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EXHIBIT 10.5
INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT, made this ____ day of , by and between
Lexent Inc., a Delaware corporation (the "Corporation"), and
("Indemnitee").
RECITALS
WHEREAS, Indemnitee is currently serving as, or is assuming the
position of, a director and/or officer of the Corporation and/or, at the
Corporation's request, a director, officer, employee and/or agent of another
Corporation, partnership, joint venture, trust or other enterprise, and the
Corporation wishes Indemnitee to continue in such capacity(ies);
WHEREAS, the Amended and Restated Certificate of Incorporation of the
Corporation (the "Certificate of Incorporation") and the By-laws of the
Corporation (the "By-laws") each provide that the Corporation shall indemnify,
to the fullest extent permitted by law, certain persons, including directors and
officers of the Corporation, against specified expenses and losses arising out
of certain threatened, pending or completed actions, suits or proceedings;
WHEREAS, Section 145(f) of the Delaware General Corporation Law (the
"DGCL") expressly recognizes that the indemnification provided by Section 145 of
the DGCL shall not be deemed exclusive of any other rights to which those
seeking indemnification or advancement of expenses may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or otherwise,
both as to action in an official capacity and as to action in another capacity
while holding such office;
WHEREAS, in recognition of Indemnitee's need for protection against
personal liability in order to induce Indemnitee to serve or continue to serve
the Corporation in an effective manner as a director and/or officer of the
Corporation and/or, at the Corporation's request, as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, and, in the case of directors and officers, to supplement or
replace the Corporation's directors' and officers' liability insurance coverage,
and to provide Indemnitee with specific contractual assurance that the
protection promised by the Certificate of Incorporation and By-laws will be
available to Indemnitee, the Corporation, with the prior approval of its
stockholders, wishes to provide Indemnitee with the benefits contemplated by
this Agreement;
WHEREAS, as a result of the provision of such benefits, Indemnitee has
indicated that he is willing to serve, or continue to serve, as a director
and/or officer of the Corporation
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and/or, at the Corporation's request, as a director, officer, employee and/or
agent of another corporation, partnership, joint venture, trust or other
enterprise;
NOW, THEREFORE, , in consideration of the premises and mutual
covenants herein contained, the Corporation and Indemnitee hereby agrees as
follows:
1. Definitions.
(a) "Expenses" means, for the purposes of this Agreement, all direct
and indirect costs of any type or nature whatsoever (including, without
limitation, any fees and disbursements of Indemnitee's counsel, accountants
another experts and other out-of-pocket costs) actually and reasonably incurred
by Indemnitee in connection with the investigation, preparation, defense or
appeal of a Proceeding; provided, however, that Expenses shall not include
judgments, fines, penalties or amounts paid in settlement of a Proceeding unless
such matters may be indemnified under applicable provisions of the DGCL.
(b) "Proceeding" means, for the purposes of this Agreement, any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (including actions, suits or
proceedings brought by or in the right of the Corporation), in which Indemnitee
may be or may have been involved as a party or otherwise, by reason of the fact
that Indemnitee is or was a director or officer of the Corporation, by reason of
any action taken by hi or of any inaction on his part while acting as such
director or officer or by reason of the fact that he is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
foreign or domestic corporation, partnership, joint venture, trust or other
enterprise, or was a director and/or officer of the foreign or domestic
corporation which was a predecessor corporation to the Corporation or of another
enterprise at the request of such predecessor corporation, whether or not he is
serving in such capacity at the time any liability or expense is incurred for
which indemnification or reimbursement can be provided under this Agreement.
2. Indemnification.
(a) Third Party Proceedings. To the fullest extent permitted by law,
the Corporation shall indemnify Indemnitee against Expenses and liabilities of
any type whatsoever (including, but not limited to, judgments, fines, penalties,
and amounts paid in settlement (if the settlement is approved in advance by the
Corporation)) incurred by Indemnitee in connection with a Proceeding (other than
a Proceeding by or in the right of the Corporation) if Indemnitee acted in good
faith and in a manner Indemnitee reasonably believed to be in, or not opposed
to, the best interests of the Corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe Indemnitee's conduct
was unlawful. The termination of any Proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that Indemnitee did not act in good faith and in a
manner that Indemnitee reasonably believed to be in, or not opposed to, the best
interests of
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the Corporation, or, with respect to any criminal Proceeding, had reasonable
cause to believe that Indemnitee's conduct was unlawful. Notwithstanding the
foregoing, no indemnification shall be made in any criminal proceeding where
Indemnitee has been adjudged guilty unless a disinterested majority of the
directors determines that Indemnitee did not receive, participate in or share in
any pecuniary benefit to the detriment of the Corporation and, in view of all
the circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnity for Expenses or liabilities.
(b) Proceedings by or in the Right of the Corporation. To the fullest
extent permitted by law, the Corporation shall indemnify Indemnitee against
Expenses incurred by Indemnitee in connection with the defense or settlement of
a Proceeding by or in the right of the Corporation to procure a judgment in its
favor if Indemnitee acted in good faith and in a manner Indemnitee reasonably
believed to be in, or not opposed to, the best interests of the Corporation.
Notwithstanding the foregoing, no indemnification shall be made in respect of
any claim, issue or matter as to which Indemnitee shall have been adjudged to be
liable to the Corporation in the performance of Indemnitee's duty to the
Corporation unless and only to the extent that the court in which such
Proceeding is or was pending shall determine upon application that, in view of
all the circumstances of the case, Indemnitee is fairly and reasonably entitled
to indemnity for Expenses.
(c) Scope. Notwithstanding any other provision of this Agreement other
than Section 3, the Corporation shall indemnify Indemnitee to the fullest extent
permitted by law, notwithstanding that such indemnification is not specifically
authorized by other provisions of this Agreement, the Certificate of
Incorporation, the By-laws or statute.
3. Limitations on Indemnification. Any other provision herein to the
contrary notwithstanding, the Corporation shall not be obligated pursuant to the
terms of this Agreement:
(a) Excluded Acts. To indemnify Indemnitee for any acts or omissions or
transactions from which a director may not be relieved of liability under
Section 102(b)(7) of the DGCL; or
(b) Claims Initiated by Indemnitee. To indemnify or advance expenses to
Indemnitee with respect to Proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except with respect to
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as required under
Section 145 of the DGCL, but such indemnification or advancement of Expenses may
be provide by the Corporation in specific cases if a majority of the
disinterested directors has approved the initiation or bringing of such
proceeding or claim; or
(c) Lack of Good Faith. To indemnify Indemnitee for any Expenses
incurred by Indemnitee with respect to any proceeding instituted by Indemnitee
to enforce or interpret this
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Agreement, if a court of competent jurisdiction determines that each of the
material assertions made by Indemnitee in such proceeding was not made in good
faith or was frivolous; or
(d) Insured Claims. To indemnify Indemnitee for Expenses or liabilities
of any type whatsoever (including, but not limited to, judgments, fines or
penalties, and amounts paid in settlement) which have been paid directly to or
on behalf of Indemnitee by an insurance carrier under a policy of directors' and
officers' liability insurance maintained by the Corporation or another policy of
insurance maintained by the Corporation or Indemnitee; or
(e) Claims Under Section 16(b). To indemnify Indemnitee for expenses
and the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute.
4. Determination of Right to Indemnification. Upon receipt of a written
claim addressed to the Board of Directors for indemnification pursuant to
Section 2 of this Agreement, the Corporation shall determine by any of the
methods set forth in Section 145(d) of the DGCL whether Indemnitee has met the
applicable standards of conduct that make it permissible under applicable law to
indemnify Indemnitee. If a claim under Section 2 of this Agreement is not paid
in full by the Corporation within ninety days after such written claim has been
received by the Corporation, Indemnitee may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim and, unless
such action is dismissed by the court as frivolous or brought in bad faith,
Indemnitee shall be entitled to be paid also the expense of prosecuting such
claim. Neither the failure of the Corporation (including its Board of Directors,
independent legal counsel or its stockholders) to make a determination prior to
the commencement of such action that indemnification of Indemnitee is proper in
the circumstances because Indemnitee has met the applicable standard of conduct
under applicable law, nor an actual determination by the Corporation (including
its Board of Directors, independent legal counsel or its stockholders) that
Indemnitee has not met such applicable standard of conduct, shall create a
presumption that Indemnitee has not met the applicable standard of conduct. The
court in which such action is brought shall determine whether Indemnitee or the
Corporation shall have the burden of proof concerning whether Indemnitee has or
has not met the applicable standard of conduct.
5. Advancement and Repayment of Expenses. The Expenses incurred by
Indemnitee in defending and investigating any Proceeding shall be paid by the
Corporation prior to the final disposition of such Proceeding within thirty days
after receiving from Indemnitee copies of invoices presented to Indemnitee for
such Expenses and an undertaking by or on behalf of Indemnitee to the
Corporation to repay such amount to the extent it is ultimately determined that
Indemnitee is not entitled to indemnification. In determining whether or not to
make an advance hereunder, the ability of Indemnitee to repay shall not be a
factor. Notwithstanding the foregoing, in a proceeding brought by the
Corporation directly, in its own right (as distinguished from an action brought
derivatively or by any receiver or trustee), the Corporation shall not be
required to make the advances called for hereby if a majority of the
disinterested directors
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determines that (i) it does not appear that Indemnitee has met the standards of
conduct that made it permissible under applicable law to indemnify Indemnitee
and (ii) the advancement of Expenses would not be in the best interests of the
Corporation and its stockholders.
6. Partial Indemnification. If Indemnitee is entitled under any
provision of this Agreement to indemnification or advancement by the Corporation
of some or a portion of any Expenses or liabilities of any type whatsoever
(including, but not limited to, judgments, fines, penalties, and amounts paid in
settlement) incurred by him in the investigation, defense, settlement or appeal
of a Proceeding, but is not entitled to indemnification or advancement of the
total amount thereof, the Corporation shall nevertheless indemnify or pay
advancements to Indemnitee for the portion of such Expenses or liabilities to
which Indemnitee is entitled.
7. Notice to Corporation by Indemnitee. Indemnitee shall notify the
Corporation in writing of any matter with respect to which Indemnitee intends to
seek indemnification hereunder as soon as reasonably practicable following the
receipt by Indemnitee of written notice thereof; provided that any delay in so
notifying Corporation shall not constitute a waiver by Indemnitee of his rights
hereunder. The written notification to the Corporation shall be addressed to the
Board of Directors and shall include a description of the nature of the
Proceeding and the facts underlying the Proceeding and be accompanied by copies
of any documents filed with the court, if any, in which the Proceeding is
pending. In addition, Indemnitee shall give the Corporation such information and
cooperation as it may reasonably require and as shall be within Indemnitee's
power.
8. Defense of Claim. In the event that the Corporation shall be
obligated under Section 5 hereof to pay the Expenses of any Proceeding against
Indemnitee, the Corporation, if appropriate, shall be entitled to assume the
defense of such Proceeding, with counsel approved by Indemnitee, which approval
shall not be unreasonably withheld, upon the delivery to Indemnitee of written
notice of its election to do so. After delivery of such notice, approval of such
counsel by Indemnitee and the retention of such counsel by the Corporation, the
Corporation will not be liable to Indemnitee under this Agreement for any fees
of counsel subsequently incurred by Indemnitee with respect to the same
proceeding; provided that (i) Indemnitee shall have the right to employ his or
her own counsel in any such Proceeding at Indemnitee's expense and (ii) if (A)
the employment of counsel by Indemnitee has been previously authorized by the
Corporation, (B) Indemnitee shall have reasonably concluded that there may be a
conflict of interest between the Corporation and Indemnitee in the conduct of
such defense or (C) the Corporation shall not, in fact, have employed counsel to
assume the defense of such Proceeding, then the fees and expenses of
Indemnitee's counsel shall be paid by the Corporation.
9. Attorneys' Fees. If any legal action is necessary to enforce the
terms of this Agreement, the prevailing party shall be entitled to recover, in
addition to other amounts to which the prevailing party may be entitled, actual
attorneys' fees and court costs as may be awarded by the court.
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10. Continuation of Obligations. All agreements and obligations of the
Corporation contained herein shall continue during the period Indemnitee is a
director or officer of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, fiduciary, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, and shall
continue thereafter so long as Indemnitee shall be subject to any possible
proceeding by reason of the fact that Indemnitee served in any capacity referred
to herein.
11. Successors and Assigns. This Agreement establishes contract rights
that shall be binding upon, and shall inure to the benefit of, the successors,
assigns, heirs and legal representatives of the parties hereto.
12. Non-exclusivity.
(a) The provisions for indemnification and advancement of expenses set
forth in this Agreement shall not be deemed to be exclusive of another rights
that Indemnitee may have under any provision of law, the Certificate of
Incorporation or By-laws, the vote of the Corporation's stockholders or
disinterested directors, other agreements or otherwise, both as to action in his
official capacity and action in another capacity while occupying his position as
a director or officer of the Corporation.
(b) In the event of any changes after the date of this Agreement in any
applicable law, statute, or rule that expand the right of Delaware corporation
to indemnify its directors and officers, Indemnitee's rights and the
Corporation's obligations under this Agreement shall be expanded to the fullest
extent permitted by such changes. In the event of any changes in any applicable
law, statute or rule that narrow the right of a Delaware corporation to
indemnify a director and officer, such changes, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement, shall
have no effect on this Agreement or the parties' rights and obligations
hereunder.
13. Effectiveness of Agreement. This Agreement shall be effective as of
the date set forth on the first page and may apply to acts or omissions of
Indemnitee that occurred prior to such date if Indemnitee was a director or
officer of the Corporation or its predecessor, or was serving at the request of
the Corporation or its predecessor as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise, a
the time such act or omission occurred.
14. Severability. Nothing in this Agreement is intended to require or
shall be construed as requiring the Corporation to do or omit to do any act or
thing in violation of applicable law. The Corporation's inability, pursuant to
court order, to perform its obligations under this Agreement shall not
constitute a breach of this Agreement. If this Agreement or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify Indemnitee to the fullest extent
permitted by any
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applicable portion of this Agreement that shall not have been invalidated, and
the balance of this Agreement not so invalidated shall be enforceable in
accordance with its terms.
15. Governing Law. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Delaware. To the extent permitted by
applicable law, the parties hereby waive any provisions of law that render any
provision of this Agreement unenforceable in any respect.
16. Notices. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand or by nationally recognized overnight courier and receipted
for by the party addressed, on the date of such receipt, or (ii) if delivered by
facsimile transmission to the recipient followed by a copy sent by mail, on the
date of such transmission, or (iii) if mailed by certified or registered mail
with postage prepaid to the following address, on the third business day after
the mailing date:
If to the Corporation:
Lexent Inc.
Three New York Plaza
New York, New York 10004
Facsimile: 212-981-2493
Attn.: President
If to Indemnitee:
Kevin O'Kane
153 South Mountain Avenue
Montclair, NJ 07042
or to such other address as either party shall have notified the other party in
accordance with this Section 16.
17. Mutual Acknowledgment. Both the Corporation and Indemnitee
acknowledge that in certain instances, federal law or applicable public policy
may prohibit the Corporation from indemnifying its directors and officers under
this Agreement or otherwise. Indemnitee understands and acknowledges that the
Corporation has undertaken or may be required in the future to undertake with
the Securities and Exchange Commission to submit the question of indemnification
to a court in certain circumstances for a determination of the Corporation's
right under public policy to indemnify Indemnitee.
18. Counterparts. This Agreement may be executed in several
counterparts, each of which shall constitute an original.
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19. Amendment and Termination. No amendment, modification, termination
or cancellation of this Agreement shall be effective unless in writing signed by
both parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first set forth above.
LEXENT INC.
By _____________________________
_____________________________
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