EXHIBIT 10.2
INDEMNIFICATION AGREEMENT
This Indemnification Agreement is entered into and effective as of the
______ day of ____________________, 1999 ("Agreement"), by and between
InfoHighway Communications Corporation, a Delaware corporation ("Company"),
and _____________ ("Indemnitee"):
WHEREAS, highly competent persons have become more reluctant to serve
corporations as directors, executive 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
corporation or business enterprise itself;
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 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; and
WHEREAS, 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;
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
SECTION 1. SERVICES BY INDEMNITEE. Indemnitee agrees to serve as a
director/executive officer of the Company and, as mutually agreed by
Indemnitee and the Company, as a director,
officer, employee, agent or fiduciary of other corporations, partnerships,
joint ventures, trusts or other enterprises (including, without limitation,
employee benefit plans). Indemnitee may at any time and for any reason
resign from any such position (subject to any other contractual obligation or
any obligation imposed by operation of law), in which event the Company shall
have no obligation under this Agreement to continue Indemnitee in that
position. This Agreement shall not be deemed an employment contract between
the Company (or any of its subsidiaries) and Indemnitee. Indemnitee
specifically acknowledges that Indemnitee's employment with the Company (or
any of its subsidiaries), if any, is at will, and the Indemnitee may be
discharged at any time for any reason, with or without cause, except as may
be otherwise provided in any written employment contract between Indemnitee
and the Company (or any of its subsidiaries), other applicable formal
severance policies duly adopted by the Board or, with respect to service as a
director of the Company, by the Company's Certificate of incorporation,
Bylaws and the General Corporation Law of the State of Delaware.
Notwithstanding, the foregoing, this Agreement shall continue in force after
Indemnitee has ceased to serve as an officer or director of the Company and
no longer serves at the request of the Company as a director, officer,
employee or agent of the Company or any subsidiary of the Company.
SECTION 2. INDEMNIFICATION--GENERAL. The Company shall indemnify,
and advance Expenses (as hereinafter defined) to, Indemnitee (a) as provided
in this Agreement and (b) to the fullest extent permitted by applicable law
in effect on the date hereof and as amended from time to time. The rights of
Indemnitee provided under the preceding sentence shall include, but shall not
be limited to, the rights set forth in the other Sections of this Agreement.
SECTION 3. PROCEEDINGS OTHER THAN PROCEEDINGS BY OR IN THE RIGHT OF
THE COMPANY. Indemnitee shall be entitled to the rights of indemnification
provided in Section 2 and this Section 3 if, by reason of his Corporate
Status (as hereinafter defined), he is, or is threatened to be made, a party
to or a participant in any threatened, pending, or completed Proceeding (as
hereinafter defined), other than a Proceeding by or in the right of the
Company. Pursuant to this Section 3, the Company shall indemnify Indemnitee
against, and shall hold Indemnitee harmless from and in respect of, all
Expenses, judgments, penalties, fines (including excise taxes) and amounts
paid in settlement (including all interest, assessments and other charges
paid or payable in connection with or in respect of such Expenses, judgments,
fines, penalties or 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 he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company and, with respect to any criminal Proceeding, had no reasonable cause
to believe his conduct was unlawful.
SECTION 4. PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY.
Indemnitee shall be entitled to the rights of indemnification provided in
Section 2 and this Section 4 if, by reason of his Corporate Status, he is, or
is threatened to be made, a party to or a participant in any threatened,
pending or completed Proceeding brought by or in the right of the Company to
procure a judgment in its favor. Pursuant to this Section 4, the Company
shall indemnify Indemnitee against, and shall hold Indemnitee harmless from
and in respect of, all Expenses actually and reasonably incurred by him or on
his behalf in connection with, and any amounts paid in settlement of, such
Proceeding if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of
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the Company. Notwithstanding the foregoing, 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 if applicable law prohibits such indemnification; PROVIDED,
HOWEVER, if applicable law so permits, indemnification against such Expenses
shall nevertheless be made by the Company in such event if and only to the
extent that the Court of Chancery of the State of Delaware, or the court in
which such Proceeding shall have been brought or is pending, shall determine.
SECTION 5. 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
(or a participant in) and is successful, on the merits or otherwise, in
defense of any Proceeding, he shall be indemnified against all Expenses
actually and reasonably incurred by him or on his behalf in connection
therewith. If Indemnitee is not wholly successful in defense of 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 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.
SECTION 6. INDEMNIFICATION FOR EXPENSES AS A WITNESS.
Notwithstanding any other provision of this Agreement, to the extent that
Indemnitee is, by reason of his Corporate Status, a witness 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.
SECTION 7. ADVANCEMENT OF EXPENSES. The Company shall advance all
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding within ten (10) 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 an undertaking by or on behalf of Indemnitee to repay any
Expenses advanced if it ultimately shall be determined, in accordance with
this Agreement, that Indemnitee is not entitled to be indemnified against
such Expenses.
SECTION 8. PROCEDURE FOR DETERMINATION OF ENTITLEMENT TO
INDEMNIFICATION.
(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.
(b) On written request by Indemnitee for indemnification pursuant
to the first sentence of Section 8(a), a determination, if required by
applicable law, with respect to Indemnitee's
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entitlement thereto shall be made in the specific case: (i) if a Change in
Control (as hereinafter defined) shall have occurred within two (2) years
prior to the date of such written request, by Independent Counsel (as
hereinafter defined) in a written opinion to the Board, a copy of which shall
be delivered to Indemnitee; or (ii) if a Change of Control shall not have
occurred within two (2) years prior to the date of such written request, (A)
by a majority vote of the Disinterested Directors (as hereinafter defined),
even though less than a quorum of the Board, or (B) if there are no such
Disinterested Directors, or if such Disinterested Directors so direct, by
Independent Counsel in a written opinion to the Board, a copy of which shall
be delivered to Indemnitee; and, if it is so determined that Indemnitee is
entitled to indemnification, payment to Indemnitee shall be made within ten
(10) days after such determination. 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 on 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 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 indemnifies and agrees to hold
Indemnitee harmless therefrom.
(c) In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Section
8(b), the Independent Counsel shall be selected as provided in this Section
8(c). If a Change of Control shall not have occurred within two (2) years
prior to the date of Indemnitee's written request for indemnification
pursuant to Section 8(a), the Independent Counsel shall be selected by the
Board, and the Company shall give written notice to Indemnitee advising him
of the identity of the Independent Counsel so selected. If a Change of
Control shall have occurred within two (2) years prior to the date of
Indemnitee's written request for indemnification pursuant to Section 8(a),
the Independent Counsel shall be selected by Indemnitee (unless Indemnitee
shall request that such selection be made by the Board, in which event the
preceding sentence shall apply), and Indemnitee shall give written notice to
the Company advising it of the identity of the Independent Counsel so
selected in either event, Indemnitee or the Company, as the case may be, may,
within ten (10) days after such written notice of selection shall have been
given, deliver to the Company or to Indemnitee, as the case may be, a written
objection to such selection. 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 17, and the
objection shall set forth with particularity the factual basis of such
assertion. If such written objection is so made and substantiated, the
Independent Counsel so 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, within twenty (20) days after submission by
Indemnitee of a written request for indemnification pursuant to Section 8(a),
no Independent Counsel shall have been selected and not objected to, either
the Company or Indemnitee may petition the Court of Chancery or other court
of competent jurisdiction for resolution of any objection which shall have
been made by the Company or Indemnitee to the other's selection of
Independent Counsel and/or for the appointment as Independent Counsel of a
person selected by the petitioned court or by such other person as the
petitioned 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 8(b). The Company shall pay any and all
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reasonable fees and expenses of Independent Counsel incurred by such
Independent Counsel in connection with acting pursuant to Section 8(b), and
the Company shall pay all reasonable fees and expenses incident to the
procedures of this Section 8(c), regardless of the manner in which such
Independent Counsel was selected and appointed. If (i) Independent Counsel
does not make any determination respecting Indemnitee's entitlement to
indemnification hereunder within ninety (90) days after receipt by the
Company of a written request therefor and (ii) any judicial proceeding or
arbitration pursuant to Section 10(a)(iii) hereof is then commenced,
Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
SECTION 9. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS.
(a) In making a determination with respect to entitlement to
indemnification hereunder, the Person, Persons or entity making such
determination shall presume that Indemnitee is entitled to indemnification
under this Agreement if Indemnitee has submitted a request for
indemnification in accordance with Section 8(a), and the Company shall have
the burden of proof to overcome that presumption in connection with the
making by any person, persons or entity of any determination contrary to that
presumption.
(b) The termination of any Proceeding or of any claim, issue or
matter therein, by judgment, order, settlement or conviction, or on 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.
(c) Any action taken by Indemnitee in connection with any employee
benefit plan shall, if taken in good faith by Indemnitee and in a manner
Indemnitee reasonably believed to be in the interest of the participants in
or beneficiaries of that plan, be deemed to have been taken in a manner "not
opposed to the best interests of the Company" for all purposes of this
Agreement.
SECTION 10. REMEDIES OF INDEMNITEE.
(a) In the event that (i) a determination is made pursuant to
Section 8 that Indemnitee is not entitled to indemnification hereunder, (ii)
advancement of Expenses is not timely made pursuant to Section 7, (iii)
Independent Counsel is to determine Indemnitee's entitlement to
indemnification hereunder, but does not make that determination within ninety
(90) days after receipt by the Company of the request for that
indemnification, (iv) payment of indemnification is not made pursuant to
section 5 or 6 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, Indemnitee shall be entitled to an adjudication from the
Court of Chancery of his entitlement to such indemnification 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.
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Indemnitee shall commence such Proceeding seeking an adjudication or an award
in arbitration within one hundred eighty (180) days following the date on
which Indemnitee first has the right to commence such proceeding pursuant to
this Section 10(a); PROVIDED, HOWEVER, that the foregoing clause shall not
apply in respect of a proceeding brought by Indemnitee to enforce his rights
under Section 5.
(b) In the event that a determination shall have been made pursuant
to Section 8(b) that Indemnitee is not entitled to indemnification, any
judicial proceeding or arbitration commenced pursuant to this Section 10
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 that adverse
determination. In any judicial proceeding or arbitration commenced pursuant
to this section 10, the Company shall have the burden of proving that
Indemnitee is not entitled to indemnification or advancement of Expenses, as
the case may be.
(c) If a determination shall have been made pursuant to Section
8(b) that Indemnitee is entitled to indemnification, the Company shall be
bound by such determination in any judicial proceeding or arbitration
commenced pursuant to this Section 10, absent (i) a misstatement by
Indemnitee of a material fact, or an omission by Indemnitee 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.
(d) In the event that Indemnitee, pursuant to this Section 10,
seeks a judicial adjudication of or an award in arbitration to enforce his
rights under, or to recover damages for breach of, this Agreement, Indemnitee
shall be entitled to recover from the Company, and shall be indemnified by
the Company against, any and all expenses (of the types described in the
definition of Expenses in Section 17) actually and reasonably incurred by him
in such judicial adjudication or arbitration, but only if he prevails
therein. If it shall be determined in said judicial adjudication or
arbitration that Indemnitee is entitled to receive part but not all of the
indemnification or advancement of expenses sought, the expenses incurred by
Indemnitee in connection with such judicial adjudication or arbitration shall
be appropriately prorated.
SECTION 11. NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE;
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 Certificate of Incorporation, the Bylaws, any agreement, a vote of
stockholders or 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 prior to
such amendment, alteration or repeal. To the extent that a change in
Delaware law (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under 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.
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(b) To the extent that the Company maintains an insurance policy or
policies providing liability insurance for directors, officers, employees, or
agents of the Company or of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise which 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 such director, Officer, employee or
agent under such policy or policies.
(c) In the event of any payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all the rights of
recovery of Indemnitee, 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.
(d) 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.
(e) The Company's obligation to indemnify or advance Expenses
hereunder to Indemnitee with respect to Indemnitee's service 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.
SECTION 12. DURATION OF AGREEMENT. This Agreement shall continue
until and terminate upon the later of: (a) ten (10) years after the date that
Indemnitee shall have ceased to serve as a director or officer of the Company
or of any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise which Indemnitee served on behalf of the
Company; or (b) the final termination of any Proceeding then pending 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 10 relating thereto. This Agreement shall be
binding upon the Company and its successors and assigns and shall inure to
the benefit of Indemnitee and his spouse (if Indemnitee resides in Texas or
another community property state), heirs, executors and administrators, and
this Agreement does not, and shall not be construed to confer any rights on
any person that is not a party to this Agreement, other than Indemnitee's
spouse, and his heirs, executors and assigns.
SECTION 13. SEVERABILITY. If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any
reason whatsoever: (a) the validity, legality and enforceability of the
remaining provisions of this Agreement (including, without limitation, each
portion of any Section of this Agreement containing any such provision held
to be invalid, illegal or unenforceable which is not itself invalid, illegal
or unenforceable) shall not in any way be affected or impaired thereby; (b)
such provision or provisions shall be deemed reformed to the extent necessary
to conform to applicable law and to give the maximum effect to the intent of
the parties hereto; and (c) to the fullest extent possible, the provisions of
this Agreement (including. without limitation, each portion of any Section of
this Agreement containing any such provision held to be invalid, illegal or
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unenforceable which is not itself invalid, illegal or unenforceable) shall be
construed so as to give effect to the intent manifested thereby.
SECTION 14. EXCEPTION TO RIGHT OF INDEMNIFICATION OR ADVANCEMENT OF
EXPENSES. Notwithstanding any other provision hereof, Indemnitee shall not
be entitled to indemnification or advancement of Expenses under this
Agreement with respect to any Proceeding brought by Indemnitee or any claim
therein prior to a Change in Control, unless the bringing of such Proceeding
or making of such claim shall have been approved by the Board of Directors.
SECTION 15. IDENTICAL COUNTERPARTS. This Agreement may be executed
in one or more counterparts by means of original or facsimile signatures,
each of which shall for all purposes be deemed to be an original but all of
which together shall constitute one and the same Agreement. Only one such
counterpart signed by the party against whom enforceability is sought needs
to be produced to evidence the existence of this Agreement.
SECTION 16. HEADINGS. The headings of the Sections hereof are
inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction thereof.
SECTION 17. DEFINITIONS. For purposes of this Agreement:
(a) "Acquiring Person" means any Person who or which,
together with all Affiliates and Associates of such Person, is or
are the Beneficial Owner of twenty-five percent (25%) or more of
the shares of Common Stock then outstanding, but does not include
any Exempt Person; PROVIDED, HOWEVER, that a Person shall not be
or become an Acquiring Person if such Person, together with its
Affiliates and Associates, shall become the Beneficial Owner of
twenty-five percent (25%) or more of the shares of Common Stock
then outstanding solely as a result of a reduction in the number
of shares of Common Stock outstanding due to the repurchase of
Common Stock by the Company, unless and until such time as such
Person or any Affiliate or Associate of such Person shall purchase
or otherwise become the Beneficial Owner of additional shares of
Common Stock constituting one percent (1%) or more of the then
outstanding shares of Common Stock or any other Person (or
Persons) who is (or collectively are) the Beneficial Owner of
shares of Common Stock constituting one percent (1%) or more of
the then outstanding shares of Common Stock shall become an
Affiliate or Associate of such Person, unless, in either such
case, such Person, together with all Affiliates and Associates of
such Person, is not then the Beneficial Owner of twenty-five
percent (25%) or more of the shares of Common Stock then
outstanding.
(b) "Affiliate" has the meaning ascribed to that term in
Exchange Act Rule 12b-2.
(c) "Associate" means, with reference to any Person, (i)
any corporation, firm, partnership, association, unincorporated
organization or other entity (other than the Company or a
subsidiary of the Company) of which that Person is an officer or
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general partner (or officer or general partner of a general
partner) or is, directly or indirectly, the Beneficial owner of
10% or more of any class of its equity securities, (ii) any trust
or other estate in which that Person has a substantial beneficial
interest or for or of which that Person serves as trustee or in a
similar fiduciary capacity and (iii) any relative or spouse of
that Person, or any relative of that spouse, who has the same home
as that Person.
(d) A specified Person is deemed the "Beneficial Owner"
of, and is deemed to "beneficially own," any securities:
(i) of which that Person or any of that Person's
Affiliates or Associates, directly or indirectly, is the
"beneficial owner" (as determined pursuant to Exchange Act
Rule 13d-3) or otherwise has the right to vote or dispose
of, including pursuant to any agreement, arrangement or
understanding (whether or not in writing); PROVIDED,
HOWEVER, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own," any security under
this subparagraph as a result of an agreement, arrangement
or understanding to vote that security if that agreement,
arrangement or understanding: (A) arises solely from a
revocable proxy or consent given in response to a public
(that is, not including a solicitation exempted by Exchange
Act Rule 14a-2(b)(2)) proxy or consent solicitation made
pursuant to, and in accordance with, the applicable
provisions of the Exchange Act; and (B) is not then
reportable by such Person on Exchange Act Schedule 13D (or
any comparable or successor report);
(ii) which that Person or any of that Person's
Affiliates or Associates, directly or indirectly, has the
right or obligation to acquire (whether that right or
obligation is exercisable or effective immediately or only
after the passage of time or the occurrence of an event)
pursuant to any agreement, arrangement or understanding
(whether or not in writing) or on the exercise of
conversion rights, exchange rights, other rights, warrants
or options, or otherwise; PROVIDED, HOWEVER, that a Person
shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," securities tendered pursuant to a
tender or exchange offer made by that Person or any of that
Person's Affiliates or Associates until those tendered
securities are accepted for purchase or exchange; or
(iii) which are beneficially owned, directly or
indirectly, by (A) any other Person (or any Affiliate or
Associate thereof) with which the specified Person or any
of the specified Person's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy or consent as
described in the proviso to subparagraph (i) of this
definition) or disposing of any voting securities of the
Company or (B) any group (as that
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term is used in Exchange Act Rule 13d-5(b)) of which that
specified Person is a member;
PROVIDED, HOWEVER, that nothing in this definition shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities acquired through such
Person's participation in good faith in a firm commitment underwriting until
the expiration of forty (40) days after the date of that acquisition. For
purposes of this Agreement, "voting" a security shall include voting,
granting a proxy, acting by consent, making a request or demand relating to
corporate action (including, without limitation, calling a stockholder
meeting) or otherwise giving an authorization (within the meaning of Section
14(a) of the Exchange Act) in respect of such security.
(e) "Change of Control" means the occurrence of any of
the following events that occurs after the Effective Date: (i)
any Person becomes an Acquiring Person; (ii) at any time the then
Continuing Directors cease to constitute a majority of the members
of the Board; (iii) a merger of the Company with or into, or a
sale by the Company of its properties and assets substantially as
an entirety to, another Person occurs and, immediately after that
occurrence, any Person, other than an Exempt Person, together with
all Affiliates and Associates of such Person, shall be the
Beneficial Owner of twenty-five percent (25%) or more of the
total voting power of the then outstanding Voting Shares of the
Person surviving that transaction (in the case or a merger or
consolidation) or the Person acquiring those properties and assets
substantially as an entirety.
(f) "Common Stock" means the common stock, par value
$.0001 per share, of the Company.
(g) "Continuing Director" means at any time any
individual who then (i) is a member of the Board and was a member
of the Board as of the Effective Date or whose nomination for his
first election, or that first election, to the Board following
that date was recommended or approved by a majority of the then
Continuing Directors (acting separately or as a part of any action
taken by the Board or any committee thereof) and (ii) is not an
Acquiring Person, an Affiliate or Associate of an Acquiring Person
or a nominee or representative of an Acquiring Person or of any
such Affiliate or Associate.
(h) "Corporate Status" describes the status of a Person
who is or was a director, officer, employee or agent of the
Company or of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise which such person
is or was serving at the request of the Company. For purposes of
this Agreement, "serving at the request of the Company" includes
any service by Indemnitee which imposes duties on, or involves
services by, Indemnitee with respect to any employee benefit plan
or its participants or beneficiaries.
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(i) "Court of Chancery" means the Court of Chancery of
the State of Delaware.
(j) "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
hereunder.
(k) "Effective Date" means the date upon which the stock of
the Company is issued and sold pursuant to a registration statement filed
under the Securities Act of 1933, as amended.
(l) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(m) "Exempt Person" means (i), (A) the Company, any
subsidiary of the Company, any employee benefit plan of the
Company or of any subsidiary of the Company and (B) any Person
organized, appointed or established by the Company for or pursuant
to the terms of any such plan or for the purpose of funding any
such plan or funding other employee benefits for employees of the
Company or any subsidiary of the Company and (ii) Indemnitee, any
Affiliate or Associate of Indemnitee or any group (as that term is
used in Exchange Act Rule 13d-5(b)) of which Indemnitee or any
Affiliate or Associate of Indemnitee is a member.
(n) "Expenses" include all 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, all other
disbursements or expenses of the types customarily incurred in
connection with prosecuting, defending, preparing to prosecute or
defend, investigating, being or preparing to be a witness in, or
otherwise participating in, a Proceeding and all interest or
finance charges attributable to any thereof. Should any payments
by the Company under this Agreement be determined to be subject to
any federal, state or local income or excise tax, "Expenses" also
shall include such amounts as are necessary to place Indemnitee in
the same after-tax position (after giving effect to all applicable
taxes) he would have been in had no such tax been determined to
apply to such payments.
(o) "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, its Affiliates or
Indemnitee in any matter material to either such party; 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.
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(p) "Person" means any natural person, sole
proprietorship, corporation, partnership of any kind having a
separate legal status, limited liability company, business trust,
unincorporated organization or association, mutual company, joint
stock company, joint venture, estate, trust, union or employee
organization or governmental authority.
(q) "Proceeding" includes any action, suit, alternate
dispute resolution mechanism, hearing or any other proceeding,
whether civil, criminal, administrative, arbitrative,
investigative or mediative, any appeal in any such action, suit,
alternate dispute resolution mechanism, hearing or other
proceeding and any inquiry or investigation that could lead to any
such action, suit, alternate dispute resolution mechanism, hearing
or other proceeding, except one (i) initiated by an Indemnitee
pursuant to Section 10 to enforce his rights hereunder or (ii)
pending on or before the date of this Agreement.
(r) "Voting Shares" means: (i) in the case of any
corporation, stock of that corporation of the class or classes
having general voting power under ordinary circumstances to elect
a majority of that corporation's board of directors; and (ii) in
the case of any other entity, equity interests of the class or
classes having general voting power under ordinary circumstances
equivalent to the Voting Shares of a corporation.
SECTION 18. MODIFICATION AND WAIVER. No supplement, modification 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.
SECTION 19. NOTICE BY INDEMNITEE. Indemnitee agrees promptly to
notify the Company in writing upon being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to
any Proceeding or matter which may be subject to indemnification or
advancement of Expenses covered hereunder; PROVIDED, HOWEVER, failure to give
such notice shall not deprive Indemnitee of his rights to indemnification and
advancement of Expenses under this Agreement unless the Company is actually
and materially prejudiced thereby.
SECTION 20. NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (a) delivered by hand and receipted for by the party to whom
said notice or other communication shall have been directed or (b) mailed by
certified or registered mail with postage prepaid, on the third (3rd)
business day after the date on which it is so mailed:
(a) If to Indemnitee, to: ________________________
________________________
________________________
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(b) If to the Company, to: InfoHighway Communications Corporation
0000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Corporate Secretary
or to such other address as may have been furnished to Indemnitee by the
Company or to the Company by Indemnitee, as the case way be.
SECTION 21. CONTRIBUTION. 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 the circumstances
of such Proceeding in order to reflect: (a) 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 (b) 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).
SECTION 22. GOVERNING LAW; SUBMISSION 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. Except with respect to any
arbitration commenced by Indemnitee pursuant to Section 10(a), the Company
and Indemnitee hereby irrevocably and unconditionally (a) agree that any
action or proceeding arising out of or in connection with this Agreement
shall be brought only in the Court of Chancery and not in any other state or
federal court in the United States of America or any court in any other
country, (b) consent to submit to the exclusive jurisdiction of the Court of
Chancery for purposes of any action or proceeding arising out of or in
connection with this Agreement, (c) waive any objection to the laying of
venue of any such action or proceeding in the Court of Chancery, and (d)
waive, and agree not to plead or to make, any claim that any such action or
proceeding brought in the Court of Chancery has been brought in an improper
or otherwise inconvenient forum.
SECTION 23. MISCELLANEOUS. Use of the masculine pronoun shall be
deemed to include usage of the feminine pronoun where appropriate. When used
in this Agreement, the words "herein," "hereof" and words of similar import
shall refer to this Agreement as a whole and not to any provision of this
Agreement, and the word "Section" refers to a Section of this Agreement,
unless otherwise specified.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
INFOHIGHWAY COMMUNICATIONS CORPORATION
By:________________________________________
Name:______________________________________
Title:_____________________________________
INDEMNITEE
___________________________________________
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