INDEMNIFICATION AGREEMENT
Exhibit 10.25
THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made as of the
_____
day of _____, 201_____
by and between Broadview Networks Holdings, Inc., a Delaware corporation (the
“Company”),
and (the “Indemnitee”).
WHEREAS, 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;
WHEREAS, highly competent persons have become more reluctant to serve corporations as
directors, officers or in other capacities unless they are provided with adequate protection
through insurance or adequate indemnification against 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 of Directors”) 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, although the Amended and Restated Certificate of Incorporation of the Company (the
“Certificate”) and the Amended and Restated Bylaws of the Company (the “Bylaws”)
require indemnification of the officers and directors of the Company under the circumstances
specified therein, and Indemnitee may also be entitled to indemnification pursuant to the General
Corporation Law of the State of Delaware (“DGCL”), the Certificate, the Bylaws 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
of directors, officers and other persons with respect to indemnification, including, but not
limited to, an insurance policy or policies providing liability insurance for a director, officer,
employee, agent or fiduciary of the Company (“Insurance Policy”); and
WHEREAS, this Agreement is a supplement to and in furtherance of the Certificate and the
Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor,
nor to diminish or abrogate any rights of Indemnitee thereunder, or under any Insurance Policy.
NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve or to continue to serve as
a director or officer, or both, of the Company after the date hereof, the parties hereto agree as
follows:
1. Definitions. For purposes of this Agreement:
(a) “Change in Control” shall mean a change in control of the Company occurring after
the date hereof of a nature that would be required to be reported in response to Item 6(e) on
Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form)
promulgated under the Securities Exchange Act of 1934, as amended (the “Act”), whether or
not the Company is then subject to such reporting requirement; provided, however,
that, without limitation, a Change in Control shall include: (i) the acquisition (other than
acquisition by or from the Company) after the date hereof by any person, entity or “group,” within
the meaning of Section 13(d)(3) or 14(d)(2) of the Act (excluding, for this purpose, the Company or
its subsidiaries, any employee benefit plan of the Company or its subsidiaries that acquires
beneficial ownership of voting securities of the Company, and any qualified institutional investor
that meets the requirements of Rule 13d-1(b)(1) promulgated under the Act) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Act) of 50% or more of either the
then-outstanding shares of common stock or the combined voting power of the Company’s
then-outstanding capital stock entitled to vote generally in the election of directors; (ii)
individuals who, as of the date hereof, constitute the Board of Directors (the “Incumbent
Board”) ceasing for any reason to constitute at least a majority of the Board of Directors,
provided that any person becoming a director subsequent to the date hereof whose election, or
nomination for election, by the Company’s stockholders was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board (other than an election or nomination
of an individual whose initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the directors of the Company) shall be, for purposes
of this Agreement, considered as though such person were a member of the Incumbent Board; or (iii)
approval by the stockholders of the Company of (A) a reorganization, merger or consolidation, in
each case, with respect to which persons who were the stockholders of the Company immediately prior
to such reorganization, merger or consolidation do not, immediately thereafter, own more than 50%
of the combined voting power entitled to vote generally in the election of directors of the
reorganized, merged, consolidated or other surviving corporation’s then-outstanding voting
securities, (B) a liquidation or dissolution of the Company, or (C) the sale of all or
substantially all of the assets of the Company.
(b) “Corporate Status” describes the status of a person who is or was a director,
officer, employee, agent or fiduciary of the Company or any direct or indirect wholly owned
subsidiary of the Company, or of any other corporation, partnership, limited liability company,
joint venture, trust, employee benefit plan or other enterprise that such person is or was serving
with in a similar capacity at the written request of the Company.
(c) “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.
(d) “Enterprise” shall mean the Company and any direct or indirect wholly owned
subsidiary of the Company, and any other corporation, partnership, limited liability company, joint
venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving with at
the written request of the Company as a director, officer, employee, agent or fiduciary.
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(e) “Expenses” shall include all reasonable attorneys’ fees, retainers, disbursements
of counsel, court costs, filing fees, transcript costs, fees and expenses of experts, witness fees
and expenses, travel expenses, duplicating and imaging costs, printing and binding costs, telephone
charges, facsimile transmission charges, computer legal research costs, 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, as well as all other “expenses” within the meaning of
that term as used in Section 145 of the General Corporation Law of the State of Delaware and all
other disbursements or expenses of types customarily and reasonably incurred in connection with
prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a
witness in, or otherwise participating in, actions, suits, or proceedings similar to or of the same
type as the Proceeding with respect to which such disbursements or expenses were incurred; but,
notwithstanding anything in the foregoing to the contrary, “Expenses” shall not include amounts of
judgments, penalties, or fines actually levied against the Indemnitee in connection with any
Proceeding. Expenses also shall include the foregoing incurred in connection with any appeal
resulting from any Proceeding, 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.
(f) “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 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.
(g) “Proceeding” includes any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation (including any internal
investigation), inquiry, administrative hearing or any other actual, threatened or completed
proceeding, whether brought by or in the right of the Company or otherwise (including, but not
limited to, as applicable, any cross claims, counterclaims or interpleader actions brought by
Indemnitee or the Company) 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.
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(h) References herein to “fines” shall not include any excise tax assessed with respect to any
employee benefit plan.
(i) References herein to a director of another Enterprise or a director of another Enterprise
shall include, in the case of any entity that is not managed by a board of directors, such other
position, such as manager or trustee or member of the governing body of such entity, that entails
responsibility for the management and direction of such entity’s affairs, including, without
limitation, the general partner of any partnership (general or limited) and the manager or managing
member of any limited liability company.
(j) (i) References herein to serving at the request of the Company as a director, officer,
employee, agent, or fiduciary of another Enterprise shall include any service as a director,
officer, employee, or agent of the Company that imposes duties on, or involves services by, such
director or officer with respect to an employee benefit plan of the Company or any of its
affiliates, other than solely as a participant or beneficiary of such a plan; and (ii) if the
Indemnitee has acted in good faith and in a manner that the Indemnitee reasonably believed to be in
the interest of the participants and beneficiaries of an employee benefit plan, the Indemnitee
shall be deemed to have acted in a manner not opposed to the best interests of the Company for
purposes of this Agreement.
(k) References herein to one gender shall be held to include the other gender as the context
requires.
2. Indemnity of Indemnitee. The Company hereby agrees to hold harmless and indemnify
Indemnitee to the fullest extent permitted by applicable 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. Except as
provided in Section 9 hereof, Indemnitee shall be entitled to the rights of indemnification
provided in this Section 2(a) if, by reason of his Corporate Status, the Indemnitee is or
was, or is or was threatened to be made, a party to or is otherwise involved in any Proceeding
other than a Proceeding by or in the right of the Company to procure a judgment in its favor (which
Proceedings are addressed in Section 2(b)). Pursuant to this Section 2(a),
Indemnitee shall be indemnified against all Expenses, judgments, penalties, fines, liabilities and
amounts paid in settlement actually and reasonably incurred by Indemnitee, or on Indemnitee’s
behalf, in connection with such Proceeding or any claim, issue or matter therein, but only if the
Indemnitee acted in good faith and in a manner the 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 the Indemnitee’s conduct was unlawful.
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(b) Proceedings by or in the Right of the Company. Except as provided in Section
9 hereof, Indemnitee shall be entitled to the rights of indemnification provided in this
Section 2(b) if, by reason of Indemnitee’s Corporate Status, the Indemnitee is or was, or
is or was threatened to be made, a party to or is or was otherwise involved in any Proceeding
brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this
Section 2(b), Indemnitee shall be indemnified against all Expenses actually and reasonably
incurred by
the Indemnitee, or on the Indemnitee’s behalf, in connection with such Proceeding or any
claim, issue or matter therein, but only if the Indemnitee acted in good faith and in a manner the
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 for such
Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which the
Indemnitee shall have been adjudged liable to the Company unless (and only to the extent that) the
Court of Chancery of the State of Delaware 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 of the case, the Indemnitee is fairly and reasonably entitled to indemnity for such
expenses that the Court of Chancery or such other court shall deem proper. Anything in this
Agreement to the contrary notwithstanding, if the Indemnitee, by reason of the Indemnitee’s
Corporate Status, is or was, or is or was threatened to be made, a party to any Proceeding by or in
the right of the Company to procure a judgment in its favor, then the Company shall not indemnify
the Indemnitee for any judgment, fines, or amounts paid in settlement to the Company in connection
with such Proceeding.
(c) Overriding Right to Indemnification if Successful on the Merits. Notwithstanding
any other provision of this Agreement, to the extent that Indemnitee is or was, by reason of his
Corporate Status or otherwise, a party to and is or was successful, on the merits or otherwise, in
any Proceeding, he shall be indemnified to the maximum extent permitted by applicable 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 Indemnitee or on Indemnitee’s behalf in connection with each
successfully resolved claim, issue or matter. For purposes of this Section 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.
3. Contribution.
(a) To the fullest extent permissible under applicable law, whether or not the indemnification
provided in Section 2 hereof is available, in respect of any threatened, pending or
completed action, suit or proceeding in which the Company may be jointly liable with Indemnitee (or
could 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 enter
into any settlement of any action, suit or proceeding in which the Company may be jointly liable
with Indemnitee (or could be if joined in such action, suit or proceeding) unless such settlement
provides for a full and final release of all claims asserted against Indemnitee.
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(b) To the fullest extent permissible under applicable law, 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, liabilities
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, liabilities 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.
(c) The Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claim
of contribution brought by or on behalf of 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, liabilities, 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 a majority of Disinterested Directors (even though less than a
quorum) deem 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 (together with its directors,
officers, employees and agents) 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 or was, by reason of his Corporate Status or
otherwise, a witness, or is or was made (or asked) to respond to discovery requests, in any
Proceeding to which Indemnitee is not a party, he shall be indemnified to the fullest extent
permissible under applicable law against all Expenses actually and reasonably incurred by him or on
his behalf in connection therewith.
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5. Advancement of Expenses. Notwithstanding any other provision of this Agreement,
but subject to Section 8(e) hereof, 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 or otherwise within thirty (30) calendar 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 or on behalf of Indemnitee and for which advancement
is requested, and shall include or be preceded or accompanied by an undertaking by or on behalf of
Indemnitee to repay any Expenses advanced if it shall finally be determined (under the procedures,
and subject to the presumptions, set forth in Section 6 and Section 7 hereof) that
Indemnitee is not entitled to be indemnified against such Expenses. Such undertaking shall be
sufficient for purposes of this Section 5 if it is substantially in the form attached
hereto as Exhibit A. Any advances and undertakings to repay pursuant to this Section
5 shall be unsecured and interest-free. The Indemnitee shall be entitled to advancement of
Expenses as provided in this Section 5 regardless of any determination by or on behalf of
the Company that the Indemnitee has not met the standards of conduct set forth in Sections
2(a) and 2(b) hereof.
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:
(a) To the extent permitted by applicable laws, rules, regulations and orders of any
governmental body, Indemnitee shall give the Company notice in writing as soon as practicable of
any claim made against Indemnitee for which indemnification will or could be sought under this
Agreement. To obtain indemnification under this Agreement, the Indemnitee shall submit to the
Company a written request for indemnification, including therein or therewith, except to the extent
previously provided to the Company in connection with a request or requests for advancement
pursuant to Section 5 hereof, a statement or statements reasonably evidencing all Expenses
incurred or paid by or on behalf of the Indemnitee and for which indemnification is requested,
together with such documentation and information as is reasonably available to Indemnitee and as is
reasonably necessary for the Company 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 of Directors in writing that Indemnitee has requested
indemnification. Failure to provide any notice required hereby shall not impair Indemnitee’s
rights of indemnification and contribution under this Agreement except to the extent that such
failure to provide notice actually and materially prejudices the rights of the Company to defend
any action or proceeding which is the basis of the claimed indemnification; provided,
however, that such failure to provide notice will not be deemed to materially prejudice the
rights of the Company where Indemnitee is prohibited by any applicable laws, rules, regulations or
orders of any governmental body from complying with the notification procedures contained in this
Section 6(a).
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(b) Upon written request by Indemnitee for indemnification pursuant to the second sentence of
Section 6(a) hereof, a determination with respect to Indemnitee’s entitlement thereto shall
be made by the following person or persons, who shall be empowered to make such determination: (i)
if a Change in Control shall have occurred, by Independent Counsel (unless Indemnitee shall request
in writing that such determination be made by the Board of Directors (or a committee thereof) in
the manner provided for in clause (ii) of this Section 6(b)) in a written opinion to the
Board of Directors, a copy of which shall be delivered to Indemnitee; or (ii) if a Change of
Control shall not have occurred, (A)(1) by Independent Counsel, if Indemnitee shall request in
writing that such determination be made by Independent Counsel upon making his or her request for
indemnification pursuant to the second sentence of Section 6(a), (2) by the Board of
Directors of the Company, by a majority vote of Disinterested Directors even though less than a
quorum, or (3) by a committee of Disinterested Directors designated by majority vote of
Disinterested Directors, even though less than a quorum, or (B) if there are no such Disinterested
Directors or, even if there are such Disinterested Directors, if the Board of Directors, by the
majority vote of Disinterested Directors, so directs, by Independent Counsel in a written opinion
to the Board of Directors, a copy of which shall be delivered to Indemnitee.
(c) If the determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 6(b) hereof, the Independent Counsel shall be selected by the
Board of Directors and approved by Indemnitee (such approval not to be unreasonably withheld,
delayed or conditioned). Upon failure of the Board of Directors to so select, or upon the failure
of Indemnitee to so approve, such Independent Counsel within 20 days after submission by Indemnitee
of a written request for indemnification pursuant to Section 6(a) hereof, the Independent
Counsel shall be selected by the Court of Chancery of the State of Delaware or such other person or
body as the Indemnitee and the Company may agree in writing. Such determination of entitlement to
indemnification shall be made not later than forty-five (45) days after receipt by the Company of a
written request for indemnification. If the person making such determination shall determine that
Indemnitee is entitled to indemnification as to part (but not all) of the application for
indemnification, such person shall reasonably pro-rate such part of indemnification among such
claims, issues or matters. If it is so determined that Indemnitee is entitled to indemnification,
payment to Indemnitee shall be made within ten (10) days after such determination. 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.
(d) In connection with any determination (including a determination by the Court of Chancery
of the State of Delaware (or other court of competent jurisdiction)) with respect to entitlement to
indemnification hereunder, the burden of proof shall be on the Company to establish that Indemnitee
is not entitled to indemnification and any decision that Indemnitee is not entitled to
indemnification must be supported by clear and convincing evidence. The failure of the Company
(including by its directors or Independent 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, or an actual
determination by the Company (including by its directors or
Independent Counsel) that Indemnitee has not met such applicable standard of conduct, shall
not be a defense to the action or create a presumption that Indemnitee has not met the applicable
standard of conduct.
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(e) In making a determination with respect to whether Indemnitee acted in good faith and in a
manner that Indemnitee reasonably believed to be in or not opposed to the best interests of the
Company, the person or persons or entity making such determination shall presume that Indemnitee
acted in good faith and in a manner that Indemnitee 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 any decision that Indemnitee is not entitled to indemnification must be
supported by clear and convincing evidence. Any action, or failure to act, by Indemnitee based on
Indemnitee’s good faith reliance on the records or books of account of the Enterprise, 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 shall not, in and
of itself, constitute grounds for an adverse determination with respect to whether Indemnitee acted
in good faith and in a manner that Indemnitee reasonably believed to be in or not opposed to the
best interests of the Company. 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.
(f) If the person, persons or entity empowered or selected under this Section 6 to
determine whether Indemnitee is entitled to indemnification shall not have made a determination
within forty-five (45) 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 forty-five
(45)-day period may be extended for a reasonable time, not to exceed an additional thirty (30)
days, if the person, persons or entity 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.
(g) Indemnitee shall cooperate with the person, persons or entity making such determination
with respect to Indemnitee’s entitlement to indemnification, including providing to such person,
persons or entity 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 or member of the Board of
Directors shall act reasonably and in good faith in making a determination regarding the
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,
persons or entity making such determination shall be borne by the Company (irrespective of the
determination as to Indemnitee’s entitlement to
indemnification) and the Company hereby agrees to indemnify and hold Indemnitee harmless
therefrom.
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(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 Proceeding to which Indemnitee is or becomes 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 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 under this Agreement 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.
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 forty-five (45) days after receipt by the Company of the request for
indemnification, (iv) payment of indemnification is not made pursuant to this Agreement within
fifty-five (55) 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 and/or advancement of Expenses. The Company shall
not oppose Indemnitee’s right to seek any such adjudication.
(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
on the merits, and Indemnitee shall not be prejudiced by reason of the adverse determination under
Section 6(b).
(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.
10
(d) In the event that (a) the Indemnitee commences a proceeding seeking (1) to establish or
enforce the Indemnitee’s entitlement to indemnification or advancement pursuant to this Agreement,
(2) to otherwise enforce Indemnitee’s rights under or to interpret the terms of this Agreement, (3)
to recover damages for breach of this Agreement, (4) to establish or enforce Indemnitee’s
entitlement to indemnification or advancement pursuant to the Certificate or the Bylaws, or (5) to
enforce or interpret the terms of any liability insurance policy maintained by the Company (each
such proceeding an “Indemnitee Enforcement Proceeding”), or (b) the Company commences a proceeding
against the Indemnitee seeking (1) to recover, pursuant to an undertaking or otherwise, amounts
previously advanced to Indemnitee, (2) to enforce the Company’s rights under or to interpret the
terms of this Agreement, or (3) to recover damages for breach of this Agreement (each such
proceeding a “Company Enforcement Proceeding” and together with each form of Indemnitee Enforcement
Proceeding, an “Enforcement Proceeding”), then the Indemnitee shall be entitled to recover from the
Company, and shall be indemnified by the Company against, any and all Expenses actually and
reasonably incurred by or on behalf of such Indemnitee in connection with such Enforcement
Proceeding; 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 on
which Indemnitee does not prevail, unless (and only to the extent that) the Court of Chancery of
the State of Delaware or the court in which such Proceeding was brought shall determine upon
application that, despite the adjudication in respect of such claim, issue or matter but in view of
all the circumstances of the case, the Indemnitee is fairly and reasonably entitled to indemnity
for such expenses that the Court of Chancery or such other court shall deem proper. The Company
also shall be required to advance all Expenses actually and reasonably incurred by or on behalf of
the Indemnitee in connection with any Enforcement Proceeding in advance of the final disposition of
such proceeding within thirty (30) days after the receipt by the Company of a written request for
such advance or advances from time to time, which request shall include or be accompanied by a
statement or statements reasonably evidencing the Expenses incurred by or on behalf of the
Indemnitee and for which advancement is requested; provided, however, that any such
advancement shall be made only after the Company receives an undertaking by or on behalf of the
Indemnitee to repay any Expenses so advanced if it shall be finally determined that Indemnitee is
not entitled to be indemnified against such Expenses.
(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.
(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.
11
8. Non-Exclusivity; Survival of Rights; Insurance; Subrogation.
(a) The rights of indemnification 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
Certificate, the Bylaws, any Insurance Policy, any agreement, a vote of stockholders, a resolution
of directors or otherwise. 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 or otherwise 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
Certificate, the 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. Notwithstanding anything in this Agreement to the contrary, the
indemnification and contribution provided for in this Agreement will remain in full force and
effect regardless of any investigation made by or on behalf of Indemnitee or any of Indemnitee’s
agents.
(b) To the extent that the Company maintains any Insurance Policy or any insurance policy or
policies providing liability insurance for any other corporation, partnership, limited liability
company, joint venture, trust, employee benefit plan or other Enterprise that such person serves at
the request of the Company, 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 director, officer,
employee, agent or fiduciary under such policy or policies. If, at the time of the receipt of a
notice of a claim pursuant to the terms hereof, the Company has any Insurance Policy in effect, 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 the Indemnitee,
all amounts payable as a result of such Proceeding in accordance with the terms of such policies.
(c) Except as otherwise agreed between the Company, on the one hand, and Indemnitee or another
indemnitor of Indemnitee, on the other, in the event of any payment to or on behalf of the
Indemnitee under this Agreement, the Company shall be subrogated to the extent of such payment to
all of the rights of recovery of Indemnitee, who shall execute all papers reasonably required and
take all action reasonably necessary to secure such rights, including execution of such documents
as are necessary to enable the Company to bring suit to enforce such rights. For the avoidance of
doubt, the Company shall make any and all payments and reimburse Indemnitee’s costs and expenses,
if any, in connection with Indemnitee’s preparation and execution of all papers and taking of any
and all actions referred to in this Section 8(c).
12
(d) Except as otherwise agreed between the Company, on the one hand, and Indemnitee or another
indemnitor of Indemnitee, on the other, 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 or any other insurance policy relating to an Enterprise other than the Company, Company
contract, Company agreement or otherwise (except to the extent that Indemnitee is required (by
court order or otherwise) to return such payment or to surrender it to the Company).
(e) Except as otherwise agreed between the Company, on the one hand, and Indemnitee or another
indemnitor of Indemnitee, on the other, 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, limited liability company, 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 the Company or any Insurance
Policy (except to the extent that Indemnitee is required (by court order or otherwise) to return
such payment or to surrender it to the Company.
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 or otherwise to which the Company is a party, except as may
otherwise be agreed between the Company, on the one hand, and Indemnitee or another indemnitor of
Indemnitee, on the other;
(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 Act, as amended,
or similar provisions of state statutory law or common law; or
(c) 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 any of its direct or indirect subsidiaries or the directors, officers, employees or
other indemnitees of the Company or its direct or indirect subsidiaries (except where specified to
the contrary in this Agreement, in each instance to be governed by the terms of the applicable
section herein), unless (i) the Board of Directors of the Company authorized the Proceeding (or any
part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification,
in its sole discretion, pursuant to the powers vested in the Company under applicable law.
10. Duration of Agreement. All agreements and obligations of the Company contained
herein shall continue until ten (10) years after the end of any period Indemnitee is an officer or
director of the Company (or is or was serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, limited liability company, joint venture,
trust or other Enterprise) but shall continue thereafter so long as Indemnitee shall be subject to
any Proceeding (or any proceeding commenced under Section 7 hereof) by reason of his
Corporate Status or otherwise, 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, notwithstanding such ten (10) year period. 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.
13
11. 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, except for the
organizational documents of the Company (including, but not limited to, the Certificate and the
Bylaws), the Amended and Restated Shareholders Agreement of the Company, any employment agreement
between Indemnitee and the Company and any Insurance Policy or other applicable insurance policy.
(c) The Company represents that this Agreement has been approved by the Company’s Board of
Directors.
12. Severability. The invalidity or unenforceability of any provision hereof shall in
no way affect the validity or enforceability of any other provision hereof. 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. In the event any provision hereof
conflicts with any applicable law, such provision shall be deemed modified, consistent with the
aforementioned intent, to the extent necessary to resolve such conflict.
13. 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.
14. Notice By Indemnitee. To the extent permitted by applicable laws, rules,
regulations and orders of any governmental body, 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 unless and only to the extent that such failure or delay materially prejudices the
Company; provided, however, that such failure to provide notice will not be deemed
to materially prejudice the rights of the Company where Indemnitee is prohibited
by any applicable laws, rules, regulations and orders of any governmental body from complying
with the notification procedures contained in this Section 14.(a.
15. Confidentiality. From the date hereof, neither the Company or the Indemnitee
shall issue, or cause or permit the publication by any of their respective affiliates or
representatives of, any press release or other announcement with respect to this Agreement unless
such party has provided such press release or other announcement to the other party hereto and
provided such other party the opportunity to review and shall not include any information which
shall have been objected to by such other party. Nothing herein shall be deemed to limit or
restrict the submission and/or disclosure of this Agreement or any payments hereunder to any
governmental body or as otherwise required by any applicable law, rule, regulation or order of any
governmental body.
14
16. Notices. Unless otherwise provided herein, any notice required or permitted under
this Agreement shall be deemed effective upon the earlier of (a) actual receipt, or (b) (i) one (1)
business day after the date of delivery by confirmed facsimile transmission, (ii) one (1) business
day after the business day of deposit with a nationally recognized overnight courier service for
next day delivery, freight prepaid, or (iii) three (3) business days after deposit with the United
States Post Office for delivery by registered or certified mail, postage prepaid. Any such notice
shall be in writing and shall be addressed to the party to be notified at the address indicated for
such party indicated on the signature pages or exhibits hereto, as otherwise set forth in this
Section 17, or at such other address as such party may designate by ten (10) days’ advance
written notice to the other parties. All communications shall be sent:
(a) To Indemnitee at the address set forth below Indemnitee’s signature hereto;
(b) To the Company at:
Broadview Networks Holdings, Inc.
000 Xxxxxxxxxxx Xxxxxx
0xx Xxxxx, Xxxxx X000
Xxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: General Counsel;
000 Xxxxxxxxxxx Xxxxxx
0xx Xxxxx, Xxxxx X000
Xxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: General Counsel;
With a copy (which shall not constitute notice) to:
Xxxxxxx Xxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxx;
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxx;
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.
17. 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 or electronic signature.
18. Headings. The headings of the sections and subsections 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.
15
19. 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) 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) consent to service of any summons and complaint and any other process that
may be served in any action, suit, or proceeding arising out of or relating to this Agreement by
mailing by certified or registered mail, with postage prepaid, copies of such process to such party
at its address for receiving notice pursuant to Section 17 hereof, (iv) waive any objection
to the laying of venue of any such action or proceeding in the Delaware Court, and (v) 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. Nothing herein shall preclude service
of process by any other means permitted by applicable law.
20. Assignment. Neither party hereto may assign this Agreement without the prior
written consent of the other party; provided, however, that the Company shall
assign this Agreement to its successor upon a Change in Control in which the Company ceases to
exist or sells all or substantially all of its assets, [and Indemnitee may assign its rights under
this Agreement to [ ] and [its/their] affiliates without prior written
consent].1
21. Construction. The parties acknowledge that both parties have contributed to the
drafting of this Agreement and, therefore, waive the application of any law, regulation, holding or
rule of construction providing that ambiguities in an agreement or other document will be construed
against the party drafting such agreement or document.
[signature page follows]
| 1 | This clause shall apply only to directors who are designated by stockholder funds. |
16
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.
INDEMNITEE:
Signature:
Name:
Address (for notices):
COMPANY:
| BROADVIEW NETWORKS HOLDINGS, INC. | ||||
By: |
||||
| Title: | ||||
Address (for notices):
000 Xxxxxxxxxxx Xxxxxx
0xx Xxxxx, Xxxxx X000
Xxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: General Counsel
000 Xxxxxxxxxxx Xxxxxx
0xx Xxxxx, Xxxxx X000
Xxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: General Counsel
[Signature Page to Indemnification Agreement]
Exhibit A
UNDERTAKING
Reference is hereby made to that certain Indemnification Agreement, by and between Broadview
Networks Holdings, Inc., a Delaware corporation (the “Company”), and the undersigned, dated
as of [•] (the “Indemnification Agreement”). All initially capitalized terms used herein
and not otherwise defined herein shall have the meanings set forth in the Indemnification
Agreement.
Pursuant to the Indemnification Agreement, I, , agree to reimburse the
Company for all Expenses paid to me or on my behalf by the Company in connection with my
involvement in [name or description of proceeding or proceedings], in the event, and to the extent,
that it shall ultimately be determined (pursuant to the terms of the Indemnification Agreement)
that I am not entitled to be indemnified by the Company for such Expenses.
Signature
Typed Name
) ss:
Before me , on this day personally appeared
, known to me to be the person whose name is subscribed to the foregoing
instrument, and who, after being duly sworn, stated that the contents of said instrument is to the
best of his/her knowledge and belief true and correct and who acknowledged that he/she executed the
same for the purpose and consideration therein expressed.
GIVEN under my hand and official seal at
_____, this day of ,
20_____.
My commission expires:
