INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT, dated as
of October 1, 2007 between Spanish Broadcasting System, Inc.,
a Delaware corporation (the “Company”), and Mitchell A.
Yelen (“Indemnitee”).
WHEREAS, it is essential that the
Company retain as directors and executive officers 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 being asserted against directors of public companies in
today’s environment;
WHEREAS, the Third Amended and
Restated Certificate of Incorporation of the Company (the
“Charter”) requires the Company to indemnify directors,
officers and certain other persons to the fullest extent permitted
by law and Indemnitee will serve as a director of the Company in
part in reliance on the Charter;
WHEREAS, in recognition of
Indemnitee’s need for substantial protection against personal
liability and to provide Indemnitee with specific contractual
assurance that the protection provided by the Charter will be
available to Indemnitee (regardless of, among other things, any
amendment to or revocation of the Charter or any change in the
composition of the Company’s Board of Directors or any
acquisition transaction relating to the Company), the Company
wishes to provide in this agreement for the indemnification of and
the advancement of expenses to Indemnitee to the fullest extent
permitted by law and as set forth in this agreement, and, to the
extent insurance is maintained, for the continued coverage of
Indemnitee under the Company’s directors’ and
officers’ liability insurance policies.
NOW, THEREFORE, in consideration of
the premises and intending to be legally bound hereby, the parties
hereto agree as follows:
I.
Certain Definitions.
A. Change in Control:
shall be deemed to have occurred if, (i) any
“person” (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended), other
than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company 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 said Act), directly or indirectly, of
securities of the Company representing 15% or more of the total
voting power represented by the Company’s then outstanding
Voting Securities, or (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 80% 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 transactions) all or
substantially all of the Company’s assets.
B. Claim: any
threatened, pending or completed action, suit, proceeding,
arbitration, alternate dispute resolution mechanism, (whether
civil, criminal, administrative or investigative, whether
instituted by or in the right of the Company or any other party,
that Indemnitee in good faith believes might lead to the
institution of any such action, suit, proceeding, arbitration or
alternate dispute resolution mechanism, whether civil, criminal,
administrative or investigative, arising from or in connection with
the fact that Indemnitee, or a person for whom Indemnitee is the
legal representative, is or was a director or officer of the
Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust, enterprise or nonprofit entity,
including service with respect to employee benefit plans.
C. Expenses: include
reasonable attorneys’ fees and all other costs, expenses and
obligations actually and reasonably incurred by the Indemnitee in
connection with investigating, defending, or preparing to defend
any Claim.
D. Independent Legal
Counsel: an attorney or firm of attorneys, selected in
accordance with the provisions of Section 3, who shall not
have otherwise performed services for the Company or Indemnitee
within the last five years
2
(other than with respect to matters concerning the rights of
Indemnitee under this Agreement, or of other indemnitees under
similar indemnity agreements).
E. Reviewing Party:
(1) a Majority of directors who are not parties to the action,
even though less than a quorum, or (2) a Committee of such
directors designated by majority vote of such directors, even
though less than a quorum, or (3) if there are no such
directors, or if such directors so direct, independent legal
counsel, or (4) the stockholders.
F. Voting Securities:
any securities which vote generally in the election of
directors.
II.
Indemnification.
A. In General . In
connection with any Claim, whether relating to events occurring
before or after the Effective Date, the Company shall indemnify,
and advance Expenses, to Indemnitee as provided in this Agreement
and to the fullest extent permitted by law.
B. Claims Other Than Claims
by or in the Right of the Company . 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 any proceeding pursuant to any Claim, other than a
Claim by or in the right of the Company, the Company shall, subject
to Sections 2(e) and 2(f), indemnify Indemnitee against any and all
Expenses, judgments, fines, penalties and amounts paid in
settlement (including all interest, assessments and other charges
paid or payable in connection with or in respect of such Expenses,
judgments, fines, penalties or amounts paid in settlement) of such
Claim; provided , however , that Indemnitee shall not
be entitled to indemnification pursuant to this Section 2(b) in
connection with conduct finally adjudged as constituting acts or
omissions not in good faith or which involved a knowing violation
of the law.
C. Proceedings by or in the
Right of the Company . 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
any proceeding pursuant to any Claim brought by or in the right of
the Company to procure a judgment in its favor, the Company shall,
subject to Sections 2(e) and 2(f), indemnify Indemnitee against any
and all Expenses (including all interest, assessments and other
charges paid or payable in connection with or in respect of such
Expenses) of such Claim. Notwithstanding the foregoing, no such
indemnification shall be made in respect of any Claim, issue or
matter as to which Indemnitee shall have been finally adjudged to
be liable to the Company unless and only to the extent that the
Court of Chancery or the court in which such Claim was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnity for
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