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EXHIBIT 10.2
FLUX U.S. CORPORATION
INDEMNIFICATION AGREEMENT
This
INDEMNIFICATION AGREEMENT (the "Agreement") is made as of
November
13th, 2003, by and between FLUX U.S. CORPORATION (the "Company"), a
Delaware
corporation, and FLUX FIXED WIRELESS, LLC, a Washington limited
liability
company, ("Indemnitee").
RECITALS
A. The
Company (i) desires to induce Indemnitee to invest in the
Company
and become a controlling stockholder; and (ii) desires to attract
and retain the
involvement of highly qualified individuals and entities, such as
Indemnitee, to
serve the Company and, in part, in order to induce Indemnitee to be
involved
with the Company.
B. The
Company and Indemnitee each recognize the continued difficulty
in
obtaining liability insurance for its stockholders, controlling
persons,
directors, officers, employees, agents and fiduciaries, the
significant
increases in the cost of such insurance and the general reductions
in the
coverage of such insurance.
C. The
Company and Indemnitee each further recognize the substantial
increase in corporate litigation in general, subjecting
stockholders,
controlling persons, directors, officers, employees, agents and
fiduciaries to
expensive litigation risks at the same time as the availability and
coverage of
liability insurance has been severely limited.
D.
Indemnitee does not regard the current protection available as
adequate
under the present circumstances, and Indemnitee and other potential
investors
may not be willing to invest in the Company and cause their agents
to serve as
officers or directors of the Company without additional protection.
Therefore,
the Company wishes to provide for the indemnification and advancing
of expenses
to Indemnitee and its Affiliates (as defined below) to the maximum
extent
permitted by law.
E. In view
of the considerations set forth above, the Company desires that
Indemnitee and its Affiliates (as defined below) be indemnified by
the Company
as set forth herein.
AGREEMENT
NOW,
THEREFORE, the Company and Indemnitee hereby agree as set forth
below.
1. CERTAIN
DEFINITIONS.
(a) "AFFILIATE" of an individual, joint venture, corporation,
limited liability company, trust, unincorporated organization or
other entity
(each a "Person") means a Person that directly or indirectly
through one or more
intermediaries, controls, is controlled by, or is
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under common control with, the first Person, and with respect to a
natural
person includes any child, stepchild, grandchild, parent,
stepparent, spouse,
sibling, mother-in-law, father-in-law, son-in-law,
daughter-in-law,
brother-in-law or sister-in-law, and includes adoptive
relationships.
"Controlled by" and "under common control with" means the
possession, directly
or indirectly, of the power to direct or cause the direction of the
management
policies of a Person, whether through the ownership of voting
securities, by
contract or credit arrangement, as trustee or executor, or
otherwise.
(b) "CHANGE IN CONTROL" shall mean, and shall be deemed to have
occurred if, on or after the date of this Agreement, (i) any
"person" (as such
term is used in Sections 13(d)(3) and 14(d)(2) of the Securities
Exchange Act of
1934, as amended (the "Exchange Act")), other than a trustee or
other fiduciary
holding securities under an employee benefit plan of the Company
acting in such
capacity or 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, becomes the "beneficial owner" (as defined in Rule
13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing
more than thirty percent (30%) of the total voting power
represented by the
Company's then outstanding Voting Securities, (ii) during any
period of two
consecutive years, individuals who at the beginning of such period
constitute
the Board of Directors of the Company and any new director whose
election by the
Board of Directors or nomination for election by the Company's
stockholders was
approved by a vote of at least two-thirds (2/3) 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,
cease for any
reason to constitute a majority thereof, or (iii) the stockholders
of the
Company approve a merger or consolidation of the Company with any
other
corporation other than 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 entity) at least two-thirds
(2/3) of the
total voting power represented by the Voting Securities of the
Company or such
surviving entity outstanding immediately after such merger or
consolidation, or
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 (in one
transaction or a series of related transactions) all or
substantially all of the
Company's assets.
(c) "CLAIM" shall mean any threatened, pending or completed
action,
suit, proceeding or alternative dispute resolution mechanism, or
any hearing,
inquiry or investigation that Indemnitee believes might lead to the
institution
of any such action, suit, proceeding or alternative dispute
resolution
mechanism, whether civil, criminal, administrative, investigative
or other.
(d) References to the "COMPANY" shall include, in addition to
Flux
U.S. Corporation, any resulting or constituent corporation
(including any
constituent of a constituent) absorbed in a consolidation or merger
which, if
its separate existence had continued, would have had power and
authority to
indemnify its directors, officers, employees, agents, control
persons,
stockholders, or fiduciaries, so that if Indemnitee is or was or
may be deemed a
director, officer, employee, agent, control person, stockholder or
fiduciary of
such constituent corporation, or is or was or may be deemed to be
serving at the
request of such constituent corporation as a director,
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officer, employee, control person, stockholder, agent or fiduciary
of another
corporation, partnership, joint venture, employee benefit plan,
trust or other
enterprise, Indemnitee shall stand in the same position under the
provisions of
this Agreement with respect to the resulting or surviving
corporation as
Indemnitee would have with respect to such constituent corporation
if its
separate existence had continued.
(e) "EXPENSES" shall mean any and all expenses (including
attorneys'
fees and all other costs, expenses and obligations incurred in
connection with
investigating, defending, being a witness in or participating in
(including on
appeal), or preparing to defend, to be a witness in or to
participate in, any
action, suit, proceeding, alternative dispute resolution mechanism,
hearing,
inquiry or investigation), judgments, losses, fines, penalties and
amounts paid
in settlement (if such settlement is approved in advance by the
Company, which
approval shall not be unreasonably withheld) of any Claim regarding
any
Indemnifiable Event and any federal, state, local or foreign taxes
imposed on
Indemnitee as a result of the actual or deemed receipt of any
payments under
this Agreement, including all interest, assessments and other
charges paid or
payable in connection with or in respect of such expenses.
(f) "EXPENSE ADVANCE" shall mean an advance payment of Expenses
to
Indemnitee pursuant to Section 3(a).
(g) "INDEMNIFIABLE EVENT" shall mean any event or occurrence in
any
way resulting from, arising out of or in connection with, based
upon or directly
related to the fact that Indemnitee is or was a stockholder,
controlling person,
agent or fiduciary of the Company, or any subsidiary of the
Company, or by
reason of (or arising in part or in whole out of) any event or
occurrence
related to (a) the fact that Indemnitee is or was or may be deemed
a
stockholder, director, officer, employee, controlling person, agent
or fiduciary
of the Company, or any subsidiary of the Company, or (b) is or was
or may be
deemed to be serving at the request of the Company as a
stockholder, director,
officer, employee, controlling person, agent or fiduciary of
another
corporation, partnership, limited liability company, joint venture,
trust or
other enterprise, or (c) to the fullest extent permitted by
applicable law, any
alleged breach by Indemnitee of his or her fiduciary duty as a
director or
officer of the Company or any of its subsidiaries, or (d) by reason
of any
action or inaction on the part of Indemnitee while serving in the
capacity of a
stockholder, director, officer, employee, controlling person, agent
or fiduciary
of the Company, or any subsidiary of the Company, including,
without limitation,
any and all losses, claims, damages, expenses and liabilities,
joint or several
(including any investigation, legal and other expenses incurred in
connection
with, and any amount paid in settlement of, any action, suit,
proceeding or any
claim asserted) under the Securities Act of 1933, as amended (the
"Securities
Act"), the Exchange Act or other federal or state statutory law or
regulation,
at common law or otherwise or (e) which relates directly or
indirectly to the
registration, purchase, sale or ownership of any securities of the
Company or to
any fiduciary obligation owed with respect thereto or (f) as a
direct or
indirect result of any Claim made by any stockholder of the Company
against
Indemnitee and arising out of or related to any round of financing
of the
Company (including but not limited to Claims regarding
non-participation, or
non-prorata participation, in such round by such stockholder), or
(g) made by a
third party against Indemnitee based on any misstatement or
omission of a
material fact by the Company in
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violation of any duty of disclosure imposed on the Company by
federal or state
securities or common laws.
(h) References to the "INDEMNITEE" shall include, in addition
to
Flux Fixed Wireless, LLC, any of its directors, officers, partners,
employees,
agents and spouses and each of its and their Affiliates, including,
without
limitation, any of such Persons who may be liable within the
meaning of Section
15 of the Securities Act, or Section 20 of the Exchange Act.
(i) "INDEPENDENT LEGAL COUNSEL" shall mean an attorney or firm
of
attorneys, selected in accordance with the provisions of Section
2(c) hereof,
who shall not have otherwise performed services for the Company or
Indemnitee
within the last three (3) years (other than with respect to matters
concerning
the rights of Indemnitee under this Agreement, or of other
indemnitees under
similar indemnity agreements).
(j) References to "OTHER ENTERPRISES" shall include employee
benefit
plans; references to "fines" shall include any excise taxes
assessed on
Indemnitee with respect to an employee benefit plan; and references
to "serving
at the request of the Company" shall include any service as a
director, officer,
employee, agent or fiduciary of the Company which imposes duties
on, or involves
services by, such director, officer, employee, agent or fiduciary
with respect
to an employee benefit plan, its participants or its beneficiaries;
and if
Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to
be in the interest of the participants and beneficiaries of an
employee benefit
plan, Indemnitee shall be deemed to have acted in a manner "not
opposed to the
best interests of the Company" as referred to in this
Agreement.
(k) "REVIEWING PARTY" shall mean any appropriate person or body
consisting of a member or members of the Company's Board of
Directors or any
other person or body appointed by the Board of Directors who is not
a party to
the particular Claim for which Indemnitee is seeking
indemnification, or
Independent Legal Counsel.
(l) "VOTING SECURITIES" shall mean any securities of the
Company
that vote generally in the election of directors.
2.
INDEMNIFICATION.
(a) INDEMNIFICATION OF EXPENSES. The Company shall indemnify,
defend
and hold harmless Indemnitee to the fullest extent permitted by law
if
Indemnitee was or 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
Claim by reason of (or arising in part out of) any Indemnifiable
Event against
Expenses, including all interest, assessments and other charges
paid or payable
in connection with or in respect of such Expenses. Such payment of
Expenses
shall be made by the Company as soon as practicable but in any
event no later
than thirty (30) business days after written demand by Indemnitee
therefor is
presented to the Company.
(b) REVIEWING PARTY. Notwithstanding the foregoing, (i) the
obligations of the Company under Section 2(a) shall be subject to
the condition
that the Reviewing Party shall not have determined (in a written
opinion, in any
case in which the Independent Legal Counsel
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referred to in Section 2(c) hereof is involved) that Indemnitee
would not be
permitted to be indemnified under applicable law, and (ii) the
obligation of the
Company to make an Expense Advance shall be subject to the
condition that, if,
when and to the extent that the Reviewing Party determines that
Indemnitee would
not be permitted to be so indemnified under applicable law, the
Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to
reimburse the
Company) for all such amounts theretofore paid; provided, however,
that if
Indemnitee has commenced or thereafter commences legal proceedings
in a court of
competent jurisdiction to secure a determination that Indemnitee
should be
indemnified under applicable law, 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 lapsed). Indemnitee's obligation to reimburse the
Company for any
Expense Advance shall be unsecured and no interest shall be charged
thereon. If
there has not been a Change in Control, the Reviewing Party shall
be selected by
the Board of Directors, and if there has been such a Change in
Control (other
than a Change in Control which has been approved by a majority of
the Company's
Board of Directors who were directors immediately prior to such
Change in
Control), the Reviewing Party shall be the Independent Legal
Counsel. If there
has been no determi
