INDEMNIFICATION AGREEMENT
THIS
INDEMNIFICATION AGREEMENT (the “Agreement”) is made
and entered into as of January 27, 2010 between Berliner Communications, Inc., a
Delaware corporation (the “Company”), and [______________]
(“Indemnitee”).
WHEREAS,
highly competent persons have become more reluctant to serve corporations as
directors or officers or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification against
inordinate risks of claims and actions against them arising out of their service
to and activities on behalf of the corporation;
WHEREAS,
the Board of Directors of the Company (the “Board”) has
determined that, in order to attract and retain qualified individuals, the
Company will attempt to maintain on an ongoing basis, at its sole expense,
liability insurance to protect persons serving the Company and its subsidiaries
from certain liabilities. Although the furnishing of such insurance
has been a customary and widespread practice among United States-based
corporations and other business enterprises, the Company believes that, given
current market conditions and trends, such insurance may be available to it in
the future only at higher premiums and with more exclusions. At the
same time, directors, officers, and other persons in service to corporations or
business enterprises are being increasingly subjected to expensive and
time-consuming litigation relating to, among other things, matters that
traditionally would have been brought only against the Company or business
enterprise itself. The Amended and Restated Certificate of
Incorporation of the Company (the “Charter”) requires
indemnification of the officers and directors of the
Company. Indemnitee may also be entitled to indemnification pursuant
to the General Corporation Law of the State of Delaware (“DGCL”). The
Charter and the DGCL expressly provide that the indemnification provisions set
forth therein are not exclusive, and thereby contemplate that contracts may be
entered into between the Company and members of the Board, officers and other
persons with respect to indemnification;
WHEREAS,
the uncertainties relating to such insurance and to indemnification have
increased the difficulty of attracting and retaining such persons;
WHEREAS,
the Board has determined that the increased difficulty in attracting and
retaining such persons is detrimental to the best interests of the Company’s
stockholders and that the Company should act to assure such persons that there
will be increased certainty of such protection in the future;
WHEREAS,
it is reasonable, prudent and necessary for the Company contractually to
obligate itself to indemnify, and to advance expenses on behalf of, such persons
to the fullest extent permitted by applicable law so that they will serve or
continue to serve the Company free from undue concern that they will not be so
indemnified;
WHEREAS,
this Agreement is a supplement to and in furtherance of the Charter and any
resolutions adopted pursuant thereto, and shall not be deemed a substitute
therefor, nor to diminish or abrogate any rights of Indemnitee
thereunder;
WHEREAS,
Indemnitee may not be willing to serve as an officer or director without
adequate protection, and the Company desires Indemnitee to serve in such
capacity; Indemnitee is willing to serve, continue to serve and to take on
additional service for or on behalf of the Company on the condition that he be
so indemnified; and
WHEREAS,
Indemnitee has certain rights to indemnification and/or insurance provided by HM
Capital Partners LLC (“HM Capital”) which
Indemnitee and HM Capital intend to be secondary to the primary obligation of
the Company to indemnify Indemnitee as provided herein, with the Company’s
acknowledgement and agreement to the foregoing being a material condition to
Indemnitee’s willingness to serve on the Board.
NOW,
THEREFORE, in consideration of Indemnitee’s agreement to serve as a director or
officer from and after the date hereof, the parties hereto agree as
follows:
1. Indemnity of
Indemnitee. The Company hereby agrees to hold harmless and
indemnify Indemnitee to the fullest extent permitted by law, as such may be
amended from time to time. In furtherance of the foregoing
indemnification, and without limiting the generality thereof:
(a)
Proceedings
other than Proceedings by or in the Right of the Company. Indemnitee
shall be entitled to the rights of indemnification provided in this Section l(a) if,
by reason of his Corporate Status (as hereinafter defined), Indemnitee is, or is
threatened to be made, a party to or participant in any Proceeding (as
hereinafter defined) other than a Proceeding by or in the right of the
Company. Pursuant to this Section 1(a),
Indemnitee shall be indemnified against all Expenses (as hereinafter defined),
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by him, or on his behalf, in connection with such Proceeding
or any claim, issue or matter therein, if Indemnitee acted in good faith and in
a manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, and with respect to any criminal Proceeding, had no
reasonable cause to believe Indemnitee’s conduct was unlawful.
(b) Proceedings by or in the
Right of the Company. Indemnitee shall be entitled to the
rights of indemnification provided in this Section 1(b) if, by
reason of his Corporate Status, Indemnitee is, or is threatened to be made, a
party to or participant in any Proceeding brought by or in the right of the
Company. Pursuant to this Section 1(b),
Indemnitee shall be indemnified against all Expenses actually and reasonably
incurred by Indemnitee, or on Indemnitee’s behalf, in connection with such
Proceeding if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company; provided, however, if
applicable law so provides, no indemnification against such Expenses shall be
made in respect of any claim, issue or matter in such Proceeding as to which
Indemnitee shall have been adjudged to be liable to the Company unless and to
the extent that the Court of Chancery of the State of Delaware shall determine
that such indemnification may be made.
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(c)
Indemnification for
Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding
any other provision of this Agreement, to the extent that Indemnitee is, by
reason of his Corporate Status, a party to and is successful, on the merits or
otherwise, in any Proceeding, he shall be indemnified to the maximum extent
permitted by law, as such may be amended from time to time, against all Expenses
actually and reasonably incurred by him or on his behalf in connection
therewith. If Indemnitee is not wholly successful in such Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in such Proceeding, the Company shall indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or on
his behalf in connection with each successfully resolved claim, issue or matter.
For purposes of this Section 1(c) and
without limitation, the termination of any claim, issue or matter in such a
Proceeding by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter.
2. Additional
Indemnity. In addition to, and without regard to any
limitations on, the indemnification provided for in Section 1 of this
Agreement, the Company shall and hereby does indemnify and hold harmless
Indemnitee against all Expenses, judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by him or on his behalf if, by
reason of his Corporate Status, he is, or is threatened to be made, a party to
or participant in any Proceeding (including a Proceeding by or in the right of
the Company), including, without limitation, all liability arising out of the
negligence or active or passive wrongdoing of Indemnitee. The only
limitation that shall exist upon the Company’s obligations pursuant to this
Agreement shall be that the Company shall not be obligated to make any payment
to Indemnitee that is finally determined (under the procedures, and subject to
the presumptions, set forth in Sections 6 and 7 hereof) to be
unlawful.
3. Contribution.
(a) Whether
or not the indemnification provided in Sections 1 and 2 hereof is
available, in respect of any threatened, pending or completed action, suit or
proceeding in which the Company is jointly liable with Indemnitee (or would be
if joined in such action, suit or proceeding), the Company shall pay, in the
first instance, the entire amount of any judgment or settlement of such action,
suit or proceeding without requiring Indemnitee to contribute to such payment
and the Company hereby waives and relinquishes any right of contribution it may
have against Indemnitee. The Company shall not, without the
Indemnitee’s prior written consent, enter into any such settlement of any
action, suit or proceeding (in whole or in part) unless such settlement (i)
provides for a full and final release of all claims asserted against Indemnitee
and (ii) does not impose any Expense, judgment, fine, penalty or limitation on
Indemnitee.
(b) Without
diminishing or impairing the obligations of the Company set forth in the
preceding subparagraph, if, for any reason, Indemnitee shall elect or be
required to pay all or any portion of any judgment or settlement in any
threatened, pending or completed action, suit or proceeding in which the Company
is jointly liable with Indemnitee (or would be if joined in such action, suit or
proceeding), the Company shall contribute to the amount of Expenses, judgments,
fines and amounts paid in settlement actually and reasonably incurred and paid
or payable by Indemnitee in proportion to 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 action, suit or proceeding), on the one hand, and Indemnitee, on the other
hand, from the transaction from which such action, suit or proceeding arose;
provided, however, that the
proportion determined on the basis of relative benefit may, to the extent
necessary to conform to law, be further adjusted by reference to 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 action, suit or proceeding), on the one hand, and Indemnitee, on
the other hand, in connection with the events that resulted in such expenses,
judgments, fines or settlement amounts, as well as any other equitable
considerations which the law may require to be considered. 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 action, suit or proceeding), on the one hand, and
Indemnitee, on the other hand, shall be determined by reference to, among other
things, the degree to which their actions were motivated by intent to gain
personal profit or advantage, the degree to which their liability is primary or
secondary and the degree to which their conduct is active or
passive.
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(c) The
Company hereby agrees to fully indemnify and hold Indemnitee harmless from any
claims of contribution which may be brought by officers, directors or employees
of the Company, other than Indemnitee, who may be jointly liable with
Indemnitee.
(d) To
the fullest extent permissible under applicable law, if the indemnification
provided for in this Agreement is unavailable to Indemnitee for any reason
whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to
the amount incurred by Indemnitee, whether for judgments, fines, penalties,
excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in
connection with any claim relating to an indemnifiable event under this
Agreement, in such proportion as is deemed fair and reasonable in light of all
of the circumstances of such Proceeding in order to reflect (i) the relative
benefits received by the Company and Indemnitee as a result of the event(s)
and/or transaction(s) giving cause to such Proceeding, and/or (ii) the relative
fault of the Company (and its directors, officers, employees and agents) and
Indemnitee in connection with such event(s) and/or transaction(s).
4. Indemnification for Expenses
of a Witness. Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of his Corporate Status,
a witness, or is made (or asked to) respond to discovery requests, in any
Proceeding to which Indemnitee is not a party, he shall be indemnified against
all Expenses actually and reasonably incurred by him or on his behalf in
connection therewith.
5. Advancement of
Expenses. Notwithstanding any other provision of this
Agreement, the Company shall advance all Expenses incurred by or on behalf of
Indemnitee in connection with any Proceeding by reason of Indemnitee’s Corporate
Status within thirty (30) days after the receipt by the Company of a statement
or statements from Indemnitee requesting such advance or advances from time to
time, whether prior to or after final disposition of such
Proceeding. Such statement or statements shall reasonably evidence
the Expenses incurred by Indemnitee and shall include or be preceded or
accompanied by a written undertaking by or on behalf of Indemnitee to repay any
Expenses advanced if it shall ultimately be determined that Indemnitee is not
entitled to be indemnified against such Expenses. Any advances and
undertakings to repay pursuant to this Section 5 shall be
unsecured and interest free.
6. Procedures and Presumptions
for Determination of Entitlement to Indemnification. It is the
intent of this Agreement to secure for Indemnitee rights of indemnity that are
as favorable as may be permitted under the DGCL and public policy of the State
of Delaware. Accordingly, the parties agree that the following
procedures and presumptions shall apply in the event of any question as to
whether Indemnitee is entitled to indemnification under this
Agreement:
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(a) To
obtain indemnification under this Agreement, Indemnitee shall submit to the
Company a written request, including therein or therewith such documentation and
information as is reasonably available to Indemnitee and is reasonably necessary
to determine whether and to what extent Indemnitee is entitled to
indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board in writing that
Indemnitee has requested indemnification. Notwithstanding the
foregoing, any failure of Indemnitee to provide such a request to the Company,
or to provide such a request in a timely fashion, shall not relieve the Company
of any liability that it may have to Indemnitee unless, and to the extent that,
such failure actually and materially prejudices the interests of the
Company.
(b) Upon
written request by Indemnitee for indemnification pursuant to the first sentence
of Section 6(a)
hereof, a determination with respect to Indemnitee’s entitlement thereto shall
be made in the specific case by one of the following four methods, which shall
be at the election of the Board: (1) by a majority vote of the
Disinterested Directors (as hereinafter defined), even though less than a
quorum, (2) by a committee of Disinterested Directors designated by a majority
vote of the Disinterested Directors, even though less than a quorum, (3) if
there are no Disinterested Directors, or if the Disinterested Directors so
direct, by Independent Counsel in a written opinion to the Board, a copy of
which shall be delivered to Indemnitee, or (4) if so directed by the Board, by
the stockholders of the Company; provided, however, that if a
Change in Control has occurred, the determination with respect to Indemnitee’s
entitlement to indemnification shall be made by Independent
Counsel. For purposes hereof, Disinterested Directors are those
members of the Board who are not parties to the action, suit or proceeding in
respect of which indemnification is sought by Indemnitee.
(c) In
the event the determination of entitlement to indemnification is to be made by
Independent Counsel, the Independent Counsel shall be selected as provided in
this Section
6(c). If a Change in Control has not occurred, the Independent Counsel
shall be selected by the Board (including a vote of a majority of the
Disinterested Directors if obtainable), and the Company shall give written
notice to the Indemnitee advising him of the identity of the Independent Counsel
so selected. Indemnitee may, within 10 days after such written notice of
selection shall have been given, deliver to the Company a written objection to
such selection; provided, however, that such
objection may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of “Independent Counsel” as defined in
Section 14 of
this Agreement, and the objection shall set forth with particularity the factual
basis of such assertion. Absent a proper and timely objection, the
Person so selected shall act as Independent Counsel. If a written
objection is made and substantiated, the Independent Counsel selected may not
serve as Independent Counsel unless and until such objection is withdrawn or a
court has determined that such objection is without merit. If a
Change in Control has occurred, the Independent Counsel shall be selected by the
Indemnitee (unless the Indemnitee shall request that such selection be made by
the Board, in which event the preceding sentence shall apply),
and approved by the Board (which approval shall not be unreasonably
withheld). If (i) an Independent Counsel is to make the determination of
entitlement pursuant to this Section 6, and (ii)
within 20 days after submission by Indemnitee of a written request for
indemnification pursuant to Section 6(a) hereof,
no Independent Counsel shall have been selected and not objected to, either the
Company or Indemnitee may petition the Court of Chancery of the State of
Delaware or other court of competent jurisdiction for resolution of any
objection which shall have been made by Indemnitee to the Company’s selection of
Independent Counsel and/or for the appointment as Independent Counsel of a
Person selected by the court or by such other Person as the court shall
designate, and the Person with respect to whom all objections are so resolved or
the Person so appointed shall act as Independent Counsel under Section 6(b)
hereof. The Company shall pay any and all reasonable fees and
expenses of Independent Counsel incurred by such Independent Counsel in
connection with acting pursuant to Section 6(b) hereof,
and the Company shall pay all reasonable fees and expenses incident to the
procedures of this Section 6(c),
regardless of the manner in which such Independent Counsel was selected or
appointed.
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(d) In
making a determination with respect to entitlement to indemnification hereunder,
the Person making such determination shall presume that Indemnitee is entitled
to indemnification under this Agreement. Anyone seeking to overcome
this presumption shall have the burden of proof and the burden of persuasion by
clear and convincing evidence. Neither the failure of the Company
(including by its directors or independent legal counsel) to have made a
determination prior to the commencement of any action pursuant to this Agreement
that indemnification is proper in the circumstances because Indemnitee has met
the applicable standard of conduct, nor an actual determination by the Company
(including by its directors or independent legal counsel) that Indemnitee has
not met such applicable standard of conduct, shall be a defense to the action or
create a presumption that Indemnitee has not met the applicable standard of
conduct.
(e) Indemnitee
shall be deemed to have acted in good faith if Indemnitee’s action is based on
the records or books of account of the Enterprise (as hereinafter defined),
including financial statements, or on information supplied to Indemnitee by the
officers of the Enterprise in the course of their duties, or on the advice of
legal counsel for the Enterprise or on information or records given or reports
made to the Enterprise by an independent certified public accountant or by an
appraiser or other expert selected with reasonable care by the
Enterprise. In addition, the knowledge and/or actions, or failure to
act, of any director, officer, agent or employee of the Enterprise shall not be
imputed to Indemnitee for purposes of determining the right to indemnification
under this Agreement. Whether or not the foregoing provisions of this
Section 6(e)
are satisfied, it shall in any event be presumed that Indemnitee has at all
times acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company. Anyone seeking to
overcome this presumption shall have the burden of proof and the burden of
persuasion by clear and convincing evidence.
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(f) If
the Person empowered or selected under this Section 6 to
determine whether Indemnitee is entitled to indemnification shall not have made
a determination within sixty (60) days after receipt by the Company of the
request therefor, the requisite determination of entitlement to indemnification
shall be deemed to have been made and Indemnitee shall 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
thirty (30) days, if the Person making such determination with respect to
entitlement to indemnification in good faith requires such additional time to
obtain or evaluate documentation and/or information relating thereto; and provided, further, that the
foregoing provisions of this Section 6(f) shall
not apply if the determination of entitlement to indemnification is to be made
by the stockholders pursuant to Section 6(b) of this
Agreement and if (A) within fifteen (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 seventy-five (75)
days after such receipt and such determination is made thereat, or (B) a special
meeting of stockholders is called within fifteen (15) days after such receipt
for the purpose of making such determination, such meeting is held for such
purpose within sixty (60) days after having been so called and such
determination is made thereat.
(g) Indemnitee
shall cooperate with the Person making such determination with respect to
Indemnitee’s entitlement to indemnification, including providing to such Person
upon reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such
determination. Any Independent Counsel, member of the Board or
stockholder of the Company shall act reasonably and in good faith in making a
determination regarding Indemnitee’s entitlement to indemnification under this
Agreement. Any costs or expenses (including attorneys’ fees and
disbursements) incurred by Indemnitee in so cooperating with the Person making
such determination shall be borne by the Company (irrespective of the
determination as to Indemnitee’s entitlement to indemnification) and the Company
hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
(h) The
Company acknowledges that a settlement or other disposition short of final
judgment may be successful if it permits a party to avoid expense, delay,
distraction, disruption and uncertainty. In the event that any
action, claim or proceeding to which Indemnitee is a party is resolved in any
manner other than by adverse judgment against Indemnitee (including, without
limitation, settlement of such action, claim or proceeding with or without
payment of money or other consideration) it shall be presumed that Indemnitee
has been successful on the merits or otherwise in such action, suit or
proceeding. Anyone seeking to overcome this presumption shall have
the burden of proof and the burden of persuasion by clear and convincing
evidence.
(i) The
termination of any Proceeding or of any claim, issue or matter therein, by
judgment, order, settlement or conviction, or upon a plea of nolo contendere or
its equivalent, shall not (except as otherwise expressly provided in this
Agreement) of itself adversely affect the right of Indemnitee to indemnification
or create a presumption that Indemnitee did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Company or, with respect to any criminal Proceeding, that
Indemnitee had reasonable cause to believe that his conduct was
unlawful.
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7.
Remedies of
Indemnitee.
(a) In
the event that (i) a determination is made pursuant to Section 6 of this
Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to
Section 5 of
this Agreement, (iii) no determination of entitlement to indemnification is made
pursuant to Section
6(b) of this Agreement within ninety (90) days after receipt by the
Company of the request for indemnification, (iv) payment of indemnification
is not made pursuant to this Agreement within ten (10) days after receipt by the
Company of a written request therefor or (v) payment of indemnification is not
made within ten (10) days after a determination has been made that Indemnitee is
entitled to indemnification or such determination is deemed to have been made
pursuant to Section
6 of this Agreement, Indemnitee shall be entitled to an adjudication in
an appropriate court of the State of Delaware, or in any other court of
competent jurisdiction, of Indemnitee’s entitlement to such indemnification,
contribution or advancement of Expenses. Alternatively, Indemnitee,
at his option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Except as set forth herein, the provisions
of Delaware law (without regard to its conflict-of-law rules) shall apply to any
such arbitration. The Company shall not oppose Indemnitee’s right to
seek any such adjudication or award in arbitration.
(b) In
the event that a determination shall have been made pursuant to Section 6(b) of this
Agreement that Indemnitee is not entitled to indemnification, any judicial
proceeding commenced pursuant to this Section 7 shall be
conducted in all respects as a de novo trial, or arbitration, on the merits, and
Indemnitee shall not be prejudiced by reason of the adverse determination under
Section
6(b). In any judicial proceeding or arbitration commenced
pursuant to this Section 7, Indemnitee
shall be presumed to be entitled to indemnification under this Agreement and the
Company shall have the burden of proving Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be, and the Company
may not refer to or introduce into evidence any determination pursuant to Section 6(b) of this
Agreement adverse to Indemnitee for any purpose. If Indemnitee
commences a judicial proceeding or arbitration pursuant to this Section 7, Indemnitee
shall not be required to reimburse the Company for any advances pursuant to
Section 5 until
a final determination is made with respect to Indemnitee’s entitlement to
indemnification (as to which all rights of appeal have been exhausted or
lapsed).
(c) If
a determination shall have been made pursuant to Section 6(b) of this
Agreement that Indemnitee is entitled to indemnification, the Company shall be
bound by such determination in any judicial proceeding commenced pursuant to
this Section 7,
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.
(d) In
the event that Indemnitee, pursuant to this Section 7, seeks a
judicial adjudication of his rights under, or to recover damages for breach of,
this Agreement, or to recover under any directors’ and officers’ liability
insurance policies maintained by the Company, the Company shall pay on his
behalf, in advance, any and all expenses (of the types described in the
definition of Expenses in Section 14 of this
Agreement) actually and reasonably incurred by him in such judicial
adjudication, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advancement of expenses or insurance
recovery.
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(e) The
Company shall be precluded from asserting in any judicial proceeding commenced
pursuant to this Section 7 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court that the Company is bound by
all the provisions of this Agreement. The Company shall indemnify
Indemnitee against any and all Expenses and, if requested by Indemnitee, shall
(within ten (10) days after receipt by the Company of a written request
therefore) advance, to the extent not prohibited by law, such expenses to
Indemnitee, which are incurred by Indemnitee in connection with any action
brought by Indemnitee for indemnification or advance of Expenses from the
Company under this Agreement or under any directors’ and officers’ liability
insurance policies maintained by the Company, regardless of whether Indemnitee
ultimately is determined to be entitled to such indemnification, advancement of
Expenses or insurance recovery, as the case may be.
(f) Notwithstanding
anything in this Agreement to the contrary, no determination as to entitlement
to indemnification under this Agreement shall be required to be made prior to
the final disposition of the Proceeding.
8. Non-Exclusivity; Survival of
Rights; Insurance; Primacy of Indemnification; Subrogation.
(a) The
rights of indemnification and to receive advancement of expenses as provided by
this Agreement shall not be deemed exclusive of any other rights to which
Indemnitee may at any time be entitled under applicable law, the Charter, the
Bylaws, any agreement, a vote of stockholders, a resolution of directors or
otherwise, of the Company. No amendment, alteration or repeal of this
Agreement or of any provision hereof shall limit or restrict any right of
Indemnitee under this Agreement in respect of any action taken or omitted by
such Indemnitee in his Corporate Status prior to such amendment, alteration or
repeal. To the extent that a change in the DGCL, whether by statute
or judicial decision, permits greater indemnification than would be afforded
currently under the Charter, Bylaws and this Agreement, it is the intent of the
parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits so afforded by such change. No right or remedy herein
conferred is intended to be exclusive of any other right or remedy, and every
other right and remedy shall be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.
(b) The
Company shall obtain and maintain in effect during the entire period for which
the Company is obligated to indemnify Indemnitee under this Agreement, one or
more policies of insurance with reputable insurance companies to provide the
directors of the Company with coverage for losses from wrongful acts and
omissions and to ensure the Company’s performance of its indemnification
obligations under this Agreement. Indemnitee shall be covered by such
policy or policies in accordance with its or their terms to the maximum extent
of the coverage available for any such officer or director under such policy or
policies. In all such insurance policies, Indemnitee shall be named
as an insured in such a manner as to provide Indemnitee with the same rights and
benefits as are accorded to the most favorably insured of the Company’s
directors and officers. At the time of the receipt of a notice of a
claim pursuant to the terms hereof, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.
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(c) The
Company hereby acknowledges that Indemnitee has certain rights to
indemnification, advancement of expenses and/or insurance provided by HM Capital
and certain affiliates that, directly or indirectly, (i) are controlled by, (ii)
control or (iii) are under common control with, HM Capital (collectively, the
“Fund
Indemnitors”). The Company hereby agrees (i) that it is the
indemnitor of first resort (i.e., its obligations to Indemnitee are primary and
any obligation of the Fund Indemnitors to advance expenses or to provide
indemnification for the same expenses or liabilities incurred by Indemnitee are
secondary), (ii) that it shall be required to advance the full amount of
expenses incurred by Indemnitee and shall be liable for the full amount of all
Expenses, judgments, penalties, fines and amounts paid in settlement to the
extent legally permitted and as required by the terms of this Agreement and the
Charter or Bylaws of the Company (or any other agreement between the Company and
Indemnitee), without regard to any rights Indemnitee may have against the Fund
Indemnitors, and (iii) that it irrevocably waives, relinquishes and releases the
Fund Indemnitors from any and all claims against the Fund Indemnitors for
contribution, subrogation or any other recovery of any kind in respect
thereof. The Company further agrees that no advancement or payment by
the Fund Indemnitors on behalf of Indemnitee with respect to any claim for which
Indemnitee has sought indemnification from the Company shall affect the
foregoing and the Fund Indemnitors shall have a right of contribution and/or be
subrogated to the extent of such advancement or payment to all of the rights of
recovery of Indemnitee against the Company. The Company and
Indemnitee agree that the Fund Indemnitors are express third party beneficiaries
of the terms of this Section
8(c).
(d) Except
as provided in Section
8(c) above, in the event of any payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee (other than against the Fund Indemnitors), who shall
execute all papers required and take all action necessary to secure such rights,
including execution of such documents as are necessary to enable the Company to
bring suit to enforce such rights.
(e) Except
as provided in Section
8(c) above, the Company shall not be liable under this Agreement to make
any payment of amounts otherwise indemnifiable hereunder if and to the extent
that Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.
(f)
Except as provided in Section 8(c) above,
the Company’s obligation to indemnify or advance Expenses hereunder to
Indemnitee who is or was serving at the request of the Company as a director,
officer, employee or agent of any other corporation, partnership, joint venture,
trust, employee benefit plan or other Enterprise shall be reduced by any amount
Indemnitee has actually received as indemnification or advancement of expenses
from such other corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise.
10
9. Exception to Right of
Indemnification. Notwithstanding any provision in this Agreement, the
Company shall not be obligated under this Agreement to make any indemnity in
connection with any claim made against Indemnitee:
(a) for
which payment has actually been made to or on behalf of Indemnitee under any
insurance policy or other indemnity provision, except with respect to any excess
beyond the amount paid under any insurance policy or other indemnity provision;
provided, that
the foregoing shall not affect the rights of Indemnitee or the Fund Indemnitors
set forth in Section
8(c) above; or
(b) for
an accounting of profits made from the purchase and sale (or sale and purchase)
by Indemnitee of securities of the Company within the meaning of
Section 16(b) of the Exchange Act (as hereinafter defined), or similar
provisions of state statutory law or common law; or
(c) for
reimbursement to the Company of any bonus or other incentive-based or
equity-based compensation or of any profits realized by Indemnitee from the sale
of securities of the Company in each case as required under the Exchange Act;
or
(d) in
connection with any Proceeding (or any part of any Proceeding) initiated by
Indemnitee, including any Proceeding (or any part of any Proceeding) initiated
by Indemnitee against the Company or its directors, officers, employees or other
indemnitees, unless (i) the Company has joined in or the Board authorized the
Proceeding (or any part of any Proceeding) prior to its initiation, (ii) the
Company provides the indemnification, in its sole discretion, pursuant to the
powers vested in the Company under applicable law, or (iii) the Proceeding is
one to enforce Indemnitee’s rights under this Agreement.
10. Non−Disclosure of
Payments. Except as expressly required by the securities laws of the
United States of America, neither party shall disclose any payments under this
Agreement unless prior approval of the other party is obtained. If any payment
information must be disclosed, the Company shall afford the Indemnitee an
opportunity to review all such disclosures and, if requested, to explain in such
statement any mitigating circumstances regarding the events to be
reported.
11. Duration of
Agreement. All agreements and obligations of the Company
contained herein shall continue upon the later of (i) ten (10) years after the
date that Indemnitee shall have ceased to serve as a director or officer of the
Company or a director, officer, trustee, partner, managing member, fiduciary,
employee or agent of any other corporation, partnership, joint venture, trust,
employee benefit plan or other Enterprise which Indemnitee served at the request
of the Company, and (ii) one (1) year after the final termination of any
Proceeding (including any rights of appeal thereto) in respect of which
Indemnitee is granted rights of indemnification or advancement of Expenses
hereunder and of any Proceeding commenced by Indemnitee pursuant to Section 7 of this
Agreement relating thereto (including any rights of appeal of any Section 7
Proceeding. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business or assets
of the Company), assigns, spouses, heirs, executors and personal and legal
representatives.
11
12. Security. To
the extent requested by Indemnitee and approved by the Board, the Company may at
any time and from time to time provide security to Indemnitee for the Company’s
obligations hereunder through an irrevocable bank line of credit, funded trust
or other collateral. Any such security, once provided to Indemnitee,
may not be revoked or released without the prior written consent of
Indemnitee.
13. Enforcement.
(a) The
Company expressly confirms and agrees that it has entered into this Agreement
and assumes the obligations imposed on it hereby in order to induce Indemnitee
to serve as an officer or director of the Company, and the Company acknowledges
that Indemnitee is relying upon this Agreement in serving as an officer or
director of the Company.
(b) This
Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, oral, written and implied, between the parties hereto with
respect to the subject matter hereof.
14. Definitions. For
purposes of this Agreement:
(a) “Change in Control”
shall be deemed to occur upon the earliest to occur after the date of this
Agreement of any of the following events:
(i) Acquisition of Stock by Third
Party. Any Person (as defined below), other than HM Capital
and its affiliates and 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, is or becomes the
Beneficial Owner (as defined below), directly or indirectly, of securities of
the Company representing 50% or more of the combined voting power of the
Company’s then outstanding securities;
(ii) Change in Board of
Directors. During any period of two (2) consecutive years (not
including any period prior to the execution of this Agreement), individuals who
at the beginning of such period constitute the Board, and any new director
(other than a director designated by a Person who has entered into an agreement
with the Company to effect a transaction described in Section 14(a)(i),
14(a)(iii) or
14(a)(iv))
whose election by the Board or nomination for election by the Company’s
stockholders was approved by a vote of at least two-thirds 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 at least a majority of the members of the
Board;
12
(iii) Corporate
Transactions. The effective date of a merger or consolidation
of the Company with any other entity, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior to such merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 51% of the combined voting power of the voting
securities of the surviving entity outstanding immediately after such merger or
consolidation and with the power to elect at least a majority of the board of
directors or other governing body of such surviving entity; and
(iv) Liquidation. The
approval by the stockholders of the Company of a complete liquidation of the
Company or an agreement or series of agreements for the sale or disposition by
the Company of all or substantially all of the Company’s assets, or, if such
approval is not required, the decision by the Board to proceed with such a
liquidation, sale, or disposition in one transaction or a series of related
transactions.
(b) “Beneficial Owner”
shall have the meaning given to such term in Rule 13d-3 under the Exchange Act;
provided, however, that
Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner
by reason of the stockholders of the Company approving a merger of the Company
with another entity.
(c) “Corporate Status”
describes the status of a person who is or was a director, officer, employee,
agent or fiduciary of the Company, any direct or indirect subsidiary of the
Company, or of any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise that such person is or was serving at
the express written request of the Company.
(d) “Disinterested
Director” means a director of the Company who is not and was not a party
to the Proceeding in respect of which indemnification is sought by
Indemnitee.
(e) “Enterprise” shall
mean the Company and any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise that Indemnitee is or was serving at
the express written request of the Company as a director, officer, employee,
agent or fiduciary.
13
(f) “Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended.
(g) “Expenses” shall
include all reasonable attorneys’ fees, retainers, court costs, transcript
costs, fees of experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery service fees
and all other disbursements or expenses of the types customarily incurred in
connection with prosecuting, defending, preparing to prosecute or defend,
investigating, participating, or being or preparing to be a witness in a
Proceeding, or responding to, or objecting to, a request to provide discovery in
any Proceeding. Expenses also shall include Expenses incurred in
connection with any appeal resulting from any Proceeding 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 without limitation the
premium, security for, and other costs relating to any cost bond, supersede as
bond, or other appeal bond or its equivalent. Expenses, however,
shall not include amounts paid in settlement by Indemnitee or the amount of
judgments or fines against Indemnitee.
(h) “Independent Counsel”
means a law firm, or a member of a law firm, that is experienced in matters of
corporation law and neither presently is, nor in the past five (5) years has
been, retained to represent: (i) the Company or Indemnitee in any
matter material to either such party (other than with respect to matters
concerning Indemnitee under this Agreement, or of other indemnitees under
similar indemnification agreements), or (ii) any other party to the Proceeding
giving rise to a claim for indemnification hereunder. Notwithstanding
the foregoing, the term “Independent Counsel” shall not include any Person who,
under the applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the Company or Indemnitee in
an action to determine Indemnitee’s rights under this Agreement. The
Company agrees to pay the reasonable fees of the Independent Counsel referred to
above and to fully indemnify such counsel against any and all Expenses, claims,
liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.
(i) “Person” shall have
the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person
shall exclude (i) the Company, (ii) any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, and (iii) any
corporation owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the
Company.
(j) “Proceeding” includes
any threatened, pending or completed action, suit, arbitration, alternate
dispute resolution mechanism, investigation, inquiry, administrative hearing or
any other actual, threatened or completed proceeding, whether brought by or in
the right of the Company or otherwise and whether civil, criminal,
administrative or investigative, in which Indemnitee was, is or will be involved
as a party or otherwise, by reason of the fact that Indemnitee is or was an
officer or director of the Company, by reason of any action taken by him or of
any inaction on his part while acting as an officer or director of the Company,
or by reason of the fact that he is or was serving at the request of the Company
as a director, officer, employee, agent or fiduciary of another corporation,
partnership, joint venture, trust or other Enterprise; in each case whether or
not he is acting or serving in any such capacity at the time any liability or
expense is incurred for which indemnification can be provided under this
Agreement; including one pending on or before the date of this Agreement, but
excluding one initiated by an Indemnitee pursuant to Section 7 of this
Agreement to enforce his rights under this Agreement.
14
15. Severability. If
any provision or provisions of this 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 Agreement (including,
without limitation, each portion of any Section, paragraph or sentence of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby and shall remain enforceable to the
fullest extent permitted by law; (ii) such provision or provisions shall be
deemed reformed to the fullest extent necessary to conform to applicable law and
to give the maximum effect to the intent of the parties hereto; and (iii) to the
fullest extent possible, the provisions of this Agreement (including, without
limitation, each portion of any Section, paragraph or sentence of this Agreement
containing any such provision held to be invalid, illegal or unenforceable, that
is not itself invalid, illegal or unenforceable) shall be construed so as to
give effect to the intent manifested thereby. Without limiting the
generality of the foregoing, this Agreement is intended to confer upon
Indemnitee indemnification rights to the fullest extent permitted by applicable
laws.
16. Enforcement and Binding
Effect.
(a) The
Company expressly confirms and agrees that it has entered into this Agreement
and assumed the obligations imposed on it hereby in order to induce Indemnitee
to serve as a director, officer or key employee of the Company, and the Company
acknowledges that Indemnitee is relying upon this Agreement in serving as a
director, officer or key employee of the Company.
(b) Without
limiting any of the rights of Indemnitee under the Charter or Bylaws of the
Company as they may be amended from time to time, this Agreement constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter
hereof.
(c) The
indemnification and advancement of expenses provided by, or granted pursuant to
this Agreement shall be binding upon and be enforceable by the parties hereto
and their respective successors and assigns (including any direct or indirect
successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Company), shall continue as
to an Indemnitee who has ceased to be a director, officer, employee or agent of
the Company or of any other Enterprise at the Company’s request, and shall inure
to the benefit of Indemnitee and his spouse, assigns, heirs, devisees, executors
and administrators and other legal representatives.
(d) The
Company shall require and cause any successor (whether direct or indirect by
purchase, merger, consolidation or otherwise) to all, substantially all or a
substantial part, of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such succession had
taken place.
15
(e) The
Company and Indemnitee agree herein that a monetary remedy for breach of this
Agreement, at some later date, may be inadequate, impracticable and difficult of
proof, and further agree that such breach may cause Indemnitee irreparable harm.
Accordingly, the parties hereto agree that Indemnitee may enforce this Agreement
by seeking injunctive relief and/or specific performance hereof, without any
necessity of showing actual damage or irreparable harm and that by seeking
injunctive relief and/or specific performance, Indemnitee shall not he precluded
from seeking or obtaining any other relief to which he may be entitled. The
Company and Indemnitee further agree that Indemnitee shall be entitled to such
specific performance and injunctive relief, including temporary restraining
orders, preliminary injunctions and permanent injunctions, without the necessity
of posting bonds or other undertaking in connection therewith. The Company
acknowledges that in the absence of a waiver, a bond or undertaking may be
required of Indemnitee by the Court, and the Company hereby waives any such
requirement of such a bond or undertaking.
17. Modification and
Waiver. No supplement, modification, termination or amendment
of this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing
waiver.
18. Notice By
Indemnitee. Indemnitee agrees promptly to notify the Company
in writing upon being served with or otherwise receiving any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
Proceeding or matter which may be subject to indemnification covered
hereunder. The failure to so notify the Company shall not relieve the
Company of any obligation which it may have to Indemnitee under this Agreement
or otherwise.
19. Notices. All
notices and other communications given or made pursuant to this Agreement shall
be in writing and shall be deemed effectively given: (i) upon
personal delivery to the party to be notified, (ii) when sent by confirmed
electronic mail or facsimile if sent during normal business hours of the
recipient, and if not so confirmed, then on the next business day, (iii) five
(5) days after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (iv) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be
sent:
(a) To
Indemnitee at the address set forth below Indemnitee’s signature
hereto.
(b) To the
Company at:
Berliner
Communications, Inc.
00-00
Xxxxxxx Xxxxx
Xxxx
Xxxx, Xxx Xxxxxx 00000
Attention: General
Counsel
Fax: (000)
000-0000
16
or to
such other address as may have been furnished to Indemnitee by the Company or to
the Company by Indemnitee, as the case may be.
20. Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
Agreement. This Agreement may also be executed and delivered by
facsimile signature and in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
21. Headings. The
headings of the paragraphs of this Agreement are inserted for convenience only
and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.
22. Usage of
Pronouns. Use of the masculine pronoun shall be deemed to
include usage of the feminine pronoun where appropriate.
23. Governing Law and Consent to
Jurisdiction. This Agreement and the legal relations among the
parties shall be governed by, and construed and enforced in accordance with, the
laws of the State of Delaware, without regard to its conflict-of-laws
rules. The Company and Indemnitee hereby irrevocably and
unconditionally (i) agree that any action or proceeding arising out of or in
connection with this Agreement shall be brought only in the Chancery Court of
the State of Delaware (the “Delaware Court”), and
not in any other state or federal court in the United States of America or any
court in any other country, (ii) generally and unconditionally consent to submit
to the exclusive jurisdiction of the Delaware Court for purposes of any action
or proceeding arising out of or in connection with this Agreement,
(iii) waive any objection to the laying of venue of any such action or
proceeding in the Delaware Court, and (iv) waive, and agree not to plead or to
make, any claim that any such action or proceeding brought in the Delaware Court
has been brought in an improper or inconvenient forum. The foregoing
consent to jurisdiction shall not constitute general consent to service of
process in the state for any purpose except as provided above, and shall not be
deemed to confer rights on any Person other than the parties to this
Agreement.
[The
Remainder of This Page Is Intentionally Left Blank.]
17
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement on and as of the day and year first
written above.
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BERLINER
COMMUNICATIONS, INC.
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By:
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Name:
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Title:
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INDEMNITEE
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Name:
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Address:
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