EXHIBIT 10.17
TOWERSTREAM CORPORATION
DIRECTOR AND OFFICER INDEMNIFICATION AGREEMENT
This Director and Officer Indemnification Agreement, dated as of
January
___, 2007 (this "AGREEMENT"), is made by and between Towerstream
Corporation., a
Delaware corporation (the "COMPANY"), and __________ (the
"INDEMNITEE").
RECITALS:
A. Section 141 of the Delaware General Corporation Law provides
that the
business and affairs of a corporation shall be managed by or under
the direction
of its board of directors.
B. By virtue of the managerial prerogatives vested in the directors
and
officers of a Delaware corporation, directors and officers act as
fiduciaries of
the corporation and its stockholders.
C. Thus, it is critically important to the Company and its
stockholders
that the Company be able to attract and retain the most capable
persons
reasonably available to serve as directors and officers of the
Company.
D. In recognition of the need for corporations to be able to induce
capable
and responsible persons to accept positions in corporate
management, Delaware
law authorizes (and in some instances requires) corporations to
indemnify their
directors and officers, and further authorizes corporations to
purchase and
maintain insurance for the benefit of their directors and officers.
E. The Delaware courts have recognized that indemnification by a
corporation serves the dual policies of (1) allowing corporate
officials to
resist unjustified lawsuits, secure in the knowledge that, if
vindicated, the
corporation will bear the expense of litigation, and (2)
encouraging capable
women and men to serve as corporate directors and officers, secure
in the
knowledge that the corporation will absorb the costs of defending
their honesty
and integrity.
F. The number of lawsuits challenging the judgment and actions of
directors
and officers of Delaware corporations, the costs of defending those
lawsuits and
the threat to personal assets have all materially increased over
the past
several years, chilling the willingness of capable women and men to
undertake
the responsibilities imposed on corporate directors and officers.
G. Recent federal legislation and rules adopted by the Securities
and
Exchange Commission and the national securities exchanges have
exposed such
directors and officers to new and substantially broadened civil
liabilities.
H. Under Delaware law, a director's or officer's right to be
reimbursed for
the costs of defense of criminal actions, whether such claims are
asserted under
state or federal law, does
not depend upon the merits of the claims asserted against the
director or
officer and is separate and distinct from any right to
indemnification the
director may be able to establish.
I. Indemnitee is, or will be, a director and/or officer of the
Company and
his or her willingness to serve in such capacity is predicated, in
substantial
part, upon the Company's willingness to indemnify him or her in
accordance with
the principles reflected above, to the fullest extent permitted by
the laws of
the State of Delaware, and upon the other undertakings set forth in
this
Agreement.
J. Therefore, in recognition of the need to provide Indemnitee with
substantial protection against personal liability, in order to
procure
Indemnitee's continued service as a director and/or officer of the
Company and
to enhance Indemnitee's ability to serve the Company in an
effective manner, and
in order to provide such protection pursuant to express contract
rights
(intended to be enforceable irrespective of, among other things,
any amendment
to the Company's certificate of incorporation or bylaws
(collectively, the
"CONSTITUENT DOCUMENTS"), any change in the composition of the
Company's Board
of Directors (the "BOARD") or any change-in-control or business
combination
transaction relating to the Company), the Company wishes to provide
in this
Agreement for the indemnification and advancement of Expenses to
Indemnitee on
the terms, and subject to the conditions, set forth in this
Agreement.
K. In light of the considerations referred to in the preceding
recitals, it
is the Company's intention and desire that the provisions of this
Agreement be
construed liberally, subject to their express terms, to maximize
the protections
to be provided to Indemnitee hereunder.
AGREEMENT:
NOW, THEREFORE, the parties hereby agree as follows:
1. Certain Definitions. In addition to terms defined elsewhere
herein, the
following terms have the following meanings when used in this
Agreement with
initial capital letters:
(a) "CHANGE IN CONTROL" shall have occurred at such time, if any,
as
Incumbent Directors cease for any reason to constitute a majority
of Directors.
For purposes of this Section 1(a), "INCUMBENT DIRECTORS" means the
individuals
who, as of the date hereof, are Directors of the Company and any
individual
becoming a Director subsequent to the date hereof whose election,
nomination for
election by the Company's stockholders, or appointment, was
approved by a vote
of at least a majority of the then Incumbent Directors (either by a
specific
vote or by approval of the proxy statement of the Company in which
such person
is named as a nominee for director, without objection to such
nomination);
provided, however, that an individual shall not be an Incumbent
Director if such
individual's election or appointment to the Board occurs as a
result of an
actual or threatened election contest (as described in Rule
14a-12(c) of the
Securities Exchange Act of 1934, as amended) with respect to the
election or
removal of directors or other actual or threatened solicitation of
proxies or
consents by or on behalf of a Person other than the Board.
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(b) "CLAIM" means (i) any threatened, asserted, pending or
completed
claim, demand, action, suit or proceeding, whether civil, criminal,
administrative, arbitrative, investigative or other, and whether
made pursuant
to federal, state or other law; and (ii) any inquiry or
investigation, whether
made, instituted or conducted by the Company or any other Person,
including,
without limitation, any federal, state or other governmental
entity, that
Indemnitee reasonably determines might lead to the institution of
any such
claim, demand, action, suit or proceeding. For the avoidance of
doubt, the
Company intends indemnity to be provided hereunder in respect of
acts or failure
to act prior to, on or after the date hereof.
(c) "CONTROLLED AFFILIATE" means any corporation, limited liability
company, partnership, joint venture, trust or other entity or
enterprise,
whether or not for profit, that is directly or indirectly
controlled by the
Company. For purposes of this definition, "CONTROL" means the
possession,
directly or indirectly, of the power to direct or cause the
direction of the
management or policies of an entity or enterprise, whether through
the ownership
of voting securities, through other voting rights, by contract or
otherwise;
provided that direct or indirect beneficial ownership of capital
stock or other
interests in an entity or enterprise entitling the holder to cast
15% or more of
the total number of votes generally entitled to be cast in the
election of
directors (or persons performing comparable functions) of such
entity or
enterprise shall be deemed to constitute control for purposes of
this
definition.
(d) "DISINTERESTED DIRECTOR" means a director of the Company who is
not and was not a party to the Claim in respect of which
indemnification is
sought by Indemnitee.
(e) "EXPENSES" means attorneys' and experts' fees and expenses and
all
other costs and expenses paid or payable in connection with
investigating,
defending, being a witness in or participating in (including on
appeal), or
preparing to investigate, defend, be a witness in or participate in
(including
on appeal), any Claim.
(f) "INDEMNIFIABLE CLAIM" means any Claim based upon, arising out
of
or resulting from (i) any actual, alleged or suspected act or
failure to act by
Indemnitee in his or her capacity as a director, officer, employee
or agent of
the Company or as a director, officer, employee, member, manager,
trustee or
agent of any other corporation, limited liability company,
partnership, joint
venture, trust or other entity or enterprise, whether or not for
profit, as to
which Indemnitee is or was serving at the request of the Company,
(ii) any
actual, alleged or suspected act or failure to act by Indemnitee in
respect of
any business, transaction, communication, filing, disclosure or
other activity
of the Company or any other entity or enterprise referred to in
clause (i) of
this sentence, or (iii) Indemnitee's status as a current or former
director,
officer, employee or agent of the Company or as a current or former
director,
officer, employee, member, manager, trustee or agent of the Company
or any other
entity or enterprise referred to in clause (i) of this sentence or
any actual,
alleged or suspected act or failure to act by Indemnitee in
connection with any
obligation or restriction imposed upon Indemnitee by reason of such
status. In
addition to any service at the actual request of the Company, for
purposes of
this Agreement, Indemnitee shall be deemed to be serving or to have
served at
the request of the Company as a director, officer, employee,
member, manager,
trustee or agent of another entity or enterprise if Indemnitee is
or was serving
as a director, officer, employee, member, manager, agent, trustee
or other
fiduciary of such entity or enterprise and (i)
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such entity or enterprise is or at the time of such service was a
Controlled
Affiliate, (ii) such entity or enterprise is or at the time of such
service was
an employee benefit plan (or related trust) sponsored or maintained
by the
Company or a Controlled Affiliate, or (iii) the Company or a
Controlled
Affiliate (by action of the Board, any committee thereof or the
Company's Chief
Executive Officer ("CEO") (other than as the CEO him or herself))
caused or
authorized Indemnitee to be nominated, elected, appointed,
designated, employed,
engaged or selected to serve in such capacity.
(g) "INDEMNIFIABLE LOSSES" means any and all Losses relating to,
arising out of or resulting from any Indemnifiable Claim; provided,
however,
that Indemnifiable Losses shall not include Losses incurred by
Indemnitee in
respect of any Indemnifiable Claim (or any matter or issue therein)
as to which
Indemnitee shall have been adjudged liable to the Company, unless
and only to
the extent that the Delaware Court of Chancery or the court in
which such
Indemnifiable Claim was brought shall have determined 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
indemnification for
such Expenses as the court shall deem proper.
(h) "INDEPENDENT COUNSEL" means a nationally recognized law firm,
or a
member of a nationally recognized law firm, that is experienced in
matters of
Delaware corporate law and neither presently is, nor in the past
five years has
been, retained to represent: (i) the Company (or any subsidiary) or
Indemnitee
in any matter material to either such party (other than with
respect to matters
concerning the Indemnitee under this Agreement, or of other
indemnitees under
similar indemnification agreements) or (ii) any other named (or, as
to a
threatened matter, reasonably likely to be named) party to the
Indemnifiable
Claim 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.
(i) "LOSSES" means any and all Expenses, damages, losses,
liabilities,
judgments, fines, penalties (whether civil, criminal or other) and
amounts paid
or payable in settlement, including, without limitation, all
interest,
assessments and other charges paid or payable in connection with or
in respect
of any of the foregoing.
(j) "PERSON" means any individual, entity or group, within the
meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as
amended.
(k) "STANDARD OF CONDUCT" means the standard for conduct by
Indemnitee
that is a condition precedent to indemnification of Indemnitee
hereunder against
Indemnifiable Losses relating to, arising out of or resulting from
an
Indemnifiable Claim. The Standard of Conduct is (i) good faith and
a reasonable
belief by Indemnitee that his action was in or not opposed to the
best interests
of the Company and, with respect to any criminal action or
proceeding, that
Indemnitee had no reasonable cause to believe that his conduct was
unlawful, or
(ii) any other applicable standard of conduct that may hereafter be
substituted
under Section 145(a) or (b) of the Delaware General Corporation Law
or any
successor to such provision(s).
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2. Indemnification Obligation. Subject only to Section 7 and to the
proviso
in this Section, the Company shall indemnify, defend and hold
harmless
Indemnitee, to the fullest extent permitted or required by the laws
of the State
of Delaware in effect on the date hereof or as such laws may from
time to time
hereafter be amended to increase the scope of such permitted
indemnification,
against any and all Indemnifiable Claims and Indemnifiable Losses;
provided,
however, that, except as provided in Section 5, Indemnitee shall
not be entitled
to indemnification pursuant to this Agreement in connection with
(i) any Claim
initiated by Indemnitee against the Company or any director or
officer of the
Company unless the Company has joined in or consented to the
initiation of such
Claim, or (ii) the purchase and sale by Indemnitee of securities in
violation of
Section 16(b) of the Securities Exchange Act of 1934, as amended.
The Company
acknowledges that the foregoing obligation may be broader than that
now provided
by applicable law and the Company's Constituent Documents and
intends that it be
interpreted consistently with this Section and the recitals to this
Agreement.
3. Advancement of Expenses. Indemnitee shall have the right to
advancement
by the Company prior to the final disposition of any Indemnifiable
Claim of any
and all actual and reasonable Expenses relating to, arising out of
or resulting
from any Indemnifiable Claim paid or incurred by Indemnitee.
Without limiting
the generality or effect of any other provision hereof,
Indemnitee's right to
such advancement is not subject to the satisfaction of any Standard
of Conduct.
Without limiting the generality or effect of the foregoing, within
five business
days after any request by Indemnitee that is accompanied by
supporting
documentation for specific reasonable Expenses to be reimbursed or
advanced, the
Company shall, in accordance with such request (but without
duplication), (a)
pay such Expenses on behalf of Indemnitee, (b) advance to
Indemnitee funds in an
amount sufficient to pay such Expenses, or (c) reimburse Indemnitee
for such
Expenses; provided that Indemnitee shall repay, without interest,
any amounts
actually advanced to Indemnitee that, at the final disposition of
the
Indemnifiable Claim to which the advance related, were in excess of
amounts paid
or payable by Indemnitee in respect of Expenses relating to,
arising out of or
resulting from such Indemnifiable Claim. In connection with any
such payment,
advancement or reimbursement, at the request of the Company,
Indemnitee shall
execute and deliver to the Company an undertaking, which need not
be secured and
shall be accepted without reference to Indemnitee's ability to
repay the
Expenses, by or on behalf of the Indemnitee, to repay any amounts
paid, advanced
or reimbursed by the Company in respect of Expenses relating to,
arising out of
or resulting from any Indemnifiable Claim in respect of which it
shall have been
determined, following the final disposition of such Indemnifiable
Claim and in
accordance with Section 7, that Indemnitee is not entitled to
indemnification
hereunder.
4. Indemnification for Additional Expenses. Without limiting the
generality
or effect of the foregoing, the Company shall indemnify and hold
harmless
Indemnitee against and, if requested by Indemnitee, shall reimburse
Indemnitee
for, or advance to Indemnitee, within five business days of such
request
accompanied by supporting documentation for specific Expenses to be
reimbursed
or advanced, any and all actual and reasonable Expenses paid or
incurred by
Indemnitee in connection with any Claim made, instituted or
conducted by
Indemnitee for (a) indemnification or reimbursement or advance
payment of
Expenses by the Company under any provision of this Agreement, or
under any
other agreement or provision of the Constituent Documents no
