Indemnification Agreement - Talk America Holdings Inc. and Helen Manich
TALK AMERICA HOLDINGS, INC.
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made as of April 14, 2003,
by and between Talk America Holdings, Inc., a Delaware corporation (the
"Company"), and Helen Manich ("Indemnitee").
WHEREAS, pursuant to that certain employment agreement between the Company
and Indemnitee dated April 14, 2003 (the "Employment Agreement") Indemnitee is
serving as Chief Marketing Officer of the Company and will perform a valuable
service in such capacity for the Company; and
WHEREAS, the Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve the Company and, in order to
induce Indemnitee to enter into the Employment Agreement, the Company agreed to
enter into an agreement with Indemnitee providing for the indemnification of
Indemnitee as provided herein.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the undersigned hereby agree as
follows:
1. Indemnification.
(a) Indemnification of Indemnitee. The Company shall indemnify and hold
harmless Indemnitee to the fullest extent permitted by law if Indemnitee was or
is or becomes a party to, or witness or other participant in, or is threatened
to be made a party to, or witness or other participant in, any threatened,
pending or completed action, suit, proceeding or alternative dispute resolution
mechanism, or any hearing, inquiry or investigation that Indemnitee in good
faith believes might lead to the institution of any such action, suit,
proceeding or alternative dispute resolution mechanism, whether civil, criminal,
administrative, investigative or other (collectively, hereinafter a "Claim") by
reason of, or arising in whole or in part out of, any event or occurrence
related to the fact that Indemnitee is or was a director, officer, manager,
employee, agent, representative or fiduciary of the Company, a subsidiary of the
Company (a "Subsidiary") or an affiliate (as defined in Rule 405 under the
Securities Act of 1933, as amended) of the Company (an "Affiliate"), or is or
was serving at the request of the Company or any Subsidiary or Affiliate as a
director, officer, manager, employee, agent, representative or fiduciary of
another corporation, limited liability company, partnership, joint venture,
employee benefit plan, trust or other entity or enterprise (collectively, an
"Other Entity"), or by reason of any action or inaction on the part of
Indemnitee while serving in any of such capacities, whether or not the basis of
the Claim is an alleged action in an official capacity as a director, officer,
manager, employee, agent, representative or fiduciary of the Company, or any
Subsidiary, Affiliate or Other Entity (any of the foregoing capacities
referenced in this Section 1(a), an "Indemnified Capacity"), against any and all
costs, expenses and other amounts actually and reasonably incurred and/or, as
the case may be, paid (including, without limitation, attorneys' fees and all
other costs, expenses and obligations actually and reasonably incurred in
connection with investigating, defending, being a witness in, or otherwise
1
<PAGE>
participating in (including on appeal), or preparing to defend, any Claim), and
judgements, fines, penalties and amounts paid in connection with the settlement
of any Claim and any federal, state, local or foreign taxes imposed on the
Indemnitee as a result of the actual or deemed receipt of any payments under
this Agreement, including all interest, assessments and other charges paid or
payable by the Indemnitee in connection with or in respect of such costs,
expenses and other amounts (collectively, hereinafter, the "Expenses"). Without
limiting the rights of Indemnitee under Section 2(a) below, the payment of
Expenses actually paid by Employee shall be made by the Company as soon as
practicable, but in any event no later than thirty (30) days after written
demand by Indemnitee therefor is presented to the Company. Any event giving use
to the right of Indemnitee to be indemnified hereinafter is referred to herein
as an "Indemnifiable Event."
(b) Reviewing Party. Notwithstanding the foregoing, (i) the obligations of
the Company under Section 1(a) hereof shall be subject to the condition that the
Reviewing Party (as defined in Section 10(e) hereof) shall not have determined
(in a written opinion, in any case in which the Independent Legal Counsel (as
defined in Section 10(d) hereof) is involved) that Indemnitee would not be
permitted to be indemnified under applicable law, and (ii) the obligation of the
Company to make an advance payment of Expenses to Indemnitee pursuant to Section
2(a) hereof (an "Expense Advance") shall be subject to the condition that, if,
when and to the extent that the Reviewing Party determines that Indemnitee would
not be permitted to be so indemnified under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to so reimburse the
Company) for all such amounts theretofore paid; provided, however, that if
Indemnitee has commenced or thereafter commences legal proceedings in a court of
competent jurisdiction to secure a determination that Indemnitee could be
indemnified under applicable law, any determination made by the Reviewing Party
that Indemnitee would not be permitted to be indemnified under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial determination is made
with respect thereto (as to which all rights of appeal therefrom have been
exhausted or lapsed). Indemnitee's obligation to reimburse the Company for any
Expense Advance shall be unsecured and no interest shall be charged thereon. If
there has not been a Change in Control (as defined in Section 10(c) hereof), the
Reviewing Party shall be selected by members of the Board of Directors who are
not or were not, as the case may be, a party or parties, as the case may be, to
the Claim in respect of which indemnification is sought, and if there has been a
Change in Control (other than a Change in Control which has been approved by a
majority of the Company's Board of Directors who were directors immediately
prior to such Change in Control), the Reviewing Party shall be the Independent
Legal Counsel. If, within thirty (30) days after the Company's receipt of
written notice from Indemnitee demanding such indemnification (the "30-Day
Period") (i) the Reviewing Party determines that Indemnitee substantively would
not be permitted to be indemnified in whole or in part under applicable law or
makes no determination in that regard or, (ii) Indemnitee shall not have
received full indemnification from the Company, Indemnitee shall have the right
to commence litigation seeking a determination by a court of competent
jurisdiction as to the propriety of indemnification under the circumstances
involved or challenging any such determination (or lack thereof) by the
Reviewing Party or any aspect thereof, including the legal or factual bases
therefor or the failure of the Company to fully indemnify the Indemnitee, and
the Company hereby consents to service of process and to appear in any such
proceeding and hereby appoints the Secretary of the Company (or, if such office
is not filled at a time in question, any Assistant Secretary of the Company or,
if such office is not filled at a time in question, any Vice President of the
2
<PAGE>
Company - each, a "Service Receiver") as its agent for such service of process.
Any determination by the Reviewing Party not otherwise so challenged shall be
conclusive and binding on the Company and Indemnitee.
(c) Change in Control. The Company agrees that if there is a Change in
Control (other than a Change in Control which has been approved by a majority of
the Company's Board of Directors who were directors immediately prior to such
Change in Control), then, with respect to all matters thereafter arising
concerning the rights of Indemnitee to payments of Expenses and Expense Advances
under this Agreement or any other agreement or under the Company's Certificate
of Incorporation or Bylaws as now or hereafter in effect, the Company shall seek
legal advice only from the Independent Legal Counsel. Such counsel, among other
things, shall render its written opinion to the Company and Indemnitee as to
whether and to what extent Indemnitee would be permitted to be indemnified under
applicable law. The Company agrees to pay the reasonable fees of the Independent
Legal Counsel referred to above and to fully indemnify such counsel against any
and all expenses (including attorneys' fees), claims, liabilities and damages
arising out of or relating to this Agreement or its engagement pursuant hereto.
(d) Mandatory Payment of Expenses. Notwithstanding any other provision of
this Agreement, to the extent that Indemnitee has been successful on the merits
or otherwise, including, without limitation, the dismissal of an action without
prejudice, in connection with any Claim, Indemnitee shall be indemnified against
all Expenses actually and reasonably incurred by Indemnitee in connection
therewith.
2. Expenses; Indemnification Procedure.
(a) Advancement of Expenses. The Company shall advance all Expenses
incurred by Indemnitee so that the Company, and not Indemnitee, shall be
obligated to pay such incurred Expenses. The advances of Expenses to be made
hereunder shall be paid by the Company to Indemnitee as soon as practicable, but
in any event no later than five (5) days after written demand by Indemnitee
therefor to the Company.
(b) Notice and Cooperation by Indemnitee. Indemnitee shall, as a condition
precedent to Indemnitee's 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; but the Indemnitee's failure to so notify the Company shall not
relieve the Company from any liability that it may have to Indemnitee under this
Agreement, except to the extent that the Company is able to establish that its
ability to avoid liability under such Claim was prejudiced in a material respect
by such failure. Notice to the Company shall be directed to a Service Receiver
at the address of the Company shown on the signature page of this Agreement (or
such other address as the Company shall designate in writing to Indemnitee). In
addition, Indemnitee shall, at the expense of the Company, provide the Company
with such information and cooperation with respect to a Claim, or any matters
related to such Claim, as it may reasonably require in connection with the
indemnification provided for herein and as shall be within Indemnitee's power.
Any costs or expenses (including attorneys' fees and disbursements) actually and
reasonably incurred by Indemnitee in so cooperating shall be borne by the
3
<PAGE>
Company (irrespective of the determination as to Indemnitee's entitlement to
indemnification), which shall pay any such amount within fifteen (15) days after
receiving a request therefor from Indemnitee, and the Company hereby indemnifies
and agrees to hold Indemnitee harmless therefrom.
(c) No Presumptions; Burden of Proof. For purposes of this Agreement, the
termination of any Claim by judgment, order, settlement (whether with or without
court approval) or conviction, or upon a plea of nolo contendere, or its
equivalent, shall not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by applicable law. In addition,
neither the failure of the Reviewing Party to have made a determination as to
whether Indemnitee has met any particular standard of conduct or had any
particular belief, nor an actual determination by the Reviewing Party that
Indemnitee has not met such standard of conduct or did not have such belief,
prior to the commencement of legal proceedings by Indemnitee to secure a
judicial determination that Indemnitee should be indemnified under applicable
law, shall be a defense to a claim for indemnification by Indemnitee hereunder
or create a presumption that Indemnitee has not met any particular standard of
conduct or did not have any particular belief. In connection with any
determination by the Reviewing Party or otherwise as to whether Indemnitee is
entitled to be indemnified hereunder, the burden of proof shall be on the
Company to establish that Indemnitee is not so entitled.
(d) Notice to Insurers. If, at the time of the receipt by the Company of a
notice of a Claim pursuant to Section 2(b) hereof, the Company has one or more
policies of liability insurance in effect which may cover such Claim, the
Company shall give prompt notice of the commencement of such Claim to the
applicable insurer(s) in accordance with the procedures set forth in the
applicable policies. The Company shall thereafter take all action necessary or
desirable to cause such insurers to pay, on behalf of Indemnitee, all amounts
payable as a result of such Claim in accordance with the terms of such policies.
(e) Selection of Counsel. In the event that the Company shall be obligated
hereunder to pay the Expenses with respect to any Claim, the Company, except as
otherwise provided below, shall be entitled to assume the defense of such Claim
at its own expense with counsel approved by Indemnitee, upon the delivery to
Indemnitee of written notice of its election so to do. Indemnitee's approval of
such counsel shall not be unreasonably withheld. After delivery of such notice,
approval of such counsel by Indemnitee and the retention of such counsel by the
Company, the Company will not be liable to the Indemnitee under this Agreement
for any fees of counsel subsequently incurred by the Indemnitee with respect to
such Claim, other than as provided below. Indemnitee shall have the right to
employ Indemnitee's own counsel in connection with a Claim, but the fees and
expenses of such counsel incurred after written notice from the Company of its
assumption of the defense thereof shall be at the expense of Indemnitee, unless
(i) the employment of counsel by Indemnitee has been previously authorized by
the Company, or, following a Change in Control (other than a Change in Control
approved by a majority of the members of the Board of Directors who were
directors immediately prior to such Change in Control), the employment of
counsel by Indemnitee has been approved by the Independent Legal Counsel, (ii)
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of any such defense,
or (iii) the Company shall not, in fact, have employed or retained or continued
to employ or retain counsel to assume the defense of such Claim, in each of
4
<PAGE>
which cases the fees and expenses of Indemnitee's counsel shall be at the
expense of the Company. The Company shall not be entitled to assume or control
the defense of any Claim brought by or on behalf of the Company or as to which
the Indemnitee has reached the conclusion that there may be a conflict of
interest between the Company and Indemnitee. The Company shall not settle any
Claim in any manner which would impose any penalty or limitation on Indemnitee
without the Indemnitee's written consent (which approval shall not be
unreasonably withheld).
(f) Settlement of Claims. The Company shall not be required to indemnify
Indemnitee under this Agreement for any amounts paid in settlement of any Claim
effected without the Company's written consent; provided, however, that consent
by the Company to the settlement of any claim shall not be unreasonably
withheld. Notwithstanding the foregoing, however, if a Change in Control has
occurred (other than a Change in Control approved by a majority of the members
of the Board of Directors who were directors immediately prior to such Change in
Control), then the Company shall be required to indemnify Indemnitee for amounts
paid in settlement of any Claim if the Independent Legal Counsel has approved
such settlement or has not made a determination with respect to such settlement
within (30) days after the effective date of such Change in Control.
3. Additional Indemnification Rights; Non-Exclusivity.
(a) Scope. The Company hereby agrees to indemnify Indemnitee to the fullest
extent permitted by law, notwithstanding that such indemnification is not
specifically authorized by the Company's Certificate of Incorporation or Bylaws
or by statute. In the event of any change after the date of this Agreement in
any applicable law, statute or rule which expands the right of the Company to
indemnify Indemnitee, it is the intent of the parties hereto that Indemnitee
shall enjoy under this Agreement the greater benefits afforded by such change.
In the event of any change in any applicable law, statute or rule which narrows
the right of the Company to indemnify the Indemnitee, such change, 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.
(b) Non-Exclusivity. The indemnification provided by this Agreement shall
be in addition to any rights to which Indemnitee may be entitled under the
Company's Certificate of Incorporation or Bylaws, any agreement, vote of
stockholders or directors, the General Corporation Law of the State of Delaware,
or otherwise. The indemnification provided under this Agreement shall continue
as to Indemnitee for any Indemnifiable Event while serving in an Indemnified
Capacity even though Indemnitee may have ceased to serve in such Indemnified
Capacity.
4. No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any Claim to the extent
Indemnitee has otherwise actually received payment (under any insurance policy
or otherwise) of the amounts otherwise indemnifiable hereunder.
5. Partial Indemnification. If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for a portion of any of the
5
<PAGE>
Expenses in connection with the investigation, appeal or settlement of any
Claim, but not for the total amount thereof, the Company shall nevertheless
indemnify Indemnitee for such portion of the Expenses.
6. Mutual Acknowledgment. Both the Company and Indemnitee acknowledge that,
in certain instances, applicable law or public policy may prohibit the Company
from indemnifying Indemnitee under this Agreement or otherwise. Indemnitee
understands and acknowledges that the Company 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 Company's right under public policy to indemnify
Indemnitee.
7. Liability Insurance. To the extent the Company or any Subsidiary or
Affiliate maintains liability insurance applicable to directors, officers,
managers, employees, agents, representatives or fiduciaries of the Company or
such Subsidiary or Affiliate (collectively, the "Covered Persons"), Indemnitee
shall be covered by such policies in such a manner as to provide Indemnitee the
same rights and benefits as are accorded to the most favorably insured of the
Covered Persons who is then serving in the same capacity or capacities, as the
case may be, as Indemnitee.
8. Exceptions. Any other provision herein to the contrary notwithstanding,
the Company shall not be obligated pursuant to the terms of this Agreement:
(a) Excluded Action or Omissions. To indemnify Indemnitee for any Expenses
resulting from acts, omissions or transactions from which Indemnitee may not be
indemnified under applicable law, or for any Expenses resulting from
Indemnitee's conduct which is finally adjudged to have been willful misconduct
or knowingly fraudulent conduct;
(b) Claims Initiated by Indemnitee. To indemnify or advance Expenses to
Indemnitee with respect to Claims initiated or brought voluntarily by Indemnitee
and not by way of defense, regardless of whether Indemnitee ultimately is
determined to be entitled to such indemnification, Expense Advance or insurance
recovery, as the case may be, except (i) with respect to proceedings brought to
establish or enforce (a) a right to, or for, Expense Advances and/or, as the
case may be, (b) any other right of Indemnitee under this Agreement or any other
agreement or insurance policy or under the Company's Certificate of
Incorporation or Bylaws now or hereafter in effect, (ii) in specific cases, if
the Board of Directors has approved the initiation or bringing of such suit or
(iii) as otherwise required under applicable law or statute;
(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 Agreement, if a court of competent jurisdiction determines
that each of the material assertions made by the Indemnitee in such proceeding
was not made in good faith or was frivolous; or
(d) Claims Under Section 16(b). To indemnify Indemnitee for Expenses and
the payment of profits arising from the purchase and sale or, sale and purchase,
by Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or any similar successor
statute.
6
<PAGE>
9. Period of Limitations. No legal action shall be brought and no cause of
action shall be asserted by or in the right of the Company with respect to the
matters addressed in this Agreement against Indemnitee, or Indemnitee's estate,
spouse, heirs, executors or personal or legal representatives after the
expiration of two(2) years from the date of accrual of such cause of action, and
any claim or cause of action of the Company shall be extinguished and deemed
released unless asserted by the timely filing of a legal action within such
two-year period; provided, however, that if any shorter period of limitations is
otherwise applicable to any such cause of action, such shorter period shall
govern.
10. Construction of Certain Phrases.
(a) Company. For purposes of this Agreement, references to the "Company"
shall include, in addition to the resulting entity, any constituent entity
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, managers, employees, agents,
representation or fiduciaries, so that if Indemnitee is or was a director,
officer, employee, agent or fiduciary of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, manager, employee, agent or fiduciary of an Other Entity, Indemnitee
shall stand in the same position under the provisions of this Agreement with
respect to the resulting or surviving entity as Indemnitee would have stood with
respect to such constituent entity if its separate existence had continued. The
consummation of any transaction described in this Section 10(a) shall be subject
to the requirements of Section 12, below.
(b) Miscellaneous Terms. For purposes of this Agreement, references to
"fines" shall include any excise taxes assessed on Indemnitee with respect to an
employee benefit plan; and references to "serving at the request of the Company
or any Subsidiary or Affiliate" or words of similar import shall include any
service as a director, officer, manager, employee, agent, representative or
fiduciary of the Company which imposes duties on, or involves services by, such
director, officer, manager, employee, representative, agent or fiduciary with
respect to an employee benefit plan, or its participants or its beneficiaries;
and if Indemnitee acted in good faith and in a manner Indemnitee reasonably
believed to be in the interest of the participants and beneficiaries of an
employee benefit plan, Indemnitee shall be deemed to have acted in a manner "not
opposed to the best interests of the Company" as referred to in this Agreement
or under any applicable law or statute.
(c) Change in Control. For purposes of this Agreement, a "Change in
Control" shall be deemed to have occurred if (i) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act), other than a trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or a corporation owned directly or indirectly by the stockholders of the Company
in substantially the same proportions as their ownership of stock of the
Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of Voting Securities (as defined
below) of the Company representing more than twenty percent (20%) of the total
voting power represented by the Company's then outstanding Voting Securities,
(ii) during any period of two (2) consecutive years, individuals who at the
7
<PAGE>
beginning of such period constitute the Board of Directors of the Company and
any new director (other than a director designated by a person who has entered
into an agreement with the Company to effect a transaction described in clauses
(i), (iii) and (iv) of this Section 10(c)) whose election by the Board of
Directors or nomination for election by the Company's stockholders was approved
by a vote of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof, or (iii) the stockholders of the Company approve
a merger or consolidation of the Company with any other corporation other than a
merger or consolidation which would result in the Voting Securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the
surviving entity) at least 80% of the total voting power of the resulting or
surviving entity outstanding immediately after such merger or consolidation, or
(iv) the stockholders of the Company approve a plan of complete liquidation of
the Company or an agreement for the sale or disposition by the Company (in one
transaction or a series of transactions) of all or substantially all of the
Company's assets. For purposes of this Agreement, "Voting Securities" shall mean
any securities the holders of which vote generally in the election of directors.
(d) Independent Legal Counsel. For purposes of this Agreement, "Independent
Legal Counsel" shall mean an attorney or firm of attorneys, who shall not have
otherwise performed services for the Company or Indemnitee within the then prior
three years (other than with respect to matters concerning the rights of
Indemnitee under this Agreement, or of other indemnitees under similar indemnity
agreements) selected by the Company and approved by Indemnitee in writing, which
approval shall not be unreasonably withheld. Notwithstanding the foregoing, the
term "Independent Legal Counsel" shall not include any firm or 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 right to indemnification under this Agreement.
(e) Reviewing Party. For purposes of this Agreement, a "Reviewing Party"
shall mean (i) any person or group of persons consisting of a member or members
of the Company's Board of Directors and/or, as the case may be, or any other
person appointed by the Board of Directors who is not a party to the particular
Claim for which Indemnitee is seeking indemnification, or (ii) Independent Legal
Counsel.
11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original and all of which,
together, shall constitute one and the same document.
12. Binding Effect; Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the parties hereto and
their respective successors and permitted assigns, heirs and personal and legal
representatives. The Company may not assign its obligations under this Agreement
to any individual or entity except by operation of law to an entity acquiring
all or substantially all of the business and/or, as the case may be, assets of
the Company (a "Successor") and, in any such case, the Company shall continue to
be obligated hereunder. The Company shall require and cause any Successor by
written agreement in form and substance satisfactory to Indemnitee, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such succession had
taken place. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve in an Indemnified Capacity.
8
<PAGE>
13. Attorneys' Fees. In the event that any action is instituted by
Indemnitee in a court of competent jurisdiction under this Agreement or under
any liability insurance policies maintained by the Company to enforce, or
interpret any of the terms hereof or thereof, Indemnitee shall be entitled to be
paid all Expenses actually and reasonably incurred by Indemnitee with respect to
such action, regardless of whether Indemnitee is ultimately successful in such
action, and shall be entitled to an advance of such Expenses in the manner
provided in Section 2 (a), above, with respect to such action, unless, as a part
of such action, the court in which such action is brought determines that each
of the material assertions made by Indemnitee as a basis for such action was not
made in good faith or was frivolous. In the event of an action instituted by or
in the name of the Company under this Agreement to enforce or interpret any of
the terms of this Agreement, Indemnitee shall be entitled to be paid all
Expenses actually and reasonably incurred by Indemnitee in defense of such
action (including costs and expenses incurred with respect to Indemnitee's
counterclaims and cross-claims made in such action), and shall be entitled to an
advance of such Expenses in the manner provided in Section 2 (a), above, with
respect to such action, unless as a part of such action such court determines
that each of Indemnitee's material defenses to such action were made in bad
faith or were frivolous.
14. Notice. Any notices or demands given in connection herewith shall be in
writing and deemed given when (a) personally delivered, (b) sent by facsimile
transmission to a number provided in writing by the addressee and a confirmation
of the transmission is received by the sender or (c) two (2) days after being
deposited for delivery with a recognized overnight courier, such as Fed Ex, and
addressed or sent, as the case may be, to the address or facsimile number set
forth below or to such other address or facsimile number as such party may in
writing designate:
If to Indemnitee: Helen Manich
If to Company: Talk America Holdings, Inc.
12020 Sunrise Valley Drive
Suite 250
Reston, VA 20190
Attn: Secretary
15. Consent to Jurisdiction. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the Commonwealth of
Pennsylvania for all purposes in connection with any action or proceeding which
arises out of or relates to this Agreement and agree that any action instituted
under this Agreement shall be commenced, prosecuted and continued only in the
courts of the Commonwealth of Pennsylvania in and for the County of
Philadelphia, which shall be the exclusive and only proper forum for
adjudicating such a claim.
16. Severability. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
9
<PAGE>
(including, without limitation, each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable, that is not
itself held to be invalid, void or unenforceable) shall be construed so as to
give effect to the intent manifested by the provision held invalid, illegal or
unenforceable.
17. Choice of Law. This Agreement shall be governed by and its provisions
construed and enforced in accordance with the laws of the State of Delaware,
without regard to the conflict of laws principles thereof.
18. Subrogation. In the event of payment to, or on behalf of 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, at Company's
expense, execute all documents required and shall do all acts that may be
necessary to secure such rights and to enable the Company effectively to bring
suit to enforce such rights.
19. Amendment and Termination. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless it is in writing signed
by both of the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed to, or shall constitute a waiver of, any other
provisions hereof (whether or not similar thereto), nor shall such waiver
constitute a continuing waiver. Except as specifically set forth herein, no
failure to exercise, or any delay in exercising, any right or remedy hereunder
shall constitute a waiver thereof.
20. Integration and Entire Agreement. This Agreement sets forth the entire
understanding between the parties hereto and supersedes all previous written and
oral negotiations, commitments, understandings and agreements relating to the
subject matter hereof between the parties hereto.
21. No Construction as Employment Agreement. Nothing contained in this
Agreement shall be construed as giving Indemnitee any right to be retained in
the employ of the Company or any Subsidiaries.
22. Certain Words. As used in this Agreement, the words "herein,"
"hereunder," "hereof" and similar words shall be deemed to refer to this
Agreement in its entirety, and not to any particular provision of this Agreement
unless the context clearly requires otherwise.
10
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
TALK AMERICA HOLDINGS, INC.
By: /s/ Aloysius T. Lawn, IV
--------------------------
Title: EVP - General Counsel
AGREED TO AND ACCEPTED
INDEMNITEE:
/s/ Helen Manich
---------------------------
Helen Manich
11