Exhibit 10.1

 

INDEMNITY AGREEMENT

 

This Indemnity Agreement (the “Agreement”), effective as of                 
    , 2004 between Internet America, Inc., a Texas corporation (the “Company”),
and                  (“Indemnitee”).

 

RECITALS:

 

WHEREAS, it is essential to the Company to retain and attract as directors and
officers the most capable persons available;

 

WHEREAS, Indemnitee is a director and/or an officer of the Company;

 

WHEREAS, both the Company and the Indemnitee recognize the increased risk of
litigation and other claims being asserted against directors and officers of
companies in today’s environment;

 

WHEREAS, in recognition of Indemnitee’s need for substantial protection against
personal liability in order to enhance Indemnitee’s continued service to the
Company in an effective manner, the Company wishes to provide in this Agreement
for the indemnification of and the advancing of expenses to Indemnitee to the
fullest extent permitted by law and as set forth in this Agreement, and, to the
extent insurance is maintained, for the continued coverage of Indemnitee under
Company directors’ and officers’ liability insurance policies.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and of Indemnitee continuing to
serve the Company directly or, at its request, with another enterprise, and
intending to be legally bound hereby, the parties hereto agree as follows:

 

1. Certain Definitions:

 

  (a) Claim: any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative, arbitrative or investigative or other,
including, without limitation, an action by or in the right of the Company or
any other corporation of any type or kind, domestic or foreign, or any
partnership, joint venture, trust, employee benefit plan or other enterprise, or
any federal, state or local government or agency thereof, whether predicated on
foreign, federal, state or local law and whether formal or informal.

 

  (b) Expenses: include attorneys’ fees, court costs and all other costs,
charges and expenses paid or incurred in connection with investigating,
defending, being a witness in or participating in (including on appeal), or
preparing to defend any Claim relating to any Indemnifiable Event.

 

  (c) Indemnifiable Event: any event or occurrence that takes place prior to or
after the execution of this Agreement related to the fact that Indemnitee is or
was or has agreed to become a director, officer, partner, venturer, proprietor,
trustee, employee, agent or similar functionary of the Company, or is or was
serving or has agreed to serve in any capacity, at the request of the Company,
in any other corporation, partnership, joint venture, employee benefit plan,
trust or other enterprise, or by reason of anything done or not done by
Indemnitee in any such capacity whether or not serving in such capacity at the
time any liability or expense is incurred for which indemnification,
reimbursement or advancement of expenses can be provided under this Agreement.

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2. Basic Indemnification Arrangement:

 

  (a) In the event Indemnitee was, 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, a Claim by reason of (or arising in part out of) an
Indemnifiable Event, the Company shall indemnify Indemnitee (without regard to
the negligence or other fault of the Indemnitee) to the fullest extent permitted
by applicable law, as soon as practicable but in no event later than thirty days
after written demand is presented to the Company, against any and all Expenses,
judgments, costs, losses, damages, liabilities, fines, penalties, excise taxes
and amounts paid or to be paid in settlement (including all interest,
assessments and other charges paid or payable in connection with or in respect
of such Expenses, judgments, costs, losses, damages, liabilities, fines,
penalties, excise taxes or amounts paid or to be paid in settlement) of such
Claim. If Indemnitee makes a request to be indemnified under this Agreement, the
Board of Directors (acting by a quorum consisting of directors who are not
parties to the Claim with respect to an Indemnifiable Event or, if such a quorum
is not obtainable, acting upon an opinion in writing of independent legal
counsel selected in accordance with Article 2.02-1(F) of the Texas Business
Corporations Act (“Board Action”)) shall, as soon as practicable but in no event
later than thirty days after such request, authorize such indemnification.

 

  (b) Notwithstanding anything in the Articles of Incorporation, the Bylaws or
this Agreement to the contrary, if so requested by Indemnitee, the Company shall
advance (within two business days of such request) any and all Expenses relating
to a Claim to Indemnitee (an “Expense Advance”), upon the receipt of a written
affirmation by Indemnitee that he believes, in good faith, that he has met the
standard of conduct necessary for indemnification under the Texas Business
Corporations Act and of a written undertaking by or on behalf of Indemnitee to
repay such Expense Advance (without interest) if a judgment or other final
adjudication or determination adverse to Indemnitee establishes that Indemnitee,
with respect to such Claim, is not eligible for indemnification.

 

  (c) If there has been no Board Action or if Board Action determines that
Indemnitee would not be permitted to be indemnified, in any respect, in whole or
in part, in accordance with Section 2(a) of this Agreement, Indemnitee shall
have the right to commence litigation in the court which is hearing the action
or proceeding relating to the Claim for which indemnification is sought or in
any court in the State of Texas having subject matter jurisdiction thereof and
in which venue is proper seeking an initial determination by the court or
challenging any Board Action or any aspect thereof, and the Company hereby
consents to service of process and to appear in any such proceeding.
Notwithstanding anything in the Articles of Incorporation, the Bylaws or this
Agreement to the contrary, if Indemnitee has commenced legal proceedings in a
court of competent jurisdiction to secure a determination that Indemnitee should
be indemnified under this Agreement, the Articles of Incorporation or Bylaws of
the Company or applicable law, any Board Action that Indemnitee would not be
permitted to be indemnified in accordance with Section 2(a) of this Agreement
shall not be binding. Any Board Action not followed by such litigation shall be
conclusive and binding on the Company and Indemnitee.

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  (d) In making a determination with respect to entitlement for indemnification
hereunder, Indemnitee shall be presumed to be entitled to indemnification under
this Agreement if Indemnitee has submitted a request for indemnification in
accordance with this Section 2. For purposes of any determination of good faith,
Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is
based on the records or books of account of the Company, including financial
statements, or information supplied to Indemnitee by the officers of the Company
in the course of their duties, or on the advice of legal counsel for the Company
or the Board or counsel selected by a committee of the Board or on information
or records given or reports made to the Company by an independent certified
public accountant or by an appraiser, investment banker or other expert selected
with reasonable care by the Company or the Board or any committee of the Board.
The provisions of this Section 2(d) shall not be deemed to be exclusive or to
limit in any way the other circumstances in which the Indemnitee may be deemed
to have met any applicable standards of conduct.

 

3. Establishment of Trust. In the event that Indemnitee shall, in his/her sole
discretion, determine, in light of existing insurance coverage, the Company’s
financial condition, the existence of potential or threatened claims and any
other facts or circumstances deemed appropriate, that the Company may be unable
to meet its obligations to Indemnitee under this Agreement, the Company shall,
upon the written request of Indemnitee, create and fund a trust fund (the
“Trust”) for the benefit of the Indemnitee in accordance with this paragraph and
from time to time, upon written request of Indemnitee to the Company, shall fund
such Trust in an amount, as set forth in such request, sufficient to satisfy any
and all Expenses reasonably anticipated at the time of each such request to be
incurred in connection with investigating, preparing for and defending any Claim
relating to an Indemnifiable Event, and any and all judgments, costs, losses,
damages, liabilities, fines, penalties and settlement amounts of any and all
Claims relating to an Indemnifiable Event from time to time actually paid or
claimed, reasonably anticipated or proposed to be paid. The terms of the Trust
are (i) the Trust shall not be revoked or the principal thereof invaded, without
the written consent of the Indemnitee; (ii) the trustee of the Trust (the
“Trustee”) shall advance, within two business days of a request by Indemnitee,
any and all Expenses to Indemnitee, not advanced directly by the Company to
Indemnitee (and Indemnitee hereby agrees to reimburse the Trust under the
circumstances under which Indemnitee would be required to reimburse the Company
under Section 2(b) of this Agreement); (iii) the Trust shall continue to be
funded by the Company in accordance with the funding obligations set forth
above; (iv) the Trustee shall promptly pay to Indemnitee all amounts for which
Indemnitee shall be entitled to indemnification pursuant to this Agreement or
otherwise; and (v) all unexpended funds in such Trust shall revert to the
Company upon a final determination by Board Action or a court of competent
jurisdiction, as the case may be, that Indemnitee has been fully indemnified
under the terms of this Agreement. The Trustee shall be chosen by Indemnitee.
Nothing in this Section 3 shall relieve the Company of any of its obligations
under this Agreement.

 

4. Indemnification for Additional Expenses. The Company shall indemnify
Indemnitee against any and all expenses (including attorneys’ fees) and, if
requested by Indemnitee, shall (within two business days of such request)
advance such expenses to Indemnitee, which are incurred by Indemnitee in
connection with any claim asserted by or action brought by Indemnitee for (i)
indemnification or advance payment of Expenses by the Company under law, this
Agreement, or any other agreement or Bylaw or Article of Incorporation of the
Company now or hereafter in effect relating to Claims for Indemnifiable Events
and/or (ii) recovery under any directors’ and officers’ liability insurance
policies maintained by the Company, regardless of whether Indemnitee ultimately
is determined to be entitled to such indemnification, advance expense payment or
insurance recovery, as the case may be.

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5. Partial Indemnity, Etc. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of the
Expenses, judgments, costs, losses, damages, liabilities, fines, penalties,
excise taxes and amounts paid or to be paid in settlement of a Claim but not,
however, for all of the total amount thereof, the Company shall nevertheless
indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
Moreover, notwithstanding any other provision of this Agreement, to the extent
that Indemnitee has been successful on the merits or otherwise in defense of any
or all Claims, relating in whole or in part to an Indemnifiable Event or in
defense of any issue or matter therein, including, without limitation, dismissal
without prejudice, Indemnitee shall be indemnified against any and all Expenses,
judgments, costs, losses, damages, liabilities, fines, penalties, excise taxes
and amounts paid or to be paid in settlement of such Claim. In connection with
any determination by Board Action, or a court of competent jurisdiction that
Indemnitee is not entitled to be indemnified hereunder, the burden of proof
shall be on the Company to establish that Indemnitee is not so entitled.

 

6. No Presumption. 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 of
itself 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 or this Agreement.

 

7. Contribution. In the event that 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, costs, losses, damages, liabilities, 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, in
such proportion as is deemed fair and reasonable in light of all of the
circumstances of such action by Board Action or by the court before which such
action was brought in order to reflect (i) the relative benefits received by the
Company and Indemnitee as a result of the event(s) and/or transaction(s) giving
cause to such action; and/or (ii) the relative fault of the Company (and its
other directors, officers, employees and agents) and Indemnitee in connection
with such event(s) and/or transaction(s). Indemnitee’s right to contribution
under this Paragraph 7 shall be determined in accordance with, pursuant to and
in the same manner as, the provisions in Paragraphs 2 and 4 hereof relating to
Indemnitee’s right to indemnification under this Agreement.

 

8. Notice to the Company by Indemnitee. Indemnitee agrees to promptly notify the
Company in writing upon being served with or having actual knowledge of any
citation, summons, complaint, indictment or any other similar document relating
to any action which may result in a claim of indemnification or contribution
hereunder.

 

9. Non-exclusivity, Etc. The right of the Indemnitee hereunder shall be in
addition to any other rights Indemnitee may have under the Company’s Articles of
Incorporation or Bylaws or the Texas Business Corporations Act or otherwise, and
nothing herein shall be deemed to diminish or otherwise restrict Indemnitee’s
right to indemnification under any such other provision. To the extent
applicable law or the Articles of Incorporation or the Bylaws of Company, as in
effect on the date hereof or at any time in the future, permit greater
indemnification than as provided for in this Agreement, the parties hereto agree
that Indemnitee shall enjoy by this Agreement the greater benefits so afforded
by such law or provision of the Articles of Incorporation or Bylaws and this
Agreement shall be deemed amended without any further action by the Company or
Indemnitee to grant such greater benefits. Indemnitee may

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elect to have Indemnitee’s right hereunder interpreted on the basis of
applicable law in effect at the time of execution of this Agreement, at the time
of the occurrence of the Indemnifiable Event giving rise to a Claim or at the
time indemnification is sought.

 

10. Liability Insurance.

 

(a) To the extent the Company maintains at any time an insurance policy or
policies providing directors’ and officers’ liability insurance, 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 other Company
director or officer under such insurance policy. The purchase and maintenance of
such insurance shall not in any way limit or affect the rights and obligations
of the parties hereto, and the execution and delivery of this Agreement shall
not in any way be construed to limit or affect the rights and obligations of the
Company and/or of the other parties under any such insurance policy.

 

(b) For seven years (or such longer period of time as Indemnitee could be
subject to any Claim) after the Indemnitee no longer serves as a director or
officer of the Company, the Company shall continue to provide directors’ and
officers’ liability insurance covering events occurring during his service with
the Company on terms no less favorable in terms of coverage and amount than any
insurance maintained by the Company at the date of the Indemnitee’s separation
from the Company.

 

11. Period of Limitations. No legal action shall be brought and no cause of
action shall be asserted by or on behalf of the Company or any affiliate of the
Company against Indemnitee, Indemnitee’s spouse, heirs, executors or personal or
legal representatives after the expiration of two years from the date of accrual
of such cause of action, and any claim or cause of action of the Company or its
affiliate 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.

 

12. Notice Compliance The Company agrees to comply with all shareholder notice
requirements under the Texas Business Corporations Act in the event any
indemnification or advance of expenses is provided under the Agreement or
pursuant to the Articles of Incorporation or Bylaws of the Company.

 

13. Amendments, Etc. 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.

 

14. Subrogation. In the event of payment under this Agreement, the Company shall
be subrogated to the extent of such payment to all of the rights of recovery
with respect to such payment of Indemnitee, who shall execute all papers
required and shall do everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable the Company
effectively to bring suit to enforce such rights.

 

15. No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy or otherwise) of the amounts otherwise indemnifiable
hereunder.

 

16. Binding Effect, Etc. This Agreement shall be binding upon and inure to the
benefit of and be enforceable against and by the parties hereto and their
respective successors, assigns (including

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any direct or indirect successor by purchase, merger, consolidation or otherwise
to all or substantially all of the business and/or assets of the Company),
spouses, heirs and personal and legal representatives. The Company shall require
and cause any successor (whether direct or indirect by purchase, merger,
consolidation or otherwise) to all, substantially all, or a substantial part, of
the business and/or assets of the Company, 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 as
a director and/or officer of the Company or of any other enterprise at the
Company’s request.

 

17. Severability. The provisions of this Agreement shall be severable in the
event that any of the provisions thereof (including any provisions 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.

 

18. Notices. All notices, requests, demands and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given when delivered by hand or when mailed by certified registered mail, return
receipt requested, with postage prepaid:

 

If to Indemnitee:

 

If to the Company:

  

Internet America, Inc.

    

350 N. St. Paul, Suite #3000

    

Dallas, TX 75201

    

Attention: President

 

19. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Texas applicable to
contracts made and to be performed in such State without giving effect to the
principles of conflicts of laws.

 

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Agreement as of the effective date above.

 

INTERNET AMERICA, INC.

By:

 

 

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William E. Ladin, Jr.

   

President and Chief Executive Officer

INDEMNITEE

By:

 

 

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