Exhibit 10.16


 


INDEMNIFICATION AGREEMENT


 


 


INDEMNIFICATION AGREEMENT, dated as of July 17, 2000 (the “Agreement”), by and among
ICO-Teledesic Global Limited, a Delaware corporation (the “Company”), and Cascade Investment,
LLC, a Washington limited liability company (the “Investor”).


 


RECITALS:


 


A.       The Company has entered
into a Stock Purchase Agreement, dated as of June 30, 2000 (the “Stock Purchase Agreement”), with Eagle River Investments, L.L.C., a
Washington limited liability company, and the Investor, providing for the
issuance by the Company to the Investor of 10 million shares of the Company’s
Class A Common Stock (“Common Stock”), and the grant by the Company to the
Investor of options to purchase up to an additional shares of Common Stock (the
issuance of shares and grant of options, collectively, the “Transactions”).


 


B.        As a condition to the
consummation of the Transactions, and concurrently with the execution and
delivery of this Agreement, the Company is entering into (i) a
Registration Rights Agreement (the “Registration
Rights Agreement”) with the Investor and (ii) a Restated
Stockholders Agreement, dated as of June 20, 2000, with the Investor, Eagle
River and the Company’s stockholders listed in Schedule A thereto (the “Stockholders Agreement”).


 


C.        Immediately following the
consummation of, the Transactions, the Investor will be a stockholder of the
Company and will have the right to appoint initially one person to serve on the
Board of Directors of the Company.


 


D.        The parties recognize that
claims might be made against and liabilities incurred by the Investor or
related Persons or Affiliates, arising from the fact that such Persons are
shareholders, directors, officers or employees of the Company, and the parties
accordingly wish to provide the and related Persons and Affiliates to be
indemnified in respect of any such claims and liabilities to the fullest extent
permitted by law, subject to the terms and conditions of this Agreement.


 


NOW, THEREFORE, the parties hereto agree as follows:


 


1.         Certain Definitions.


 


“Affiliate” of
a Person means a Person that directly or indirectly through one or more
intermediaries, controls, is controlled by, or is 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. “Control”
(including the terms “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.


 


“Claim” means,
with respect to any Indemnitee, any claim against the Indemnitee involving any
Obligation with respect to which the Indemnitee may be entitled to be defended
and indemnified by the Company under this Agreement.


 

















 


“Indemnitee”
means the Investor, its Affiliates, and their respective successors and
permitted assigns, and each of their respective directors, officers, partners,
members, managers, employees, agents, advisors, representatives and controlling
persons (within the meaning of the Securities Act of 1933, as amended (the “Securities Act”)).


 


“Obligations”
means, collectively, any and all claims, obligations, liabilities, causes of
action, actions, suits, proceedings, investigations, judgments, decrees,
losses, damages, fees, costs and expenses (including, without limitation,
interest, penalties and fees and disbursements of attorneys and accountants),
in each case whether incurred, arising or existing with respect to third
parties or otherwise at any time or from time to time, provided that the
term “Obligations” does not include losses and damages and related costs and
expenses incurred:


 


(a)       with respect to the subject
matter of the Stock Purchase Agreement;


 


(b)       by any Indemnitee, in its
capacity as a shareholder of the Company, upon its disposition of Common Stock
or otherwise resulting solely from and limited to any diminution in value of
Common Stock held by the Indemnitee;


 


(c)       by any Indemnitee as a
result of any indemnity payment required to be made by the Indemnitee under
Section 10 of the Stock Purchase Agreement;


 


(d)       by any Indemnitee as a
result of any indemnity payment required to be made by the Indemnitee under
Section 7 of the Registration Rights Agreement; or


 


(e)       by any Indemnitee, in its
capacity as a shareholder of the Company, arising out of a violation of Section
16(b) of the Securities Exchange Act, as amended (the “Exchange Act”);


 


(f)        by any Indemnitee arising
out of a violation of Rule 10(b)-5 of the Securities Act, where such violation
has been determined in a final adjudication by a court of competent
jurisdiction or acknowledged by settlement; or


 


(g)       in connection with any
Claim determined in a final adjudication by a court of competent jurisdiction
to have resulted from a breach of the Indemnitee’s fiduciary duties, gross
negligence, or willful misconduct.


 


“Person”
means any individual, partnership, joint venture, corporation, limited
liability company, trust, unincorporated organization or other entity.


 


2.         Indemnification.
The Company agrees to indemnify, defend and hold harmless each Indemnitee from
and against any and all Obligations (including, but not limited to, all
reasonable fees, costs and expenses (including reasonable fees and
disbursements of attorneys) incurred by or on behalf of the Indemnitee in
asserting, exercising or enforcing any of its rights, powers, privileges or
remedies under this Agreement), in any way resulting from, arising out of or in
connection with, based upon or relating to:


 


(a)       to the fullest
extent permitted by applicable law, the fact that the Indemnitee is or was a
shareholder, director, officer or employee of the Company or any of its
subsidiaries; and


 


(b)       to the fullest
extent permitted by applicable law, alleged breach by the Indemnitee of his or
her fiduciary duty as a director or officer of the Company or any of its
subsidiaries.


 

















 


3.         Indemnification
Procedures. (a) Whenever any Indemnitee has actual knowledge of the
reasonable likelihood of the assertion of a Claim:


 


(i)        Investor
(acting on its own behalf or, if requested by any such Indemnitee other than
itself, on behalf of the Indemnitee) or the Indemnitee will notify the Company
in writing of the Claim (the “Notice of
Claim”) with reasonable promptness after the Indemnitee has such
knowledge relating to the Claim and has notified Investor of the Claim;


 


(ii)       the Notice of
Claim must specify all material facts known to Investor (or if given by such
Indemnitee, the Indemnitee) that may give rise to the Claim and the monetary
amount or an estimate of the monetary amount of the Obligation involved if
Investor (or if given by such Indemnitee, the Indemnitee) has knowledge of such
amount or a reasonable basis for making such an estimate;


 


(iii)      the
failure of Investor or the Indemnitee to give a Notice of Claim will not
relieve the Company of its indemnification obligations under this Agreement
except to the extent that such omission results in a failure of actual notice
to the Company and the Company is materially injured as a result of the failure
to give the Notice of Claim;


 


(iv)      Investor or the
Indemnitee will permit the Company (at the expense of the Company) to assume
the defense of the Claim with counsel of its own choosing reasonably
satisfactory both to Investor and to any Indemnitee that, in the exercise of
the Indemnitee’s good faith judgment, reasonably determines that the Claim
presents an actual or potential conflict of interest with Investor. Investor
may participate in such defense with counsel of Investor’s choosing at the
expense of the Company. If in the exercise of their good faith judgment any one
or more other Indemnitees reasonably determines that the Claim presents an
actual or potential conflict of interest with Investor and the counsel chosen
by the Company and approved by Investor pursuant to the previous sentence is
not satisfactory to the Indemnitee or Indemnitees, the Indemnitee or
Indemnitees may participate in the defense of the Claim with one counsel for
all the Indemnitees, at the choosing of the Indemnitees and at the expense of
the Company;


 


(v)       if the Company
does not undertake the defense of the Claim within a reasonable time after
Investor or another Indemnitee has given the Notice of Claim, or if Investor in
good faith determines that it or another Indemnitee has available to it one or
more defenses or counterclaims that are inconsistent with one or more of those
that may be available to the Company in respect of the Claim or any litigation
relating thereto, Investor may, at the expense of the Company and after giving
notice to the Company of such action, undertake the defense of the Claim and
compromise or settle the Claim, all for the account of and at the risk of the
Company, provided that if Investor does so take over and assume control,
Investor will not settle such claim or litigation without the written consent
of the Company, such consent not to be unreasonably withheld;


 


(vi)      in the defense
of any Claim, the Company will not, except with the consent of Investor (or, in
the case of any entry of any judgment or settlement that is binding on any
other Indemnitee, such other Indemnitee), consent to entry of any judgment or
enter into any settlement that includes any injunctive or other non-monetary
relief, or that does not include as an unconditional term thereof the giving by
the Person or Persons asserting the Claim to the Indemnitee of a release from
all liability with respect to the Claim; and


 


(vii)     Investor
and each other Indemnitee seeking indemnification under this Agreement will
cooperate with the Company, so long as the Company is conducting the defense


 

















 


of the Claim, in
the preparation for and the prosecution of the defense of the Claim, including
making available evidence within the control of Investor or the Indemnitee, as
the case may be, and persons needed as witnesses who are employed by Investor
or the Indemnitee, as the case may be, in each case as reasonably needed for
such defense and at cost, which cost, to the extent reasonably incurred, to be
paid by the Company.


 


(b)       The Company hereby agrees
to advance reasonable costs and expenses, including reasonable attorney’s fees,
incurred by Investor (acting on its own behalf or, if requested by any the
Indemnitee other than itself, on behalf of the Indemnitee) or any Indemnitee in
defending any Claim in advance of the final disposition of the Claim upon
receipt of an undertaking by or on behalf of Investor or the Indemnitee to
repay amounts so advanced if it is ultimately determined that Investor or the
Indemnitee is not entitled to be indemnified by the Company under this
Agreement or otherwise.


 


(c)       Each Indemnitee will
promptly notify the Company in writing of the amount of any Claim actually paid
by the Indemnitee (the “Notice of Payment”).
The amount of any Claim actually paid by an Indemnitee will bear simple
interest at the rate equal to the Chase Manhattan Bank’s prime rate as of the
date of such payment plus 2% per annum, from the date the Company receives the
Notice of Payment to the date on which the Company repays the amount of the
Claim plus interest to the Indemnitee.


 


4.         Certain Covenants;
Other Indemnitees. The rights of each Indemnitee to be indemnified under
any other agreement, document, certificate or instrument or applicable law are
independent of and in addition to any rights of the Indemnitee to be
indemnified under this Agreement. The rights of each Indemnitee and the
obligations of the Company under this Agreement will remain in full force and
effect regardless of any investigation made by or on behalf of the Indemnitee.
The Company shall implement and maintain in full force and effect any and all
corporate articles or charter and by-law provisions that may be necessary or
appropriate to enable it to carry out its obligations under this Agreement to
the fullest extent permitted by applicable corporate law, including without
limitation a provision of its articles or certificate of incorporation
eliminating liability of a director for breach of fiduciary duty to the fullest
extent permitted by applicable corporate law, as it may be amended from time to
time.


 


5.         Third-Party
Beneficiaries. All Indemnitees not signatories to this Agreement are
intended third-party beneficiaries of this Agreement.


 


6.         Severability. If
any provision or provisions of this Agreement is held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions of this Agreement will not in any way be affected or impaired
thereby.


 


7.         Notices. All
notices, requests, demands, waivers and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given if (a) delivered personally, (b)
mailed, certified or registered mail with postage prepaid, (c) sent by
next-day or overnight mail or delivery or (d) sent by fax, with a copy
sent by (a), (b), or (c) above, or telegram, as follows:


 


(i)        if
to Investor:


Cascade
Investment, L.L.C.


2365 Carillon
Point


Kirkland, WA
98033-7353


Attn: Michael
Larson


Fax: (425)
893-8758


 

















 


(ii)       if
to the Company:



c/o Eagle River Investments, L.L.C.

2300 Carillon Point

Kirkland, WA 98033-7353

Attn: C. James Judson, Esq.

Fax: 425-828-8089



with a copy to:



Davis Wright Tremaine LLP

Suite 2300

Portland, OR 97201

Attn: Benjamin G. Wolff, Esq.

Fax: 503-778-5299


 


or, in each case,
at such other address as may be specified in writing to the other parties.


 


All such notices, requests, demands, waivers and other communications
will be deemed to have been received (w) if by personal delivery on the
day after such delivery, (x) if by certified or registered mail, on the
seventh business day after the mailing thereof, (y) if by next-day or
overnight mail or delivery, on the day delivered, or (z) if by telecopy
or telegram, on the next day following the day on which such telecopy or
telegram was sent, provided that a copy is also sent by certified or registered
mail.


 


8.         Entire Agreement.
Except as contained in Section 10 of the Stock Purchase Agreement and Section 7
of the Registration Rights Agreement, this Agreement (a) contains the
complete and entire understanding and agreement of the parties with respect to
its subject, and (b) supersedes all prior and contemporaneous
understandings, conditions and agreements, oral or written, express or implied,
in respect of its subject.


 


9.         Headings. The headings
contained in this Agreement are for purposes of convenience only and will not
affect the meaning or interpretation of this Agreement.


 


10.       Counterparts. This
Agreement may be executed in several counterparts, each of which will be deemed
an original and all of which will together constitute one and the same
instrument.


 


11.       Binding Effect;
Assignment. This Agreement will be binding upon and inure to the benefit of
the parties to this Agreement and their respective successors and permitted
assigns and to each Indemnitee, provided that no party may assign any of
its rights or obligations under this Agreement without the express written
consent of the other parties. Subject to Section 5, this Agreement is not
intended to confer any right or remedy upon any Person other than the parties
to this Agreement and their respective successors and permitted assigns and
each Indemnitee.


 


12.       Governing Law. This
Agreement will be governed in all respects including as to validity,
interpretations, and effects by the laws of the state of New York, without
giving effect to its principles or rules of conflict of laws to the extent such
principles or rules would require or permit the application of the laws of
another jurisdiction. Each of the parties hereby irrevocably submits to the
jurisdiction of the courts of the state of New York and the federal courts of
the United States of America, in each case located in the state of New York,
solely in respect of the interpretation and enforcement of the provisions of
this Agreement, and hereby waives, and agrees not to assert, as a defense in
any action, suit or proceeding for the interpretation or enforcement hereof,
that it is not subject thereto or that such action, suit or proceeding


 

















 


may not be brought
or is not maintainable in such courts or that the venue thereof may not be
appropriate or that this Agreement may not be enforced in or by such courts,
and the parties hereto irrevocably agree that all claims with respect to such
action or proceeding will be heard and determined in such a New York state or
federal court. The parties hereby consent to and grant any such court
jurisdiction over such parties with respect to, and over the subject matter of,
any such dispute and agree, to the maximum extent permitted by law, that
mailing of process or other papers in connection with any such action or
proceeding in the manner provided in Section 7, or in such other manner as may
be permitted by law, will be valid and sufficient service.


 


13.       Waiver of Jury Trial.
Each party acknowledges and agrees that any controversy that may arise under
this Agreement is likely to involve complicated and difficult issues, and
therefore it hereby irrevocably and unconditionally waives any right it may
have to a trial by jury in respect of any litigation directly or indirectly
arising out of or relating to this Agreement, or the breach, termination or
validity of this Agreement, or the transactions contemplated by this Agreement.
Each party certifies and acknowledges that (a) no representative, agent
or attorney of any other party has represented, expressly or otherwise, that
such other party would not, in the event of litigation, seek to enforce the
foregoing waiver, (b) it understands and has considered the implications
of this waiver, (c) it makes this waiver voluntarily, and (d) it
has been induced to enter into this Agreement by, among other things, the
mutual waivers and certifications contained in this Section 13.


 


14.       Amendment; Waivers.
No amendment, modification, supplement or discharge of this Agreement, and no
waiver hereunder, will be valid or binding unless set forth in writing and duly
executed by the party against whom enforcement of the amendment, modification,
supplement, discharge or waiver is sought (and in the case of the Company approved
by resolution of the Company’s Board of Directors). Any such waiver will
constitute a waiver only with respect to the specific matter described in such
writing and will in no way impair the rights of the party or Indemnitee
granting such waiver in any other respect or at any other time. Neither the
waiver by any of the parties or any Indemnitee of a breach of or a default
under any of the provisions of this Agreement, nor the failure by any party or
any Indemnitee on one or more occasions, to enforce any of the provisions of
this Agreement or to exercise any right, powers or privilege hereunder, will be
construed as a waiver of any other breach or default of a similar nature, or as
a waiver of any of such provisions, rights, power or privileges hereunder. The
rights and remedies provided in this Agreement are cumulative and are not
exclusive of any rights or remedies that any party or Indemnitee may otherwise
have at law or in equity or otherwise.


 


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IN WITNESS
WHEREOF, the parties have duly executed this Agreement as of the date first
above written.


 


 


	
   

  	
   

  	
  Cascade Investment, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Michael Larson

  	
   

  
	
   

  	
   

  	
   

  	
  Michael Larson,
  Business Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ICO-TELEDESIC GLOBAL
  LIMITED

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Dennis Weibling

  	
   

  
	
   

  	
   

  	
   

  	
  Dennis Weibling,
  President