EXHIBIT 10.21
This INDEMNIFICATION AGREEMENT is made and entered into as of
October __, 1996 between Metro Networks, Inc., a Delaware corporation ("Metro
Networks") and Xxxxx X. Xxxxxxxxxx ("Xxxxxxxxxx").
WHEREAS, as of the date hereof, Metro Networks has acquired all of the
business operations of Metro Traffic Control, Inc. ("Traffic"), Metro
Reciprocal, Inc. ("Reciprocal") and Metro Video News, Inc. ("Video");
WHEREAS, Traffic, Reciprocal and Video had elected under Section 1362
of the Internal Revenue Code of 1986, as amended (the "Code") to be treated and
operated as Subchapter S corporations;
WHEREAS, Xxxxxxxxxx was at all times the sole shareholder of Traffic,
Reciprocal and Video;
NOW, THEREFORE, in consideration of the premises and mutual provisions
hereinafter set forth, the parties hereto hereby agree as follows:
Article 1. METRO NETWORKS INDEMNITY. Metro Networks will
indemnify Xxxxxxxxxx, on an after tax basis, for any United States Federal,
state or local income tax liability, to the extent such liability is
attributable to a claim by any taxing authority that Xxxxxxxxxx'x income with
respect to his ownership of stock in Traffic, Reciprocal or Video for any
taxable year exceeds the income reported to Xxxxxxxxxx by Traffic, Reciprocal or
Video on its Internal Revenue Service Form K-1 or corresponding state or local
reporting form for such taxable year. Metro Networks shall have the right to
control any tax audit or contest which may give rise to an indemnification
obligation. Such indemnity will be payable upon a final determination of the
tax liability giving rise to the indemnity obligation.
Article 2. XXXXXXXXXX INDEMNITY. Xxxxxxxxxx will indemnify Metro
Networks for Metro Networks' United States Federal, state or local income tax
liability resulting from a claim by any taxing authority that Traffic,
Reciprocal or Video was not properly treated as a Subchapter S corporation for
any period in which Traffic, Reciprocal or Video filed a tax return on which it
claimed that it was properly treated as a Subchapter S corporation (or similar
pass through vehicle for state or local tax purposes); PROVIDED, HOWEVER, that
Xxxxxxxxxx'x obligation to indemnify Metro Networks shall be limited to the
amount that Xxxxxxxxxx is entitled to receive as a refund of United States
Federal, state or local income taxes previously paid with respect to his share
of income generated by Traffic, Video or Reciprocal. Such indemnity will be
payable upon a
final determination of the tax liability giving rise to the indemnity
obligation.
Article 3. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to principals of conflicts of laws.
Article 4. NOTICES. All notices or other communications provided
for under this Agreement shall be given in writing and shall be delivered
personally or sent by post telex or facsimile transmission to the other party.
If to Metro Networks:
Metro Networks, Inc.
0000 Xxxx Xxx Xxxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
If to Xxxxxxxxxx:
Xxxxx X. Xxxxxxxxxx
c/o Metro Networks, Inc.
0000 Xxxx Xxx Xxxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Article 5. ASSIGNMENT. Except as otherwise specifically provided
herein, this Agreement and any rights and obligations hereunder may not be
assigned by either party without the prior written approval of the other party,
and any attempted assignment not in compliance with this Article shall be void
and of no effect.
Article 6. COSTS. In any proceeding to enforce any rights under
this Agreement by legal proceedings or otherwise, the prevailing party shall be
reimbursed by the defaulting party for all of the costs and expenses of the
prevailing party in pursuing such proceedings, including, without limitation,
reasonable attorneys' or solicitors' fees.
Article 7. PARTIES NOT PARTNERS. Nothing contained in this
Agreement shall constitute a partnership or other agency agreement between the
parties hereto or their respective subsidiaries or any of them, nor shall
anything contained in this Agreement give any of the parties hereto or any of
the respective subsidiaries the right to
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bind, or pledge the credit of, any of the other parties hereto or any of their
respective subsidiaries.
Article 8. ANNUAL REVIEW. This Agreement may be amended by mutual
consultation among the parties, evidenced in a writing signed by both parties,
and the parties agree to engage in mutual consultation in good faith during each
annual period from the date hereof at the request of any party to maintain in
this Agreement the principles of fairness and equity, and to amend this
Agreement accordingly.
Article 9. SEVERABILITY. If any provision in this Agreement is
found by any court or administrative body of competent jurisdiction to be
invalid or unenforceable, the invalidity or unenforceability of such provision
shall not affect the other provisions of this Agreement and all provisions not
affected by such invalidity or unenforceability shall remain in full force and
effect unless the severance of the invalid or unenforceable provision would
unreasonably frustrate the commercial purposes of this Agreement. The parties
hereby agree to attempt to substitute for any invalid or unenforceable provision
a valid or enforceable provision which achieves to the greatest extent possible
the economic objectives of the invalid or unenforceable provision.
Article 10. WAIVER. The waiver by either party of a breach or
default of any of the provisions of this Agreement by the other party shall not
be construed as a waiver of any succeeding breach of the same or other
provisions nor shall any delay or omission on the part of either party to
exercise or avail itself of any right power or privilege that it has or may have
hereunder operate as a waiver of any breach or default by the other party.
Article 11. ENTIRE AGREEMENT. This Agreement constitutes the
entire and only Agreement between the parties hereto relating to the subject
matter hereof and overrides and supersedes any prior arrangements or oral
discussions and shall not be modified except in writing by agreement between the
parties.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the day and year first above written.
METRO NETWORKS, INC.
By: _________________________
Name:
Title:
_________________________
Xxxxx X. Xxxxxxxxxx
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