Good Faith, payment to Indemnitee shall be made within ten (10)
days after such determination. If Independent Counsel
determines that Indemnitee has acted in Good Faith, payment to
Indemnitee shall be made within ten (10) days after
authorization pursuant to Section 4(c).
5. PROCEEDINGS INVOLVING THIS AGREEMENT. Notwithstanding any other
provision of this agreement to the contrary, the Company shall
indemnify and hold harmless Indemnitee against all Expenses incurred
by Indemnitee in connection with any proceeding between the Company
and Indemnitee involving the interpretation or enforcement of the
rights of Indemnitee under this agreement, unless a court of
competent jurisdiction determines that each of the claims and/or
defenses of Indemnitee in any such Proceeding was frivolous or made
in bad faith.
6. NOTICE OF PROCEEDINGS. Promptly after receipt by Indemnitee of
notice of the commencement or the threat of commencement of any
Proceeding with respect to which Indemnitee believes that Indemnitee
may be entitled to indemnification or the advancement of Expenses
under this agreement, Indemnitee shall notify the Company in writing
of the commencement or the threat of commencement thereof; provided,
however, that Indemnitee's failure to provide any such notice shall
not relieve the Company of any of its obligations under this
agreement. Indemnitee shall have the right to retain control of the
defense of such Proceeding.
7. DISPUTES.
(a) ADJUDICATION. In the event of a dispute arising under this
agreement, Indemnitee, at Indemnitee's option, shall be entitled
to an adjudication in an appropriate court of the State of
Colorado, or binding arbitration to be conducted in Denver,
Colorado by a single arbitrator pursuant to the rules of the CPR
Institute for Dispute Resolution (or other rules as agreed).
(b) DE NOVO REVIEW. In the event that the Board fails or refuses to
authorize payment of indemnification in the amount sought
following a determination pursuant to Section 4 of this
agreement that Indemnitee has acted in Good Faith, any judicial
proceeding or arbitration commenced pursuant to this Section 7
shall be conducted in all respects as a de novo trial or
arbitration on the merits, and Indemnitee shall not be
prejudiced by reason of that action of the Board.
8. LIMITATION OF ACTIONS AND RELEASE OF CLAIMS. No claim or cause of
action shall be asserted by or in the right of the Company or a
Subsidiary against Indemnitee or the spouse, heirs, estate, executors
or administrators of Indemnitee, after the expiration of two (2)
years from the date of the alleged act or omission of Indemnitee upon
which such claim or cause of action is based; provided, however, that
in the event that Indemnitee has fraudulently concealed the facts
underlying such claim or cause of action, no claim or cause of action
shall be asserted after the expiration of two (2) years from the
earlier of the date the Company or any Subsidiary discovers such
facts or the date the Company or any Subsidiary should have
discovered such facts by the exercise of reasonable diligence, and
any and all of such claims and causes of action of the Company or a
Subsidiary against Indemnitee shall be extinguished and deemed
released unless asserted by filing of a legal action within such
period.
9. NON-EXCLUSIVITY; OTHER PROVISIONS. The benefits and rights provided
to Indemnitee under this agreement shall not be deemed exclusive of
any other rights which Indemnitee may have under any law, the
Articles of Incorporation or Bylaws of the Company, other agreements
or otherwise.
10. INTERPRETATION. The parties hereto intend for this agreement to be
interpreted and enforced so as to provide indemnification and
advancement of Expenses to Indemnitee to the fullest extent which is
now or hereafter allowed by applicable law and, in the event that the
validity, legality or enforceability of any provision of this
agreement is in question, such provision shall be interpreted in a
manner such that the provision will be valid, legal and enforceable
to the greatest extent possible. For purposes of this agreement, the
termination of any 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 Indemnitee
is not entitled to indemnification or expense advance or that
indemnification or expense advance is not permitted by applicable
law.
11. CHANGE OF LAW. If Title 7, Article 109 of the Colorado Revised
Statutes, or any successor statute, is hereafter amended (the
"Amended Statute") in a manner that expands the authority of the
Company to indemnify or advance Expenses to Indemnitee, this
agreement shall thereupon be deemed modified to provide for
indemnification of and advancement of Expenses to Indemnitee to the
fullest extent allowed by the Amended Statute.
12. TERM OF INDEMNIFICATION. The term of this agreement and all
obligations of the Company hereunder shall continue during the period
Indemnitee is an Agent of the Company and shall continue thereafter
so long as Indemnitee is subject to any possible claim or threatened,
pending or completed action, suit or proceeding, whether civil,
criminal or investigative, by reason of the fact that Indemnitee was
serving as an Agent of the Company.
13. SEVERABILITY. If any provision of this agreement is held by a court
of competent jurisdiction to be invalid or unenforceable for any
reason whatsoever, the validity and enforceability of the remaining
provisions of this agreement shall not in any way be affected or
impaired thereby, and to the fullest extent possible the other
provisions of this agreement shall be construed so as to give effect
to the intent manifested by the provision held invalid or
unenforceable and to give effect to Section 10 hereof.
14. NOTICES. All notices under this Agreement will be in writing and
deemed given upon receipt, by (1) personal delivery, (2)
telephonically confirmed fax, (3) receipted courier service or (4)
certified or registered mail, return receipt requested, addressed to
the address shown on the signature page of this agreement (or any new
address provided by written notice). Refusal to accept delivery will
be deemed receipt.
15. GENERAL. This agreement may be executed in one or more counterparts,
each of which shall be an original but all of which shall constitute
one and the same agreement. The headings in this agreement are for
convenience and shall not limit the interpretation of the text. This
agreement shall be governed by the laws of the State of Colorado, as
applied to contracts between Colorado residents entered into and to
be performed entirely within Colorado. The terms of this agreement
shall bind, and shall inure to the benefit of, the successors and
assigns of the parties hereto. Except as expressly provided herein,
no modification or amendment of this agreement shall be binding
unless executed in writing by both parties. No waiver of any
provision of this agreement shall be deemed a continuing waiver or a
waiver of any other provision.
IN WITNESS WHEREOF, the Company and Indemnitee have executed this
Indemnification Agreement as of the date first given above.
CAVION TECHNOLOGIES, INC. INDEMNITEE
By:--------------------- ---------------------------------
Xxxxx X. Xxxxxx
President
Cavion Technologies, Inc. ---------------------------------
0000 Xxxxx Xxxxxx, Xxxxx 000 ---------------------------------
Xxxxxx, Xxxxxxxx 00000-0000 ---------------------------------
Attn: President ---------------------------------
Fax: 000-000-0000 ---------------------------------
Voice: 000-000-0000 ---------------------------------
