INDEMNIFICATION AGREEMENT
Exhibit
10.20
THIS
INDEMNIFICATION AGREEMENT (the “Agreement”)
is
effective as of September 18, 2006, by and between Eagle Broadband, Inc., a
Texas corporation (the “Company”),
and
___________________________ (the “Indemnitee”).
WHEREAS,
the Indemnitee has been asked to serve on the Board of Directors of the Company
(the “Board”);
WHEREAS,
it is reasonable, prudent and necessary for the Company contractually to
obligate itself to indemnify persons serving as directors of the Company to
the
fullest extent permitted by applicable law so that they will serve or continue
to serve as directors of the Company free from undue concern that they will
not
be so indemnified;
WHEREAS,
the Indemnitee is willing to serve and continue to serve on the Board on the
condition that he be so indemnified; and
WHEREAS,
to the extent permitted by law, this Agreement is a supplement to and in
furtherance of the provisions of the Amended and Restated Articles of
Incorporation of the Company (the “Certificate”) and the provisions of the
Bylaws of the Company (the “Bylaws”) or resolutions adopted pursuant thereto,
and shall not be deemed a substitute therefor, nor to diminish or abrogate
any
rights of the Indemnitee thereunder;
NOW
THEREFORE, in consideration of the premises and the covenants contained herein,
the Company and the Indemnitee do hereby covenant and agree as
follows:
Section
1. Services
by the Indemnitee.
The
Indemnitee agrees to continue to serve at the request of the Company as a
director of the Company (including, without limitation, service on one or more
committees of the Board). Notwithstanding the foregoing, the Indemnitee may
at
any time and for any reason resign from any such position.
Section
2. Indemnification
- General.
The
Company shall indemnify, and advance Expenses (as hereinafter defined) to,
the
Indemnitee as provided in this Agreement and 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. The rights of the
Indemnitee provided under the preceding sentence shall include, but shall not
be
limited to, the rights set forth in the other Sections of this
Agreement.
Section
3. Proceedings
Other Than Proceedings by or in the Right of the Company.
The
Indemnitee shall be entitled to the rights of indemnification provided in this
Section
3
if, by
reason of his Corporate Status (as hereinafter defined), he is, or is threatened
to be made, a party to or participant in any threatened, pending or completed
Proceeding (as hereinafter defined), other than a Proceeding by or in the right
of the Company. Pursuant to this Section
3,
the
Company shall indemnify the Indemnitee against Expenses, judgments, penalties,
fines and amounts paid in settlement (as and to the extent permitted hereunder)
actually and reasonably incurred by him or on his behalf in connection with
such
Proceeding or any claim, issue or matter therein, if he acted in good faith
and
in a manner he reasonably believed to be in or not opposed to the best interests
of the Company, and, with respect to any criminal Proceeding, if he also had
no
reasonable cause to believe his conduct was unlawful.
Section
4. Proceedings
by or in the Right of the Company.
The
Indemnitee shall be entitled to the rights of indemnification provided in this
Section
4
if, by
reason of his Corporate Status, he is, or is threatened to be made, a party
to
or participant in any threatened, pending or completed Proceeding brought by
or
in the right of the Company to procure a judgment in its favor. Pursuant to
this
Section
4,
the
Company shall indemnify the Indemnitee against Expenses actually and reasonably
incurred by him or on his behalf in connection with such Proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed
to
the best interests of the Company. Notwithstanding the foregoing, no
indemnification against such Expenses shall be made in respect of any claim,
issue or matter in such Proceeding as to which the Indemnitee shall have been
adjudged to be liable to the Company or if applicable law prohibits such
indemnification; provided,
however,
that if
applicable law so permits, indemnification against Expenses shall nevertheless
be made by the Company in such event if and to the extent that the court in
which such Proceeding shall have been brought or is pending, shall so
determine.
Section
5. Indemnification
for Expenses of a Party Who is Wholly or Partly Successful.
(a) To
the
extent that the Indemnitee is, by reason of his Corporate Status, a party to
and
is successful, on the merits or otherwise, in any Proceeding, the Company shall
indemnify the Indemnitee against all Expenses actually and reasonably incurred
by him or on his behalf in connection therewith. If the Indemnitee is not wholly
successful in defense of any Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in
such
Proceeding, the Company shall indemnify the Indemnitee against all Expenses
actually and reasonably incurred by him or on his behalf in connection with
each
such claim, issue or matter as to which the Indemnitee is successful, on the
merits or otherwise. For purposes of this Section
5(a),
the
term “successful, on the merits or otherwise,” shall include, but shall not be
limited to, (i) the termination of any claim, issue or matter in a Proceeding
by
withdrawal or dismissal, with or without prejudice, (ii) termination of any
claim, issue or matter in a Proceeding by any other means without any express
finding of liability or guilt against the Indemnitee, with or without prejudice,
(iii) the expiration of 120 days after the making of a claim or threat of a
Proceeding without the institution of the same and without any promise or
payment made to induce a settlement or (iv) the settlement of any claim, issue
or matter in a Proceeding pursuant to which the Indemnitee pays less than
$200,000. The provisions of this Section
5(a)
are
subject to Section
5(b)
below.
(b) In
no
event shall the Indemnitee be entitled to indemnification under Section
5(a)
above
with respect to a claim, issue or matter to the extent (i) applicable law
prohibits such indemnification, or (ii) an admission is made by the Indemnitee
in writing to the Company or in such Proceeding or a final, nonappealable
determination is made in such Proceeding that the standard of conduct required
for indemnification under this Agreement has not been met with respect to such
claim, issue or matter.
2
Section
6. Indemnification
for Expenses as a Witness.
Notwithstanding any provisions herein to the contrary, to the extent that the
Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding,
the Company shall indemnify the Indemnitee against all Expenses actually and
reasonably incurred by or on behalf of the Indemnitee in connection
therewith.
Section
7. Advancement
of Expenses.
The
Company shall advance all reasonable Expenses incurred by or on behalf of the
Indemnitee in connection with any Proceeding within 10 days after the receipt
by
the Company of a statement or statements from the Indemnitee requesting such
advance or advances from time to time, whether prior to or after the final
disposition of such Proceeding. Such statement or statements shall reasonably
evidence the Expenses incurred by or on behalf of the Indemnitee. The Indemnitee
hereby expressly undertakes to repay such amounts advanced only if, and to
the
extent that, it shall ultimately be determined by a final, non-appealable
adjudication or arbitration decision that the Indemnitee is not entitled to
be
indemnified against such Expenses. All amounts advanced to the Indemnitee by
the
Company pursuant to this Section
7
shall be
without interest. The Company shall make all advances pursuant to this
Section
7
without
regard to the financial ability of the Indemnitee to make repayment, without
bond or other security and without regard to the prospect of whether the
Indemnitee may ultimately be found to be entitled to indemnification under
the
provisions of this Agreement. Any required reimbursement of Expenses by the
Indemnitee shall be made by the Indemnitee to the Company within 10 days
following the entry of the final, non-appealable adjudication or arbitration
decision pursuant to which it is determined that the Indemnitee is not entitled
to be indemnified against such Expenses.
Section
8. Procedure
for Determination of Entitlement to Indemnification.
(a) To
obtain
indemnification under this Agreement, the Indemnitee shall submit to the Company
a written request therefor, along with such documentation and information as
is
reasonably available to the Indemnitee and reasonably necessary to determine
whether and to what extent the Indemnitee is entitled to indemnification. The
Secretary of the Company shall, promptly upon receipt of such a request for
indemnification, advise the Board in writing that the Indemnitee has requested
indemnification.
(b) Upon
written request by the Indemnitee for indemnification pursuant to the first
sentence of Section
8(a)
hereof,
a determination, if required by applicable law, with respect to the Indemnitee’s
entitlement thereto shall be made in the specific case: (i) by the Board by
a
majority vote of a quorum consisting of Disinterested Directors (as hereinafter
defined); or (ii) if a quorum of the Board consisting of Disinterested Directors
is not obtainable or, even if obtainable, such quorum of Disinterested Directors
so directs, by Independent Counsel (as hereinafter defined), as selected
pursuant to Section
8(d),
in a
written opinion to the Board (which opinion may be a “more likely than not”
opinion), a copy of which shall be delivered to the Indemnitee. If it is so
determined that the Indemnitee is entitled to indemnification, the Company
shall
make payment to the Indemnitee within 10 days after such determination. The
Indemnitee shall cooperate with the Person or Persons making such determination
with respect to the Indemnitee’s entitlement to indemnification, including
providing to such Person or Persons upon reasonable advance request any
documentation or information which is not privileged or otherwise protected
from
disclosure and which is reasonably available to the Indemnitee and reasonably
necessary to such determination. Subject to the provisions of Section 10
hereof,
any costs or expenses (including reasonable attorneys’ fees and disbursements)
incurred by the Indemnitee in so cooperating with the Person or Persons making
such determination shall be borne by the Company, and the Company hereby agrees
to indemnify and hold the Indemnitee harmless therefrom.
3
(c) Notwithstanding
the foregoing, if a Change of Control has occurred, the Indemnitee may require
a
determination with respect to the Indemnitee’s entitlement to indemnification to
be made by Independent Counsel, as selected pursuant to Section
8(d),
in a
written opinion to the Board (which opinion may be a “more likely than not”
opinion), a copy of which shall be delivered to the Indemnitee.
(d) In
the
event the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section
8(b)
or
(c)
hereof,
the Independent Counsel shall be selected as provided in this Section
8(d).
If a
Change of Control shall not have occurred, the Independent Counsel shall be
selected by the Board (including a vote of a majority of the Disinterested
Directors if obtainable), and the Company shall give written notice to the
Indemnitee advising him of the identity of the Independent Counsel so selected.
If a Change of Control shall have occurred, the Independent Counsel shall be
selected by the Indemnitee (unless the Indemnitee shall request that such
selection be made by the Board, in which event the preceding sentence shall
apply), and approved by the Company (which approval shall not be unreasonably
withheld). If (i) an Independent Counsel is to make the determination of
entitlement pursuant to Section
8(b)
or
(c)
hereof,
and (ii) within 20 days after submission by the Indemnitee of a written
request for indemnification pursuant to Section 8(a)
hereof,
no Independent Counsel shall have been selected, either the Company or the
Indemnitee may petition the appropriate court of the State (as hereafter
defined) or other court of competent jurisdiction for the appointment as
Independent Counsel of a Person selected by such court or by such other Person
as such court shall designate. 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
8(b)
or
(c)
hereof,
and the Company shall pay all reasonable fees and expenses incident to the
procedures of this Section 8(d),
regardless of the manner in which such Independent Counsel was selected or
appointed. Upon the due commencement of any judicial proceeding or arbitration
pursuant to Section
10(a)(iv)
of this
Agreement, Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
Section
9. Presumptions
and Effect of Certain Proceedings; Construction of Certain
Phrases.
(a) In
making
a determination with respect to whether the Indemnitee is entitled to
indemnification hereunder, the reviewing party making such determination shall
presume that the Indemnitee is entitled to indemnification under this Agreement
if the Indemnitee has submitted a request for indemnification in accordance
with
Section
8(a)
of this
Agreement, and anyone seeking to overcome this presumption shall have the burden
of proof and the burden of persuasion, by clear and convincing evidence.
4
(b) Subject
to the terms of Section
16
below,
the termination of any Proceeding or of any claim, issue or matter therein,
by
judgment, order, settlement or conviction, or upon a plea of nolo
contendere
or its
equivalent, shall not (except as otherwise expressly provided in this Agreement)
of itself adversely affect the right of the Indemnitee to indemnification or
create a presumption that the Indemnitee did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Company or, with respect to any criminal Proceeding, that
the
Indemnitee had reasonable cause to believe that his conduct was
unlawful.
(c) For
purposes of any determination of the Indemnitee’s entitlement to indemnification
under this Agreement or otherwise, the Indemnitee shall be deemed to have acted
in good faith and in a manner he reasonably believe to be in or not opposed
to
the best interests of the Company, and, with respect to a criminal Proceeding,
to have also had no reasonable cause to believe his conduct was unlawful, if
the
Indemnitee’s action is based on the records or books of account of the Company
or another enterprise, including financial statements, or on information
supplied to the Indemnitee by the officers of the Company or another enterprise
in the course of their duties, or on the advice of legal or financial counsel
for the Company or the Board (or any committee thereof) or for another
enterprise or its board of directors (or any committee thereof), or on
information or records given or reports made by an independent certified public
accountant or by an appraiser or other expert selected by the Company or the
Board (or any committee thereof) or by another enterprise or its board of
directors (or any committee thereof). For purposes of this Section
9(c),
the
term “another enterprise” means any other corporation, partnership, limited
liability company, joint venture, trust, employee benefit plan or other
enterprise of which the Indemnitee is or was serving at the request of the
Company as a director, officer, employee or agent. The provisions of this
Section 9(c)
shall
not be deemed to be exclusive or to limit in any way the other circumstances
in
which the Indemnitee may be deemed or found to have met the applicable standard
of conduct set forth in this Agreement. In addition, the knowledge and/or
actions, or failure to act, of any other director, trustee, partner, managing
member, fiduciary, officer, agent or employee of the Company shall not be
imputed to the Indemnitee for purposes of determining the right to
indemnification under this Agreement. Whether or not the foregoing provisions
of
this Section 9(c)
are
satisfied, it shall in any event be presumed that the Indemnitee has acted
in
good faith and in a manner he reasonably believed to be in or not opposed to
the
best interests of the Company, and, with respect to a criminal Proceeding,
that
he also had no reasonable cause to believe his conduct was unlawful. Anyone
seeking to overcome this presumption shall have the burden of proof and the
burden of persuasion, by clear and convincing evidence.
(d) For
purposes of this Agreement, references to “fines” shall include any excise taxes
assessed on the Indemnitee with respect to an employee benefit plan; references
to “serving at the request of the Company” shall include, but shall not be
limited to, any service as a director, officer, employee or agent of the Company
which imposes duties on, or involves services by, the Indemnitee with respect
to
an employee benefit plan, its participants or its beneficiaries; and if the
Indemnitee has acted in good faith and in a manner he reasonably believed to
be
in the interest of the participants and beneficiaries of an employee benefit
plan, he shall be deemed to have acted in a manner “not opposed to the best
interests of the Company” as used in this Agreement. The provisions of this
Section
9(d)
shall
not be deemed to be exclusive or to limit in any way the other circumstances
in
which the Indemnitee may be deemed or found to have met the applicable standard
of conduct set forth in this Agreement.
5
Section
10. Remedies
of the Indemnitee.
(a) In
the
event that (i) a determination is made pursuant to Section
8
of this
Agreement that the Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to
Section
7
of this
Agreement, (iii) the determination of entitlement to indemnification is to
be made by the Board pursuant to Section 8(b)
of this
Agreement and such determination shall not have been made and delivered to
the
Indemnitee in writing within twenty (20) days after receipt by the Company
of
the request for indemnification, (iv) the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Section
8(b)
or
(c)
of this
Agreement and such determination shall not have been made in a written opinion
to the Board and a copy delivered to the Indemnitee within forty-five (45)
days
after receipt by the Company of the request for indemnification, (v) payment
of
indemnification is not made pursuant to Section
6
of this
Agreement within 10 days after receipt by the Company of a written request
therefor or (vi) payment of indemnification is not made within 10 days
after a determination has been made that the Indemnitee is entitled to
indemnification or such determination is deemed to have been made pursuant
to
Section
8
or
9
of this
Agreement, the Indemnitee shall be entitled to an adjudication in an appropriate
court of the State of his entitlement to such indemnification or advancement
of
Expenses. Alternatively, the Indemnitee, at his sole option, may seek an award
in arbitration to be conducted by a single arbitrator pursuant to the rules
of
the American Arbitration Association. The Indemnitee shall commence such
Proceeding seeking an adjudication or an award in arbitration within 180 days
following the date on which the Indemnitee first has the right to commence
such
Proceeding pursuant to this Section
10(a);
provided,
however,
that
the foregoing clause shall not apply in respect of a Proceeding brought by
the
Indemnitee to enforce his rights under Section
5
of this
Agreement.
(b) In
the
event that a determination is made pursuant to Section
8
of this
Agreement that the Indemnitee is not entitled to indemnification, any judicial
proceeding or arbitration commenced pursuant to this Section
10
shall be
conducted in all respects as a de
novo
trial or
a de
novo
arbitration (as applicable) on the merits, and the Indemnitee shall not be
prejudiced by reason of that adverse determination. In any judicial proceeding
or arbitration commenced pursuant to this Section
10,
the
Company shall have the burden of proving that the Indemnitee is not entitled
to
indemnification, and the Company shall be precluded from referring to or
offering into evidence a determination made pursuant to Section
8
of this
Agreement that is adverse to the Indemnitee’s right to indemnification. If the
Indemnitee commences a judicial proceeding or arbitration pursuant to this
Section
10,
the
Indemnitee shall not be required to reimburse the Company for any advances
pursuant to Section
7
until a
final determination is made with respect to the Indemnitee’s entitlement to
indemnification (as to which rights of appeal have been exhausted or
lapsed).
(c) If
a
determination is made or deemed to have been made pursuant to Section
8
or
9
of this
Agreement that the Indemnitee is entitled to indemnification, the Company shall
be bound by such determination in any judicial proceeding or arbitration
commenced pursuant to this Section
10,
absent
(i) a misstatement by the Indemnitee of a material fact, or an omission by
the
Indemnitee of a material fact necessary to make the Indemnitee’s statement not
materially misleading, in connection with the request for indemnification,
or
(ii) a prohibition of such indemnification under applicable law.
6
(d) The
Company shall be precluded from asserting in any judicial proceeding or
arbitration commenced pursuant to this Section
10
that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all of the provisions of this
Agreement.
(e) In
the
event that the Indemnitee, pursuant to this Section
10,
seeks a
judicial adjudication or an award in arbitration to enforce his rights under,
or
to recover damages for breach of, this Agreement, the Indemnitee shall be
entitled to recover from the Company, and shall be indemnified by the Company
against, any and all Expenses actually and reasonably incurred by him in such
judicial adjudication or arbitration, unless the court or arbitrator determines
that each of the Indemnitee’s claims in such Proceeding were made in bad faith
or were frivolous. In the event that a Proceeding is commenced by or in the
right of the Company against the Indemnitee to enforce or interpret any of
the
terms of this Agreement, the Indemnitee shall be entitled to recover from the
Company, and shall be indemnified by the Company against, any and all Expenses
actually and reasonably incurred by him in such Proceeding (including with
respect to any counter-claims or cross-claims made by the Indemnitee against
the
Company in such Proceeding), unless the court or arbitrator determines that
each
of the Indemnitee’s material defenses in such Proceeding were made in bad faith
or were frivolous.
(f) Any
judicial adjudication or arbitration determined under this Section
10
shall be
final and binding on the parties.
Section
11. Defense
of Certain Proceedings.
In the
event the Company shall be obligated under this Agreement to pay the Expenses
of
any Proceeding against the Indemnitee in which the Company is a co-defendant
with the Indemnitee, the Company shall be entitled to assume the defense of
such
Proceeding, with counsel approved by the Indemnitee, which approval shall not
be
unreasonably withheld, upon the delivery to the Indemnitee of written notice
of
its election to do so. After delivery of such notice, approval of such counsel
by the Indemnitee and the retention of such counsel by the Company, the
Indemnitee shall nevertheless be entitled to employ or continue to employ his
own counsel in such Proceeding. Employment of such counsel by the Indemnitee
shall be at the cost and expense of the Company unless and until the Company
shall have demonstrated to the reasonable satisfaction of the Indemnitee and
the
Indemnitee’s counsel that there is complete identity of issues and defenses and
no conflict of interest between the Company and the Indemnitee in such
Proceeding, after which time further employment of such counsel by the
Indemnitee shall be at the cost and expense of the Indemnitee. In all events,
if
the Company shall not, in fact, have timely employed counsel to assume the
defense of such Proceeding, then the fees and Expenses of the Indemnitee’s
counsel shall be at the cost and expense of the Company.
Section
12. Exception
to Right of Indemnification or Advancement of Expenses.
Notwithstanding any other provision of this Agreement, the Indemnitee shall
not
be entitled to indemnification or advancement of Expenses under this Agreement
with respect to any Proceeding, or any claim therein, brought or made by the
Indemnitee against:
7
(a) the
Company, except for (i) any claim or Proceeding in respect of this
Agreement and/or the Indemnitee’s rights hereunder, (ii) any claim or Proceeding
to establish or enforce a right to indemnification under any statute or law
and
(iii) any counter-claim or cross-claim brought or made by him against the
Company in any Proceeding brought by or in the right of the Company against
him;
or
(b) any
other
Person, except for Proceedings or claims approved by the Board.
Section
13. Contribution.
(a) If,
with
respect to any Proceeding, the indemnification provided for in this Agreement
is
held by a court of competent jurisdiction to be unavailable to the Indemnitee
for any reason other than that the Indemnitee did not act in good faith and
in a
manner he reasonably believed to be in or not opposed to the best interests
of
the Company or, with respect to a criminal Proceeding, that the Indemnitee
had
reasonable cause to believe his conduct was unlawful, the Company shall
contribute to the amount of Expenses, judgments, penalties, fines and amounts
paid in settlement actually and reasonably incurred by the Indemnitee or on
his
behalf in connection with such Proceeding or any claim, issue or matter therein
in such proportion as is appropriate to reflect the relative benefits received
by the Indemnitee and the relative fault of the Indemnitee versus the other
defendants or participants in connection with the action or inaction which
resulted in such Expenses, judgments, penalties, fines and amounts paid in
settlement, as well as any other relevant equitable considerations.
(b) The
Company and the Indemnitee agree that it would not be just and equitable if
contribution pursuant to this Section
13
were
determined by pro rata or per capita allocation or by any other method of
allocation which does not take into account the equitable considerations
referred to in Section
13(a)
above.
(c) No
Person
found guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act of 1933) shall be entitled to contribution from
any
Person who was not found guilty of such fraudulent
misrepresentation.
Section
14. Officer
and Director Liability Insurance.
(a) The
Company shall use all commercially reasonable efforts to obtain and maintain
in
effect during the entire period for which the Company is obligated to indemnify
the Indemnitee under this Agreement, one or more policies of insurance with
reputable insurance companies to provide the directors and officers of the
Company with coverage for losses from wrongful acts and omissions and to ensure
the Company’s performance of its indemnification obligations under this
Agreement. In all such insurance policies, the Indemnitee shall be named as
an
insured in such a manner as to provide the Indemnitee with the same rights
and
benefits as are accorded to the most favorably insured of the Company’s
directors and officers. Notwithstanding the foregoing, the Company shall have
no
obligation to obtain or maintain such insurance if the Company determines in
good faith that the Indemnitee is covered by such insurance maintained by a
subsidiary or parent of the Company.
(b) To
the
extent that the Company maintains an insurance policy or policies providing
liability insurance for directors or officers of any other corporation,
partnership, limited liability company, joint venture, trust, employee benefit
plan or other enterprise which the Indemnitee serves at the request of the
Company, the Indemnitee shall be named as an insured under and shall be covered
by such policy or policies in accordance with its or their terms to the maximum
extent of the coverage available for the most favorably insured director or
officer under such policy or policies.
8
(c) In
the
event that the Company is a named insured under any policy or policies of
insurance referenced in either Section
14(a)
or
(b)
above,
the Company hereby covenants and agrees that it will not settle any claims
or
Proceedings that may be covered by such policy or policies of insurance and
in
which the Indemnitee has or may incur Expenses, judgments, penalties, fines
or
amounts paid in settlement without the prior written consent of the
Indemnitee.
Section
15. Security.
Upon
reasonable request by the Indemnitee, the Company shall provide security to
the
Indemnitee for the Company’s obligations hereunder through an irrevocable bank
letter of credit, funded trust or other similar collateral. Any such security,
once provided to the Indemnitee, may not be revoked or released without the
prior written consent of the Indemnitee, which consent may be granted or
withheld at the Indemnitee’s sole and absolute discretion.
Section
16. Settlement
of Claims.
The
Company shall not be liable to indemnify the Indemnitee under this Agreement
for
any amounts paid in settlement of any Proceeding effected without the Company’s
written consent, which consent shall not be unreasonably withheld.
Section
17. Duration
of Agreement.
This
Agreement shall be unaffected by the termination of the Corporate Status of
the
Indemnitee and shall continue for so long as the Indemnitee may have any
liability or potential liability by virtue of his Corporate Status, including,
without limitation, the final termination of all pending Proceedings in respect
of which the Indemnitee is granted rights of indemnification or advancement
of
Expenses hereunder and of any Proceeding commenced by the Indemnitee pursuant
to
Section
10
of this
Agreement relating thereto, whether or not he is acting or serving in such
capacity at the time any liability or Expense is incurred for which
indemnification can be provided under this Agreement. 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.
Section
18. Remedies
of the Company.
The
Company hereby covenants and agrees to submit any and all disputes relating
to
this Agreement that the parties are unable to resolve between themselves to
binding arbitration pursuant to the rules of the American Arbitration
Association and waives all rights to judicial adjudication of any matter or
dispute relating to this Agreement except where judicial adjudication is
requested or required by the Indemnitee.
Section
19. Covenant
Not to Xxx, Limitation of Actions and Release of Claims.
No
legal action shall be brought and no cause of action shall be asserted by or
on
behalf of the Company (or any of its subsidiaries) against the Indemnitee,
his
spouse, heirs, executors, personal representatives or administrators after
the
expiration of two (2) years from the date on which the Corporate Status of
the
Indemnitee is terminated (for any reason), and any claim or cause of action
of
the Company (or any of its subsidiaries) shall be extinguished and deemed
released unless asserted by filing of a legal action within such two-year
period; provided,
however,
that
the foregoing shall not apply to any action or cause of action brought or
asserted by the Company pursuant to or in respect of this Agreement and shall
not constitute a waiver or release of any of the Company’s rights under this
Agreement.
9
Section
20. Limitation
of Liability.
Notwithstanding any other provision of this Agreement, neither party shall
have
any liability to the other for, and neither party shall be entitled to recover
from the other, any consequential, special, punitive, multiple or exemplary
damages as a result of a breach of this Agreement.
Section
21. Subrogation.
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 the 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.
Section
22. No
Multiple Recovery.
The
Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder if and to the extent that the Indemnitee
has
otherwise actually received such payment under any insurance policy, contract,
agreement or otherwise.
Section
23. Definitions.
For
purposes of this Agreement:
(a) “Affiliate”
means,
with respect to any Person, any other Person directly or indirectly controlling,
controlled by or under common control with such Person. For purposes hereof,
“control” (including, with correlative meaning, the terms “controlling”,
“controlled by” and “under common control with”) means the possession, directly
or indirectly, of the power to direct or cause the direction of management
and
policies of such Person, by contract or otherwise.
(b) “Change
of Control”
shall
mean a change in control of the Company occurring after the date of this
Agreement of a nature that would be required to be reported in response to
Item
6(e) of Schedule 14A of Regulation 14A (or in response to any similar item
on
any similar schedule or form) promulgated under the Exchange Act, whether or
not
the Company is then subject to such reporting requirement. Without limiting
the
foregoing, such a Change in Control shall be deemed to have occurred if, after
the date of this Agreement, (i) any “person” (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as
defined in Rule 13d-3 promulgated under the Exchange Act), directly or
indirectly, of securities of the Company representing 20% or more of the
combined voting power of the Company’s then outstanding securities entitled to
vote generally in the election of directors without the prior approval of at
least two-thirds of the members of the Board in office immediately prior to
such
person attaining such percentage interest; (ii) the Company is a party to a
merger, consolidation, sale of assets or other reorganization, or a proxy
contest, as a consequence of which members of the Board in office immediately
prior to such transaction or event constitute less than a majority of the Board
thereafter; (iii) during any period of two consecutive years, individuals who
at
the beginning of such period constituted the Board (including for this purpose
any new director whose election or nomination for election by the Company’s
shareholders was approved by a vote of at least two-thirds of the directors
then
still in office who were directors at the beginning of such period) cease for
any reason to constitute at least a majority of the Board; or (iv) approval
by the shareholders of the Company of a liquidation or dissolution of the
Company.
10
(c) “Company”
means
Eagle Broadband Corporation, a Texas corporation.
(d) “Corporate
Status”
describes the status of an individual who is or was an officer or director
of
the Company, or is or was serving at the request of the Company as an officer,
director, employee or agent of another corporation, partnership, limited
liability company, joint venture, trust, employee benefit plan or other
enterprise.
(e) “Disinterested
Director”
means
a
director of the Company who is not and was not a party to, or otherwise involved
in, the Proceeding for which indemnification is sought by the
Indemnitee.
(f) “Exchange
Act”
means
the Securities Exchange Act of 1934, as amended.
(g) “Expenses”
shall
include all reasonable attorneys’ fees, retainers, court costs, transcript
costs, fees of experts, witness fees, travel expenses, duplicating 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 or being or preparing to be a witness in a
Proceeding.
(h) “Independent
Counsel”
means
a
law firm or a member of a law firm that is experienced in matters of corporation
law and neither presently is, nor in the past five (5) years has been, retained
to represent: (i) the Company or the Indemnitee in any matter material to either
such party 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 the Indemnitee in an action to determine
the
Indemnitee’s rights under this Agreement.
(i) “Person”
means
a
natural person, firm, partnership, joint venture, association, corporation,
company, limited liability company, trust, business trust, estate or other
entity.
(j) “Proceeding”
includes any action, suit, arbitration, alternate dispute resolution mechanism,
investigation, administrative hearing or any other proceeding whether civil,
criminal, administrative or investigative.
(k) “State”
means
the State of Texas.
Section
24. Non-Exclusivity.
The
Indemnitee’s rights of indemnification and to receive advancement of Expenses as
provided by this Agreement shall not be deemed exclusive of any other rights
to
which the Indemnitee may at any time be entitled under applicable law, the
Certificate, the Bylaws, any agreement, a vote of stockholders, a resolution
of
directors or otherwise.
11
Section
25. Remedies
Not Exclusive.
No
right or remedy herein conferred upon the Indemnitee is intended to be exclusive
of any other right or remedy, and every other right or remedy shall be
cumulative of and in addition to the rights and remedies given hereunder or
now
or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy of the Indemnitee hereunder or otherwise
shall
not be deemed an election of remedies on the part of the Indemnitee and shall
not prevent the concurrent assertion or employment of any other right or remedy
by the Indemnitee.
Section
26. Changes
in Law.
In the
event that a change in applicable law after the date of this Agreement, whether
by statute, rule or judicial decision, expands or otherwise increases the right
or ability of a Texas corporation to indemnify a member of its board of
directors or an officer, the Indemnitee shall, by this Agreement, enjoy the
greater benefits so afforded by such change. In the event that a change in
applicable law after the date of this Agreement, whether by statute, rule or
judicial decision, narrows or otherwise reduces the right or ability of a Texas
corporation to indemnify a member of its board of directors or an officer,
such
change shall have no effect on this Agreement or any of the Indemnitee’s rights
hereunder, except and only to the extent required by law.
Section
27. Interpretation
of Agreement.
The
Company and the Indemnitee acknowledge and agree that it is their intention
that
this Agreement be interpreted and enforced so as to provide indemnification
to
the Indemnitee to the fullest extent now or hereafter permitted by
law.
Section
28. Severability.
If any
provision or provisions of this Agreement shall be held to be invalid, illegal
or unenforceable for any reason whatsoever: (a) the validity, legality and
enforceability of the remaining provisions of this agreement (including, without
limitation, each portion of any Section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable) shall not in any way
be
affected or impaired thereby; (b) such provision or provisions will be deemed
reformed to the extent necessary to conform to applicable law and to give
maximum effect to the intent of the parties hereto; and (c) to the fullest
extent possible, the provisions of this Agreement (including, without
limitation, each portion of any Section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall be construed so as to give effect
to
the intent manifested by the provision or provisions held invalid, illegal
or
unenforceable.
Section
29. Governing
Law; Jurisdiction and Venue; Specific Performance.
(a) The
parties agree that this Agreement shall be governed by, and construed and
enforced in accordance with, the internal laws of the State of Texas without
giving effect to any choice or conflict of law provision or rule (whether of
the
State of Texas or any other jurisdiction) that would cause the application
of
the laws of any jurisdiction other than the State of
Texas.
12
(b) ANY
“ACTION OR PROCEEDING” (AS SUCH TERM IS DEFINED BELOW) ARISING OUT OF OR
RELATING TO THIS AGREEMENT SHALL BE FILED IN AND LITIGATED OR ARBITRATED SOLELY
BEFORE THE COURTS LOCATED IN OR ARBITRATORS SITTING IN GALVESTON COUNTY IN
THE
STATE OF TEXAS, AND EACH PARTY TO THIS AGREEMENT: (i) GENERALLY AND
UNCONDITIONALLY ACCEPTS THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS
AND
ARBITRATORS AND VENUE THEREIN, AND WAIVES TO THE FULLEST EXTENT PROVIDED BY
LAW
ANY DEFENSE OR OBJECTION TO SUCH JURISDICTION AND VENUE BASED UPON THE DOCTRINE
OF “FORUM NON CONVENIENS;” AND (ii) GENERALLY AND UNCONDITIONALLY CONSENTS TO
SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING BY DELIVERY OF CERTIFIED
OR
REGISTERED MAILING OF THE SUMMONS AND COMPLAINT IN ACCORDANCE WITH THE NOTICE
PROVISIONS OF THIS AGREEMENT. FOR PURPOSES OF THIS SECTION, THE TERM “ACTION OR
PROCEEDING” IS DEFINED AS ANY AND ALL CLAIMS, SUITS, ACTIONS, HEARINGS,
ARBITRATIONS OR OTHER SIMILAR PROCEEDINGS, INCLUDING APPEALS AND PETITIONS
THEREFROM, WHETHER FORMAL OR INFORMAL, GOVERNMENTAL OR NON-GOVERNMENTAL, OR
CIVIL OR CRIMINAL. THE FOREGOING CONSENT TO JURISDICTION SHALL NOT CONSTITUTE
GENERAL CONSENT TO SERVICE OF PROCESS IN THE STATE FOR ANY PURPOSE EXCEPT AS
PROVIDED ABOVE, AND SHALL NOT BE DEEMED TO CONFER RIGHTS ON ANY PERSON OTHER
THAN THE PARTIES TO THIS AGREEMENT.
(c) The
Company acknowledges that the Indemnitee may, as a result of the Company’s
breach of its covenants and obligations under this Agreement, sustain immediate
and long-term substantial and irreparable injury and damage which cannot be
reasonably or adequately compensated by damages at law. Consequently, the
Company agrees that the Indemnitee shall be entitled, in the event of the
Company’s breach or threatened breach of its covenants and obligations
hereunder, to obtain equitable relief from a court of competent jurisdiction,
including enforcement of each provision of this Agreement by specific
performance and/or temporary, preliminary and/or permanent injunctions enforcing
any of the Indemnitee’s rights, requiring performance by the Company, or
enjoining any breach by the Company, all without proof of any actual damages
that have been or may be caused to the Indemnitee by such breach or threatened
breach and without the posting of bond or other security in connection
therewith. The Company waives the claim or defense therein that the Indemnitee
has an adequate remedy at law, and the Company shall not allege or otherwise
assert the legal position that any such remedy at law exists. The Company agrees
and acknowledges that: (i) the terms of this Section 29(c)
are
fair, reasonable and necessary to protect the legitimate interests of the
Indemnitee; (ii) this waiver is a material inducement to the Indemnitee to
enter
into the transactions contemplated hereby; and (iii) the Indemnitee relied
upon
this waiver in entering into this Agreement and will continue to rely on this
waiver in its future dealings with the Company. The Company represents and
warrants that it has reviewed this provision with its legal counsel, and that
it
has knowingly and voluntarily waived its rights referenced in this Section
29
following consultation with such legal counsel.
13
Section
30. Nondisclosure
of Payments.
Except
as expressly required by Federal securities laws, the Company shall not disclose
any payments under this Agreement without the prior written consent of the
Indemnitee. Any payments to the Indemnitee that must be disclosed shall, unless
otherwise required by law, be described only in the Company proxy or information
statements relating to special and/or annual meetings of the Company’s
shareholders, and the Company shall afford the Indemnitee a reasonable
opportunity to review all such disclosures and, if requested by the Indemnitee,
to explain in such statement any mitigating circumstances regarding the events
reported.
Section
31. Notice
by the Indemnitee.
The
Indemnitee agrees to promptly 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 or advancement of Expenses covered hereunder.
Section
32. Notices.
All
notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given if (a) delivered by hand
and
received for by the party to whom said notice or other communication shall
have
been directed, or (b) mailed by U.S. certified or registered mail with postage
prepaid, on the third business day after the date on which it is so mailed:
(i)
If to the Company: Eagle Broadband Corporation,
_______________________________________, Attention: President; and (ii) if
to
any other party hereto, including the Indemnitee, to the address of such party
set forth on the signature page hereof; or to such other address as may have
been furnished by any party to the other(s), in accordance with this
Section
32.
Section
33. Modification
and Waiver.
No
supplement, modification or amendment of this Agreement or any provision hereof
shall limit or restrict in any way any right of the Indemnitee under this
Agreement with respect to any action taken or omitted by the Indemnitee in
his
Corporate Status prior to such supplement, modification or amendment. No
supplement, modification or amendment of this Agreement or any provision hereof
shall be binding unless executed in writing by both of the Company and the
Indemnitee. No waiver of any provision of this Agreement shall be deemed or
shall constitute a wavier of any other provision hereof (whether or not similar)
nor shall such waiver constitute a continuing waiver.
Section
34. Headings.
The
headings of the Sections or paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement
or
to affect the construction thereof.
Section
35. Gender.
Use of
the masculine pronoun in this Agreement shall be deemed to include usage of
the
feminine pronoun where appropriate.
Section
36. Identical
Counterparts.
This
Agreement may be executed in one or more counterparts (whether by original,
photocopy or facsimile signature), each of which shall for all purposes be
deemed to be an original, but all of which together shall constitute one and
the
same Agreement. Only one such counterpart executed by the party against whom
enforcement is sought must be produced to evidence the existence of this
Agreement.
14
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement effective
as of
the day and year first above written.
| ATTEST: | EAGLE BROADBAND, INC. |
| By:_____________________________________ | By:_____________________________________ |
| Name: __________________________________ | Name: __________________________________ |
| Title: ___________________________________ | Title: ___________________________________ |
| INDEMNITEE | |
| ___________________________________ | |
| Name: __________________________________ | |
| Address: ________________________________ | |
| ___________________________________ |
15
