DIRECTOR INDEMNIFICATION AGREEMENT
Exhibit 10.4
THIS AGREEMENT is entered
into, effective as of May 28, 2010, between Roomlinx, Inc., a Nevada corporation
(the “Company”) and ________ (“Indemnitee”).
WHEREAS, it is essential to
the Company to retain and attract as directors 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 currently
being asserted against directors of corporations; and
WHEREAS, in recognition of
Indemnitee’s need for substantial protection against personal liability in order
to enhance Indemnitee’s continued and effective service to the Company, and in
order to induce Indemnitee to provide continued services to the Company as a
director, the Company wishes to provide in this Agreement for the
indemnification of and the advancing of expenses to Indemnitee to the fullest
extent (whether partial or complete) permitted by law and as set forth in this
Agreement and for the coverage of Indemnitee under the Company’s directors’ and
officers’ liability insurance policies.
NOW, THEREFORE, in
consideration of the above premises and of Indemnitee’s continuing to serve as a
director of the Company and intending to be legally bound hereby, the parties
agree as follows:
1. Certain
Definitions:
(a)
Board: The
Board of Directors of the Company.
(b)
Change in
Control: A Change in Control shall be deemed to occur if:
(i) any
“person,” as such term is defined in Section 3(a)(9) of the Securities
Exchange Act of 1934 (the “Exchange Act”), as modified and used in Section 13(d)
and 14(d) thereof (but not including (a) the Company or any of its
subsidiaries, (b) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its subsidiaries, (c) an
underwriter temporarily holding securities pursuant to an offering of such
securities, or (d) 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) (hereinafter a “Person”) is or becomes the
beneficial owner, as defined in Rule 13d-3 of the Exchange Act, directly or
indirectly, of securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired directly from the
Company or its affiliates, excluding an acquisition resulting from the exercise
of a conversion or exchange privilege in respect of outstanding convertible or
exchangeable securities) representing 50% or more of the combined voting power
of the Company’s then outstanding securities; or
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(ii)
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during
any period of two consecutive years beginning on the date hereof,
individuals who at the beginning of such period constitute the Board and
any new director (other than a director designated by a Person who has
entered into any agreement with the Company to effect a transaction
described in Clause (i), (iii) or (iv) of this Section) whose
election by the Board or nomination for election by the Company’s
stockholders was approved by a vote of at least two-thirds 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 (each such director, a “Continuing Director”), cease for any
reason to constitute a majority thereof;
or
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(iii)
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the
stockholders of the Company approve a merger or consolidation of the
Company with any other corporation, other than (a) 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 or acquiring entity), in combination with the ownership of any
trustee or other fiduciary holding securities under an employee benefit
plan of the Company, at least 50% of the combined voting power of the
voting securities of the Company or such surviving or acquiring entity
outstanding immediately after such merger or consolidation, or (b) a
merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person acquires more than 50%
of the combined voting power of the Company’s then outstanding securities;
or
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(iv)
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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 all
or substantially all of the Company’s
assets.
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(c)
Disinterested
Director: A director of the Company who is not and was not a party to the
Proceeding in respect of which indemnification is sought by
Indemnitee.
(d)
Expenses: Any
expense, including without limitation, attorneys’ fees, retainers, court costs,
transcript costs, fees and expenses of experts, including accountants and other
advisors, travel expenses, duplicating costs, postage, delivery service fees,
filing fees, and all other disbursements or expenses of the types typically paid
or incurred in connection with investigating, defending, being a witness in, or
participating (including on appeal), or preparing for any of the foregoing, in
any Proceeding relating to any Indemnifiable Event, and any expenses of
establishing a right to indemnification under any of Sections 2, 4 or 5 of
this Agreement, in each case, to the extent actually and reasonably
incurred.
(e)
Indemnifiable
Costs: Any cost that is eligible for indemnification pursuant to
applicable law, including, without limitation, any and all Expenses, liability
or loss, judgments, fines and amounts paid in settlement and any interest,
assessments, or other charges imposed thereon, and any federal, state, local, or
foreign taxes imposed as a result of the actual or deemed receipt of any
payments under this Agreement.
(f)
Indemnifiable
Event: Any event or occurrence that takes place either prior to or after
the execution of this Agreement, related to the fact that Indemnitee is or was a
director of the Company, or while a director is or was serving at the request of
the Company as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise or related to anything done or not done by
Indemnitee in any such capacity, whether or not the basis of the Proceeding is
alleged action in an official capacity as a director of the Company, or in any
other capacity, as described above.
(g)
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 three
years has been, retained to represent: (i) the Company or any of its
subsidiaries or affiliates, (ii) the Indemnitee or (iii) any other
party to the Proceeding giving rise to a claim for indemnification or Expense
Advances hereunder, in any matter (other than with respect to matters relating
to indemnification and advancement of expenses). No law firm or lawyer shall
qualify to serve as Independent Counsel if that person would, under the
applicable standards of professional conduct then prevailing, have a conflict of
interest in representing either the Company or Indemnitee in an action to
determine Indemnitee’s rights under this Agreement. The Indemnitee shall select
a law firm or member of a law firm to serve as Independent Counsel, subject to
the consent of the Company, which consent shall not be unreasonably withheld.
Subject to the foregoing, any law firm or a member of a law firm in the Am Law
200 shall be presumed to qualify as Independent Counsel. In the event that the
Indemnitee and the Company are unable to agree upon the selection of the
Independent Counsel, the parties shall first try to settle the dispute by
mediation under the Commercial Mediation Rules of the American Arbitration
Association. Any dispute that cannot be resolved by mediation shall be finally
resolved by arbitration by the American Arbitration Association under its
Commercial Arbitration Rules. The fees for any such dispute resolution procedure
shall be borne by the Company.
(h)
Proceeding: Any
threatened, pending, or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative that relates to an Indemnifiable
Event.
(i)
Reviewing
Party: Reviewing Party shall have the meaning ascribed to such term in
Section 3.
2.
Agreement
to Indemnify.
(a)
General Agreement
regarding Indemnification. 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, a Proceeding by reason of (or arising in
part out of) an Indemnifiable Event, the Company shall indemnify Indemnitee from
and against Indemnifiable Costs, to the fullest extent permitted by applicable
law, as the same exists or may hereafter be amended or interpreted (but in the
case of any such amendment or interpretation, only to the extent that such
amendment or interpretation permits the Company to provide broader
indemnification rights than were permitted prior thereto); provided that the
Company’s commitment set forth in this Section 2(a) to indemnify the Indemnitee
shall be subject to the limitations and procedural requirements set forth in
this Agreement.
(b)
Partial
Indemnification. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of
Indemnifiable Costs, but not, however, for the total amount thereof, the Company
shall nevertheless indemnify Indemnitee for the portion thereof to which
Indemnitee is entitled.
(c)
Advancement of
Expenses. If so requested by Indemnitee, the Company shall advance to
Indemnitee, to the fullest extent permitted by applicable law, any and all
Expenses incurred by Indemnitee (an “Expense Advance” or an “Advance”) within 10
calendar days after the receipt by the Company of a request from Indemnitee for
an Advance, whether prior to or after final disposition of any Proceeding.
Indemnitee shall, and hereby undertakes to, repay to the Company any funds
advanced to Indemnitee or paid on his or her behalf if it shall ultimately be
determined that Indemnitee is not entitled to indemnification. Indemnitee shall
make any such repayment promptly following written notice of any such
determination. Payment by the Company of Indemnitee’s expenses in connection
with any Proceeding in advance of the final disposition thereof shall not be
deemed an admission by the Company that it shall ultimately be determined that
Indemnitee is entitled to indemnification. Any request for an Expense Advance
shall be accompanied by an itemization of the Expenses for which advancement is
sought, and a reasonably detailed summary shall be provided if the Company so
requests. Advances shall be made without regard to Indemnitee’s ability to repay
the Expenses. If Indemnitee has commenced legal proceedings in a court of
competent jurisdiction in the State of Nevada to secure a determination that
Indemnitee should be indemnified under applicable law, as provided in
Section 4, 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 have
lapsed). Indemnitee’s obligation to reimburse the Company for Expense Advances
shall be unsecured and no interest shall be charged thereon.
(d)
Exception to
Obligation to Indemnify and Advance Expenses. Notwithstanding anything in
this Agreement to the contrary, Indemnitee shall not be entitled to
indemnification or advancement pursuant to this Agreement in connection with any
Proceeding initiated by Indemnitee against the Company or any director or
officer of the Company unless (i) the Company has joined in or the Board
has consented to the initiation of such Proceeding; or (ii) the Proceeding
is one to enforce indemnification rights under this Agreement, including
Section 5.
3.
Reviewing
Party.
(a)
Definition of
Reviewing Party. Other than as contemplated by Section 3(b), the
person, persons or entity who shall determine whether Indemnitee is entitled to
indemnification in the first instance (“the Reviewing Party”) shall be
(i) the Board of Directors of the Company acting by a majority vote of a
quorum of Disinterested Directors or (ii) if there are no Disinterested
Directors, or if the Disinterested Directors so direct, by Independent Counsel
in a written determination to the Board of Directors, a copy of which shall be
delivered to Indemnitee.
(b)
Reviewing Party
Following Change in Control. After a Change in Control, the Reviewing
Party shall be the Independent Counsel. With respect to all matters arising from
such a Change in Control concerning the rights of Indemnitee to indemnity
payments and Expense Advances under this Agreement or any other agreement or
under applicable law or the Company’s Articles of Incorporation or Bylaws now or
hereafter in effect relating to indemnification for Indemnifiable Events, the
Company shall seek legal advice only from the Independent Counsel. Such counsel,
among other things, shall render its written opinion to the Company and
Indemnitee as to whether and to what extent the Indemnitee should be permitted
to be indemnified under applicable law. The Company agrees to pay the reasonable
fees of the Independent Counsel and to indemnify fully such counsel against any
and all expenses (including attorneys’ fees), claims, liabilities, loss, and
damages arising out of or relating to this Agreement or the engagement of
Independent Counsel pursuant hereto.
4. Indemnification
Process and Appeal.
(a)
Indemnification
Payment.
(i)
The
determination with respect to Indemnitee’s entitlement to indemnification shall,
to the extent practicable, be made by the Reviewing Party not later than 30
calendar days after receipt by the Company of a written demand on the Company
for indemnification (which written demand shall include such documentation and
information as is reasonably available to Indemnitee and is reasonably necessary
to determine whether and to what extent Indemnitee is entitled to
indemnification). The Reviewing Party making the determination with respect to
Indemnitee’s entitlement to indemnification shall notify Indemnitee of such
written determination no later than two business days
thereafter.
(ii)
Unless
the Reviewing Party has provided a written determination to the Company that
Indemnitee is not entitled to indemnification under applicable law, Indemnitee
shall be entitled to indemnification of Indemnifiable Costs, and shall receive
payment thereof, from the Company in accordance with this Agreement as early as
practicable, but not later than 10 business days after the Reviewing Party has
made its determination with respect to Indemnitee’s entitlement to
indemnification.
(b)
Suit to Enforce
Rights. If (i) no determination of entitlement to indemnification
shall have been made within the time limitation for such a determination set
forth in Section 4(a)(i), (ii) payment of indemnification pursuant to
Section 4(a)(ii) is not made within the period permitted for such payment
by such section, (iii) the Reviewing Party determines pursuant to Section
4(a) that Indemnitee is not entitled to indemnification under this Agreement, or
(iv) Indemnitee has not received advancement of Expenses within the time period
permitted for such advancement by Section 2(c), then Indemnitee shall have
the right to enforce the indemnification rights granted under this Agreement by
commencing litigation in any court of competent jurisdiction in the State of
Nevada seeking an initial determination by the court or challenging any
determination by the Reviewing Party or any aspect thereof. The Company hereby
consents to service of process and to appear in any such proceeding. Any
determination by the Reviewing Party not challenged by the Indemnitee within six
months of the date of the Reviewing Party’s determination shall be binding on
the Company and Indemnitee. The remedy provided for in this Section 4 shall
be in addition to any other remedies available to Indemnitee in law or
equity.
(c)
Defense to
Indemnification, Burden of Proof, and Presumptions.
(i)
To
the maximum extent permitted by applicable law in making a determination with
respect to entitlement to indemnification (or payment of Expense Advances)
hereunder, the Reviewing Party shall presume that an Indemnitee is entitled to
indemnification (or payment of Expense Advances) under this Agreement, and the
Company shall have the burden of proof to overcome that presumption in
connection with the making by the Reviewing Party of any determination contrary
to that presumption.
(ii)
It
shall be a defense to any action brought by Indemnitee against the Company to
enforce this Agreement that it is not permissible under applicable law for the
Company to indemnify Indemnitee for the amount claimed.
(iii) For
purposes of this Agreement, the termination of any claim, action, suit, or
proceeding, by judgment, order, settlement (whether with or without court
approval), 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.
5.
Indemnification
for Expenses Incurred in Enforcing Rights. The Company shall indemnify
Indemnitee against any and all Expenses to the fullest extent permitted by law
and, if requested by Indemnitee pursuant to the procedures set forth in
Section 2(c), shall advance such Expenses to Indemnitee, that are incurred
by Indemnitee in connection with any claim asserted against or action brought by
Indemnitee for:
(i) enforcement
of this Agreement;
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(ii)
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indemnification
of Indemnifiable Costs or Expense Advances by the Company under this
Agreement or any other agreement or under applicable law or the Company’s
Articles of Incorporation or Bylaws now or hereafter in effect relating to
indemnification for Indemnifiable Events;
and/or
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(iii)
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recovery
under directors’ and officers’ liability insurance policies maintained by
the Company.
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6. Notification
and Defense of Proceeding.
(a)
Notice.
Promptly after receipt by Indemnitee of notice of the commencement of any
Proceeding, Indemnitee will, if a claim in respect thereof is to be made against
the Company under this Agreement, notify the Company of the commencement
thereof. The failure to notify or promptly notify the Company shall not relieve
the Company from any liability which it may have to the Indemnitee otherwise
than under this Agreement, and shall not relieve the Company from liability
hereunder except to the extent the Company has been materially prejudiced or as
further provided in Section 6(c).
(b)
Defense. With
respect to any Proceeding as to which Indemnitee notifies the Company of the
commencement thereof, the Company will be entitled to participate in the
Proceeding at its own expense and except as otherwise provided below, to the
extent the Company so wishes, it may assume the defense thereof with counsel
selected by the Company and reasonably acceptable to Indemnitee. After notice
from the Company to Indemnitee of its election to assume the defense of any
Proceeding, the Company will not be liable to Indemnitee under this Agreement or
otherwise for any Expenses subsequently incurred by Indemnitee in connection
with the defense of such Proceeding other than reasonable costs of investigation
or as otherwise provided below. Indemnitee shall have the right to employ
separate counsel in such Proceeding, but all Expenses related thereto incurred
after notice from the Company of its assumption of the defense shall be at
Indemnitee’s expense unless: (i) the employment of counsel by Indemnitee
has been authorized by the Company, (ii) Indemnitee has reasonably
determined that there may be a conflict of interest between Indemnitee and the
Company in the defense of the Proceeding, (iii) after a Change in Control,
the employment of counsel by Indemnitee has been approved by the Independent
Counsel, or (iv) the Company shall not within 60 calendar days in fact have
employed counsel to assume the defense of such Proceeding, in each of which case
all Expenses of the Proceeding shall be borne by the Company. If the Company has
selected counsel to represent Indemnitee and other current and former directors,
officers or employees of the Company in the defense of a Proceeding, and a
majority of such persons, including Indemnitee, reasonably object to such
counsel selected by the Company pursuant to the first sentence of this Section 6(b),
then such persons, including Indemnitee, shall be permitted to employ one
additional counsel(s) and local counsel of their choice and the reasonable fees
and expenses of such counsel(s) shall be at the expense of the Company; provided, however, that such
counsel shall, if required by any company with which the Company obtains or
maintains insurance, be approved by such company or chosen from amongst the list
of counsel approved by such company. In the event separate counsel(s) is
retained by Indemnitee and/or by a group of persons including Indemnitee
pursuant to this Section 6(b), the Company shall cooperate with such
counsel(s) with respect to the defense of the Proceeding, including making
documents, witnesses and other information related to the defense available to
such separate counsel(s) pursuant to joint-defense agreements or confidentiality
agreements, as appropriate. The Company shall not be entitled to assume the
defense of any Proceeding (x) brought by or on behalf of the Company,
(y) as to which Indemnitee shall have made the determination provided for
in clause (ii) above or (z) as to which Independent Counsel has
approved the employment of counsel by Indemnitee in accordance with clause
(iii) above.
(c)
Settlement of
Claims. The
Company shall not be liable to indemnify Indemnitee under this Agreement or
otherwise for any amounts paid in settlement of any Proceeding effected without
the Company’s written consent. The Company shall not settle any Proceeding in
any manner that would impose any monetary damages, penalty or limitation on
Indemnitee without Indemnitee’s prior written consent. Neither the Company nor
the Indemnitee will unreasonably withhold their consent to any proposed
settlement. The Company shall not be liable to indemnify the Indemnitee under
this Agreement with regard to any judicial award if the Company was not given a
reasonable and timely opportunity, at its expense, to participate in the defense
of such action; the Company’s liability hereunder shall not be excused if
participation in the Proceeding by the Company was barred by this
Agreement.
7.
Non-Exclusivity. The rights of Indemnitee
hereunder shall be in addition to any other rights Indemnitee may have under the
laws of the State of Nevada, the Company’s Articles of Incorporation, Bylaws,
applicable law, or otherwise. To the extent that a change in applicable law
(whether by statute or judicial decision) permits greater indemnification by
agreement than would be afforded currently under the Company’s Articles of
Incorporation, Bylaws, applicable law, or this Agreement, it is the intent of
the parties that Indemnitee enjoy by this Agreement the greater benefits so
afforded by such change.
8.
Liability
Insurance. The
Company shall use its best efforts (a) to continue to maintain in effect
directors’ and officers’ insurance policies and fiduciary liability insurance
policies (collectively, “D&O Insurance Policies”) with terms, conditions,
retentions and limits of liability that are at least as favorable as those
contained in the Company’s D&O Insurance Policies in effect as of the date
hereof (D&O Insurance Policies containing such terms, conditions, retentions
and limits of liability, referred to herein as “Comparable D&O Insurance
Policies”), and, for so long as Indemnitee serves as a director of the Company
and for a period of six (6) years thereafter, to cause Indemnitee to be covered
under such Comparable D&O Insurance Policies in accordance with their
respective terms, and (b) for a period of not less than six (6) years
following the occurrence of (i) a Change in Control or (ii) the
Company ceasing to operate its business as a going concern, to maintain in
effect Comparable D&O Insurance Policies, and, until the earlier of
(x) such time as the Company is no longer required to maintain such
Comparable D&O Insurance Policies pursuant to this clause (b) or
(y) the sixth (6th)
anniversary of Indemnitee ceasing to serve as a director of the Company, to
cause Indemnitee to be covered under such Comparable D&O Insurance Policies
in accordance with their respective terms. In the event the Company, at any time
it is required to maintain Comparable D&O Insurance Policies pursuant to the
foregoing sentence, is not able to obtain Comparable D&O Insurance Policies,
the Company shall be obligated to maintain D&O Insurance Policies with the
best coverage then available for the time periods provided in, and otherwise in
accordance with the terms of, the foregoing sentence.
9.
Amendment
of this Agreement.
No supplement, modification, or amendment of this Agreement shall be
binding unless executed in writing by both of the parties hereto. No waiver of
any of the provisions of this Agreement shall operate as a waiver of any other
provisions hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver. Except as specifically provided herein, no failure to
exercise or any delay in exercising any right or remedy hereunder shall
constitute a waiver thereof.
10.
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 reasonably necessary to
secure such rights, including the execution of such documents necessary to
enable the Company effectively to bring suit to enforce such
rights.
11.
No
Duplication or Shortfall of Payments. The Company shall make any
payment required to be made under this Agreement to the extent, but only to the
extent, Indemnitee has not otherwise actually received payment (whether under
the Company’s Articles of Incorporation, the Company’s Bylaws, any insurance
policy, by law, or otherwise) of the amounts otherwise payable
hereunder.
12.
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, and personal and legal representatives. The Company shall require and
cause any successor (whether direct or indirect by purchase, merger,
consolidation, or otherwise) to all, substantially all, or a substantial part,
of the business and/or assets of the Company, by written agreement in form and
substance satisfactory to Indemnitee, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform if no such succession had taken place. This Agreement
shall continue in effect regardless of whether Indemnitee continues to serve as
a director of the Company or of any other enterprise at the Company’s
request.
13.
Severability. If any provision (or portion
thereof) of this Agreement shall be held by a court of competent jurisdiction to
be invalid, void, or otherwise unenforceable, the remaining 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
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, void, or unenforceable.
14.
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,
except to the extent that the laws of the State of Nevada are mandatorily
applicable.
15.
Notices. All notices, demands, and
other communications required or permitted hereunder shall be made in writing
and shall be deemed to have been duly given if delivered by hand, against
receipt, transmitted by facsimile upon confirmation that such facsimile has been
received or mailed, postage prepaid, certified or registered mail, return
receipt requested, and addressed
to the Company at:
Roomlinx, Inc.
0000 Xxxx
0xx
Xxxxxx, Xxxxx X
Xxxxxxxxxx,
XX 00000
Attn:
Xxxxxxx Xxxxx
Fax:
(000) 000-0000
and
to
Indemnitee at:
Notice of
change of address shall be effective only when done in accordance with this
Section. All notices complying with this Section shall be deemed to have been
received on the date of delivery or on the third business day after
mailing.
* * *
IN WITNESS WHEREOF, the
parties hereto have duly executed and delivered this Agreement as of the day
specified above.
COMPANY:
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ROOMLINX,
INC.
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By:
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Name:
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Xxxxxxx
Xxxxx
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Title:
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Chief
Executive Officer
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INDEMNITEE:
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