INDEMNIFICATION AGREEMENT
Exhibit
10.64
This
Indemnification Agreement (this “Agreement”) is made
as of this ____ day of _______, 200_, by and between Electronic Clearing House,
Inc., a Nevada corporation (the “Company”), and
____________, an individual
(“Indemnitee”).
RECITALS
WHEREAS,
the Articles of Incorporation (the “Articles”) and the
bylaws (the “Bylaws”) of the Company provide for the
indemnification of the officers and directors of the Company to the maximum
extent permitted by Chapter 78 of the Nevada Revised Statutes, as amended
(“Nevada Law”);
WHEREAS,
the Articles, the Bylaws and Nevada Law permit contracts between the
Company and the officers and directors of the Company with respect to
indemnification of such officers and directors;
WHEREAS,
in accordance with Nevada Law, the Company may purchase and maintain a policy
or
policies of directors’ and officers’ liability insurance covering certain
liabilities that may be incurred by its officers or directors in the performance
of their obligations to the Company;
WHEREAS,
the Company recognizes that corporate litigation against, and the difficulty
of
obtaining liability insurance for, the Company’s directors and officers impede
the Company’s ability to attract and retain the most capable and qualified
persons available for such positions; and
WHEREAS,
in order to induce Indemnitee to serve or continue to serve as an
officer and/or director of the Company, the Company desires that the Indemnitee
shall be indemnified and advanced expenses as set forth herein.
AGREEMENT
NOW,
THEREFORE, in consideration of Indemnitee’s service as an officer
and/or director of the Company after the date hereof, the Company and Indemnitee
hereby agree as follows:
1. Certain
Definitions. Capitalized terms used but not otherwise
defined in this Agreement shall have the meanings set forth below:
“Corporate
Status” means the fact that a person (i) is or was a director,
officer, employee or agent of the Company, or (ii) is or was serving at the
request of the Company as a director, officer, employee or agent of another
Enterprise. A Proceeding shall be deemed to have been brought by
reason of a person’s “Corporate Status” if it is brought because of the status
described in the preceding sentence or because of any action or inaction on
the
part of such person in connection with such status.
“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.
“Enterprise”
shall mean the Company and any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise in which Indemnitee is or
was
serving at the request of the Company as a director, officer, employee, agent
or
fiduciary.
“Expenses”
shall include all reasonable attorney’s fees, disbursements and retainers, court
costs, transcript costs, fees of experts, witness fees, travel and deposition
costs, printing and binding costs, telephone charges, postage, delivery service
fees and all other disbursements or expenses of the types customarily incurred
in connection with prosecuting, defending, preparing to prosecute or defend,
investigating, participating or being prepared to be a witness in a
Proceeding.
“Independent
Counsel” means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and neither currently is, nor in
the
past five (5) years has been, retained to represent: (i) the Company or
Indemnitee in any matter material to either such party (other than with respect
to matters concerning the Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements), or (ii) 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”
includes any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation, inquiry,
administrative hearing or any other actual, threatened or completed proceeding,
whether brought by or in the right of the Company or otherwise and whether
civil, criminal, administrative or investigative, in which Indemnitee was,
is or
will be involved as a party or otherwise, including one pending on or before
the
date of this Agreement; and excluding one initiated by an Indemnitee pursuant
to
Section 8 of this Agreement to enforce his rights under this
Agreement.
“Reviewing
Party” means the person or persons selected to make the
determination of the availability of indemnification pursuant to Section
6.3 hereof.
2. Indemnification.
2.1 Proceedings
Not By or In The Right Of the Company. The Company hereby
agrees to hold harmless and indemnify Indemnitee to the full extent authorized
or permitted by the provisions of Nevada Law, the Articles and the Bylaws,
as
such may be amended from time to time, if Indemnitee was or is a party or is
threatened to be made a party to any Proceeding, other than a Proceeding by
or
in the right of the Company, by reason of Indemnitee’s Corporate Status, against
all Expenses, judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by Indemnitee or on his/her behalf in
connection with such Proceeding if Indemnitee (i) is not liable pursuant to
Section 78.138 of Nevada Law or (ii) acted in good faith and in a manner he/she
reasonably believed to be in or not opposed to the best interests of the Company
and, with respect to any criminal Proceeding, had no reasonable cause to believe
his/her conduct was unlawful.
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2.2 Proceedings
By or In Right of the Company. The Company hereby agrees to
hold harmless and indemnify Indemnitee to the full extent authorized or
permitted by the provisions of Nevada Law, the Articles and the Bylaws, as
such
may be amended from time to time, if Indemnitee was or is a party or is
threatened to be made a party to any Proceeding by or in the right of the
Company, by reason of Indemnitee’s Corporate Status, against all Expenses
(including amounts paid in settlement and attorneys’ fees), actually and
reasonably incurred by Indemnitee or on his/her behalf in connection with such
Proceeding if Indemnitee (i) is not liable pursuant to Section 138 of Nevada
Law
or (ii) acted in good faith and in a manner he/she reasonably believed to be
in
or not opposed to the best interests of the Company; provided,
however, that, if applicable law so provides,
no
indemnification against such Expenses shall be in respect of any claim, issue
or
matter in such Proceeding as to which Indemnitee shall have been adjudged by
a
court of competent jurisdiction, after exhaustion of all appeals therefrom,
to
be liable to the Company or for amounts paid in settlement to the corporation
unless and only to the extent that the court in which the Proceeding was brought
or other court of competent jurisdiction determines upon application that in
view of all the circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnity for such Expenses as the court shall deem
proper.
2.3 Partial
Indemnification. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of the
Expenses, judgments, penalties, fines and amounts paid in settlement actually
and reasonably incurred by Indemnitee or on his/her behalf in connection with
a
Proceeding, but not, however, for the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion of the foregoing to which
Indemnitee is entitled.
2.4 Additional
Indemnification Rights. The Company hereby agrees to
indemnify the Indemnitee to the fullest extent from time to time permitted
by
law, notwithstanding that such indemnification is not specifically authorized
by
the other provisions of this Agreement, the Articles, the Bylaws or by
statute.
3. Advances
of Expenses.
3.1 The
Company shall advance all Expenses as they are incurred by or on behalf of
Indemnitee in connection with the investigation, defense, settlement or appeal
of any Proceeding, and prior to the final disposition of such Proceeding, upon
receipt of an undertaking by or on behalf of Indemnitee to repay such amount
if
it is ultimately determined by a court of competent jurisdiction that such
person is not entitled to be indemnified by the Company. Any advances and
undertakings to repay pursuant to this Section 3.1 shall be
unsecured and interest free and shall
provide that, if Indemnitee has commenced or thereafter commences legal
proceedings in a court of competent jurisdiction to secure a determination
that
Indemnitee should be indemnified under applicable law, Indemnitee shall not
be
required to reimburse the Company for any advance of Expenses until a final
judicial determination is made with respect thereto (as to which all rights
of
appeal therefrom have been exhausted or lapsed).
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3.2 Advances
of Expenses pursuant to Section 3 hereof shall be made within ten
(10) days after the receipt by the Company of a written statement or statements
from Indemnitee requesting such advance or advances from time to time, whether
prior to or after final disposition of such Proceeding, and accompanied by
or
preceded by the undertaking referred to in Section 3.1
above.
4.
Contribution in the Event of Joint Liability.
4.1 Whether
or not the indemnification provided in Section 2 hereof is
available, in respect of any threatened, pending or completed action, suit
or
proceeding in which Company is jointly liable with Indemnitee (or would be
if
joined in such action, suit or proceeding), Company shall pay, in the first
instance, the entire amount of any judgment or settlement of such action, suit
or proceeding without requiring Indemnitee to contribute to such payment and
Company hereby waives and relinquishes any right of contribution it may have
against Indemnitee. Company shall not enter into any settlement of any action,
suit or proceeding in which Company is jointly liable with Indemnitee (or would
be if joined in such action, suit or proceeding) unless such settlement provides
for a full and final release of all claims asserted against
Indemnitee.
4.2 Without
diminishing or impairing the obligations of the Company set forth in the
preceding subparagraph, if, for any reason, Indemnitee shall elect or be
required to pay all or any portion of any judgment or settlement in any
threatened, pending or completed action, suit or proceeding in which Company
is
jointly liable with Indemnitee (or would be if joined in such action, suit
or
proceeding), Company shall contribute to the amount of expenses (including
attorneys’ fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred and paid or payable by Indemnitee in proportion to the
relative benefits received by the Company and all officers, directors or
employees of the Company other than Indemnitee who are jointly liable with
Indemnitee (or would be if joined in such action, suit or proceeding), on the
one hand, and Indemnitee, on the other hand, from the transaction from which
such action, suit or proceeding arose; provided, however, that the
proportion determined on the basis of relative benefit may, to the extent
necessary to conform to law, be further adjusted by reference to the relative
fault of Company and all officers, directors or employees of the Company other
than Indemnitee who are jointly liable with Indemnitee (or would be if joined
in
such action, suit or proceeding), on the one hand, and Indemnitee, on the other
hand, in connection with the events that resulted in such expenses, judgments,
fines or settlement amounts, as well as any other equitable considerations
which
applicable law may require to be considered. The relative fault of Company
and
all officers, directors or employees of the Company other than Indemnitee who
are jointly liable with Indemnitee (or would be if joined in such action, suit
or proceeding), on the one hand, and Indemnitee, on the other hand, shall be
determined by reference to, among other things, the degree to which their
actions were motivated by intent to gain personal profit or advantage, the
degree to which their liability is primary or secondary, and the degree to
which
their conduct is active or passive.
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4.3 Company
hereby agrees to fully indemnify and hold Indemnitee harmless from any claims
of
contribution which may be brought by other officers, directors or employees
of
the Company who may be jointly liable with Indemnitee.
5. Indemnification
for Expenses as a Witness. In addition to the rights of Indemnitee
under, and without limiting, the other provision of this Agreement, to the
extent that Indemnitee is, by reason of his/her Corporate Status, a witness
in
any action, suit or proceeding to which Indemnitee is not a party, Indemnitee
shall be indemnified by the Company against all Expenses actually and reasonably
incurred by him/her or on his/her behalf in connection therewith.
6. Procedures
and Presumptions for Determination of Entitlement to
Indemnification.
6.1 Timing
of Payments. All payments of Expenses, judgments, penalties, fines and
other amounts by the Company to the Indemnitee pursuant to this Agreement shall
be made to the fullest extent permitted by applicable law as soon as practicable
after written demand therefor by Indemnitee is presented to the Company, but
in
no event later than (i) thirty (30) days after such demand is presented or
(ii)
such later date as may be permitted for the determination of entitlement to
indemnification pursuant to Section 6.7 hereof, if
applicable; provided, however, that advances of Expenses shall be
made within the time provided in Section 3.2.
6.2 Request
for Indemnification. Indemnitee shall submit to the Company
a written request, including therein or therewith such documentation and
information as is reasonably available to Indemnitee and is reasonably necessary
to determine whether and to what extent Indemnitee is entitled to
indemnification. The Secretary of the Company shall, promptly upon receipt
of
such a request for indemnification, advise the board of directors of the Company
(the “Board of Directors”) in writing that Indemnitee
has requested indemnification.
6.3 Reviewing
Party. Upon written request by Indemnitee for
indemnification pursuant to the first sentence of Section 6.2
hereof, a determination, if required by applicable law, with respect to
Indemnitee’s entitlement thereto shall be made in the specific case by one of
the following four methods, which shall be at the election of
Indemnitee: (1) by a majority vote of a quorum consisting of the
Disinterested Directors, or (2) by Independent Counsel in a written opinion
if a
majority vote of a quorum consisting of directors who are not parties to the
Proceeding so orders, (3) by Independent Counsel in a written opinion if a
quorum consisting of directors who are not parties to the Proceeding cannot
be
obtained, or (4) by the stockholders.
6.4 Determination
by Independent Counsel. If the determination of entitlement
to indemnification is to be made by Independent Counsel pursuant to Section
6.3 hereof, the Independent Counsel shall be selected as provided
in
this Section 6.4. The Independent Counsel shall be selected by
Indemnitee (unless Indemnitee shall request that such selection be made by
the
Board of Directors). Indemnitee or the Company, as the case may be, may, within
10 days after such written notice of selection shall have been given, deliver
to
the Company or to Indemnitee, as the case may be, a written objection to such
selection; provided, however, that such objection may be asserted only on the
ground that the Independent Counsel so selected does not meet the requirements
of “Independent Counsel” as defined in this Agreement, and the objection shall
set forth with particularity the factual basis of such assertion. Absent a
proper and timely objection, the person so selected shall act as Independent
Counsel. If a written objection is made and substantiated, the Independent
Counsel selected may not serve as Independent Counsel unless and until such
objection is withdrawn or a court has determined that such objection is without
merit. If, within 20 days after submission by Indemnitee of a written request
for indemnification pursuant to Section 6.2 hereof, no Independent
Counsel shall have been selected and not objected to, either the Company or
Indemnitee may petition an appropriate court in the State of Nevada or another
court of competent jurisdiction for resolution of any objection which shall
have
been made by the Company or Indemnitee to the other’s selection of Independent
Counsel and/or for the appointment as Independent Counsel of a person selected
by the court or by such other person as the court shall designate, and the
person with respect to whom all objections are so resolved or the person so
appointed shall act as Independent Counsel under Section 6.3
hereof. 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 Section 6.3 hereof, and the Company shall pay
all reasonable fees and expenses incident to the procedures of this Section
6.4, regardless of the manner in which such Independent Counsel
was
selected or appointed.
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6.5 Burden
of Proof. In making a determination with respect to entitlement to
indemnification hereunder, the Reviewing Party shall presume that Indemnitee
is
entitled to indemnification under this Agreement if Indemnitee has submitted
a
request for indemnification in accordance with Section 6.2 of this
Agreement. Anyone seeking to overcome this presumption shall have the burden
of
proof and the burden of persuasion, by clear and convincing
evidence.
6.6 Additional
Presumptions and Standards. For purposes of this Agreement, the
termination of any Proceeding or any claim 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 this
Agreement or applicable law. In addition, neither the failure of any
Reviewing Party to have made a determination as to whether Indemnitee has met
any particular standard of conduct or had any particular belief, nor an actual
determination by any Reviewing Party that Indemnitee has not met such standard
of conduct or did not have such belief, prior to the commencement of legal
proceedings by Indemnitee to secure a judicial determination that Indemnified
Person should be indemnified under this Agreement under applicable law, shall
be
a defense to Indemnitee’s claim or create a presumption that Indemnitee has not
met any particular standard of conduct or did not have any particular
belief. Indemnitee shall be deemed to have acted in good faith if
Indemnitee’s action is based on the records or books of account of the
Enterprise, including financial statements, or on information supplied to
Indemnitee by the officers of the Enterprise in the course of their duties,
or
on the advice of legal counsel for the Enterprise or on information or records
given or reports made to the Enterprise by an independent certified public
accountant or by an appraiser or other expert selected with reasonable care
by
the Enterprise. In addition, the knowledge and/or actions, or failure to act,
of
any other director, officer, agent or employee of the Enterprise shall not
be
imputed to Indemnitee for purposes of determining the right to indemnification
under this Agreement.
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6.7 Timing
of Determination. If the Reviewing Party shall not have made
a determination within thirty (30) days after receipt by the Company of the
request therefor, the requisite determination of entitlement to indemnification
shall be deemed to have been made and Indemnitee shall be entitled to such
indemnification, absent (i) a misstatement by Indemnitee of a material fact,
or
an omission of a material fact necessary to make Indemnitee’s statement not
materially misleading, in connection with the request for indemnification,
or
(ii) a prohibition of such indemnification under applicable law; provided,
however, that such 30 day period may be extended for a reasonable time, not
to
exceed an additional fifteen (15) days, if the person, persons or entity making
the determination with respect to entitlement to indemnification in good faith
requires such additional time for the obtaining or evaluating documentation
and/or information relating thereto; and provided, further, that the foregoing
provisions of this Section 6.7 shall not apply if the
determination of entitlement to indemnification is to be made by the
stockholders pursuant to Section 6.3 of this Agreement and if (A)
within fifteen (15) days after receipt by the Company of the request for such
determination the Board of Directors or the Disinterested Directors, if
appropriate, resolve to submit such determination to the stockholders for their
consideration at an annual meeting thereof to be held within seventy-five (75)
days after such receipt and such determination is made thereat, or (B) a special
meeting of stockholders is called within fifteen (15) days after such receipt
for the purpose of making such determination, such meeting is held for such
purpose within sixty (60) days after having been so called and such
determination is made thereat.
6.8 Cooperation. Indemnitee
shall cooperate with the person, persons or entity making such determination
with respect to Indemnitee’s entitlement to indemnification, including providing
to such person, persons or entity upon reasonable advance request any
documentation or information which is not privileged or otherwise protected
from
disclosure and which is reasonably available to Indemnitee and reasonably
necessary to such determination. Any Independent Counsel, member of the Board
of
Directors, or stockholder of the Company shall act reasonably and in good faith
in making a determination under this Agreement of the Indemnitee’s entitlement
to indemnification. Any costs or expenses (including attorneys’ fees and
disbursements) incurred by Indemnitee in so cooperating with the person, persons
or entity making such determination shall be borne by the Company (irrespective
of the determination as to Indemnitee’s entitlement to indemnification) and the
Company hereby indemnifies Indemnitee therefor and agrees to hold Indemnitee
harmless therefrom.
6.9 Success. The
Company acknowledges that a settlement or other disposition short of final
judgment may be successful if it permits a party to avoid expense, delay,
distraction, disruption and uncertainty. In the event that any action, claim
or
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 action, claim or proceeding with or without payment of money
or other consideration) it shall be presumed that Indemnitee has been successful
on the merits or otherwise in such action, suit or proceeding. Anyone seeking
to
overcome this presumption shall have the burden of proof and the burden of
persuasion, by clear and convincing evidence.
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7. Liability
Insurance. The Company shall, from time to time, make the
good faith determination whether or not it is practicable for the Company to
obtain and maintain a policy or policies of insurance with a reputable insurance
company providing the Indemnitee with coverage for losses from acts or omissions
of Indemnitee, and to ensure the Company’s performance of its indemnification
obligations under this Agreement. Among other considerations, the
Company will weigh the costs of obtaining such insurance coverage against the
protection afforded by such coverage. In all policies of director and
officer liability insurance obtained by the Company, Indemnitee shall be named
as an insured party in such manner as to provide Indemnitee with the same rights
and benefits as are afforded to the most favorably insured directors or
officers, as applicable, of the Company. Notwithstanding the
foregoing, the Company shall have no obligation to obtain or maintain such
insurance if the Company determines in good faith that such insurance is not
reasonably available, if the premium costs for such insurance are
disproportionately high compared to the amount of coverage provided, or if
the
coverage provided by such insurance is limited by exclusions so as to provide
an
insufficient benefit. The Company shall promptly notify Indemnitee of
any such determination not to provide insurance
coverage. Additionally, the Indemnitee acknowledges that no insurance
policy that may be obtained pursuant to this Section 7 or other financial
arrangement (including self insurance) which the Company may obtain, may provide
protection for an Indemnitee adjudged by a court of competent jurisdiction,
after exhaustion of all appeals therefrom, to be liable for intentional
misconduct, fraud or a knowing violation of law, except with respect to the
advancement of expenses or indemnification ordered by a court.
8. Remedies
of Indemnitee.
8.1 In
the event that (i) a determination is made pursuant to Section 6
of this Agreement that Indemnitee is not entitled to indemnification under
this
Agreement, (ii) advancement of Expenses is not timely made pursuant to
Section 3.2 of this Agreement, (iii) no determination of
entitlement to indemnification shall have been made within the time period
specified in Section 6.7 of this Agreement, (iv) payment of
indemnified amounts is not made pursuant to within the time period specified
in
Section 6.1 of this Agreement, or (v) payment of indemnified is
not made within ten (10) days after a determination has been made that
Indemnitee is entitled to indemnification or such determination is deemed to
have been made pursuant to Section 6.7 of this Agreement,
Indemnitee shall be entitled to an adjudication in an appropriate court of
the
State of Nevada, or in any other court of competent jurisdiction, of his
entitlement to such indemnification. Indemnitee shall commence such proceeding
seeking an adjudication within 180 days following the date on which Indemnitee
first has the right to commence such proceeding pursuant to this Section
8.1. The Company shall not oppose Indemnitee’s right to seek any such
adjudication.
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8.2 In
the event that a determination shall have been made pursuant to Section
6.3 of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding commenced pursuant to this Section
8 shall be conducted in all respects as a de novo trial, on
the merits and Indemnitee shall not be prejudiced by reason of that adverse
determination under Section 6.3.
8.3 If
a determination shall have been made pursuant to Section 6.3 of
this Agreement that Indemnitee is entitled to indemnification, the Company
shall
be bound by such determination in any judicial proceeding commenced pursuant
to
this Section 8, absent a prohibition of such indemnification under
applicable law.
8.4 In
the event that Indemnitee, pursuant to this Section 8, seeks a
judicial adjudication of his rights under, or to recover damages for breach
of,
this Agreement, or to recover under any directors’ and officers’ liability
insurance policies maintained by the Company the Company shall pay on his
behalf, in advance, any and all Expenses actually and reasonably
incurred by him in such judicial adjudication, regardless of whether Indemnitee
ultimately is determined to be entitled to such indemnification, advancement
of
expenses or insurance recovery.
8.5 The
Company shall be precluded from asserting in any judicial proceeding commenced
pursuant to this Section 8 that the procedures and presumptions of
this Agreement are not valid, binding and enforceable and shall stipulate in
any
such court that the Company is bound by all the provisions of this
Agreement.
9. Non-Exclusivity,
Survival of Rights, Subrogation.
9.1 The
rights of indemnification as provided by this Agreement shall not be deemed
exclusive of any other rights to which Indemnitee may at any time be entitled
under applicable law, the Articles, the Bylaws, any agreement, a vote of
stockholders or a resolution of directors, or otherwise. No amendment,
alteration or repeal of this Agreement or of any provision hereof shall limit
or
restrict any right of Indemnitee under this Agreement in respect of any action
taken or omitted by such Indemnitee in his Corporate Status prior to such
amendment, alteration or repeal. To the extent that a change in Nevada Law,
whether by statute or judicial decision, permits greater indemnification than
would be afforded currently under the Bylaws and this Agreement, it is the
intent of the parties hereto that Indemnitee shall enjoy by this Agreement
the
greater benefits so afforded by such change. No right or remedy herein conferred
is intended to be exclusive of any other right or remedy, and every other right
and remedy shall be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other right
or
remedy.
9.2 In
the event of any 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 take all action necessary to secure
such rights, including execution of such documents as are necessary to enable
the Company to bring suit to enforce such rights.
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9.3 The
Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder if and to the extent that Indemnitee has
otherwise actually received such payment under any insurance policy, contract,
agreement or otherwise.
10. Exceptions
to Right of Indemnification. Notwithstanding any other provision of
this Agreement, Indemnitee shall not be entitled to indemnification under this
Agreement:
10.1 with
respect to any Proceeding brought by Indemnitee, or any claim therein, unless
(a) the bringing of such Proceeding or making of such claim shall have been
approved by the Board of Directors of the Company or (b) such Proceeding is
being brought by the Indemnitee to assert, interpret or enforce his rights
under
this Agreement or any other agreement or insurance policy or under the Company’s
Articles or Bylaws now or hereafter in effect.
10.2 for
Expenses incurred by Indemnitee with respect to any action instituted (i) by
Indemnitee to enforce or interpret this agreement, if a court having
jurisdiction over such action determines that necessary assertions made by
Indemnitee as a basis for such action were not made in good faith or were
frivolous, or (ii) by or in the name of the Company to enforce or interpret
this
Agreement, if a court having jurisdiction over such action determines that
each
of the material defenses asserted by Indemnitee was made in bad faith or was
frivolous.
10.3 for
Expenses and other liabilities arising from the purchase and sale by Indemnitee
of securities in violation of Section 16(b) of the Securities Exchange Act
of
1934, or any similar state or successor statute.
10.4 for
indemnification made to or on behalf of any director or officer if a final
adjudication establishes that his/her acts or omissions involved intentional
misconduct, fraud or a knowing violation of the law and was material to the
cause of action, unless ordered by a court pursuant to Section 78.7502 of Nevada
Law or for the advancement of Expenses pursuant to Section
3.
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11. Duration
of Agreement. All agreements and obligations of the Company contained
herein shall continue during the period Indemnitee is an officer or director
of
the Company (or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise) and shall continue thereafter so long as Indemnitee
shall be subject to any Proceeding (or any proceeding commenced under Section
8 hereof) by reason of his Corporate Status, whether or not
he is
acting or serving in any such capacity at the time any liability or expense
is
incurred for which indemnification can be provided under this Agreement. This
Agreement shall continue in effect regardless of whether Indemnitee continues
to
serve as an officer or director of the Company or any other Enterprise at the
Company’s request.
12. Miscellaneous.
12.1 Notice
by Indemnitee. Indemnitee agrees promptly to notify the
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification covered
hereunder. The failure to so notify the Company shall not relieve the
Company of any obligation which it may have to Indemnitee under this Agreement
or otherwise unless and only to the extent that such failure or delay materially
prejudices the Company.
12.2 No
Employment Agreement. Nothing contained in this Agreement
shall be construed as giving Indemnitee any right to be retained in the
employment of the Company or any of its subsidiaries or affiliated
entities.
12.3 Amendments
and Waivers. No amendment, modification, replacement,
termination or cancellation of any provision of this Agreement will be valid,
unless the same will be in writing and signed by the Company and
Indemnitee. No waiver of any default, misrepresentation or breach of
warranty or covenant hereunder, whether intentional or not, may be deemed to
extend to any prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights arising because
of any prior or subsequent such occurrence.
12.4 Successors
and Assigns. 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 or assets
of the Company), assigns, spouses, heirs, executors and personal and legal
representatives.
12.5 Notices.
All notices, demands and other communications provided for or permitted
hereunder shall be made in writing and shall be by facsimile, commercial
overnight courier service or personal delivery to the following addresses,
or to
such other addresses as shall be designated from time to time by a party in
accordance with this Section:
11
if
to the
Company, at:
Electronic
Clearing House, Inc.
000
Xxxxx
Xxxxxxxxx
Xxxxxxxxx,
XX 00000
Attention:
Board of Directors
or
if to
Indemnitee, at the address set forth on the signature page hereto.
If
any
notice, request, demand, direction or other communication required or permitted
by this Agreement is given by mail it will be effective on the earlier of
receipt or the third calendar day after deposit in the United States mail with
first class or airmail postage prepaid; if given by telecopier during regular
business hours of the recipient, when sent with delivery confirmation if given
by telecopier outside regular business hours of the recipient, with delivery
confirmation, at the opening of business on the next business day; if dispatched
by commercial courier, on the scheduled delivery date; or if given by personal
delivery, when delivered.
12.6 Counterparts. This
Agreement may be executed in two or more counterparts, each of which will be
deemed an original but all of which together will constitute one and the same
instrument.
12.7 Headings. The
section and paragraph headings contained in this Agreement are inserted for
convenience only and will not affect in any way the meaning or construction
of
this Agreement.
12.8 GOVERNING
LAW. THIS AGREEMENT AND ALL RIGHTS, REMEDIES, LIABILITIES,
POWERS AND DUTIES OF THE PARTIES TO THIS AGREEMENT, SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA, WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW PRINCIPLES.
[REMAINDER
OF PAGE LEFT INTENTIONALLY BLANK]
12
IN
WITNESS WHEREOF, the parties hereto
have executed this Indemnification Agreement as of the date first hereinabove
written.
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ELECTRONIC
CLEARING HOUSE, INC.
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By:
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Name:
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Title:
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Indemnitee
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Name:
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Address:
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Facsimile:
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