INDEMNIFICATION AGREEMENT
This Indemnification Agreement (this "Agreement") is made as of March 17,
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2003 by and among Telaxis Communications Corporation, a Massachusetts
corporation ("Telaxis"), and Xxxxx Xxxxxx, LLC, a Delaware limited liability
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company ("Xxxxx Xxxxxx"), Concorde Equity, LLC, a Delaware limited liability
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company ("Concorde"), and Xxxxxxx X. Xxxxx ("Xxxxx" and, together with Merry
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Fields and Concorde, the "Indemnitors").
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RECITALS
A. Concurrently with the execution of this Agreement, Telaxis has entered
into an Agreement and Plan of Merger (as the same may be amended from time to
time, the "Merger Agreement"), providing for the merger of a to-be-formed
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Virginia corporation and wholly owned subsidiary of Telaxis with and into Young
Design, Inc., a Virginia corporation (the "Company"), wherein the Company will
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be the surviving corporation and become a wholly owned subsidiary of Telaxis
(the "Merger") pursuant to the terms and conditions of the Merger Agreement.
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B. The Company leases its facility at 0000 Xxx Xxxxxxx, Xxxxx Xxxxxx,
Xxxxxxxx (the "Facility") from Xxxxx Xxxxxx pursuant to a lease agreement dated
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August 24, 2000 (the "Lease Agreement").
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C. Xxxxx Xxxxxx acquired the Facility using, in part, a loan from Bank of
America (the "Bank").
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D. As part of the lending transaction, the Bank required the Company to
guarantee all of Merry Field's current and future obligations to the Bank (the
"Guarantee").
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E. Concorde and Young together own all of the member interests of Xxxxx
Xxxxxx and also all of the outstanding shares of capital stock of the Company.
F. In order to induce Telaxis to enter into the Merger Agreement, the
Indemnitors have agreed to enter into this Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt,
sufficiency, and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
1. Definitions. As used in this Agreement:
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(a) The term "Proceeding" shall include any threatened, pending or
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completed action, suit, or proceeding, whether of a civil, criminal,
administrative, or investigative nature, and any appeal therefrom.
(b) The term "Expenses" shall include, without limitation, all
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reasonably incurred attorneys' fees, retainers, court costs, transcript costs,
fees of experts, travel expenses, duplicating costs, printing and binding costs,
telephone and facsimile charges, postage and overnight delivery service fees and
other disbursements or expenses of the types customarily incurred in connection
with investigations, judicial or administrative proceedings or appeals, but
shall not include the amount of judgments, fines or penalties against Indemnitee
or amounts paid in settlement in connection with such matters.
(c) The term "Indemnified Costs" shall mean all Expenses and any and
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all costs, liabilities, obligations, losses, damages, claims, actions,
judgments, fines, penalties, and amounts paid in settlement.
2. Indemnification. The Indemnitors shall indemnify Telaxis, and hold
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Telaxis harmless, from and against any and all Indemnified Costs which may be
paid by, imposed on, incurred by, or asserted against the Company or Telaxis at
any time as a result of or in connection with the Guarantee or any other claim
that the Company or Telaxis is obligated to pay or has any responsibility for
any agreement, debt, loan, or other obligation of Xxxxx Xxxxxx, whether to the
Bank or any other person or entity and whether or not a Proceeding is threatened
or commenced. Provided however, that Indemnitors are relieved of their
obligations pursuant to this Agreement if the Company breaches its obligations
pursuant to the Lease Agreement and such breach is a direct or indirect cause
for the claim for Indemnified Costs.
3. Notification and Defense of Claim. Telaxis shall notify Merry
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Fields, on behalf of all the Indemnitors, in writing as soon as practicable of
any Proceeding for which Telaxis will seek indemnification or for which
indemnification could be sought by Telaxis and provide Xxxxx Xxxxxx with a copy
of any summons, citation, subpoena, complaint, indictment, information, or other
document relating to such Proceeding with which Telaxis is served; provided that
any failure to so notify Xxxxx Xxxxxx shall not relieve the Indemnitors from any
liability under this Agreement, except to the extent any late notice or failure
by Telaxis to provide notice to Xxxxx Xxxxxx shall increase the Indemnitors'
liability hereunder. Upon such notice, the Indemnitors shall have twenty (20)
business days to remedy the basis for the alleged indemnification claim and
provide Telaxis with written documentation for such remedy. In the even that the
claim results in a Proceeding, Indemnitors shall assume the defense thereof and
shall bear all costs associated with such defense.
4. Procedure for Indemnification. In order to obtain indemnification
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of Indemnified Costs pursuant to this Agreement, Telaxis shall submit to Xxxxx
Xxxxxx, on behalf of the Indemnitors, a written request, including in such
request such documentation and information as is reasonably available to Telaxis
describing the amount of indemnification requested. Upon Telaxis' verification
to the reasonable satisfaction of the Indemnitors of the amount of any
Indemnified Costs incurred by Telaxis or the Company, the Indemnitors shall
either, at Telaxis' direction, reimburse Telaxis or pay as and when due to the
person or other entity entitled thereto the Indemnified Costs covered by this
Agreement.
5. Term of Agreement. This Agreement shall continue until such time as
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the Company shall have ceased to have any liability under the Guarantee or
otherwise for any agreement, debt, loan or other obligation of Xxxxx Xxxxxx (the
"Liability Termination Date"); provided that the term shall be extended until
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the final resolution of any actual or threatened Proceeding against the Company
in existence on the Liability Termination Date that is based on a claim of its
obligations as a guarantor to Xxxxx Xxxxxx' obligations.
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6. Indemnification Hereunder Not Exclusive. The rights provided to
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Telaxis by this Agreement shall be independent of, in addition to, and not be
deemed exclusive or in derogation of any other rights to which Telaxis may be
entitled under any other law (common or statutory), or otherwise.
7. Savings Clause. If this Agreement or any portion thereof shall be
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held invalid, unenforceable or void in whole or in part on any ground by any
court of competent jurisdiction, then (a) the parties shall promptly negotiate a
replacement provision effecting the parties' intent to provide indemnification
and advancement rights to Telaxis to the maximum extent permitted by applicable
law for obligations of Xxxxx Xxxxxx that are paid by the Company, (b) the
Indemnitors shall nevertheless indemnify Telaxis as to Indemnified Costs to the
maximum extent permitted by any applicable portion of this Agreement that shall
not have been invalidated and, in any event, to the maximum extent permitted by
applicable law, and (c) the remaining provisions of this Agreement shall remain
in full force and effect.
8. Counterparts. This Agreement may be executed in one or more
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counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart. A facsimile or copy of a signature
is valid as an original.
9. Successors and Assigns. This Agreement shall be binding upon the
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Indemnitors and their respective successors and 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 Indemnitors, and shall
inure to the benefit of the successors and assigns of Telaxis. The Indemnitors
may not assign their rights or delegate their obligations under this Agreement
without the prior written consent of Telaxis.
10. Headings. The headings of the paragraphs of this Agreement are
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inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
11. Modification and Waiver. No supplement, modification, waiver, or
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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 be deemed or shall constitute a waiver of any other provision hereof nor
shall any such waiver constitute a continuing waiver.
12. Notices. All notices, requests, demands and other communications
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hereunder shall be in writing and shall be deemed to have been given (i) when
delivered by hand or (ii) if mailed by certified or registered mail with postage
prepaid, on the third day after the date on which it is so mailed.
(a) if to any of the Indemnitors, to:
Xxxxx Xxxxxx, LLC
0000 Xxx Xxxxxxx
Xxxxx Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx
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(b) if to Telaxis, to:
Telaxis Communications Corporation
00 Xxxxxxxxxx Xxxxx Xxxx
Xxxxx Xxxxxxxxx, XX 00000
Attention: Chief Executive Officer
or to such other addresses as may have been furnished to the Indemnitors by
Telaxis or to Telaxis by Xxxxx Xxxxxx, on behalf of the Indemnitors, as the case
may be.
13. Applicable Law. This Agreement shall be governed by and construed
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in accordance with the internal laws of the Commonwealth of Virginia without
regard to its principles of conflicts of laws.
14. Attorneys' Fees. If any action at law or in equity is necessary to
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enforce or interpret the terms of this Agreement or to protect the rights
obtained hereunder, the prevailing party shall be entitled to its reasonable
attorneys' fees, costs and disbursements in addition to any other relief to
which it may be entitled.
15. Extent of Obligations. The Indemnitors hereby represent and
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warrant to Telaxis that (a) the Company has no liability, exposure, or
responsibility, primary, secondary, or contingent, for any agreement, debt,
loan, or other obligation of Xxxxx Xxxxxx other than pursuant to the Guarantee
in favor of the Bank and (b) the total amount owed by Xxxxx Xxxxxx to the Bank
as of the date of this Agreement is no more than One Million Five Hundred
Eighty-Five Thousand and 00/100 Dollars ($1,585,000.00). The Indemnitors
covenant and agree that (i) the Company's liability, exposure, or
responsibility, whether primary, secondary, or contingent, for any of Xxxxx
Xxxxxx' agreements, debts, loans, or other obligations shall never be more than
the amount shown in clause (b) above and (ii) the amount shown in clause (b)
above will be repaid in accordance with the current repayment schedule for that
loan; provided, however, that such amount may be prepaid. So long as the
Indemnitors' representations and warranties in this Section 15 are accurate and
the Indemnitors comply with their covenants in this Section 15, at no time and
in no instance will Indemnitors' collective liability under this Agreement
exceed $1,585,000 for any reason.
16. Obligations of Telaxis and the Company. Nothing in this Agreement
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shall in any way relieve the Company from its obligations under the Lease
Agreement, specifically including its obligation to pay rent, and Telaxis hereby
agrees that it will take no action that will interfere with the Company's
obligations under the Lease Agreement specifically including the Company's
ability to pay rent as it comes due.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be duly executed as of the day and year first written above.
TELAXIS COMMUNICATIONS CONCORDE EQUITY, LLC
CORPORATION
By: /s/ Xxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxx X. Xxxxxxxxxx Name: Xxxxxx X. Xxxxxxxxxx
Title: President Title: President and Managing Member
XXXXX XXXXXX, LLC
/s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
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Xxxxxxx X. Xxxxx Name: Xxxxxx X. Xxxxxxxxxx
Title: President and Managing Member
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