Exhibit 10.1
FORM OF INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made as of
___________, 2003 by and between ATX Communications, Inc., a Delaware
corporation (the "Company"), and _____________ ("Indemnitee").
WHEREAS, the Company and Indemnitee recognize the increasing
difficulty in obtaining corporate directors' and officers' liability
insurance, the significant increases in the cost of such insurance and the
general reductions in the coverage of such insurance;
WHEREAS, the Company and Indemnitee further recognize the
substantial increase in corporate litigation in general, subjecting
corporate directors and officers to expensive litigation risks at the same
time as the coverage of liability insurance has been limited; and
WHEREAS, the Company desires to attract and/or retain the
services of highly qualified individuals, such as Indemnitee, to serve as
corporate directors and officers and to indemnify its corporate directors
and officers so as to provide them with the maximum protection permitted by
law.
NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:
1. Defined Terms.
(a) "Affiliate" of a Person shall mean any Person that
directly or indirectly controls, is controlled by, or is under common
control with, such Person.
(b) "Board" shall mean, in the case of a corporation, the
board of directors of such corporation and, in the case of any other
entity, the corresponding governing Person.
(c) "Claim" shall include, without limitation, any claim,
demand, request, investigation, dispute, controversy, threat, discovery
request, or request for testimony or information.
(d) "Person" shall mean any individual, corporation,
partnership, limited liability Company, joint venture, trust, estate,
board, committee, agency, body, employee benefit plan, or other person or
entity.
(e) "Proceeding" shall include, without limitation, any
actual, threatened or reasonably anticipated action, suit or proceeding,
whether civil, criminal, administrative, investigative, appellate, formal,
informal or other.
(f) "Termination Date" shall mean the date on which the
Indemnitee ceases to be a director, officer, employee or other agent of the
Company or any of its subsidiaries or Affiliates.
2. Indemnification.
(a) If the Indemnitee is made a party, is threatened to be
made a party, or reasonably anticipates being made a party, to any
Proceeding by reason of the fact that he is or was a director, officer,
member, employee, agent, manager, trustee, consultant or representative of
either the Company or any of its Affiliates or is or was serving at the
request of the Company or any of its Affiliates, or in connection with his
service hereunder, as a director, officer, member, employee, agent,
manager, trustee, consultant or representative of another Person, or if any
Claim is made, is threatened to be made, or is reasonably anticipated to be
made, that arises out of or relates to the Indemnitee's service in any of
the foregoing capacities, then the Indemnitee shall promptly be indemnified
and held harmless to the fullest extent permitted or authorized by the
Certificate of Incorporation or Bylaws of the Company, or if greater, by
applicable law, against any and all costs, expenses, liabilities and losses
(including, without limitation, attorneys' and other professional fees and
charges, judgments, interest, costs, expenses of investigation, penalties,
fines, ERISA excise taxes or penalties and amounts paid or to be paid in
settlement) incurred or suffered by the Indemnitee in connection therewith
or in connection with seeking to enforce his rights under this Section
2(a), and such indemnification shall continue as to the Indemnitee even if
he has ceased to be a director, officer, member, employee, agent, manager,
trustee, consultant or representative of the Company or other Person and
shall inure to the benefit of his heirs, executors and administrators. The
Indemnitee shall be entitled to prompt advancement of any and all costs and
expenses (including, without limitation, attorneys' and other professional
fees and charges) incurred by him personally in connection with any such
Proceeding or Claim, or in connection with seeking to enforce his rights
under this Section 2(a), any such advancement to be made within 15 days
after the Indemnitee gives written notice, supported by reasonable
documentation, requesting such advancement. Such notice shall include an
undertaking by the Indemnitee to repay the amount advanced if he is
ultimately determined not to be entitled to indemnification against such
costs and expenses. Nothing in this Agreement shall operate to limit or
extinguish any right to indemnification, advancement of expenses, or
contribution that the Indemnitee would otherwise have (including, without
limitation, by agreement or under applicable law).
(b) Neither the failure of the Company (including its Board,
independent legal counsel or stockholders) to have made a determination
prior to the commencement of any Proceeding concerning payment of amounts
claimed by the Indemnitee under Section 2(a) that indemnification of the
Indemnitee is proper because he has met the applicable standard of conduct,
nor a determination by either of the Company (including its Board,
independent legal counsel or stockholders) that the Indemnitee has not met
such applicable standard of conduct, shall create a presumption that the
Indemnitee has not met the applicable standard of conduct.
(c) A directors' and officers' liability insurance policy (or
policies) shall be kept in place until the Termination Date and thereafter
until the earlier of (x) the third anniversary of the Termination Date, (y)
the date on which all claims against the Indemnitee that would otherwise be
covered by such policy (or policies) become fully time-barred, and (z) the
date on which such coverage for the President or Executive Vice President
of the Company terminates, providing coverage to the Indemnitee that is no
less favorable to him in any respect (including, without limitation, with
respect to scope, exclusions, amounts, and deductibles) than the coverage
then being provided to any other present or former senior executive or
director of the Company.
(d) Anything in this Agreement to the contrary
notwithstanding, the Company shall have no obligation to indemnify the
Indemnitee for expenses or the payment of profits arising from the purchase
and sale by the Indemnitee of securities in violation of Section 16(b) of
the Securities Exchange Act of 1934, as amended, or any similar successor
statute.
3. Assignability; Binding Nature.
(a) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, heirs (in
the case of the Indemnitee) and assigns.
(b) No rights or obligations of the Company under this
Agreement may be assigned or transferred by the Company (the "Transferor")
except that such rights and obligations may be assigned or transferred
pursuant to a merger, consolidation or other combination in which the
Transferor is not the continuing entity, or a sale or liquidation of all or
substantially all of the business and assets of the Transferor, provided
that the assignee or transferee is the successor to all or substantially
all of the business and assets of the Transferor and such assignee or
transferee expressly assumes the liabilities, obligations and duties of the
Transferor as set forth in this Agreement. In the event of any merger,
consolidation, other combination, sale of business and assets, or
liquidation as described in the preceding sentence, the Transferor shall
use its best reasonable efforts to cause such assignee or transferee to
promptly and expressly assume the liabilities, obligations and duties of
the Transferor hereunder.
(c) No rights or obligations of the Indemnitee under this
Agreement may be assigned or transferred by the Indemnitee.
4. Resolution of Disputes. Any Claim arising out of or relating to this
Agreement shall be resolved by binding confidential arbitration, to be held
in the City of Philadelphia, Pennsylvania in accordance with the Commercial
Arbitration Rules (and not the National Rules for Resolution of Employment
Disputes) of the American Arbitration Association and this Section 4.
Judgment upon the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof.
5. Notices. Any notice, consent, demand, request, or other communication
given to a Person in connection with this Agreement shall be in writing and
shall be deemed to have been given to such Person (x) when delivered
personally to such Person or (y), provided that a written acknowledgment of
receipt is obtained, five days after being sent by prepaid certified or
registered mail, or two days after being sent by a nationally recognized
overnight courier, to the address (if any) specified below for such Person
(or to such other address as such Person shall have specified by ten days'
advance notice given in accordance with this Section 5) or (z), in the case
of the Company only, on the first business day after it is sent by
facsimile to the facsimile number set forth below (or to such other
facsimile number as shall have specified by ten days' advance notice given
in accordance with this Section 5), with a confirmatory copy sent by
certified or registered mail or by overnight courier in accordance with
this Section 5.
If to the Company: ATX Communications, Inc.
00 Xxxxxxxx Xxxx
Xxxx Xxxxxx, XX 00000
Attn: Legal Department
Fax #: 000-000-0000
If to Indemnitee: _________________________
_________________________
_________________________
6. Amendment or Waiver. No provision in this Agreement may be amended
unless such amendment is set forth in a writing that expressly refers to
the provision of this Agreement that is being amended and that is signed by
the Indemnitee and by an authorized (or apparently authorized) officer of
the Company. No waiver by any Person of any breach of any condition or
provision contained in this Agreement shall be deemed a waiver of any
similar or dissimilar condition or provision at the same or any prior or
subsequent time. To be effective, any waiver must be set forth in a writing
signed by the waiving Person and must specifically refer to the
condition(s) or provision(s) of this Agreement being waived.
7. Headings. The headings of the Sections and sub-sections contained in
this Agreement are for convenience only and shall not be deemed to control
or affect the meaning or construction of any provision of this Agreement.
8. Severability. To the extent that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any
reason, in whole or in part, the remaining provisions of this Agreement
shall remain in full force and effect so as to achieve the intentions of
the parties, as set forth in this Agreement, to the maximum extent
possible.
9. Governing Law. This Agreement shall be governed, construed, performed
and enforced in accordance with its express terms, and otherwise in
accordance with the laws of the State of Delaware, without reference to
principles of conflict of laws.
10. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall be deemed to be one and the same instrument. Signatures
delivered by facsimile shall be effective for all purposes.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
ATX COMMUNICATIONS, INC.
By:______________________
Name:
Title:
_________________________
