INDEMNIFICATION AGREEMENT
THIS
INDEMNIFICATION AGREEMENT ("Agreement") is made and entered into as of the
____
day May, 2008 by and among Capital Growth Systems, Inc., a Florida corporation
(the "Company") and ____________________, a director and/or officer of the
Company (the "Indemnitee").
RECITALS
WHEREAS,
the
interpretation of statutes, regulations, Articles of Incorporation and Bylaws
regarding indemnification of directors and officers may be too uncertain to
provide directors and officers with adequate notice of the legal, financial
and
other risks to which they may be exposed by virtue of their service as such;
and
WHEREAS,
damages
sought against directors and officers in shareholder or similar litigation
may
be substantial, and the costs of defending such actions, and of judgments in
favor of plaintiffs or of settlement therewith, may be prohibitive for
individual directors and officers, without regard to the merits of a particular
action and without regard to the culpability of, or the receipt of improper
personal benefit by, any named director or officer; and
WHEREAS,
the
long period of time which may elapse before final disposition of such litigation
may impose undue hardship and burden on a director or officer or his estate
in
maintaining a proper and adequate defense of himself or his estate against
claims for damages; and
WHEREAS,
the
Company is organized under the Florida Business Corporation Act (the "FBCA"),
and the FBCA empowers corporations to indemnify and advance expenses to a person
serving as a director or officer of the corporation and further provides that
the indemnification and advancement of expenses set forth in the FBCA are not
exclusive of any other rights to which a director may be entitled under a
corporation's charter, bylaws, a resolution of stockholders or directors, an
agreement or otherwise; and
WHEREAS,
the
Company desires to retain the services of highly qualified individuals, such
as
Indemnitee, to serve as directors of the Company; and
WHEREAS,
the
Board of Directors of the Company (the "Board") has concluded that it is
reasonable and prudent for the Company to enter into an agreement to indemnify
in a reasonable and adequate manner Indemnitee and to assume for itself maximum
liability for expenses and damages in connection with claims lodged against
Indemnitee for his decisions and actions as a director and/or officer of the
Company.
NOW,
THEREFORE,
in
consideration of the foregoing, and of other good and valuable consideration,
the receipt and sufficiency of which is acknowledged by each of the parties
hereto, the parties agree as follows:
ARTICLE
I
DEFINITIONS
For
purposes of this Agreement, the following terms shall have the meanings set
forth below:
Section
1.1 "Board"
shall
mean the Board of Directors of the Company.
Section
1.2 "Change
in Control" shall
mean, and shall be deemed to have occurred if on or after the date of this
Agreement, (i) any "person" or "group" (as such terms are used in Sections
13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended) (such person
or
entity as is agreed to by a majority of the Pre-Change in Control Directors)
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Company representing more than
forty percent (40%) of the voting power represented by the Company's then
outstanding Voting Securities, (ii) any "person" or "group" (as such terms
are
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) becomes the "beneficial owner", directly or indirectly, of securities
of the Company entitling such beneficial owner to elect a majority of the
Company's Board of Directors, (iii) at any time during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors, and any new director whose election to the Board of
Directors or whose nomination for election was approved by two-thirds (2/3)
of
the directors 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 of the Board of Directors, or (iv) the Company
is liquidated or dissolved or adopts a plan of liquidation or dissolution or
the
stockholders of the Company approve a sale of all or substantially all of the
Company's assets.
Section
1.3 "Corporate
Status" shall
mean the status of a person who is or was a director or officer of the Company,
or a member of any committee of the Board, and the status of a person who,
while
a director or officer of the Company, is or was serving at the request of the
Company as a director, officer, partner, trustee, employee, or agent of another
foreign or domestic corporation, partnership, joint venture, trust, other
incorporated or unincorporated entity or enterprise or employee benefit
plan.
Section
1.4 "Disinterested
Director" shall
mean a director of the Company who neither is nor was a party to the Proceeding
in respect of which indemnification is being sought by Indemnitee.
Section
1.5 "Expenses"
shall
mean, without limitation, all reasonable expenses incurred in connection with
any Proceedings, including all attorneys' fees, retainers, court costs,
transcript costs, fees of experts, investigation fees and expenses, accounting
and 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.
Section
1.6 "Good
Faith Act or Omission" shall
mean an act or omission of Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company and other than (i) one that was
material to the loss or liability and that was committed in bad faith or that
was the result of active or deliberate dishonesty; (ii) one from which
Indemnitee actually received an improper personal benefit in money, property
or
services; or (iii) in the case of a criminal Proceeding, one as to which
Indemnitee had cause to believe his conduct was unlawful.
Section
1.7 "Liabilities"
shall
mean all liabilities or obligations of any type whatsoever, including, without
limitation, any claims, damages, judgments, fines, excise taxes and penalties
(including under the Employee Retirement Income Security Act of 1974, as
amended) and amounts paid in settlement (including all interest, assessments
and
other charges paid or payable in connection with or in respect of such claims,
damages, judgments, fines, penalties or amounts paid in settlement) incurred,
paid or suffered in connection with the investigation, defense, prosecution,
settlement or appeal of any Proceeding or any claim, issue or matter
therein.
2
Section
1.8 "Pre-Change
in Control Directors" shall
mean each of Xxxxxxx Xxxxx, Xxxxxx Xxxx, Xxx Xxxxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
Xxxxxxx, Xxxxxx Xxxxx and such other persons who become directors of the Company
prior to a Change in Control and who are approved in writing as Pre-Change
in
Control Directors by a majority of the above-named individuals from time to
time.
Section
1.9 "Proceeding"
shall
mean any threatened, pending or completed claim, action, suit, arbitration,
alternate dispute resolution mechanism, investigation, inquiry, administrative
hearing or any other actual, threatened or completed proceeding whether civil,
criminal, administrative or investigative, or any appeal therefrom.
Section
1.10 "Voting
Securities" shall
mean any securities of the Company that are entitled to vote generally in the
election of directors.
ARTICLE
II
NOTICE
OF PROCEEDINGS AND DEFENSE OF CLAIMS
Section
2.1 Notice
of Proceedings.
Indemnitee
agrees to notify the Company promptly 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, but Indemnitee's
failure to so notify the Company shall not relieve the Company from any
liability which it may have to Indemnitee under this Agreement.
Section
2.2 Defense
of Claims.
The
Company will be entitled to participate, at its own expense, in any Proceeding
of which it has notice. The Company jointly with any other indemnifying party
similarly notified of any Proceeding will be entitled to assume the defense
of
Indemnitee therein, with counsel reasonably satisfactory to Indemnitee, upon
delivery of written notice to Indemnitee of its election to do so; provided,
however,
that
the Company shall not be entitled to assume the defense of Indemnitee in any
Proceeding if there has been a Change in Control or if Indemnitee has reasonably
concluded that there may be a conflict of interest between the Company and
Indemnitee with respect to such Proceeding. After notice from the Company to
Indemnitee of its election to assume the defense of Indemnitee and the retention
by the Company of counsel reasonably satisfactory to Indemnitee, the Company
will not be liable to Indemnitee under this Agreement for any Expenses incurred
thereafter by Indemnitee in connection with the defense of any Proceeding,
other
than reasonable costs of investigation or as otherwise provided below.
Notwithstanding the foregoing, Indemnitee shall have the right to employ his
own
counsel in any such Proceeding if (i) the employment of counsel by Indemnitee
has been authorized by the Company; (ii) Indemnitee shall have reasonably
concluded that counsel employed by the Company may not adequately represent
Indemnitee and shall have so informed the Company; or (iii) the Company shall
not in fact have employed counsel to assume the defense of Indemnitee in such
Proceeding or the counsel employed by the Company shall not, in fact, have
assumed such defense or such counsel shall not be acting, in connection
therewith, with reasonable diligence; and in each such case the fees and
expenses of Indemnitee's counsel shall be an Expense under this Agreement and
shall therefore be advanced by the Company in accordance with this Agreement.
If
Indemnitee employs his own counsel pursuant to the prior sentence, Indemnitee
shall use good faith efforts to utilize the same counsel as other similarly
situated officers and directors of the Company who have similar interests and
defenses in a Proceeding unless Indemnitee shall have reasonably concluded
that
counsel employed by other officers and directors may not adequately represent
Indemnitee.
3
Section
2.3 Settlement
of Claims.
The
Company shall not settle any Proceeding in any manner which would impose any
liability, penalty or limitation on Indemnitee without the written consent
of
Indemnitee; provided, however, that Indemnitee will not unreasonably withhold
or
delay consent to any proposed settlement. The Company shall not be liable to
indemnify Indemnitee under this Agreement or otherwise for any amounts paid
in
settlement of any Proceeding effected by Indemnitee without the Company's
written consent, which consent shall not be unreasonably withheld or delayed.
ARTICLE
III
PERIOD
OF LIMITATIONS
No
legal
action shall be brought and no cause of action shall be asserted by or in the
right of the Company against Indemnitee, Indemnitee's estate, spouse, heirs,
executors or personal or legal representatives after the expiration of the
later
of (a) two years from the date of accrual of such cause of action, and (b)
one
year from the date that the Company knew, or could have discovered with the
exercise of reasonable diligence, of the circumstances giving rise to such
cause
of action. Any claim or cause of action of the Company shall be extinguished
and
deemed released unless asserted by the timely filing of a legal action within
such period; provided, however, that if any shorter period of limitations is
otherwise applicable to any such cause of action, such shorter period shall
govern.
ARTICLE
IV
INDEMNIFICATION
Section
4.1 General.
In
addition to the Company's specific obligations set forth below, the Company
hereby agrees to indemnify Indemnitee to the fullest extent required or
permitted by the Company's Articles of Incorporation or Bylaws and by applicable
law in effect on the date hereof and to such greater extent as applicable law
may hereafter from time to time permit. For all matters for which Indemnitee
is
entitled to indemnification under this Article IV, Indemnitee shall be entitled
to advancement of Expenses in accordance with Article V hereof. The Company's
obligation to indemnify and advance Expenses pursuant to this Agreement shall
apply to all Proceedings, regardless of whether the underlying events, acts
or
omissions occurred before or after the date hereof.
Section
4.2 Proceeding
Other Than a Proceeding by or in the Right of the
Company.
If
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 (other than a Proceeding by or in the right of the Company) by reason
of, or in connection with, his Corporate Status, or by reason of alleged action
or inaction by him in any such capacity, the Company shall, subject to the
limitations set forth in Section
4.6
below,
hold harmless and indemnify Indemnitee against any and all Expenses and
Liabilities actually and reasonably incurred by or for Indemnitee in connection
with the Proceeding unless it is established pursuant to this Agreement that
act(s) or omission(s) of Indemnitee giving rise thereto were not Good Faith
Act(s) or Omission(s).
4
Section
4.3 Proceedings
by or in the Right of the Company.
If
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 by or in the right of the Company, by reason of, or in connection
with, his Corporate Status, or by reason of alleged action or inaction by him
in
such capacity, then the Company shall, subject to the limitations set forth
in
Section
4.6
below,
hold harmless and indemnify Indemnitee against any and all Liabilities and
Expenses actually incurred by or for him in connection with the Proceeding,
unless it is established pursuant to this Agreement that the act(s) or
omission(s) of Indemnitee giving rise to the Proceeding were not Good Faith
Act(s) or Omission(s); except that no indemnification under this Section
4.3
shall be
made in respect of any claim, issue or matter as to which Indemnitee shall
have
been adjudged to be liable to the Company, unless a court of appropriate
jurisdiction (including, but not limited to, the court in which such Proceeding
was brought) shall determine upon application that, despite the adjudication
of
liability but in view of all the circumstances of the case, regardless of
whether Indemnitee's act(s) or omission(s) were found to be a Good Faith Act(s)
or Omission(s), Indemnitee is fairly and reasonably entitled to indemnification
for such Expenses which such court shall deem proper.
Section
4.4 Indemnification
of a Party Who is Wholly or Partly Successful.
Notwithstanding
any other provision of this Agreement, to the extent that Indemnitee is, by
reason of Indemnitee's Corporate Status, a party to and is successful, on the
merits or otherwise, in any Proceeding, Indemnitee shall be indemnified by
the
Company to the maximum extent permitted by applicable law, against all Expenses
and Liabilities actually incurred by or for him in connection therewith. If
Indemnitee is not wholly successful in such 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 hold harmless and indemnify
Indemnitee to the maximum extent permitted by applicable law, against all
Expenses and Liabilities actually and reasonably incurred by or for him in
connection with each successfully resolved claim, issue or matter in such
Proceeding. Resolution of a claim, issue or matter by dismissal, with or without
prejudice, except as provided in Section
4.6
hereof,
shall be deemed a successful result as to such claim, issue or matter, so long
as there has been no finding (either adjudicated or pursuant to Article VI
hereof) that the act(s) or omission(s) of Indemnitee giving rise thereto were
not a Good Faith Act(s) or Omission(s).
Section
4.5 Indemnification
for Expenses as Witness.
Notwithstanding
any other provision of this Agreement, to the extent that Indemnitee, by reason
of Indemnitee's Corporate Status, has prepared to serve or has served as a
witness in any Proceeding, or has participated in discovery proceedings or
other
trial preparation, Indemnitee shall be held harmless and indemnified against
all
Expenses actually and reasonably incurred by or for him in connection
therewith.
5
Section
4.6 Specific
Limitations on Indemnification.
In
addition to the other limitations set forth in this Article IV, and
notwithstanding anything in this Agreement to the contrary, the Company shall
not be obligated under this Agreement to make any payment to Indemnitee for
indemnification or Expenses with respect to any Proceeding:
(a) To
the
extent that payment is actually made to Indemnitee under any insurance policy
or
is made on behalf of Indemnitee by or on behalf of the Company otherwise than
pursuant to this Agreement.
(b) To
the
extent it is determined pursuant to this Agreement that a claim of Indemnitee
for such indemnification arose from: (i) a breach by Indemnitee of Indemnitee's
duty of loyalty to the Company or its shareholders; (ii) acts or omissions
of
Indemnitee that are not Good Faith Acts or Omissions or which are the result
of
active and deliberate dishonesty; (iii) acts or omissions of Indemnitee which
Indemnitee had reasonable cause to believe were unlawful; or (iv) a transaction
in which Indemnitee or one of his "affiliates" (as that term is construed under
Rule 405 promulgated under the Securities Act of 1933, as amended) actually
received an improper personal benefit in money, property or
service.
(c) If
there
has been no Change in Control, for Liabilities in connection with Proceedings
settled by Indemnitee without the consent of the Company which consent, however,
shall not be unreasonably withheld.
(d) If
the
Proceeding was initiated by Indemnitee (other than Proceedings initiated by
Indemnitee in defense and Proceedings to enforce Indemnitee's rights under
this
Agreement or the Company's Articles of Incorporation or Bylaws as contemplated
by Section
6.7).
ARTICLE
V
ADVANCEMENT
OF EXPENSES
The
Company shall advance to Indemnitee all Expenses which are incurred by or for
Indemnitee in connection with any Proceeding (whether or not Indemnitee is
a
party in such Proceeding) for which Indemnitee is entitled to indemnification
pursuant to Article IV hereof, in advance of the final disposition of such
Proceeding, provided that (i) Indemnitee provides the Company with written
affirmation of his good faith belief that he has met the standard of conduct
necessary for indemnification by the Company pursuant to Article IV hereof,
and
(ii) Indemnitee provides the Company with a written agreement (the
"Undertaking") to repay the amount paid or reimbursed by the Company, together
with the applicable legal rate of interest thereon (computed at the Company's
cost of borrowing funds over the period of advance from the Company's principal
lender from time to time), if it is ultimately determined that Indemnitee is
not
entitled to be indemnified by the Company for such amount. The Company shall
advance such expenses within five (5) business days after the receipt by the
Company of the Undertaking. Indemnitee hereby agrees to repay any Expenses
advanced hereunder if it shall ultimately be determined that Indemnitee is
not
entitled to be indemnified against such Expenses. Any advances and the
undertaking to repay pursuant to this Article V shall be unsecured.
ARTICLE
VI
PROCEDURE
FOR PAYMENT OF LIABILITIES;
DETERMINATION
OF RIGHT TO INDEMNIFICATION
Section
6.1 Procedure
for Payment.
To
obtain
indemnification for Liabilities under this Agreement, Indemnitee shall submit
to
the Company a written request for payment, including with such request such
documentation as is reasonably available to Indemnitee and reasonably necessary
to determine whether, and to what extent, Indemnitee is entitled to
indemnification and payment hereunder. The Secretary of the Company, or such
other person as shall be designated by the Board of Directors, promptly upon
receipt of a request for indemnification shall advise the Board of Directors,
in
writing, of such request. Any indemnification payment due hereunder shall be
paid by the Company within ten (10) business days of Indemnitee submitting
such
a request for payment, unless in such ten (10) business day period the Company
notifies Indemnitee that the Board of Directors has determined that Indemnitee
is not entitled to indemnification under this Agreement, in which case such
indemnification payment shall be paid by the Company no later than five (5)
business days following any determination, pursuant to this Article VI that
such
indemnification payment is proper hereunder.
6
Section
6.2 No
Determination Necessary when Indemnitee was Successful.
To
the
extent Indemnitee has been successful, on the merits or otherwise, in defense
of
any Proceeding referred to in Sections
4.2 or 4.3
above or
in the defense of any claim, issue or matter described therein, the Company
shall indemnify Indemnitee against Liabilities and Expenses actually and
reasonably incurred by or for him in connection with the investigation, defense
or appeal of such Proceeding.
Section
6.3 Determination
of Good Faith Act or Omission.
In
the
event that Section
6.2
is
inapplicable, the Company also shall hold harmless and indemnify Indemnitee
unless the Company shall prove by clear and convincing evidence to a forum
listed in Section
6.4
below
that the act(s) or omission(s) of Indemnitee giving rise to the Proceeding
were
not Good Faith Act(s) or Omission(s).
Section
6.4 Forum
for Determination. Indemnitee
shall be entitled to select from among the following the forums, in which the
validity of the Company's claim under Section
6.3
that
Indemnitee is not entitled to indemnification will be heard:
(a) A
quorum
of the Board consisting of Disinterested Directors; or
(b) A
majority of the Pre-Change in Control Directors.
As
soon
as practicable, and in no event later than thirty (30) days after written notice
of Indemnitee's choice of forum pursuant to this Section
6.4,
the
Company shall, at its own expense, submit to the selected forum in such manner
as Indemnitee or Indemnitee's counsel may reasonably request, its claim that
Indemnitee is not entitled to indemnification, and the Company shall act in
the
utmost good faith to assure Indemnitee a complete opportunity to defend against
such claim. The fees and expenses of the selected forum in connection with
making the determination contemplated hereunder shall be paid by the Company.
If
the Company shall fail to submit the matter to the selected forum within thirty
(30) days after Indemnitee's written notice or if the forum so empowered to
make
the determination shall have failed to make the requested determination within
thirty (30) days after the matter has been submitted to it by the Company,
the
requisite determination that Indemnitee has the right to indemnification shall
be deemed to have been made.
Section
6.5 Right
to Appeal.
Notwithstanding
a determination by any forum listed in Section 6.4 above that Indemnitee is
not
entitled to indemnification with respect to a specific Proceeding, Indemnitee
shall have the right to apply to the court in which that Proceeding is or was
pending, or to any other court of competent jurisdiction, for the purpose of
enforcing Indemnitee's right to indemnification pursuant to this Agreement.
Such
enforcement action shall consider Indemnitee's entitlement to indemnification
de
novo, and Indemnitee shall not be prejudiced by reason of a prior determination
that Indemnitee is not entitled to indemnification. The Company shall be
precluded from asserting that the procedures and presumptions of this Agreement
are not valid, binding and enforceable. The Company further agrees to stipulate
in any such judicial proceeding that the Company is bound by all the provisions
of this Agreement and is precluded from making any assertion to the
contrary.
7
Section
6.6 Right
to Seek Judicial Determination.
Notwithstanding
any other provision of this Agreement to the contrary, at any time after sixty
(60) days after a request for indemnification has been made to the Company
(or
upon earlier receipt of written notice that a request for indemnification has
been rejected) and within one (1) year after the making of such indemnification
request, Indemnitee may petition a court of competent jurisdiction, whether
or
not the court has jurisdiction over, or is the forum in which is pending, the
Proceeding, to determine whether Indemnitee is entitled to indemnification
hereunder, and such court thereupon shall have the exclusive authority to make
such determination, unless and until such court dismisses or otherwise
terminates Indemnitee's action without having made such determination. The
court, as petitioned, shall make an independent determination of whether
Indemnitee is entitled to indemnification hereunder, without regard to any
prior
determination in any other forum as provided hereby.
Section
6.7 Expenses
under this Agreement.
Notwithstanding
any other provision in this Agreement to the contrary, the Company shall
indemnify Indemnitee against all Expenses incurred by Indemnitee in connection
with any hearing or proceeding under this Article VI involving Indemnitee if
Indemnitee is successful in such claim and against all Expenses incurred by
Indemnitee in connection with any other action between the Company and
Indemnitee involving the interpretation or enforcement of the rights of
Indemnitee under this Agreement, if it is determined that Indemnitee was
entitled to indemnification in whole or in part thereunder.
ARTICLE
VII
PRESUMPTIONS
AND EFFECT OF CERTAIN PROCEEDINGS
Section
7.1 Burden
of Proof.
In
making
a determination with respect to entitlement to indemnification hereunder, the
person, persons, entity or entities making such determination shall presume
that
Indemnitee is entitled to indemnification under this Agreement and the Company
shall have the burden of proof to overcome that presumption.
Section
7.2 Effect
of Other Proceedings.
The
termination of any Proceeding or of any claim, issue or matter therein, by
judgment, order or settlement shall not create a presumption that the act(s)
or
omission(s) giving rise to the Proceeding were not Good Faith Act(s) or
Omission(s). The termination of any Proceeding by conviction shall create a
rebuttable presumption that the act(s) or omission(s) of Indemnitee giving
rise
to the Proceeding were not Good Faith Act(s) or Omission(s).
Section
7.3 Reliance
as Safe Harbor.
For
purposes of any determination of whether any act or omission of Indemnitee
was a
Good Faith Act or Omission, each act of Indemnitee shall be deemed to be a
Good
Faith Act or Omission if Indemnitee's action is based on the records or books
of
accounts of the Company, including financial statements, or on information
supplied to Indemnitee by the officers of the Company in the course of their
duties, or on the advice of legal counsel for the Company or on information
or
records given or reports made to the Company by an independent certified public
accountant or by an appraiser or other expert selected with reasonable care
by
the Company. The provisions of this Section
7.3
shall
not be deemed to be exclusive or to limit in any way the other circumstances
in
which Indemnitee may be deemed to have met the applicable standard of conduct
set forth in this Agreement or under applicable law.
8
Section
7.4 Actions
of Others.
The
knowledge and/or actions, or failure to act, of any other director, officer,
agent or employee of the Company shall not be imputed to Indemnitee for purposes
of determining the right to indemnification under this Agreement.
ARTICLE
VIII
INSURANCE
In
the
event that the Company maintains officers' and directors' or similar liability
insurance to protect itself and any director or officer of the Company against
any expense, liability or loss, such insurance shall cover Indemnitee to at
least the same degree as each other similarly situated director and/or officer
of the Company.
ARTICLE
IX
MISCELLANEOUS
Section
9.1 Non-Exclusivity.
The
rights of Indemnitee hereunder shall be in addition to any other rights to
which
Indemnitee may at any time be entitled under any provision of law or the
Articles of Incorporation or the Bylaws of the Company, as the same may be
in
effect from time to time, or any agreement, a vote of shareholders of the
Company or a resolution of directors of the Company or otherwise, and to the
extent that during the term of this Agreement the rights of the then-existing
directors and officers of the Company are more favorable to such directors
or
officers than the rights currently provided to Indemnitee under this Agreement,
Indemnitee shall be entitled to the full benefits of such more favorable rights.
No amendment, alteration, rescission or replacement of this Agreement or any
provision hereof which would in any way limit the benefits and protections
afforded to an Indemnitee hereby shall be effective as to such Indemnitee with
respect to any action or inaction by such Indemnitee in Indemnitee's Corporate
Status prior to such amendment, alteration, rescission or
replacement.
Section
9.2 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 Indemnitee,
who
shall execute all documents 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.
9
Section
9.3 Notices.
All
notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given (i) if delivered by hand,
by
courier or by telegram and receipted for by the party to whom said notice or
other communication shall have been directed at the time indicated on such
receipt; (ii) if by facsimile at the time shown on the confirmation of such
facsimile transmission; or (iii) if by U.S. certified or registered mail, with
postage prepaid, on the third business day after the date on which it is so
mailed:
|
If
to Indemnitee:
|
As
shown with Indemnitee's signature below.
|
|
If
to the Company, to:
|
Capital
Growth Systems, Inc.
000
X. Xxxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxxx 00000
Attention: Chief
Financial Officer
Facsimile: 312-673-2422-
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or
to
such other address as may have been furnished to Indemnitee by the Company
or to
the Company by Indemnitee, as the case may be.
Section
9.4 Governing
Law.
The
parties agree that this Agreement shall be governed by, and construed and
enforced in accordance with, the substantive laws of the State of Illinois,
without application of the conflict of laws principles thereof. Any action
to
enforce the terms hereof shall be litigated in the state or federal courts
situated in Xxxx County, Illinois, by bench trial, to which jurisdiction and
venue all parties consent, and where all parties waive their right to trial
by
jury.
Section
9.5 Binding
Effect.
Except
as
otherwise provided in this Agreement, this Agreement shall be binding upon
and
inure to the benefit of and be enforceable by the parties hereto and their
heirs, executors, administrators, successors, legal representatives and
permitted assigns. The Company shall require any successor or assignee (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all
or
substantially all of its respective assets or business, by written agreement
in
form and substance reasonably satisfactory to Indemnitee, to assume and agree
to
be bound by and to perform this Agreement in the same manner and to the same
extent as the Company would be required to perform absent such succession or
assignment. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as an executive officer, director, employee,
agent
or other representative of the Company. Notwithstanding anything to the contrary
contained herein, this Agreement may be terminated or amended by the Company
with the written consent of not less than seventy-five percent (75%) of the
Pre-Change in Control Directors serving as directors of the Company from time
to
time.
Section
9.6 Waiver.
No
termination, cancellation, modification, amendment, deletion, addition or other
change in this Agreement, or any provision hereof, or waiver of any right or
remedy herein, shall be effective for any purpose unless specifically set forth
in a writing signed by the party or parties to be bound thereby. The waiver
of
any right or remedy with respect to any occurrence on one occasion shall not
be
deemed a waiver of such right or remedy with respect to such occurrence on
any
other occasion.
Section
9.7 Entire
Agreement.
This
Agreement, constitutes the entire agreement and understanding among the parties
hereto in reference to the subject matter hereof; provided, however, that the
parties acknowledge and agree that the Articles of Incorporation of the Company
contain provisions on the subject matter hereof and that this Agreement is
not
intended to, and does not, limit the rights or obligations of the parties hereto
pursuant to such Articles of Incorporation.
10
Section
9.8 Titles.
The
titles to the articles and sections of this Agreement are inserted for
convenience of reference only and should not be deemed a part hereof or affect
the construction or interpretation of any provisions hereof.
Section
9.9 Severability.
Every
provision of this Agreement is severable. In the event that the invalidity
or
any term or provision (including any provision within a single section,
paragraph or section) is held by a court of competent jurisdiction to be
invalid, void or otherwise unenforceable, the remaining terms and provisions
shall remain enforceable to the fullest extent permitted by law. Furthermore,
to
the fullest extent possible, the provisions of this Agreement (including,
without limitation, each portion of this Agreement containing any provision
held
to be invalid, void or otherwise unenforceable, that is not itself invalid,
void
or otherwise enforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable.
Section
9.10 Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together constitute one agreement binding
on all the parties hereto.
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement as of the day and year first above
written.
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COMPANY:
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INDEMNITEE:
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Capital
Growth Systems, Inc.,
a
Florida corporation
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[Signature]
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By:
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Its:
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[Print
Name]
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Address:
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