Exhibit 10.3
INDEMNIFICATION AGREEMENT
     This Indemnification Agreement, dated as of November 13, 2006, is made by
and between COLLEGIATE PACIFIC INC., a Delaware corporation (the “Company”), and
Terrence M. Babilla, a director, officer or key employee of the Company or one
of the Company’s Subsidiaries (the “Indemnitee”).
     The following recitals are true and constitute the basis for this
Indemnification Agreement:
A. The Company is aware that competent and experienced persons are increasingly
reluctant to serve as representatives of corporations unless they are protected
by comprehensive liability insurance and/or indemnification, due to increased
exposure to litigation costs and risks resulting from their service to such
corporations, and due to the fact that the exposure frequently bears no
reasonable relationship to the compensation of such representatives;
B. Plaintiffs often seek damages in such large amounts and the costs of
litigation may be so substantial (whether or not the case is meritorious), that
the defense and/or settlement of such litigation is often beyond the personal
resources of representatives;
C. The Company believes that it is unfair for its representatives and the
representatives of its Subsidiaries (as defined below) to assume the risk of
large judgments and Expenses (as defined below) that may be incurred in cases in
which the representative received no personal profit and in cases where the
director or officer was not culpable;
D. The Company recognizes that the issues in controversy in litigation against a
representative of a corporation such as the Company or a Subsidiary of the
Company are often related to the knowledge, motives and intent of such
representatives, that he or she is usually the only witness with knowledge of
the essential facts and exculpating circumstances regarding such matters and
that the long period of time which usually elapses before the trial or other
disposition of such litigation often extends beyond the time that the
representative can reasonably recall such matters; and may extend beyond the
normal time for retirement for such director or officer with the result that he
or she, after retirement or in the event of his or her death, his or her spouse,
heirs, executors or administrators, may be faced with limited ability and undue
hardship in maintaining an adequate defense, which may discourage such a
representatives from serving in that position;
E. Based upon their experience as business managers, the Board of Directors of
the Company (the “Board”) has concluded that, to retain and attract talented and
experienced individuals to serve as representatives of the Company and its
Subsidiaries and to encourage such individuals to take the business risks
necessary for the success of the Company and its Subsidiaries, it is necessary
for the Company to contractually indemnify its representatives and the
representatives of its Subsidiaries, and to assume for itself maximum liability
for Expenses and damages in connection with claims against such representatives
in connection with their service to the Company and its Subsidiaries, and has
further concluded that the failure to provide such contractual indemnification
could result in great harm to the Company and its Subsidiaries and the Company’s
stockholders;

 

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F. Section 145 of the General Corporation Law of Delaware, under which the
Company is organized (“Section 145”), empowers the Company to indemnify by
agreement its officers, directors, employees and agents, and persons who serve,
at the request of the Company, as directors, officers, employees or agents of
other corporations or enterprises, and expressly provides that the
indemnification provided by Section 145 is not exclusive;
G. The Company desires and has requested the Indemnitee to serve or continue to
serve as a representatives of the Company and/or the Subsidiaries of the Company
free from undue concern for claims for damages arising out of or related to such
services to the Company and/or the Subsidiaries of the Company; and
H. The Indemnitee is willing to serve, or to continue to serve, the Company
and/or the Subsidiaries of the Company; provided that he or she is furnished the
indemnity provided for herein.
     NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
     1. Definitions.
          (a) Affiliate. For purposes of this Indemnification Agreement,
“Affiliate” of the Company means any corporation, partnership, joint venture,
trust or other enterprise in respect of which the Indemnitee is or was or will
be serving as a director, officer, advisory director, trustee, manager, member,
partner, employee, agent, attorney, consultant, member of the entity’s governing
body (whether constituted as a board of directors, board of managers, general
partner or otherwise), fiduciary, or in any other similar capacity at the direct
or indirect request of the Company, and including, but not limited to, any
employee benefit plan of the Company or a Subsidiary or Affiliate of the
Company.
          (b) Agent. For the purposes of this Indemnification Agreement, “Agent”
of the Company means any person who is or was a director, officer, employee,
attorney or other agent of the Company or a Subsidiary of the Company; or is or
was serving at the request of, for the convenience of, or to represent the
interest of the Company or a Subsidiary of the Company as a director, officer,
employee or agent of another foreign or domestic corporation, partnership, joint
venture, trust or other enterprise; or was a director, officer, employee or
agent of a foreign or domestic corporation which was a predecessor corporation
of the Company or a Subsidiary of the Company, or was a director, officer,
employee or agent of another enterprise at the request of, for the convenience
of, or to represent the interests of such predecessor corporation.
          (c) Expenses. For purposes of this Indemnification Agreement,
“Expenses” means all direct and indirect costs of any type or nature whatsoever
(including, without limitation, all attorneys’ fees and related disbursements,
and other out-of-pocket costs) actually and reasonably incurred by the
Indemnitee in connection with either the investigation, defense or appeal of, or
being a witness in, a Proceeding (as defined below) or establishing or enforcing
a right to indemnification under this Indemnification Agreement, Section 145 or
otherwise; provided, however, that Expenses shall not include any judgments,
fines, ERISA excise taxes or penalties or amounts paid in settlement of a
Proceeding.
          (d) Other Liabilities. For purposes of this Indemnification Agreement,
“Other Liabilities” means any and all liabilities of any type whatsoever
(including, but not limited to, judgments, fines, ERISA (or other benefit plan
related) excise taxes or penalties, and amounts paid in settlement and all
interest, taxes, assessments and other charges paid or payable in connection
with or in respect of any

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Expenses or any such judgments, fines, ERISA (or other benefit plan related)
excise taxes or penalties, or amounts paid in settlement).
          (e) Proceeding. For the purposes of this Indemnification Agreement,
“Proceeding” means any threatened, pending, or completed action, suit or other
proceeding, whether civil, criminal, administrative, investigative or any other
type whatsoever, including any arbitration or other alternative dispute
resolution and including any appeal of any of the foregoing.
          (f) Subsidiary. For purposes of this Indemnification Agreement,
“Subsidiary” means any corporation of which more than 50% of the outstanding
voting securities is owned directly or indirectly by the Company, by the Company
and one or more other subsidiaries, or by one or more other subsidiaries.
     2. Agreement to Serve. The Indemnitee agrees to serve and/or continue to
serve as an Agent of the Company, at the will of the Company (or under separate
agreement, if such agreement exists), in the capacity the Indemnitee currently
serves as an Agent of the Company, so long as he or she is duly appointed or
elected, and is and remains qualified to serve in such capacity, in accordance
with the applicable provisions of the Bylaws of the Company or any Subsidiary of
the Company and until the resignation, removal, termination, permanent
disability or death of the Indemnitee; provided, however, that nothing contained
in this Indemnification Agreement is intended to create any right to continued
employment or other form of service by the Indemnitee.
     3. Mandatory Indemnification. The Company shall indemnify the Indemnitee to
the fullest extent not prohibited by the provisions of the Company’s Bylaws and
the Delaware General Corporation Law (“DGCL”), as the same may be amended from
time to time (but only to the extent that such amendment permits the Company to
provide broader indemnification rights than the Bylaws or the DGCL permitted
prior to the adoption of such amendment) as follows, subject to the limitations
set forth in Section 10 below:
          (a) Third Party Actions. If the Indemnitee is a person who was or is a
party to, or witness in, or is threatened to be made a party to, or witness in,
any Proceeding (other than an action by or in the right of the Company, which
actions are addressed in Section 3(b) below) by reason of the fact that he or
she is or was an Agent of the Company, or by reason of anything done or not done
by the Indemnitee in any such capacity, against any and all Expenses and Other
Liabilities actually and reasonably incurred by the Indemnitee in connection
with the investigation, defense, settlement or appeal of such Proceeding if he
or she acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Company, and, with respect to any
criminal action or Proceeding, had no reasonable cause to believe his or her
conduct was unlawful; and
          (b) Derivative Actions. If the Indemnitee is a person who was or is a
party or is threatened to be made a party to any Proceeding by or in the right
of the Company to procure a judgment in its favor by reason of the fact that he
or she is or was an Agent of the Company, or by reason of anything done or not
done by the Indemnitee in any such capacity, against any amounts paid in
settlement of any such Proceeding, to the maximum extent permitted by law, and
all Expenses actually and reasonably incurred by the Indemnitee in connection
with the investigation, defense, settlement, or appeal of such Proceeding if the
Indemnitee acted in good faith and in a manner he or she reasonably believed to
be in or not opposed to the best interests of the Company; except that no
indemnification under this subsection shall be made in respect of any claim,
issue or matter as to which such person shall have been finally adjudged to be
liable to the Company, unless and only to the extent that the Court of Chancery
of the State of Delaware (“Court of Chancery”) or 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

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of the case, such person is fairly and reasonably entitled to indemnity for such
amounts which the Court of Chancery or such other court shall deem proper.
     4. Determination of “Good Faith”. For purposes of any determination of
“good faith” hereunder, the Indemnitee shall be deemed to have acted in good
faith if in taking such action the Indemnitee relied on the records or books of
account of the Company or a Subsidiary or Affiliate of the Company, including
financial statements, or on information, opinions, reports or statements
provided to the Indemnitee by the officers or other employees of the Company or
a Subsidiary or Affiliate of the Company in the course of their duties, or on
the advice of legal counsel for the Company or a Subsidiary or Affiliate of the
Company, or on information or records given or reports made to the Company or a
Subsidiary or Affiliate of the Company by an independent certified public
accountant or by an appraiser or other expert selected by the Company or a
Subsidiary or Affiliate of the Company, or by any other person (including legal
counsel, accountants and financial advisors) as to matters the Indemnitee
reasonably believes are within such other person’s professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Company. In connection with any determination as to whether the Indemnitee is
entitled to be indemnified hereunder, the Reviewing Party (as defined below) or
court shall presume that the Indemnitee has satisfied the applicable standard of
conduct and shall be entitled to indemnification, and the burden of proof shall
be on the Company to establish that the Indemnitee is not so entitled. The
provisions of this Section 4 shall not be deemed to be exclusive or to limit in
any way the other circumstances in which the Indemnitee may be deemed to have
met the applicable standard of conduct set forth in this Indemnification
Agreement. In addition, the knowledge and/or actions, or failures to act, of any
other person serving the Company or a Subsidiary or Affiliate of the Company as
an indemnifiable person shall not be imputed to the Indemnitee for purposes of
determining the right to indemnification hereunder.
     5. Exception for Amounts Covered by Insurance and Other Sources.
Notwithstanding the foregoing, the Company shall not be obligated to indemnify
the Indemnitee for Expenses or Other Liabilities of any type whatsoever
(including, but not limited to judgments, fines, ERISA excise taxes or penalties
and amounts paid in settlement) to the extent such have been paid directly to
the Indemnitee by any directors and officers insurance (“D&O Insurance")
maintained by the Company or other indemnity arrangements with third parties.
     6. Partial Indemnification and Contribution.
          (a) Partial Indemnification. If the Indemnitee is entitled under any
provision of this Indemnification Agreement to indemnification by the Company
for some or a portion of any Expenses or Other Liabilities, but not entitled,
however, to indemnification for all of the total amount thereof, the Company
shall nevertheless indemnify the Indemnitee for such total amount except as to
the portion thereof to which the Indemnitee is not entitled.
          (b) Contribution. If the Indemnitee is not entitled to the
indemnification provided in Section 3 above for any reason other than the
statutory limitations set forth in the DGCL, then in respect of any threatened,
pending or completed Proceeding in which the Company is jointly liable with the
Indemnitee (or would be adjoined in such Proceeding), the Company shall
contribute to the amount of Expenses (including attorneys’ fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred and paid
or payable by the Indemnitee in such proportion as is appropriate to reflect
(i) the relative benefits received by the Company and all officers, directors or
employees of the Company, other than Indemnitee, who are jointly liable with
Indemnitee (or would be if joined in such Proceeding), on the one hand, and the
Indemnitee, on the other hand, from the transaction from which such Proceeding
arose and (ii) the relative fault of the Company and all officers, directors or
employees of the Company, other than Indemnitee, who are jointly liable with
Indemnitee (or would be if joined in such Proceeding),

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on the one hand, and of the Indemnitee, on the other hand, in connection with
the events which resulted in such Expenses, judgments, fines or settlement
amounts, as well as any other relevant equitable considerations. The relative
fault on the Company and all officers, directors or employees of the Company,
other than Indemnitee, who are jointly liable with Indemnitee (or would be if
joined in such Proceeding), on the one hand, and of the Indemnitee, on the other
hand, shall be determined by reference to, among other things, the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent the circumstances resulting in such Expenses, judgments, fines or
settlement amounts. The Company agrees that it would not be just and equitable
if contribution pursuant to this Section 6 were determined by pro rata
allocation or any other method of allocation which does not take into account
the foregoing equitable considerations.
     7. Mandatory Advancement of Expenses.
          (a) Advancement. Subject to Section 5 above or Section 10 below, the
Company shall advance prior to the final disposition of the Proceeding, all
Expenses incurred by the Indemnitee in connection with the investigation,
defense, settlement or appeal of any Proceeding to which the Indemnitee is a
party or is threatened to be made a party by reason of the fact that the
Indemnitee is or was an Agent of the Company or by reason of anything done or
not done by him or her in any such capacity. The Indemnitee hereby undertakes to
repay such amounts advanced only if, and to the extent that, it shall ultimately
be determined that the Indemnitee is not entitled to be indemnified by the
Company under the provisions of this Indemnification Agreement, the Company’s
Bylaws or the DGCL. The advances to be made hereunder shall be paid by the
Company to the Indemnitee or directly to a third party designated in writing by
the Indemnitee within twenty (20) days following delivery of a written request
therefor by the Indemnitee to the Company.
          (b) Exception. Notwithstanding the foregoing provisions of this
Section 7, the Company shall not be obligated to advance any Expenses to the
Indemnitee if: (i) those members of the Board consisting of directors who were
not parties to the Proceeding for which a claim is made under this
Indemnification Agreement, even though less than a quorum or (ii) independent
legal counsel, selected by the Indemnitee, and approved by the Board, which
approval may not be unreasonably withheld, by written legal opinion, or (iii) a
panel of arbitrators (one of whom is selected by the Company, another of whom is
selected by the Indemnitee and the last of whom is selected by the first two
arbitrators so selected), determines in good faith, within thirty (30) days of
the Indemnitee’s request to be advanced Expenses, that the facts known to them
at the time such determination is made demonstrate clearly and convincingly that
the Indemnitee acted in bad faith. If such a determination is made, the
Indemnitee may have such decision reviewed in the manner set forth in Section
9(d) hereof, with all references therein to “indemnification” being deemed to
refer to “advancement of Expenses,” and the burden of proof shall be on the
Company to demonstrate clearly and convincingly that, based on the facts known
at the time, the Indemnitee acted in bad faith.
     8. Notice and Other Indemnification Procedures.
          (a) Notification. Promptly after receipt by the Indemnitee of notice
of the commencement of or the threat of commencement of any Proceeding, the
Indemnitee shall, if the Indemnitee believes that indemnification with respect
thereto may be sought from the Company under this Indemnification Agreement,
notify the Company of the commencement or threat of commencement thereof. The
failure to promptly notify the Company of the commencement of, or the threat of
commencement of, any Proceeding, or the Indemnitee’s request for indemnification
will not relieve the Company from any obligation that it may have to the
Indemnitee hereunder, except to the extent that the Company is materially
prejudiced in its defense of such Proceeding as a result of such failure.

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          (b) Insurance and Other Matters. The Company hereby covenants and
agrees that, so long as Indemnitee serves as a director or officer of the
Company and thereafter so long as Indemnitee may be subject to any possible
Proceeding by reason of the fact that Indemnitee was a director or officer of
the Company, the Company, subject to the last sentence of this Section 8(b),
will promptly obtain and maintain in full force and effect liability insurance
to protect Indemnitee from personal liabilities incurred by reason of the fact
that Indemnitee is or was serving in such capacity (“Liability Insurance”) in
reasonable amounts from established and reputable insurers. In all applicable
policies of Liability Insurance, Indemnitee will be named as an insured and will
be covered by such policies in accordance with their terms to the maximum extent
of the coverage available for any director, officer, employee, or agent or
fiduciary under such policy or policies. At the time of the receipt of a notice
of the commencement of a Proceeding pursuant to Section 8(a) above, the Company
shall give prompt notice of the commencement of such Proceeding to the issuers
in accordance with the procedures set forth in the respective policies. The
Company shall thereafter take all reasonable action to cause such insurers to
pay, on behalf of the Indemnitee, all amounts payable as a result of such
Proceeding in accordance with the terms of such D&O Insurance policies.
Notwithstanding the foregoing, the Company will have no obligation to obtain or
maintain Liability Insurance if the Company determines in good faith that such
insurance is not reasonably available, the premium costs for such insurance are
disproportionate to the amount of coverage provided, the coverage provided by
such insurance is limited by exclusions so as to provide an insufficient
benefit, or Indemnitee is covered by similar insurance maintained by a
Subsidiary of the Company or by another person pursuant to a contractual
obligation owed to the Company or Indemnitee.
          (c) Assumption of Defense. In the event the Company shall be obligated
to advance the Expenses for any Proceeding against the Indemnitee, the Company,
if deemed appropriate by the Company, shall be entitled to assume the defense of
such Proceeding as provided herein. Following delivery of written notice to the
Indemnitee of the Company’s election to assume the defense of such Proceeding,
the approval by the Indemnitee (which approval shall not be unreasonably
withheld) of counsel designated by the Company and the retention of such counsel
by the Company, the Company will not be liable to the Indemnitee under this
Indemnification Agreement for any fees and expenses of counsel subsequently
incurred by the Indemnitee with respect to the same Proceeding. If (A) the
employment of counsel by the Indemnitee has been previously authorized by the
Company, (B) the Indemnitee shall have notified the Board in writing that the
Indemnitee has reasonably concluded that there may be a conflict of interest
between the Company and the Indemnitee in the conduct of any such defense, or
(C) the Company fails to employ counsel to assume the defense of such
Proceeding, the fees and expenses of the Indemnitee’s counsel shall be subject
to indemnification and/or advancement pursuant to the terms of this
Indemnification Agreement. Nothing herein shall prevent the Indemnitee from
employing counsel for any such Proceeding at the Indemnitee’s expense.
     9. Determination of Right to Indemnification.
          (a) Success on the Merits. To the extent the Indemnitee has been
successful on the merits or otherwise in defense of any Proceeding referred to
in Section 3(a) or 3(b) of this Indemnification Agreement or in the defense of
any claim, issue or matter described therein, the Company shall indemnify the
Indemnitee against Expenses actually and reasonably incurred by him or her in
connection therewith.
          (b) Right to Indemnification in Other Situations. In the event that
Section 9(a) is inapplicable, the Company shall also indemnify the Indemnitee if
he or she has not failed to meet the applicable standard of conduct for
indemnification.
          (c) Forum. The Indemnitee shall be entitled to select the forum in
which

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determination of whether or not the Indemnitee has met the applicable standard
of conduct will be made from among the following, except that the Indemnitee can
select the forum consisting of the stockholders of the Company only with the
approval of the Company:
               (1) Those members of the Board consisting of directors who are
not parties to the Proceeding for which indemnification is being sought, even
though less than a quorum;
               (2) The stockholders of the Company;
               (3) Independent legal counsel selected by the Indemnitee, and
approved by the Board, which approval may not be unreasonably withheld, which
counsel shall make such determination in a written opinion; or
               (4) A panel of three arbitrators, one of whom is selected by the
Company, another of whom is selected by the Indemnitee and the last of whom is
selected by the first two arbitrators so selected.
     The selected forum shall be referred to herein as the “Reviewing Party”.
     As soon as practicable, and in no event later than 30 days after written
notice of the Indemnitee’s choice of forum pursuant to Section 9(c) above, the
Company and the Indemnitee shall each submit to the Reviewing Party such
information as they believe is appropriate for the Reviewing Party to consider.
If the Reviewing Party has not made a determination within 60 days after receipt
by the Company of the request therefor, the requisite determination of
entitlement to indemnification will be deemed to have been made and Indemnitee
will be entitled to such indemnification absent (i) a misstatement by Indemnitee
of a material fact, or an omission of a material fact necessary to make
Indemnitee’s statement not materially misleading, in connection with the request
for indemnification or (ii) a prohibition of such indemnification under
applicable law; provided, however, that such 60-day period may be extended for a
reasonable time, not to exceed an additional 30 days, if the Reviewing Party
making such determination with respect to entitlement to indemnification in good
faith requires such additional time to obtain or evaluate documentation
information relating thereto; and provided, further, that the foregoing
provisions will not apply if the determination of entitlement to indemnification
is to be made by the stockholders pursuant to Section 9(c) and if (A) within
15 days after receipt by the Company of the request for such determination, the
Board or the disinterested directors, if appropriate, resolve to submit such
determination to the stockholders for their consideration at an annual meeting
thereof to be held within 75 days after such receipt and such determination is
made thereat, or (B) a special meeting of stockholders is called within 15 days
after such receipt for the purpose of making such determination, such meeting is
held for such purpose within 60 days after having been so called and such
determination is made thereat.
          (d) Delaware Court of Chancery. Notwithstanding a final determination
by any Reviewing Party that the Indemnitee is not entitled to indemnification
with respect to a specific Proceeding, the Indemnitee shall have the right to
apply to any of the Court of Chancery of Delaware, the court in which that
Proceeding is or was pending or any other court of competent jurisdiction, for
the purpose of enforcing the Indemnitee’s right to indemnification pursuant to
this Indemnification Agreement, and any such judicial proceeding will be
conducted in all respects as a de novo trial on the merits, and Indemnitee will
not be prejudiced by reason of the adverse determination by any Reviewing Party.
          (e) Expenses. Notwithstanding any other provision of this
Indemnification Agreement to the contrary, the Company shall indemnify the
Indemnitee against all Expenses incurred by the Indemnitee in connection with
any hearing or Proceeding under this Section 9 involving the

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Indemnitee and against all Expenses incurred by the Indemnitee in connection
with any other Proceeding between the Company and the Indemnitee involving the
interpretation or enforcement of the rights of the Indemnitee under this
Indemnification Agreement unless a court of competent jurisdiction finds that
each of the material claims and/or defenses of the Indemnitee in any such
Proceeding was frivolous or not made in good faith.
          (f) Final Determination. If a determination has been made pursuant to
this Agreement that Indemnitee is entitled to indemnification, the Company will
be bound by such determination in any judicial proceeding absent (i) a
misstatement by Indemnitee of a material fact, or an omission of a material fact
necessary to make Indemnitee’s misstatement not materially misleading in
connection with the application for indemnification, or (ii) a prohibition of
such indemnification under applicable law. The Company will be precluded from
asserting in any proceeding that the procedures and presumptions of this
Agreement are not valid, binding, and enforceable and will stipulate in any such
court that the Company is bound by all the provisions of this Agreement.
     10. Exceptions. Any other provision herein to the contrary notwithstanding,
the Company shall not be obligated pursuant to the terms of this Indemnification
Agreement under the following circumstances:
          (a) Claims Initiated by Indemnitee. To indemnify or advance Expenses
to the Indemnitee with respect to Proceedings or claims initiated or brought
voluntarily by the Indemnitee and not by way of defense, except with respect to
(1) Proceedings brought to establish or enforce a right to indemnification under
this Indemnification Agreement, any other statute or law, as permitted under
Section 145, or otherwise, and (2) Proceedings brought to discharge the
Indemnitee’s fiduciary responsibilities, whether under ERISA or otherwise, but
such indemnification or advancement of Expenses may be provided by the Company
in specific cases if the Board finds it to be appropriate; or
          (b) Unauthorized Settlements. To indemnify the Indemnitee under this
Indemnification Agreement for any amounts paid in settlement of a Proceeding
unless the Company consents to such settlement, which consent shall not be
unreasonably withheld or delayed; or
          (c) Undeserved Personal Advantage. To indemnify the Indemnitee under
this Indemnification Agreement for Other Liabilities from a Proceeding in which
a court enters a judgment concluding that the Indemnitee gained in fact a
material personal profit or advantage to which the Indemnitee is not entitled;
or
          (d) Advance Expenses. To advance Expenses to the Indemnitee under this
Indemnification Agreement for any Expenses incurred by the Indemnitee with
respect to any Proceeding brought by the Company against the Indemnitee for
breach of the duty of loyalty, an act or omission not in good faith or that
involves intentional misconduct or knowing violation of law, or a transaction
from which the Indemnitee gained an improper personal benefit; or
          (e) Actions. To indemnify the Indemnitee on account of any suit in
which judgment is rendered against the Indemnitee for an accounting of profits
made from the purchase or sale by the Indemnitee of securities of the Company
pursuant to the provisions of Section 16(b) of the Securities Exchange Act of
1934 and amendments thereto or similar provisions of any federal, state or local
statutory law; or
          (f) Unlawful Indemnification. To indemnify the Indemnitee for Other
Liabilities if a final decision by a court having jurisdiction in the matter
shall determine that such indemnification is

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prohibited by law. Both the Company and the Indemnitee acknowledge that in
certain instances, federal law or applicable public policy may prohibit the
Company from Indemnifying under this Indemnification Agreement or otherwise a
person serving the Company or a Subsidiary or Affiliate of the Company as an
Agent.
     11. Non-exclusivity. The provisions for indemnification and advancement of
Expenses set forth in this Indemnification Agreement shall not be deemed
exclusive of any other rights which the Indemnitee may have under any provision
of law, the Company’s Certificate of Incorporation or Bylaws, the vote of the
Company’s stockholders or disinterested directors, other agreements, or
otherwise, both as to acts or omissions in his or her official capacity and to
acts or omissions in another capacity while occupying his or her position as an
Agent of the Company, and the Indemnitee ‘ s rights hereunder shall continue
after the Indemnitee has ceased acting as an Agent of the Company and shall
inure to the benefit of the heirs, executors and administrators of the
Indemnitee. If the Company and the Indemnitee have previously entered into an
Indemnity Agreement providing for indemnification of the Indemnitee by the
Company, the parties’ entry into this Indemnification Agreement shall be deemed
to amend and restate such Indemnity Agreement to read in its entirety as, and to
be superseded by, this Indemnification Agreement.
     12. Interpretation of Agreement. It is understood that the parties hereto
intend this Indemnification Agreement to be interpreted and enforced so as to
provide indemnification and advancement of Expenses to the Indemnitee to the
fullest extent now or hereafter permitted by law, except as expressly prohibited
herein.
     13. Severability. If any provision or provisions of this Indemnification
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever, (i) the validity, legality and enforceability of the remaining
provisions of this Indemnification Agreement (including, without limitation, all
portions of any paragraphs of this Indemnification Agreement containing any such
provision held to be invalid, illegal or unenforceable, that are not themselves
invalid, illegal or unenforceable) shall not in any way be affected or impaired
thereby, and (ii) to the fullest extent possible, the provisions of this
Indemnification Agreement (including, without limitation, all portions of any
paragraphs of this Indemnification Agreement containing any such provision held
to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable and to give
effect to Section 12 above.
     14. Modification and Waiver. No supplement, modification or amendment of
this Indemnification Agreement shall be binding unless executed in writing by
both of the parties hereto. No waiver of any of the provisions of this
Indemnification Agreement shall be deemed or shall constitute a waiver of any
other provision hereof (whether or not similar) and except as expressly provided
herein, no such waiver shall constitute a continuing waiver.
     15. Successors and Assigns. The terms of this Indemnification Agreement
shall bind, and shall inure to the benefit of, the successors and assigns of the
parties hereto.
     16. Notice. All notices, requests, demands and other communications under
this Indemnification Agreement shall be in writing and shall be deemed duly
given (i) if delivered by hand and receipt is provided by the party to whom such
communication is delivered or (ii) if mailed by certified or registered mail
with postage prepaid, return receipt requested, on the signing by the recipient
of an acknowledgment of receipt form accompanying deliver through the U.S. mail,
(iii) personal service by a process server, or (iv) delivery to the recipient’s
address by overnight delivery (e.g. FedEx, UPS or DHL) or other commercial
delivery service. Addresses for notice to either party are as shown on the

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signature page of this Indemnification Agreement, or as subsequently modified by
written notice complying with the provisions of this Section 16. Delivery of
communications to the Company with respect to this Indemnification Agreement
shall be sent to the attention of the Company’s Chief Financial Officer.
     17. No Presumptions. For purposes of this Indemnification Agreement, the
termination of any Proceeding, by judgment, order, settlement (whether with or
without court approval) or conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the 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 or otherwise. In addition, neither the failure of the Company or a Reviewing
Party to have made a determination as to whether the Indemnitee has met any
particular standard of conduct or had any particular belief, nor an actual
determination by the Company or a Reviewing Party that the Indemnitee has not
met such standard of conduct or did not have such belief, prior to the
commencement of Proceedings by the Indemnitee to secure a judicial determination
by exercising the Indemnitee’s rights under Section 7 or 9(d) of this
Indemnification Agreement that the Indemnitee should be indemnified under
applicable law shall be a defense to the Indemnitee’s claim or create a
presumption that the Indemnitee has failed to meet any particular standard of
conduct or did not have any particular belief or is not entitled to
indemnification under applicable law or otherwise.
     18. Survival of Rights. The rights conferred on the Indemnitee by this
Indemnification Agreement shall continue after the Indemnitee has ceased to
serve the Company or a Subsidiary or Affiliate of the Company as an
indemnifiable person and shall inure to the benefit of the Indemnitee’s heirs,
executors and administrators.
     19. Subrogation. In the event of payment under this Indemnification
Agreement, the Company shall be subrogated to the extent of such payment to all
of the rights of recovery of the Indemnitee, who shall execute all documents
required and shall do all acts that may be necessary to secure such rights and
to enable the Company effectively to bring suit to enforce such rights.
     20. Specific Performance. The parties recognize that if any provision of
this Indemnification Agreement is violated by the Company, the Indemnitee may be
without an adequate remedy at law. Accordingly, in the event of any such
violation, the Indemnitee shall be entitled, if the Indemnitee so elects, to
institute Proceedings, either in law or at equity, to obtain damages, to enforce
specific performance, to enjoin such violation, or to obtain any relief or any
combination of the foregoing as the Indemnitee may elect to pursue.
     21. Counterparts. This Indemnification Agreement may be executed in
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute one and the same agreement. Only one
such counterpart signed by the party against whom enforceability is sought needs
to be produced to evidence the existence of this Indemnification Agreement.
     22. Headings. The headings of the sections and paragraphs of this
Indemnification Agreement are inserted for convenience only and shall not be
deemed to constitute part of this Indemnification Agreement or to affect the
construction of interpretation thereof.
     23. Governing Law. This Indemnification Agreement shall be governed
exclusively by and construed according to the laws of the State of Delaware, as
applied to contracts between Delaware residents entered into and to be performed
entirely with Delaware.
     24. Consent to Jurisdiction. The Company and the Indemnitee each hereby
irrevocably

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consent to the jurisdiction of the courts of the State of Delaware for all
purposes in connection with any action or Proceeding which arises out of or
relates to this Indemnification Agreement.
     25. Period of Limitations. No legal action may be brought and no cause of
action may 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 one year from the date of accrual of
such cause of action, and any claim or cause of action of the Company will be
extinguished and deemed released, unless asserted by the timely filing of a
legal action within such one year period; provided, however, that if any shorter
period of limitations is otherwise applicable to any such cause of action, such
shorter period will govern.
     The parties hereto have entered into this Indemnification Agreement
effective as of the date first above written.

                      COLLEGIATE PACIFIC INC.    
 
                    By:      /s/ Adam Blumenfeld                           Adam
Blumenfeld, Chief Executive Officer    
 
                    Address:   1901 Diplomat Drive    
 
          Dallas, TX 75234    
 
                    INDEMNITEE:    
 
                    By:      /s/ Terrence M. Babilla                  
 
                    Address:   P.O. Box 2563    
 
          Dallas, TX 75225    

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