Exhibit 10.47
INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT, dated as of August 9, 2001 between Spanish
Broadcasting System, Inc., a Delaware corporation (the "Company"), and Castor
Xxxxxxxxx ("Indemnitee").
WHEREAS, it is essential that the Company retain as directors and
executive officers the most capable persons available;
WHEREAS, Indemnitee is a director of the Company;
WHEREAS, both the Company and Indemnitee recognize the increased risk
of litigation and other claims being asserted against directors of public
companies in today's environment;
WHEREAS, the Third Amended and Restated Certificate of Incorporation of
the Company (the "Charter") requires the Company to indemnify directors,
officers and certain other persons to the fullest extent permitted by law and
Indemnitee will serve as a director of the Company in part in reliance on the
Charter;
WHEREAS, in recognition of Indemnitee's need for substantial protection
against personal liability and to provide Indemnitee with specific contractual
assurance that the protection provided by the Charter will be available to
Indemnitee (regardless of, among other things, any amendment to or revocation of
the Charter or any change in the composition of the Company's Board of Directors
or any acquisition transaction relating to the Company), the Company wishes to
provide in this agreement for the indemnification of and the advancement of
expenses to Indemnitee to the fullest extent permitted by law and as set forth
in this agreement, and, to the extent insurance is maintained, for the continued
coverage of Indemnitee under the Company's directors' and officers' liability
insurance policies.
NOW, THEREFORE, in consideration of the premises and intending to be
legally bound hereby, the parties hereto agree as follows:
1. Certain Definitions.
(a) 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), 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,
becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing 15% 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 of Directors of the Company
and any new director whose election by the Board of Directors 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 thereof, or (iii) the stockholders
of the Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which 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 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 of (in one
transaction or a series of transactions) all or substantially all of the
Company's assets.
(b) Claim: any threatened, pending or completed action, suit,
proceeding, arbitration, alternate dispute resolution mechanism, (whether civil,
criminal, administrative or investigative, whether instituted by or in the right
of the Company or any other party, that Indemnitee in good faith believes might
lead to the institution of any such action, suit, proceeding, arbitration or
alternate dispute resolution mechanism, whether civil, criminal, administrative
or investigative, arising from or in connection with the fact that Indemnitee,
or a person for whom Indemnitee is the legal representative, is or was a
director or officer of the Company, or is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust, enterprise or nonprofit entity, including
service with respect to employee benefit plans.
(c) Expenses: include reasonable attorneys' fees and all other costs,
expenses and obligations actually and reasonably incurred by the Indemnitee in
connection with investigating, defending, or preparing to defend any Claim.
(d) Independent Legal Counsel: an attorney or firm of attorneys,
selected in accordance with the provisions of Section 3, who shall not have
otherwise performed services for the Company or Indemnitee within the last five
years (other than with respect to matters concerning the rights of Indemnitee
under this Agreement, or of other indemnitees under similar indemnity
agreements).
(e) Reviewing Party: (1) a Majority of directors who are not parties to
the action, even though less than a quorum, or (2) a Committee of such directors
designated by majority vote of such directors, even though less than a quorum,
or (3) if there are no such directors, or if such directors so direct,
independent legal counsel, or (4) the stockholders.
(f) Voting Securities: any securities which vote generally in the
election of directors.
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2. Indemnification.
(a) In General. In connection with any Claim, whether relating to
events occurring before or after the Effective Date, the Company shall
indemnify, and advance Expenses, to Indemnitee as provided in this Agreement and
to the fullest extent permitted by law.
(b) Claims Other Than Claims by or in the Right of the Company. 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
any proceeding pursuant to any Claim, other than a Claim by or in the right of
the Company, the Company shall, subject to Sections 2(e) and 2(f), indemnify
Indemnitee against any and all Expenses, judgments, fines, penalties and amounts
paid in settlement (including all interest, assessments and other charges paid
or payable in connection with or in respect of such Expenses, judgments, fines,
penalties or amounts paid in settlement) of such Claim; provided, however, that
Indemnitee shall not be entitled to indemnification pursuant to this Section
2(b) in connection with conduct finally adjudged as constituting acts or
omissions not in good faith or which involved a knowing violation of the law.
(c) Proceedings by or in the Right of the Company. 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 any
proceeding pursuant to any Claim brought by or in the right of the Company to
procure a judgment in its favor, the Company shall, subject to Sections 2(e) and
2(f), indemnify Indemnitee against any and all Expenses (including all interest,
assessments and other charges paid or payable in connection with or in respect
of such Expenses) of such Claim. Notwithstanding the foregoing, no such
indemnification shall be made in respect of any Claim, issue or matter as to
which Indemnitee shall have been finally adjudged to be liable to the Company
unless and only to the extent that the Court of Chancery or the court in which
such Claim was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnity for such Expenses
which the Court of Chancery or such other court shall deem proper.
(d) Payment of Indemnification; Advancement of Expenses. Subject to
Sections 2(e) and 2(f), the Company shall indemnify Indemnitee as soon as
practicable but in any event no later than 60 days after written demand is
presented to the Company. If so requested by Indemnitee, the Company shall
advance (within 10 business days of such request) any and all Expenses to
Indemnitee (an "Expense Advance"); provided, however, that the payment of
Expenses incurred by Indemnitee in advance of the final disposition of the Claim
will be made only upon receipt by the Company of an undertaking by the
Indemnitee to repay all amounts advanced if it should be ultimately determined
that the Indemnitee is not entitled to be indemnified under this Agreement or
otherwise.
(e) Indemnitee Not Entitled to Indemnification. Notwithstanding
anything in this Agreement to the contrary, Indemnitee shall not be entitled to
indemnification pursuant to
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this Agreement in connection with any Claim (or part thereof) initiated by
Indemnitee unless the Board of Directors has authorized or consented to the
initiation of such Claim (or part thereof).
(f) Determination of Entitlement. Notwithstanding anything in this
Agreement to the contrary, (i) the obligations of the Company under this Section
2 shall be subject to the condition that the Reviewing Party shall not have
determined (in a written opinion, in any case in which the Independent Legal
Counsel referred to in Section 3 is involved) that Indemnitee would not be
permitted to be indemnified under applicable law, and (ii) the obligation of the
Company to make an Expense Advance pursuant to Section 2(d) shall be subject to
the condition that, if, when and to the extent that the Reviewing Party
determines that Indemnitee would not be permitted to be so indemnified under
applicable law, the Company shall be entitled to be reimbursed by Indemnitee
(who hereby agrees to reimburse the Company) for all such amounts theretofore
paid; provided, however, that if Indemnitee has commenced or thereafter
commences legal proceedings in a court of competent jurisdiction to secure a
determination that Indemnitee should be indemnified under applicable law, any
determination made by the Reviewing Party that Indemnitee would not be permitted
to be indemnified under applicable law shall not be binding and Indemnitee shall
not be required to reimburse the Company for any Expense Advance until a final
judicial determination is made with respect thereto (as to which all rights of
appeal therefrom have been exhausted or lapsed). If there has not been a Change
in Control, the Reviewing Party shall be selected by the Board of Directors, and
if there has been such a Change in Control (other than a Change in Control which
has been approved by a majority of the Company's Board of Directors who were
directors immediately prior to such Change in Control), the Reviewing Party
shall be the Independent Legal Counsel referred to in Section 3. If there has
been no determination by the Reviewing Party within 60 days after written demand
for indemnification made under Section 2(d) or if the Reviewing Party determines
that Indemnitee would not be permitted to be indemnified in whole or in part
under applicable law, Indemnitee shall have the right to commence litigation in
any court in the State of Delaware having subject matter jurisdiction thereof
and in which venue is proper seeking an initial determination by the court or
challenging any such determination by the Reviewing Party or any aspect thereof,
including the legal or factual bases therefor, and the Company hereby consents
to service of process and to appear in any such proceeding. Any determination by
the Reviewing Party otherwise shall be conclusive and binding on the Company and
Indemnitee.
3. Change in Control.
If there is a Change in Control of the Company (other than a Change in
Control which has been approved by a majority of the Company's Board of
Directors who were directors immediately prior to such Change in Control), then
with respect to all matters thereafter arising concerning the rights of
Indemnitee to indemnity payments and Expense Advances under this Agreement, the
Company shall seek legal advice only from Independent Legal Counsel selected by
Indemnitee and approved by the Company (which approval shall not be unreasonably
withheld). Such counsel, among other things, shall render its written opinion to
the Company and Indemnitee as to whether and to what extent Indemnitee would be
permitted to be indemnified under applicable law. The Company shall pay the
reasonable fees of the Independent Legal Counsel referred to above and fully
indemnify such counsel against any and
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all expenses (including reasonable attorneys' fees), claims, liabilities and
damages arising out of or relating to this Agreement or its engagement pursuant
hereto.
4. Indemnification for Additional Expenses.
The Company shall indemnify Indemnitee against any and all Expenses
(including reasonable attorneys' fees) and, if requested by Indemnitee, shall
(within 10 business days of such request) advance such Expenses to Indemnitee,
which are incurred by Indemnitee in connection with any action brought by
Indemnitee for (i) indemnification or advance payment of Expenses by the Company
under this Agreement, the Charter or any other agreement, certificate of
incorporation or Company by-law now or hereafter in effect relating to Claims
and/or (ii) recovery under any directors' and officers' liability insurance
policies maintained by the Company; provided, however, that the payment of
Expenses incurred by Indemnitee in advance of the final disposition of such
action will be made only upon receipt by the Company of an undertaking by the
Indemnitee to repay all amounts advanced if it should be ultimately determined
that the Indemnitee is not entitled to be indemnified under this Agreement or
otherwise.
5. Partial Indemnity.
If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for a portion of the Expenses, judgments, fines,
penalties and amounts paid in settlement of a Claim but not, however, for the
total amount thereof, the Company shall nevertheless indemnify Indemnitee for
the portion thereof to which Indemnitee is entitled. Moreover, notwithstanding
any other provision of this Agreement, to the extent that Indemnitee has been
successful on the merits or otherwise in defense of any or all Claims or in
defense of any issue or matter therein, including dismissal without prejudice,
Indemnitee shall be indemnified against all Expenses incurred in connection
therewith.
6. Burden of Proof.
In connection with any determination by the Reviewing Party or
otherwise as to whether Indemnitee is entitled to be indemnified hereunder, the
burden of proof shall be on the Company to establish that Indemnitee is not so
entitled.
7. No Presumptions.
For purposes of this Agreement, 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. In addition,
neither the failure of the 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 the Reviewing Party that
Indemnitee has not met such standard of conduct or did not have such
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belief, prior to the commencement of legal proceedings by Indemnitee to secure a
judicial determination that Indemnitee should be indemnified 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.
8. Nonexclusivity.
The rights of Indemnitee hereunder shall be in addition to any other
rights Indemnitee may have under the Charter, the Company's by-laws, the
Delaware General Corporation Law or otherwise. To the extent that a change in
the Delaware General Corporation Law (whether by statute or judicial decision)
permits greater indemnification by agreement than would be afforded currently
under the Charter 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.
9. Liability Insurance.
Subject to the availability of insurance at substantially similar rates
for similar coverage (as determined in the sole discretion of the Company), the
Company will maintain insurance (i) at the levels in effect as of the date
hereof with respect to Indemnitee until the third anniversary of the date
hereof, or (ii) at the levels in effect as of the date of the expiration of the
term, death, removal, retirement or resignation of Indemnitee for a period of
three years after such event, whichever level is greater, in either case, with
respect to any Claim, against all liability and loss suffered and Expenses
(including reasonable attorney's fees) reasonably incurred by Indemnitee at the
Company's expense, to protect the Company and Indemnitee against any such
liability, cost, payment or Expense; provided, however, that subject to the
provisions of this Section 9, the Company shall only be required to maintain
insurance until the earlier of the date which is (a) three years after the
expiration of the term, death, removal, retirement or resignation of Indemnitee
and (b) the sixth anniversary of the date hereof.
10. Amendments and Waivers.
No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by the parties hereto. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.
11. Subrogation.
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.
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12. 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 actually received payment (under any insurance policy,
the Charter or otherwise) of the amounts otherwise indemnifiable hereunder.
13. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective successors, assigns,
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, spouses, heirs, executors and personal and legal representatives. This
Agreement shall continue in effect regardless of whether Indemnitee continues to
serve as an executive officer or director of the Company or of any other
enterprise at the Company's request.
14. Severability.
The provisions of this Agreement shall be severable in the event that
any of the provisions hereof (including any provision within a single section,
paragraph or sentence) is held by a court of competent jurisdiction to be
invalid, void or otherwise unenforceable in any respect, and the validity and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired and shall remain enforceable
to the fullest extent permitted by law.
15. Governing Law.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed in such state without giving effect to the principles of
conflicts of laws.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SPANISH BROADCASTING SYSTEM, INC.
By: /s/ Xxxx Xxxxxxx, Xx.
-------------------------
Name: Xxxx Xxxxxxx, Xx.
Title: President and CEO
INDEMNITEE
/s/ Castor Xxxxxxxxx
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