Exhibit 10.2
Execution Copy
INDEMNITY ESCROW AGREEMENT
          THIS INDEMNITY ESCROW AGREEMENT, dated as of May 31, 2007 (the
“Agreement”), is made by and among by and among Broadview Networks Holdings,
Inc., a Delaware corporation (“Parent”), Jeffrey Ginsberg, as agent for the
former Stockholders of the Company (the “Stockholders’ Agent”), and JPMorgan
Chase Bank N.A., a national banking association, as escrow agent (the “Escrow
Agent”). Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed to them in the Merger Agreement (as defined below).
RECITALS:
          WHEREAS, Parent, Eureka Acquisition Corporation, a Delaware
corporation and wholly-owned Subsidiary of Parent (“Merger Sub”), Eureka
Broadband Corporation, a Delaware corporation (the “Company”), the Significant
Stockholders of the Company, and the Stockholders’ Agent are parties to that
certain Agreement and Plan of Merger, dated as of February 23, 2007 (the “Merger
Agreement”), pursuant to which Merger Sub on the date hereof was merged with and
into the Company and the separate existence of Merger Sub has ceased;
          WHEREAS, Section 15.2 of the Merger Agreement provides for the
indemnification of the Parent Indemnitees by the Stockholders from certain
losses that may be incurred by the Parent Indemnitees;
          WHEREAS, Sections 4.7(b) and 4.7(c) of the Merger Agreement provide
for certain deposits to be made by Parent and Stockholders’ Agent, in each case
on behalf of the Stockholders, to the Indemnity Escrow Fund (as defined below)
(and, in the event that Stockholders’ Agent does not satisfy such obligation,
for each Significant Stockholder to make a deposit to the Indemnity Escrow Fund
with respect to its pro rata share of the Indemnity Escrow Fund);
          WHEREAS, pursuant to the Merger Agreement, the Stockholders have
appointed the Stockholders’ Agent to perform the functions of the Stockholders’
Agent set forth in this Agreement on behalf of the Stockholders; and
          WHEREAS, consummation of the Merger was conditioned upon, inter alia,
the execution and delivery of this Agreement, and this Agreement was an
essential part of the consideration for which Parent and Merger Sub were willing
to enter into the Merger Agreement and to consummate the transactions
contemplated thereby.
          NOW, THEREFORE, in consideration of the foregoing premises, and for
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:
          1. Appointment of Escrow Agent; Deposits.

 

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               (a) Parent and Stockholders’ Agent (on behalf of itself and the
Stockholders, respectively) hereby designate and appoint Escrow Agent as escrow
agent to act in accordance with the terms of this Agreement, and Escrow Agent
agrees to act as such escrow agent on the terms, conditions and provisions
provided in this Agreement.
               (b) Simultaneously with the execution of this Agreement, Parent
shall have deposited three million dollars ($3,000,000) in cash (the “Cash
Escrow Deposit”) with the Escrow Agent for the account of the Stockholders. The
Cash Escrow Deposit, together with the Stock Escrow Deposit (as defined below)
plus any additions thereto which may be made from time to time pursuant to
Sections 4.7(b) and/or 4.7(c) of the Merger Agreement, shall be held in an
account referred to herein as the “Indemnity Escrow Fund”.
               (i) Escrow Agent shall hold, invest, reinvest, manage,
administer, distribute and dispose of the Cash Escrow Deposit in accordance with
the terms and conditions of this Agreement.
               (ii) From time to time, pursuant to Sections 4.7(b) and/or 4.7(c)
of the Merger Agreement, the Stockholders’ Agent (on behalf of the Stockholders)
may be required to deposit additional funds into the Indemnity Escrow Fund. Such
additional deposit(s) shall be treated in the same manner as, and shall upon
deposit be deemed part of, the Cash Escrow Deposit.
               (c) Simultaneously with the execution of this Agreement, Parent
shall deposit with Escrow Agent certificates registered in the names of the
Stockholders (in accordance with each such Stockholder’s Percentage Interest, as
set forth on Exhibit A hereto) evidencing (i) an aggregate of 5,045.309 shares
of Parent’s Series B-1 Preferred Stock, par value $0.01 per share (the
“Series B-1 Preferred Stock”), (ii) an aggregate of 126,132.725 shares of
Parent’s Class A Common Stock, par value $0.01 per share (the “Class A Common
Stock”), and (iii) warrants to purchase 3,783.985 shares of Series B-1 Preferred
Stock and 94,599.625 Class A Common Stock (the “Parent Stock Warrants” and,
together with the Series B-1 Preferred Stock and the Class A Common Stock, the
“Stock Escrow Deposit”), and Stockholders’ Agent shall deposit stock powers and
assignment forms for the transfer of such shares and warrants, respectively,
duly executed by the Stockholders in blank. Escrow Agent shall hold, manage,
administer, distribute and dispose of the Stock Escrow Deposit and Proceeds (as
defined below) in accordance with the terms and conditions of this Agreement.
Solely for the purposes of this Agreement and the Merger Agreement, during the
term hereof, the aggregate value of the Stock Escrow Deposit shall be deemed to
be seven million dollars $7,000,000 (the “Ascribed Value”). From time to time,
pursuant to Sections 4.7(b) and 4.7(c) of the Merger Agreement, Stockholders’
Agent (on behalf of Stockholders) may be required to deposit additional cash
into the Indemnity Escrow Fund (and, in the event that Stockholders’ Agent does
not satisfy such obligation, for each Stockholder to make a deposit to the
Indemnity Escrow Fund with respect to its pro rata share of such Indemnity
Escrow Fund). Such additional deposit(s) shall be treated in the same manner as,
and shall upon deposit be deemed part of, the Cash Escrow Deposit.
               (d) As of any given date, the sum of the then current value of
the remaining Cash Escrow Deposit, the Stock Escrow Deposit and Proceeds held by
Escrow Agent (excluding any interest and other earnings on the Cash Escrow
Deposit, and any cash Proceeds,

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which shall be set apart and distributed on a quarterly basis to the
Stockholders pursuant to Section 3(f) of this Agreement) shall be referred to
herein as the “Indemnity Escrow Fund Balance”.
          2. Investment of Cash Escrow Deposit and Cash Proceeds. Until the
termination of this Agreement, the Cash Escrow Deposit and any cash Proceeds
(together with the interest, if any, earned thereon and on the Cash Escrow
Deposit) shall be fully invested and reinvested by Escrow Agent (i) in a
JPMorgan Chase Money Market Account or (ii) as jointly directed by Parent and
Stockholders’ Agent, in any other type of investment account offered by Escrow
Agent that is acceptable to the Escrow Agent. Escrow Agent shall have the
authority to liquidate any investment as required to administer its duties
hereunder. The parties acknowledge that the Escrow Agent shall not be
responsible for any diminution in value of the Indemnity Escrow Fund Balance due
to losses resulting from investments made pursuant to this Agreement. The
parties to this Agreement recognize and agree that the Escrow Agent will not
provide supervision, recommendations or advice relating to either the investment
of moneys held in the Indemnity Escrow Fund or the purchase, sale, retention or
other disposition of any investment described herein. The Escrow Agent or any of
its affiliates may receive compensation with respect to any investment directed
hereunder. Receipt, investment and reinvestment of the Indemnity Escrow Fund
shall be confirmed by the Escrow Agent as soon as practicable by account
statement, and any discrepancies in any such account statement shall be noted by
the parties to the Escrow Agent within thirty (30) calendar days after receipt
thereof.
          3. Releases From Indemnity Escrow Fund Balance.
               (a) General Rules.
               (i) Escrow Agent shall hold the Indemnity Escrow Fund Balance
(together with any cash Proceeds and the interest, if any, earned thereon and on
the Indemnity Escrow Fund Balance) in accordance with this Agreement and shall
release amounts from the Indemnity Escrow Fund Balance (together with any cash
Proceeds and the interest, if any, earned thereon and on the Indemnity Escrow
Fund Balance) only as provided by Sections 3 and 4 hereof or as jointly directed
in writing by Stockholders’ Agent and Parent.
               (ii) In the event Escrow Agent is duly instructed in writing, in
accordance with Sections 4(b), 4(c) or 4(e) hereof (or is otherwise permitted
under Sections 3(c), 3(d), or 4(b)(i) hereof) to disburse cash out of the
Indemnity Escrow Fund Balance to any party, (i) Escrow Agent shall disburse such
amount of cash by mailing a check to such party at the address set forth in the
instruction or by wire transfer to the bank account specified in such
instruction notice and (ii) if Escrow Agent is instructed to transfer cash out
of the Indemnity Escrow Fund Balance to any bank for the account of any party,
Escrow Agent may require the party issuing the instruction to agree to
appropriate security procedures to verify that the instruction is that of such
issuing party.
               (iii) In the event Escrow Agent is duly instructed in writing, in
accordance with Sections 4(b), 4(c) or 4(e) hereof (or is otherwise permitted
under Sections 3(c), 3(d), 3(b)(ii) hereof) to disburse any of the Stock Escrow
Deposit out of

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the Indemnity Escrow Fund Balance to any party and Parent is notified in writing
of such instruction to disburse any of the Stock Escrow Deposit, Parent shall
deposit with Escrow Agent (i) share certificates, registered in the names of the
Stockholders, in an amount for each Stockholder equal to such Stockholder’s
Percentage Interest, as set forth on Exhibit A, of the shares of Series B-1
Preferred Stock and Class A Common Stock remaining in the Indemnity Escrow
Account immediately prior to such disbursement reduced by such Seller’s
Percentage Interest of such disbursement and (ii) Parent Stock Warrants,
registered in the names of the Stockholders, representing shares of Series B-1
Preferred Stock and Class A Common Stock in an amount for each Stockholder equal
to such Stockholder’s Percentage Interest of the shares subject to such
warrants, as set forth on Exhibit A, remaining in the Indemnity Escrow Account
immediately prior to such disbursement reduced by such Stockholder’s Percentage
Interest of the shares subject to such warrants that comprise such disbursement.
Upon receipt of such notice, Parent shall, as soon as reasonably practicable,
issue (i) new stock certificates and new warrants to the party, and in the
amounts, specified in the instruction notice from Escrow Agent and
(ii) replacement stock certificates in the name of the person in whose name the
original stock certificates were issued for the balance of the shares (the
“Replacement Certificates”), and new warrants in the name of the person in whose
name the original warrants were issued representing the balance of the shares
underlying such warrants (the “Replacement Warrants”). The Replacement
Certificates and Replacement Warrants shall be delivered to Escrow Agent to be
held in the Indemnity Escrow Fund as part of the Stock Escrow Deposit. Any
notice by Parent and/or Stockholders’ Agent required hereunder relating to the
release of all or a portion of the Stock Escrow Deposit shall instruct Escrow
Agent to whom the shares of Series B-1 Preferred Stock, Class A Common Stock and
Parent Stock Warrants held in the Indemnity Escrow Fund are to be delivered.
Escrow Agent shall not be responsible for the certificates representing the
shares of Series B-1 Preferred Stock, Class A Common Stock and Parent Stock
Warrants when they are not in Escrow Agent’s possession.
               (b) Release of Remaining Indemnity Escrow Fund Balance.
               (i) Pursuant to Section 4.10(b) of the Merger Agreement, on the
date that is 13 months following the date hereof (the “Escrow Cash Release
Date”), Escrow Agent shall pay the Stockholders the remaining balance of the
Cash Escrow Deposit from the Indemnity Escrow Account, to the extent that such
cash exceeds an amount equal to thirty percent (30%) of the aggregate dollar
amount of Open Claims (as defined below) at such time. Such payment shall be
allocated among the Stockholders in accordance with Section 3(e) hereof, it
being understood that Escrow Agent is not a calculation agent and shall be
entitled to rely upon any calculations set forth in a joint written instruction
of Parent and Stockholders’ Agent relating to such release.
               (ii) Pursuant to Section 4.10(b) of the Merger Agreement, Escrow
Agent shall distribute to the Stockholders the remaining balance of the Stock
Escrow Deposit remaining in the Indemnity Escrow Account on the earlier of
(A) 5:00 pm (New York Time) on March 31, 2009 and (B) the date that is 120
Business Days after the date of a Parent Change of Control if Escrow Agent has
received notice of such Parent Change of Control (including the date of the
Escrow Stock Release Date) prior to

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115 Business Days after the date of the Parent Change of Control (such earlier
date, the “Escrow Stock Release Date” and after 3:00 p.m. on the later of such
date and the Escrow Cash Release Date, the “Escrow Release Date”); provided that
(I) the Stock Escrow Deposit shall be released only to the extent that the
Ascribed Value of such remaining balance of the Stock Escrow Deposit exceeds the
percentage of the aggregate dollar amount of Open Claims at such time that
equals the difference between one hundred percent (100%) and the percentage of
such Open Claims for which a portion of the Cash Escrow Deposit is then reserved
(i.e. those Open Claims that arose prior to the Escrow Cash Release Date),
(II) if the Escrow Stock Release Date is prior to the Escrow Cash Release Date,
then the remaining balance of the Stock Escrow Deposit shall be released to the
Stockholders only to the extent that the Stockholders restore and deposit into
the Indemnity Escrow Fund cash, stock or other proceeds received by the
Stockholders in connection with the Parent Change of Control equal to the
Ascribed Value of the remaining balance of the Stock Escrow Deposit (the “Tender
Proceeds”), and such Tender Proceeds shall then be treated as part of the Cash
Escrow Deposit for purposes of the release thereof from the Indemnity Escrow
Account, it being understood that in the event that holders of Series B-1
Preferred Stock and Class A Common Stock are required to tender, sell or
transfer their shares of Series B-1 Preferred Stock and Class A Common Stock to
a third party pursuant to a Parent Change of Control, such shares shall be
released to the Stockholders (or a designee thereof) on the date on which the
Stockholders are so required to tender, sell or transfer such shares (subject to
the obligation to deposit the Tender Proceeds into the Indemnity Escrow Fund
pursuant to this Section 3(b)(ii)). The parties acknowledge and agree that
Escrow Agent is not a calculation agent and shall be entitled to rely upon any
calculations set forth in a joint written instruction of Parent and
Stockholders’ Agent relating to such release.
               (c) Releases Upon Resolution of Open Claims. Promptly after
Escrow Agent’s receipt of a copy of a Final Determination (as hereinafter
defined) for an Open Claim (as hereinafter defined), the amount payable to
Parent or the Stockholders under the Final Determination for such Open Claim
shall be paid to Parent or Stockholders, as applicable, from the Claim Reserve
(as hereinafter defined) for such Open Claim and, if the Escrow Release Date has
passed, the balance of such Claim Reserve, if any, shall then be paid to the
Stockholders to the extent authorized pursuant to Section 4 below less the
Stockholders’ share of amounts payable to the Escrow Agent pursuant to
Section 13 below.
               (d) Quarterly Payments of Interest and Cash Proceeds. Neither
cash Proceeds (including any interest and other earnings thereon) nor any
interest or other earnings from the Cash Escrow Deposit shall be part of the
Cash Escrow Deposit or the Indemnity Escrow Fund Balance but shall instead be
distributed to the Stockholders in accordance with Section 3(e) each calendar
quarter commencing on June 30, 2007.
               (e) Distributions to Stockholders. Distributions to be made to
the Stockholders pursuant to this Agreement shall be made in accordance with
each Stockholder’s Percentage Interest as set forth on Exhibit A.

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          4. Payment Procedures in Respect of Parent Claims. The procedure for
payments to Parent out of the Indemnity Escrow Fund Balance for indemnification
claims shall be as follows:
               (a) From time to time prior to 12:00 p.m. (New York Time) on the
Escrow Release Date, in the event Parent determines that a Parent Indemnitee is
entitled to indemnification from the Indemnity Escrow Fund, Parent may request
payment from the Indemnity Escrow Fund Balance by giving written notice of its
claim to Escrow Agent and Stockholders’ Agent, specifying in such notice (i) the
nature of the claim, (ii) the amount thereof if then ascertainable and, if not
then ascertainable, the estimated maximum amount thereof, (iii) the provisions
in the Merger Agreement on which the claim is based and (iv) that such request
for payment is being made in good faith (a “Claim Notice”).
               (b) If the Claim Notice states that the claim is being made
pursuant to Sections 4.7(b) (with respect to dissenters’ rights) or 4.7(c) of
the Merger Agreement in respect of distributions from the Additional Escrow Fund
in excess of the then current balance of the Additional Escrow Fund (an
“Additional Escrow Fund Claim”), then the claim shall be paid in accordance with
Section 3 of the Additional Escrow Agreement, a copy of which is attached hereto
as Exhibit B, and such payments shall be made from the Cash Escrow Deposit
hereunder.
               (c) If Escrow Agent has not received from Stockholders’ Agent a
written objection to a Claim Notice given by Parent in accordance with
Section 4(a) by 5:00 p.m. (New York Time) on the twentieth (20) Business Day
after receipt by Stockholders’ Agent of such Claim Notice (the “Objection
Period”), the claim stated in such Claim Notice shall be conclusively deemed to
be approved by Stockholders’ Agent, and Escrow Agent shall promptly thereafter
pay to Parent or its designee(s) (as indicated in the Claim Notice) in the
manner specified in the Claim Notice the amount of such claim to the extent of
the Indemnity Escrow Fund Balance then remaining. The Claim Notice shall include
the information described below including the amount and number of shares of
Series B-1 Preferred Stock and Class A Common Stock and number of Parent Stock
Warrants to be paid from the Stock Escrow Deposit. Such payment shall be made
thirty percent (30%) from the Cash Escrow Deposit and, based upon the Ascribed
Value, seventy percent (70%) from the Stock Escrow Deposit (and within the Stock
Escrow Deposit, such payment shall be made from the Series B-1 Preferred Stock,
Class A Common Stock and Parent Stock Warrants in the same ratio that such
securities made up the original Stock Escrow Deposit); provided, however, that
if there is an insufficient amount in the Cash Escrow Deposit or the Stock
Escrow Deposit, as the case may be, in the Indemnity Escrow Fund Balance to
satisfy payment in accordance with the foregoing percentages, then the amount
equal to the portion of the foregoing percentage that cannot be so satisfied
shall instead be satisfied from the Cash Escrow Deposit or the Stock Escrow
Deposit, as the case may be, to the extent available in the Indemnity Escrow
Fund Balance. To the extent that such amount is paid in shares of stock, and
warrants representing shares of stock, constituting all or a portion of the
Stock Escrow Deposit, the certificates representing all of the shares of stock
in the Stock Escrow Deposit and warrants representing all of the shares of stock
subject to such warrants (together with all related stock powers and assignment
forms) shall be delivered to Parent for cancellation on the books and records of
Parent. Upon receipt of such shares of stock and warrants representing such
shares of stock, if such amount consists of stock and warrants representing
shares of stock which are less than the total amount of the Stock Escrow
Deposit, Parent shall, as

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soon as reasonably practicable, issue Replacement Certificates, and Replacement
Warrants which Replacement Certificates and Replacement Warrants shall be
delivered to Escrow Agent to be held in the Indemnity Escrow Fund as part of the
Stock Escrow Deposit. Escrow Agent shall have no responsibility to determine if
the value of the Replacement Certificates or Replacement Warrants is sufficient
or valid. All non-cash Proceeds shall follow the shares in the Stock Escrow
Deposit to which such Proceeds relate and shall be disbursed to the person
receiving such shares, and any reference herein to delivery of shares shall
include delivery of the non-cash Proceeds related thereto, it being understood
that Escrow Agent is not a calculation agent and shall be entitled to rely upon
any calculations set forth in any written instruction required under this
section. Escrow Agent shall have no responsibility to verify that Parent has
complied with the provisions of Section 4(a) hereof, but instead may assume that
upon receipt of the request from Parent, the provisions of Section 4(a) have
been so complied with.
               (d) If during the Objection Period Escrow Agent shall have
received from Stockholders’ Agent an objection to the claim by Parent describing
the nature of and grounds for such objection and that such objection is being
made in good faith (a copy of which shall in each case be sent to Parent by
Stockholders’ Agent in accordance with the provisions of Section 15 below), then
such claim shall be deemed to be an “Open Claim” regardless of whether the
Objection Period has elapsed, and Escrow Agent shall reserve within the
Indemnity Escrow Fund Balance an amount equal to the amount of the Open Claim
(which amount for each Open Claim is referred to herein as the “Claim Reserve”).
Such Claim Reserve shall consist of thirty (30%) from the Cash Escrow Deposit
and, based upon the Ascribed Value, seventy percent (70%) from the Stock Escrow
Deposit (and within the Stock Escrow Deposit, such payment shall be made from
the Series B-1 Preferred Stock, Class A Common Stock and Parent Stock Warrants
in the same ratio that such securities made up the original Stock Escrow
Deposit); provided, however, that if there is an insufficient amount in the Cash
Escrow Deposit or the Stock Escrow Deposit, as the case may be, in the Indemnity
Escrow Fund Balance for such Claim Reserve in accordance with the foregoing
percentages, then the amount equal to the portion of the foregoing percentage
that cannot be so satisfied shall instead be satisfied from the Cash Escrow
Deposit or the Stock Escrow Deposit, as the case may be, to the extent available
in the Indemnity Escrow Fund Balance, it being understood that Escrow Agent is
not a calculation agent and shall be entitled to rely upon any calculation
provided to it in a joint written instruction of Parent and Shareholders’ Agent.
For the avoidance of doubt, the term Open Claim shall include any claim for
which a Claim Notice has been received during the twenty (20) Business Day
period prior to the Escrow Release Date. Escrow Agent shall have no
responsibility to verify that Stockholders’ Agent has complied with the
provisions of Section 4(d) hereof, but instead may assume that upon receipt of
the notice from Stockholders’ Agent, the provisions of Section 4(d) have been so
complied with.
               (e) The amount constituting the Claim Reserve for each Open Claim
shall be paid by Escrow Agent from the Indemnity Escrow Fund Balance to Parent
in accordance with the payment procedures set out in Section 3(c) hereof either
(i) in accordance with a joint written instruction by Parent and Stockholders’
Agent or (ii) if and to the extent consistent with either, as the case may be,
(A) a copy of a final order, decree or judgment from a court of competent
jurisdiction pertaining to the Open Claim or (B) a copy of a final result,
determination, finding, judgment and/or award from an arbitrator pertaining to
the Open Claim (each, a “Final Determination”), and any portion of the Claim
Reserve for such Open Claim not

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so required to be paid to Parent shall be paid by Escrow Agent to the
Stockholders in accordance with Section 3(e) above and such Claim Reserve shall
be reduced to zero; provided, however, that if the Escrow Release Date has not
yet passed, such portion of the Claim Reserve shall not be paid to the
Stockholders but rather shall simply cease to be a reserved portion of the
Indemnity Escrow Fund Balance.
               (f) If, after being paid from the Indemnity Escrow Fund Balance
the maximum amount it is entitled to be paid in respect of any indemnifiable
event based upon the provisions of this Section 4, a Parent Indemnitee shall
have additional Losses (as defined in the Merger Agreement) in respect of such
indemnifiable event, each of Parent and Merger Sub shall retain any and all of
its rights and remedies set forth in the Merger Agreement (subject to any
limitations on such rights and remedies contained therein), including the right
to seek indemnification from the Stockholders under Section 15.2 thereof in
respect of any deficient amounts to the extent permitted thereunder.
          5. Termination.
               (a) This Agreement shall terminate on the earlier to occur of:
               (i) the date on which Escrow Agent shall have been notified in
writing by Parent and Stockholders’ Agent that this Agreement shall be
terminated; or
               (ii) the date on which Escrow Agent shall have delivered the
entire Indemnity Escrow Fund Balance in accordance with the provisions of this
Agreement, unless the Stockholders’ Agent (on behalf of the Stockholders) is
required at such time to make a deposit into the Indemnity Escrow Fund in
accordance with Sections 1(b)(ii), 1(c) or 3(b)(ii) hereof.
               (b) Upon termination of this Agreement as set forth in this
Section 5, Escrow Agent shall be discharged from all further obligations or
responsibilities hereunder.
          6. Duties of Escrow Agent. The instructions of the parties set forth
herein are irrevocable, and Escrow Agent shall act only in accordance with such
instructions and in any amendment or amendments executed by all parties hereto
and not in accordance with any contrary instructions from any third person. The
duties and obligations of Escrow Agent shall be determined solely by the express
provisions of this Agreement, and Escrow Agent shall not be liable except for
the performance of its duties and obligations as are specifically set forth
herein. Escrow Agent shall provide to Stockholders’ Agent and Parent monthly
statements reflecting the Indemnity Escrow Fund Balance and the interest earned
thereon.
          7. Liability of Escrow Agent. In order to induce Escrow Agent to act
as escrow agent hereunder, the parties hereto agree that:
               (a) Escrow Agent shall not in any way be bound or affected by any
amendment or modification of this Agreement, unless the same shall have been
agreed to in writing by Escrow Agent;

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               (b) Escrow Agent shall not be under any duty to give the property
held hereunder any greater degree of care than it gives its other customers’
deposits of similar property;
               (c) Escrow Agent may act in reliance upon, and shall incur no
liability for or in respect of any action taken or omitted to be taken or
anything suffered by it in reliance upon, any notice, direction, consent,
certificate, affidavit, statement or other paper or document reasonably believed
by Escrow Agent to be genuine and to have been presented or signed by the proper
party or parties;
               (d) Escrow Agent shall not at any time be under any duty or
responsibility to make a determination of any facts contained in any certificate
delivered pursuant hereto or to make any independent verification of the
statements or signatures in such certificate or amounts delivered thereby;
               (e) Escrow Agent shall not be responsible for any failure by
Parent or Stockholders’ Agent to comply with any of their respective covenants
contained in this Agreement, the Merger Agreement or any other agreement;
               (f) Escrow Agent shall be under no duty or obligation to take any
legal action in connection with this Agreement or to enforce, through the
institution of legal proceedings or otherwise, any of its rights as escrow agent
hereunder or any rights of any other party hereto pursuant to this Agreement or
any other agreement, nor shall it be required to defend any action or legal
proceeding which, in its opinion, would or might involve Escrow Agent in any
cost, expense, loss or liability;
               (g) Escrow Agent may engage or be interested in any financial or
other transaction with the parties hereunder as freely as if it were not Escrow
Agent hereunder;
               (h) Escrow Agent shall be entitled to rely upon advice of counsel
of its choosing in reference to any matter connected herewith, and shall have
full and complete authorization and protection for any action taken or suffered
by it hereunder in good faith and in accordance with the opinion of such counsel
and shall not be liable for any mistake of fact or error of judgment, or for any
acts or omissions of any kind unless caused by its willful misconduct or gross
negligence;
               (i) notwithstanding anything to the contrary contained herein, if
Escrow Agent shall be uncertain as to its duties or rights hereunder, shall
receive any notice, advice, direction, or other document from any other party
with respect to this Agreement which, in its opinion, is in conflict with any of
the provisions of this Agreement, or should be advised that a dispute has arisen
with respect to the payment, ownership, or right of possession of or to the
Indemnity Escrow Fund Balance or any part thereof (or as to the delivery,
non-delivery, or content of any notice, advice, direction or other document),
Escrow Agent shall be entitled (but not obligated), without liability to anyone,
to refrain from taking any action other than to use its best efforts to safely
keep the Indemnity Escrow Fund Balance until Escrow Agent shall be directed
otherwise in writing by (A) joint written notice of Parent and Stockholders’
Agent or (B) an order, decree or judgment of a court of competent jurisdiction
which has been finally

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affirmed on appeal or which by lapse of time or otherwise is no longer subject
to appeal, but Escrow Agent shall be under no duty to institute or to defend any
proceeding, although it may institute or defend such proceedings;
               (j) Parent and Stockholders’ Agent (both on its own behalf and on
behalf of the Stockholders) hereby authorize Escrow Agent, if Escrow Agent is
threatened with litigation or is sued, to interplead all interested parties in
any court of competent jurisdiction and to deposit the Indemnity Escrow Fund
Balance with the clerk of that court; and
               (k) this Agreement sets forth exclusively the duties of Escrow
Agent with respect to any and all matters pertinent hereto and no implied duties
or obligations shall be read into this Agreement against Escrow Agent.
          8. Indemnification. Parent and Stockholders’ Agent (who for purposes
of this Section 8 is acting on behalf of the Stockholders and shall not incur
any indemnification liability hereunder to the extent acting in such
representative capacity), covenant and agree to jointly and severally indemnify
and hold harmless Escrow Agent and its directors, officers, agents and employees
(the “Indemnitees”) from all loss, liability or expense (including the
reasonable fees and expenses of in-house or outside counsel) arising out of or
in connection with (i) Escrow Agent’s execution and performance of this
Agreement, except in the case of any Indemnitee to the extent that such loss,
liability or expense is due to the gross negligence or willful misconduct of
such Indemnitee, or (ii) its following any instructions or other directions from
Parent or Stockholders’ Agent, except to the extent that its following any such
instruction or direction is expressly forbidden by the terms hereof and
(iii) against any costs or expenses (including reasonable attorneys’ fees and
expenses), judgments, fines, losses, claims, damages, liabilities and amounts
paid in settlement in connection with any claim, action, suit, proceeding or
investigation arising out of or pertaining to this Agreement, and in the event
of any such claim, action, suit, proceeding or investigation: (a) Parent and
Stockholders’ Agent, and with full right of contribution from the other party,
shall each be obligated to pay the reasonable fees and expenses of counsel
selected by Escrow Agent, promptly as statements therefor are received; and
(b) Parent and Stockholders’ Agent will cooperate in the defense of any such
matter; except that Parent and Stockholders’ Agent shall not have any obligation
to indemnify Escrow Agent against any cost, expense, judgment, fine, loss,
claim, damage, liability or settlement amount arising out of or pertaining to
this Agreement arising from Escrow Agent’s own gross negligence or willful
misconduct. The obligations of Parent and Stockholders’ Agent under this
Section 8 shall survive: (i) the delivery of the Indemnity Escrow Fund Balance
pursuant to this Agreement; (ii) the termination of this Agreement; and
(iii) the resignation or removal of Escrow Agent. In the event Parent or
Stockholders’ Agent, on behalf of the Stockholders, makes any payment pursuant
to this Section 8, as between Parent and the Stockholders, the party making the
payment shall have the right to seek contribution from the other party in the
amount of 50% of the amount so paid; provided, however, that in the event of a
dispute between Parent and Stockholders’ Agent, the prevailing party in such
proceeding shall be entitled to recover from the other party those costs and
expenses of Escrow Agent incurred under this Section 8 in connection with such
proceeding, in addition to such other costs and expenses as may be applicable in
such proceeding.

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          Parent and Stockholders’ Agent (on behalf of the Stockholders) each
agrees to assume any and all obligations imposed now or hereafter by any
applicable tax law with respect to the payment of the Indemnity Escrow Fund
Balance or any portion thereof under this Agreement, and to indemnify and hold
Escrow Agent harmless from and against any taxes, additions for late payment,
interest, penalties and other expenses that may be assessed against Escrow Agent
on any such payment or other activities under this Agreement. Parent and
Stockholders’ Agent undertake to instruct Escrow Agent in writing with respect
to Escrow Agent’s responsibility for withholding and other taxes, assessments or
other governmental charges, certifications and governmental reporting in
connection with its acting as Escrow Agent under this Agreement. Notwithstanding
such written directions, Escrow Agent shall report and, as required, withhold
any taxes as it determines may be required by any law or regulation in effect at
the time of the distribution. Parent and Stockholders’ Agent (on behalf of the
Stockholders) agree to indemnify and hold Escrow Agent harmless from any
liability on account of taxes, assessments or other governmental charges,
including without limitation the withholding or deduction or the failure to
obtain proper certifications or to properly report to governmental authorities,
to which Escrow Agent may be or become subject in connection with or which
arises out of this Agreement, including costs and expenses (including reasonable
legal fees), interest and penalties.
          Anything in this Agreement to the contrary notwithstanding, in no
event shall Escrow Agent be liable for special, indirect or consequential loss
or damage of any kind whatsoever (including but not limited to lost profits),
even if Escrow Agent has been advised of the likelihood of such loss or damage
and regardless of the form of action pursuant to which such damages may be
sought.
          9. Non-Cash Proceeds; Restrictions on Sale; Assignment or Transfer.
               (a) Escrow Agent has no duty to convert to cash any Proceeds
received in any form other than cash and may hold any such non-cash Proceeds in
the form received.
               (b) The interests of a Stockholder in the Indemnity Escrow Fund
Balance may not be sold and may not be assigned or transferred without the prior
written consent of Parent.
          10. Resignation. Escrow Agent may at any time resign as escrow agent
by mailing written notice to Parent and Stockholders’ Agent of such intention on
its part, specifying the date on which its desired resignation shall become
effective. Upon receiving such notice of resignation, Parent and Stockholders’
Agent shall promptly appoint a successor escrow agent by written instrument
signed on behalf of Parent and the Stockholders’ Agent, one copy of which shall
be delivered to each of the resigning Escrow Agent and the successor escrow
agent. If Parent and Stockholders’ Agent shall fail to make such appointment
within a period of thirty (30) days after they have been notified in writing of
such resignation by the resigning Escrow Agent, then the resigning Escrow Agent
may apply to any court of competent jurisdiction in the State of New York for
the appointment of a successor escrow agent. Such resignation shall become
effective upon the acceptance of the appointment by the successor escrow agent
as provided in this Section 10. Upon resignation, Escrow Agent shall be entitled
to payment by Parent and

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Stockholders’ Agent (on behalf of the Stockholders), split equally, of any
amounts then due it hereunder. Any successor escrow agent shall have all of the
rights, obligations and immunities of the Escrow Agent set forth herein.
          11. Assignment. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but except as set forth in
Section 10 hereof, neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto without the
prior written consent of the other parties, nor is this Agreement intended to
confer upon any other person except the parties hereto any rights or remedies
hereunder; provided, however, that Parent and any Stockholders’ Agent may assign
all of their rights hereunder to any Person to whom their rights under the
Merger Agreement have been duly assigned in accordance with the terms thereof.
          12. Definitions.
               (a) The term “Proceeds” means, as to each share constituting the
Stock Escrow Deposit, any stock, cash or other dividend or distribution (whether
or not liquidating or a return of capital) made in respect of such share,
including any resulting from a subdivision, combination or reclassification of
the outstanding capital stock of Parent or as a result of a merger,
consolidation, acquisition or other exchange of assets to which Parent may be a
party.
               (b) The term “Business Day” shall mean a day other than a
Saturday, Sunday or other day on which banks in the State of New York are
required or authorized to close.
          13. Escrow Costs. The fees, costs and expenses payable to Escrow Agent
hereunder shall be borne one-half by Stockholders’ Agent (on behalf of the
Stockholders) and one-half by Parent. Escrow Agent shall be entitled to deduct
from the Cash Escrow Deposit that portion of the fee for its services applicable
to the Stockholders pursuant to the attached Fee Schedule and to be reimbursed
for its reasonable costs and expenses hereunder (including reasonable counsel
fees and expenses). Acceptance fees are payable in advance as compensation for
the ordinary administrative services to be rendered hereunder.
          14. Tax Matters. Upon execution of this Agreement, Parent and
Stockholders’ Agent, on behalf of each Stockholder, and all Stockholders, shall
provide Escrow Agent with a fully executed W-8 or W-9 IRS form, as applicable,
which shall include Parent’s and each Stockholder’s respective Taxpayer
Identification Number (“TIN”) assigned by the Internal Revenue Service. In
addition, all interest or other income earned under this Agreement shall be
allocated and/or paid pursuant to the terms of this Agreement and reported by
the recipient to the Internal Revenue Service or any other taxing authority.
Notwithstanding the terms of this Agreement, the Escrow Agent shall report and,
as required, withhold any taxes as it determines may be required by any law or
regulation in effect at the time of the distribution. In the event that any
earnings remain undistributed at the end of any calendar year, Escrow Agent
shall report to the Internal Revenue Service or such other authority such
earnings as it deems appropriate or as required by any applicable law or
regulation in a manner it deems consistent with the terms of this Agreement. In
addition, Escrow Agent shall withhold any taxes it deems appropriate and

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shall remit such taxes to the appropriate authorities. Income attributable to
the Stockholders shall be allocated among them for reporting and withholding
purposes in accordance with their Percentage Interests as listed on Exhibit A.
Escrow Agent shall have no responsibility for any information reporting
activities related to the Stock Escrow Deposit. Parent shall bear the
responsibility for all information reporting relating to the Stock Escrow
Deposit.
          15. Notices. All notices and other communications pursuant to or in
connection with this Agreement shall be in writing and shall be deemed to have
been given and received when actually hand-delivered against receipt, one
(1) Business Day after dispatch by facsimile transmission with electronic
confirmation of receipt, two (2) Business Days after dispatch by recognized
overnight delivery service, or seven (7) calendar days after mailing by
certified or registered mail with proper postage affixed and return receipt
requested, in each case to the address of the party set forth below (or to any
changed address provided by any party to the other parties by notice given as
provided herein):

         
 
  To Parent:   Broadview Networks Holdings, Inc.
800 Westchester Avenue
5th Floor, Suite N501
Rye Brook, NY 10573
Attn: General Counsel
Facsimile No.: (914) 742-5818
 
       
 
  with a copy to:
(which shall not
constitute notice)   Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, NY 10019
Attention: Jeffrey R. Poss, Esq.
Facsimile No.: (212) 728-9536
 
       
 
  To Stockholders:   To the addresses specified for notices
set forth on Schedule 1.
 
       
 
  with a copy to:
(which shall not
constitute notice)   Kleinbard Bell & Brecker LLP
1900 Market Street
Philadelphia, PA 19103
Attention: Howard J. Davis, Esq.
Facsimile No.: (215) 568-0140
 
       
 
  To Stockholders’ Agent:   Mr. Jeffrey Ginsberg
203 Congress Street
Brooklyn, NY 11201
Phone:
Fax: (718) 885-9691
 
       
 
  with a copy to:
(which will not   Kleinbard Bell & Brecker LLP
1900 Market Street

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  constitute notice)   Philadelphia, PA 19103
Attention: Howard J. Davis, Esq.
Facsimile No.: (215) 568-0140
 
       
 
  To Escrow Agent:   JPMorgan Chase Bank, N.A.,
4 New York Plaza, 21st Floor
New York, NY 10004
Attn: Larissa Urcia
Facsimile No.: 212-623-6168

          16. Security Procedures. In the event that funds transfer instructions
are given (other than in writing at the time of execution of this Agreement),
whether in writing, by fax or otherwise, Escrow Agent is authorized to seek
confirmation of such instructions by telephone call-back to the person or
persons designated on Schedule 1 for each Stockholder and on Schedule 2 with
respect to Parent and the Stockholders’ Agent, and Escrow Agent may rely upon
the confirmation of anyone purporting to be the person or persons so designated.
The persons and telephone numbers for call-backs may be changed only in writing
actually received and acknowledged by Escrow Agent. If Escrow Agent is unable to
contact any of the authorized representatives identified in Schedule 1 or 2, as
applicable, Escrow Agent is hereby authorized to seek confirmation of such
instructions by telephone call-back to any one or more of the relevant party’s
executive officers (“Executive Officers”) if such party is an entity, which
shall include the titles of President and Chief Financial Officer, as Escrow
Agent may select. Such Executive Officer shall deliver to Escrow Agent a fully
executed incumbency certificate, in a form reasonably acceptable to Escrow
Agent, and Escrow Agent may rely upon the confirmation of anyone purporting to
be any such officer. Escrow Agent and the beneficiary’s bank in any funds
transfer may rely solely upon any account numbers or similar identifying numbers
provided by Parent or Stockholders’ Agent to identify (i) the beneficiary,
(ii) the beneficiary’s bank, or (iii) an intermediary bank. Escrow Agent may
apply any portion of the Indemnity Escrow Fund Balance for any payment order it
executes using any such identifying number, even when its use may result in a
person other than the beneficiary being paid, or the transfer of funds to a bank
other than the beneficiary’s bank or an intermediary bank designated. The
parties to this Agreement acknowledge that these security procedures are
commercially reasonable.
          17. Account Opening Information/TINs. IMPORTANT INFORMATION ABOUT
PROCEDURES FOR OPENING A NEW ACCOUNT
          For accounts opened in the US: To help the government fight the
funding of terrorism and money laundering activities, federal law requires all
financial institutions to obtain, verify, and record information that identifies
each person who opens an account. When an account is opened, we will ask for
information that will allow us to identify relevant parties.
          18. Amendment and Modification. This Agreement may be amended,
modified or supplemented only by written agreement of each of Parent, Escrow
Agent and Stockholders’ Agent.
          19. Governing Law. This Agreement shall be governed by the laws of the
State of New York (regardless of the laws that might otherwise govern under
applicable New

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York principles of conflicts of law) as to all matters, including but not
limited to matters of validity, construction, effect, performance and remedies,
and such operating circulars of any Federal Reserve Bank, federal laws and
regulations, funds transfer system rules and general commercial bank practices
applicable to funds transfer and related activities. Each party hereto
irrevocably waives any objection on the grounds of venue, forum non-conveniens
or any similar grounds and irrevocably consents to service of process by mail or
in any other manner permitted by applicable law and consents to the jurisdiction
of the courts located in the State of New York. The parties further hereby waive
any right to a trial by jury with respect to any lawsuit or judicial proceeding
arising or relating to this Agreement.
          20. Counterparts. This Agreement may be executed and delivered in two
or more counterparts, including by facsimile transmission, each of which shall
be deemed to be an original, but all of which together shall constitute one and
the same instrument.
          21. Force Majeure. No party to this Agreement is liable to any other
party for losses due to, or if it is unable to perform its obligations under the
terms of this Agreement because of, acts of God, fire, floods, strikes,
equipment or transmission failure, or other causes reasonably beyond its
control.
          22. Interpretation. The section headings contained in this Agreement
are solely for the purpose of reference, are not part of this Agreement and
shall not in any way affect the meaning or interpretation of this Agreement.
          23. Entire Agreement. This Agreement, including the exhibits and
schedules attached hereto, embodies the entire agreement and understanding of
the parties hereto in respect of the subject matter hereof. There are no
restrictions, promises, representations, warranties, covenants or undertakings,
other than those expressly set forth or referred to herein or therein. In the
event that any of the terms of this Agreement conflict with any of the terms of
the Merger Agreement with regard to the matters set forth herein, the terms of
this Agreement shall govern.
[Remainder of page intentionally left blank]

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          IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.

            PARENT

BROADVIEW NETWORKS HOLDINGS, INC.
      By:   /s/ Corey Rinker       Name:   Corey Rinker       Title:   Chief
Financial Officer       STOCKHOLDERS’ AGENT

/s/ JEFFREY GINSBERG                                               ,
JEFFREY GINSBERG
As Agent for the former Stockholders of
Eureka Broadband Corporation

ESCROW AGENT

JP MORGAN CHASE BANK N.A.
      By:   /s/ Saverio A. Lunetta       Name:   Saverio A. Lunetta      
Title:   Vice President    

[Indemnity Escrow Agreement]