COVAD COMMUNICATIONS GROUP,
INC.
INDEMNIFICATION
AGREEMENT
This
Indemnification Agreement (“ Agreement ”) is
made as of this 27th day of October, 2005, by and between Covad
Communications Group, Inc., a Delaware corporation (the “
Company ”), and Lisa Hook (“ Indemnitee
”).
WHEREAS , the Company and Indemnitee recognize the
increasing difficulty in obtaining directors’ and
officers’ liability insurance, the significant increases in
the cost of such insurance and the general reductions in the
coverage of such insurance;
WHEREAS, the Company and Indemnitee further recognize
the substantial increase in corporate litigation in general,
subjecting officers and directors to expensive litigation risks at
the same time as the availability and coverage of liability
insurance has been severely limited; and
WHEREAS, the Company desires to attract and retain
the services of highly qualified individuals, such as Indemnitee,
to serve as officers and directors of the Company and to indemnify
its officers and directors so as to provide them with the maximum
protection permitted by law.
NOW,
THEREFORE , in consideration for Indemnitee’s
services as an officer or director of the Company, the Company and
Indemnitee hereby agree as follows:
(a)
Third Party Proceedings . The Company shall indemnify
Indemnitee if Indemnitee is or was a party or is threatened to be
made a party to any threatened, pending or completed action, suit,
proceeding or any alternative dispute resolution mechanism, whether
civil, criminal, administrative or investigative (other than an
action by or in the right of the Company) by reason of the fact
that Indemnitee is or was a director, officer, employee or agent of
the Company, or any subsidiary of the Company, or by reason of the
fact that Indemnitee is or was serving at the request of the
Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys’ fees), judgments,
fines and amounts paid in settlement (if such settlement is
approved in advance by the Company, which approval shall not be
unreasonably withheld) actually and reasonably incurred by
Indemnitee in connection with such action, suit or proceeding if
Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests
of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe Indemnitee’s
conduct was unlawful. The termination of any action, suit or
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 which Indemnitee reasonably believed to be in
or not opposed to the best interests of the Company, and, with
respect to any criminal action or proceeding, had reasonable cause
to believe that Indemnitee’s conduct was unlawful.
(b)
Proceedings By or in the Right of the Company . The Company
shall indemnify Indemnitee if Indemnitee was or is a party or is
threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Company or any
subsidiary of the Company to procure a judgment in its favor by
reason of the fact that Indemnitee is or was a director, officer,
employee or agent of the Company, or any subsidiary of the Company,
or by reason of the fact that Indemnitee is or was serving at the
request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys’ fees) and,
to the fullest extent permitted by law, amounts paid in settlement
actually and reasonably incurred by Indemnitee in connection with
the defense or settlement of such action or suit if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed
to be in or not opposed to the best interests of the Company,
except that 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 Company unless and only to the extent
that the Court of Chancery of the State of Delaware or the court in
which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view
of all the circumstances of the case, Indemnitee is fairly and
reasonably entitled to indemnity for such expenses which the Court
of Chancery of the State of Delaware or such other court shall deem
proper.
(c)
Mandatory Payment of Expenses . To the extent that
Indemnitee has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in
Subsections (a) and (b) of this Section 1, or in
defense of any claim, issue or matter therein, Indemnitee shall be
indemnified against expenses (including attorneys’ fees)
actually and reasonably incurred by Indemnitee in connection
therewith.
2.
Agreement to Serve . In consideration of the
protection afforded by this Agreement, if Indemnitee is a director
of the Company he agrees to serve at least for the 90 days
after the effective date of this Agreement as a director and not to
resign voluntarily during such period without the written consent
of a majority of the Board of Directors. If Indemnitee is an
officer of the Company not serving under an employment contract, he
agrees to serve in such capacity at least for 90 days and not
to resign voluntarily during such period without the written
consent of a majority of the Board of Directors. Following the
applicable period set forth above, Indemnitee agrees to continue to
serve in such capacity at the will of the Company (or under
separate agreement, if such agreement exists) so long as he is duly
appointed or elected and qualified in accordance with the
applicable provisions of the Bylaws of the Company or any
subsidiary of the Company or until such time as he tenders his
resignation in writing. Nothing contained in this Agreement is
intended to create in Indemnitee any right to continued
employment.
3.
Expenses; Indemnification Procedure .
(a)
Advancement of Expenses . The Company shall advance all
expenses incurred by Indemnitee in connection with the
investigation, defense, settlement or appeal of any civil or
criminal action, suit or proceeding referenced in Section 1(a) or
(b) hereof (but not amounts actually paid in settlement of any
such action, suit or proceeding). Indemnitee hereby undertakes to
repay such amounts advanced only if, and to the extent that, it
shall ultimately be determined that
-2-
Indemnitee is
not entitled to be indemnified by the Company as authorized hereby.
The advances to be made hereunder shall be paid by the Company to
Indemnitee within thirty (30) days following delivery of a
written request therefor by Indemnitee to the Company.
(b)
Notice/Cooperation by Indemnitee . Indemnitee shall, as a
condition precedent to his right to be indemnified under this
Agreement, 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.
Notice to the Company shall be directed to the President of the
Company at the address shown on the signature page of this
Agreement (or such other address as the Company shall designate in
writing to Indemnitee and given as provided in Section 14). In
addition, Indemnitee shall give the Company such information and
cooperation as it may reasonably require and as shall be within
Indemnitee’s power.
(c)
Procedure . Any indemnification and advances provided for in
Section 1 and this Section 3 shall be made no later than
thirty (30) days after receipt of the written request of
Indemnitee. If a claim under this Agreement, under any statute, or
under any provision of the Company’s Certificate of
Incorporation or Bylaws providing for indemnification, is not paid
in full by the Company within thirty (30) days after a written
request for payment thereof has first been received by the Company,
Indemnitee may, but need not, at any time thereafter bring an
action against the Company to recover the unpaid amount of the
claim and, subject to Section 14 of this Agreement, Indemnitee
shall also be entitled to be paid for the expenses (including
attorneys’ fees) of bringing such action. It shall be a
defense to any such action (other than an action brought to enforce
a claim for expenses incurred in connection with any action, suit
or proceeding in advance of its final disposition) that Indemnitee
has not met the standards of conduct which make it permissible
under applicable law for the Company to indemnify Indemnitee for
the amount claimed. However, Indemnitee shall be entitled to
receive interim payments of expenses pursuant to Subsection 3(a)
unless and until such defense may be finally adjudicated by court
order or judgment from which no further right of appeal exists. It
is the parties’ intention that if the Company contests
Indemnitee’s right to indemnification, the question of
Indemnitee’s right to indemnification shall be for the court
to decide, and neither the failure of the Company (including its
Board of Directors, any committee or subgroup of the Board of
Directors, independent legal counsel, or its stockholders) to have
made a determination that indemnification of Indemnitee is proper
in the circumstances because Indemnitee has met the applicable
standard of conduct required by applicable law, nor an actual
determination by the Company (including it Board of Directors, any
committee or subgroup of the 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 or has not met the applicable standard of
conduct.
(d)
Notice to Insurers . If, at the time of the receipt of a
notice of a claim pursuant to Section 3(b) hereof, the Company has
director and officer liability insurance in effect, the Company
shall give prompt notice of the commence
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