Document:

e1170279ex4_1.htm

    AMENDMENT
      NO. 1 TO RIGHTS AGREEMENT

     

     

    Amendment
      No. 1, dated as of July 1, 2007 (the “Amendment”), between North
      Pittsburgh Systems, Inc., a Pennsylvania corporation (the “Company”), and
      Wells Fargo Bank Minnesota, N.A., a National Association, as Rights Agent (the
      “Rights Agent”).

     

    WHEREAS,
      the Company and the Rights Agent entered into a Rights Agreement, dated as
      of
      September 25, 2003 (the “Rights Agreement”);

     

    WHEREAS,
      the Company intends to enter into an Agreement and Plan of Merger with
      Consolidated Communications Holdings, Inc., a Delaware corporation
      (“Parent”), and Fort Pitt Acquisition Sub Inc., a Pennsylvania
      corporation and a wholly-owed subsidiary of Parent (“Merger Sub”);
      and

     

    WHEREAS,
      the Company desires to amend the Rights Agreement as set forth herein and to
      direct the Rights Agent to execute this Amendment in accordance with Section
      28
      of the Rights Agreement;

     

    NOW,
      THEREFORE, in consideration of the premises and mutual agreements set forth
      in
      the Rights Agreement and this Amendment, the parties hereby agree as
      follows:

     

    1.           Amendment
      toDefinition ofAcquiring Person. Section 1(a) of the
      Rights Agreement is hereby amended to add the following sentence at the end
      thereof:

     

    Notwithstanding
      anything to the contrary in this Agreement, neither Parent, Merger Sub nor
      any
      of their respective Affiliates or Associates shall be, or shall be deemed to
      be,
      an Acquiring Person solely by virtue of (w) the execution and delivery of the
      Merger Agreement or any agreements, arrangements or understandings entered
      into
      by Parent or Merger Sub contemplated by the Merger Agreement if such agreements,
      arrangements or understandings are in accordance with the terms and conditions
      of the Merger Agreement, (x) the announcement of the Merger Agreement or the
      Merger, (y) the consummation of the Merger or (z) the consummation of the other
      transactions contemplated by the Merger Agreement upon the terms and conditions
      of the Merger Agreement (each of the events set forth in the foregoing clauses
      (w), (x), (y) and (z), an “Exempt Event”).

     

    2.           New
      Definitions.  Section 1 of the Rights Agreement is hereby amended
      to add the following defined terms at the end thereof:

     

    (dd)           “Exempt
      Event” shall have the meaning set forth in Section 1(a) hereof.

     

    (ee)           “Merger
      Agreement” shall mean the Agreement and Plan of Merger, dated as of July 1,
      2007, by and among the Company, Consolidated Communications Holdings, Inc.,
      a
      Delaware corporation (“Parent”), and Fort Pitt Acquisition Sub Inc., a
      Pennsylvania corporation and a wholly-owned subsidiary

    
      
        
        

      

      
        
        

        
          

        

      

      
        Page
          2

      

    

     

    of
      Parent
      (“Merger Sub”) (as it may be amended or supplemented from time to
      time).

     

    (ff)           “Merger
      Sub” shall have the meaning set forth in Section 1(ee) hereof.

     

    (gg)           “Parent”
      shall have the meaning set forth in Section 1(ee) hereof.

     

    2.           Amendment
      to Definitionof Final Expiration Date.  Section 7(a) of
      the Rights Agreement is hereby amended by replacing clause (i) thereof with
      the
      following (and Exhibit B to the Rights Agreement shall be deemed amended
      accordingly):

     

    (i)
      (x)
      the Close of Business on October 6, 2013 or (y) if earlier, the time immediately
      prior to the Effective Time (as defined in the Merger Agreement), if the
      Effective Time shall occur (the earlier to occur of (x) and (y), the “Final
      Expiration Date”)

     

    3.           Amendment
      to Section 13(a).  Section 13(a) of the Rights Agreement is
      hereby amended by adding the following sentence at the end thereof:

     

    Notwithstanding
      anything to the contrary in this Agreement, the provisions of this Section
      13
      and Section 14 hereof shall not apply to any Exempt Event.

     

    4.           Amendment
      to Section 31.  Section 31 of the Rights Agreement is hereby
      amended by adding the following sentence at the end thereof:

     

    Notwithstanding
      the foregoing, nothing in this Agreement shall be construed to give any holder
      of Rights or any other Person any legal or equitable rights, remedy or claim
      under this Agreement in connection with any Exempt Event.

     

    5.           Directions
      to Rights Agent; Officer’s Certificate.  The Company hereby
      directs the Rights Agent, in accordance with the terms of Section 28 of the
      Rights Agreement, to execute this Amendment in its capacity as Rights
      Agent.  The undersigned officer of the Company, being duly authorized
      on behalf of the Company, hereby certifies on behalf of the Company that (a)
      he
      holds the office set forth under his name on the signature page hereto and
      (b)
      this Amendment is in compliance with Section 28 of the Rights
      Agreement.

     

    6.           Miscellaneous.  The
      term “Agreement” as used in the Rights Agreement shall be deemed to refer to the
      Rights Agreement as amended hereby.  In accordance with the
      resolutions adopted by the Company’s Board of Directors, this Amendment is
      effective as of the time at which such resolutions were so
      adopted.  Except as set forth in this Amendment, the Rights Agreement
      shall remain in full force and effect and shall be otherwise unaffected
      hereby.  This Amendment may be executed in any number of counterparts,
      and each of such counterparts shall for all purposes be deemed an original,
      but
      all such counterparts shall together constitute but one and the same instrument,
      it being understood that counterparts may be delivered by facsimile or
      .pdf.  Headings of the several Sections of the Amendment are inserted
      for convenience only and shall not control or affect the meaning or construction
      of any of the provisions hereof.

    
      
        
        

      

      
         

        
          

        

      

      
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          3

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
      executed as of the day and year first above written.

    

    

    
      	 	
              NORTH
                PITTSBURGH SYSTEMS, INC.

            
	 	 
	 	 
	 	
              By:

            	
              /s/
                Harry R. Brown

            
	 	 	
              Name:

            	
              Harry
                R. Brown

            
	 	 	
              Title:

            	
              President
                and Chief Executive Officer

            
	 	 
	 	 
	 	 
	 	
              WELLS
                FARGO BANK MINNESOTA, N.A., as Rights Agent

            
	 	 
	 	 
	 	
              By:

            	
              /s/
                Barbara M. Novak

            
	 	 	
              Name:

            	
              Barbara
                M. Novak

            
	 	 	
              Title:

            	
              Vice
                Presidente1170279ex10_1.htm

    FORM
      OF INDEMNIFICATION AGREEMENT

     

    THIS
      INDEMNIFICATION AGREEMENT (this “Agreement”) is made as of the 1st
      day of July, 2007,
      between North Pittsburgh Systems, Inc., a Pennsylvania corporation (the
“Company”), and ______________ (“Indemnitee”).

     

    WHEREAS,
      Indemnitee is a member of the Board of Directors of the Company (the “Board
      of Directors”) and/or an officer of the Company and in such capacity, or
      capacities, is performing valuable services for the Company; and

     

    WHEREAS,
      the Company’s By-laws, as amended (the “Company By-Laws” and, together
      with the Company’s Articles of Incorporation, as amended, the “Governing
      Instruments”) provide for the indemnification of the Company’s directors and
      officers; and

     

    WHEREAS,
      Section 4 of Article VII of the Company By-Laws and Section 1746 of the
      Pennsylvania Business Corporation Law (the “PBCL”) provide that they
      shall not be deemed exclusive of any other rights to indemnification or
      advancement of expenses to which directors or officers may be entitled under
      any
      by-law, agreement, vote of shareholders or disinterested directors or otherwise;
      and

     

    WHEREAS,
      the number of lawsuits and shareholders’ derivative lawsuits against
      corporations, their directors and officers has increased in recent years, such
      lawsuits frequently are without merit and seek damages in amounts having no
      reasonable relationship to the amount of compensation received by the directors
      and officers from the corporation, and such lawsuits whether or not meritorious
      are expensive and time-consuming to defend; and

     

    WHEREAS,
      adequate directors and officers liability insurance may not be available at
      a
      reasonable cost; and

     

    WHEREAS,
      the Company desires that Indemnitee continue to serve as a director and/or
      an
      officer of the Company free from undue concern for unpredictable or unreasonable
      claims for damages by reason of Indemnitee’s status as a director and/or an
      officer of the Company, by reason of Indemnitee’s decisions or actions on the
      Company’ behalf or by reason of Indemnitee’s decisions or actions in another
      capacity for the Company while serving as a director and/or an officer of the
      Company; and

     

    WHEREAS,
      the Board of Directors has determined that the Company’s entry into this
      Agreement is not only reasonable and prudent but also promotes the best
      interests of the Company and its shareholders;  and

     

    WHEREAS,
      Indemnitee has agreed to continue to serve as a director and/or an officer
      of
      the Company in reliance on the protections afforded to him under this
      Agreement;

     

    NOW,
      THEREFORE, in consideration of Indemnitee’s continued service as a director
      and/or an officer of the Company and of other good and valuable consideration,
      the receipt and sufficiency of which are hereby acknowledged, the parties hereto
      hereby agree as follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.  Indemnification.
      Subject only to the exclusions set forth in this Agreement, the Company hereby
      agrees (i) to hold harmless and indemnify Indemnitee, from time to time, against
      any and all Expenses and Liabilities (as such terms are defined in Section
      1(h)
      below) to the fullest extent authorized or permitted by the PBCL (or any other
      applicable law), the Governing Instruments in effect on the date hereof or
      as
      such law or the Governing Instruments may from time to time be amended (but
      in
      the case of any such amendment, only to the extent such amendment permits the
      Company to provide broader indemnification rights than such law or Governing
      Instruments permitted the Company to provide prior to such amendment) and (ii)
      to take all such action as may reasonably be required or requested to carry
      out
      such indemnification. Notwithstanding the foregoing, the Company shall not
      be
      required to indemnify Indemnitee for any Expenses and/or Liabilities to the
      extent that such amounts have been paid directly to or for the account of
      Indemnitee pursuant to any directors and officers liability insurance policy
      maintained by the Company.  Without limiting the generality of the
      foregoing:

     

    (a)  Third
      Party Proceedings. The Company shall indemnify Indemnitee if Indemnitee was
      or is a party or is threatened to be made a party to any Proceeding (as defined
      in Section 1(h) below), other than a Proceeding by or in the right of the
      Company, by reason of the fact that Indemnitee is or was a director and/or
      an
      officer of the Company, or is or was serving at the request of the Company
      as a
      director, officer, employee or agent of another corporation, limited liability
      company, partnership, joint venture, trust or other enterprise (including,
      without limitation, service with respect to any employee benefit plan), against
      any and all Expenses and Liabilities actually and reasonably incurred by
      Indemnitee or on Indemnitee’s behalf in connection with such Proceeding, and any
      appeal therefrom, provided that Indemnitee acted in good faith and in a manner
      Indemnitee reasonably believed to be in or not opposed to the best interests
      of
      the Company and, with respect to any criminal action or proceeding, had no
      reasonable cause to believe Indemnitee’s conduct was unlawful. The termination
      of any action, suit or proceeding by judgment, order, settlement, conviction
      or
      upon a plea of nolo contendere or its equivalent shall not, of itself, create
      a
      presumption that Indemnitee did not satisfy the foregoing standard of conduct
      to
      the extent applicable thereto.

     

    (b)  Proceedings
      By or in the Right of the Company. The Company shall indemnify Indemnitee if
      Indemnitee is or was a party or is threatened to be made a party to any
      Proceeding by or in the right of the Company by reason of the fact that
      Indemnitee is or was a director and/or an officer of the Company, or is or
      was
      serving at the request of the Company as a director, officer, employee or agent
      of another corporation, limited liability company, partnership, joint venture,
      trust or other enterprise (including, without limitation, service with respect
      to any employee benefit plan), against any and all Expenses actually and
      reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with
      the defense or settlement of such Proceeding, and any appeal therefrom, if
      Indemnitee acted in good faith and in a manner Indemnitee reasonably believed
      to
      be in or not opposed to the best interests of the Company, except that no
      indemnification shall be made in respect of any claim, issue or matter as to
      which Indemnitee shall have been adjudged to be liable to the Company unless
      and
      only to the extent that the Court of Common Pleas of Allegheny County,
      Pennsylvania or the court in which such Proceeding was brought shall determine
      upon application that, despite the adjudication of liability but in view of
      all
      the circumstances of the case, Indemnitee is fairly and reasonably entitled
      to
      indemnity for such Expenses which the Court of Common Pleas of Allegheny County,
      Pennsylvania or such other court shall deem proper.

     

    
      
        
        

      

      
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    (c)  Successful
      Defense. To the extent that Indemnitee has been successful on the merits or
      otherwise in the defense of any Proceeding referred to in Section 1(a) or 1(b)
      above, or in the defense of any claim, issue or matter therein, the Company
      shall indemnify Indemnitee against any and all Expenses actually and reasonably
      incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.
      Dismissal of any Proceeding with prejudice, or a settlement not involving any
      payment or assumption of liability, shall be deemed a successful
      defense.

     

    (d)  Partial
      Indemnification. If Indemnitee is entitled to indemnification under any
      provision of this Agreement for a portion of the Expenses and/or Liabilities
      actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in the
      investigation, defense, appeal or settlement of any Proceeding, but not,
      however, for the total amount thereof, the Company shall nevertheless indemnify
      Indemnitee for the portion thereof to which Indemnitee is entitled.

     

    (e)  Advancement
      of Expenses. All Expenses incurred by Indemnitee or on Indemnitee’s behalf
      in the investigation, defense or appeal of a Proceeding referred to in either
      of
      Sections 1(a) and 1(b) of this Agreement, or in enforcing Indemnitee’s rights
      under any provisions of this Agreement, shall be paid by the Company in advance
      of the final disposition of such Proceeding in the manner prescribed by Section
      3 below.

     

    (f)  Amendments
      to Indemnification Rights. The Company shall not adopt any amendment to its
      Governing Instruments, the effect of which would be to deny, diminish or
      encumber Indemnitee’s rights to indemnity pursuant to the Governing Instruments,
      the PBCL or any other applicable law as applied to any act or failure to act
      occurring in whole or in part prior to the date (the “Effective Date”)
      upon which the amendment was approved by the Board of Directors. In the event
      that the Company shall adopt any amendment to its Governing Instruments the
      effect of which is to change Indemnitee’s rights to indemnity under such
      instruments, such amendment shall apply only to acts or failures to act
      occurring entirely after the Effective Date thereof. The Company shall give
      written notice to Indemnitee of any proposal with respect to any such amendment
      no later than the date such amendment is first presented to the Board of
      Directors (or any committee thereof) for consideration, and shall provide a
      copy
      of any such amendment to Indemnitee promptly after its adoption.

     

    (g)  Indemnification
      for Expenses as a Witness. To the extent Indemnitee is, by reason of the
      fact that Indemnitee is or was a director and/or an officer of the Company
      (or
      is or was serving at the Company’s request in any one or more of the capacities
      described in Sections 1(a) and 1(b) of this Agreement), a witness in any
      Proceeding, the Company shall indemnify Indemnitee against all Expenses in
      connection therewith.

     

    (h)  Certain
      Definitions.  As used in this Agreement:

     

    (i)  “Expenses”
      shall mean any and all expenses to the fullest extent permitted by the PBCL
      (or
      any other applicable law), the Governing Instruments in effect on the date
      hereof or as such law or Governing Instruments may from time to time be amended
      (but, in the case of any such amendment, only to the extent such amendment
      broadens the range or amount of expenses that may be paid or reimbursed relative
      to the range or amounts permitted before such amendment), including, without
      limitation, any and all retainers, court costs,

     

    
      
        
        

      

      
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    transcript
      costs, fees of experts, witness fees, private investigators, travel expenses,
      duplicating costs, printing and binding costs, telephone charges, postage,
      fax
      transmission charges, secretarial services, delivery service fees, attorneys’
fees, and all other costs, disbursements or expenses of the types customarily
      incurred in connection with prosecuting, defending, preparing to prosecute
      or
      defend, investigating, being or preparing to be a witness in, or otherwise
      participating in, a Proceeding or in connection with seeking indemnification
      under this Agreement or enforcing this Agreement in accordance with Section
      3(g)
      below.  Expenses also shall include the foregoing expenses incurred in
      connection with any appeal resulting from any action, suit or proceeding,
      including, without limitation, the premium, security for, and other costs
      relating to any cost bond, supersedeas bond, or other appeal bond or its
      equivalent.

     

    (ii)  “Liabilities”
      shall mean any and all obligations, indebtedness and liabilities of any kind
      (including, without limitation, any and all claims, judgments, settlements,
      fines, ERISA excise taxes, damages, losses, deficiencies, costs, penalties,
      interest, expenses, charges, and fees), to the fullest extent permitted by
      the
      PBCL (or any other applicable law), the Governing Instruments in effect on
      the
      date hereof or as such law or Governing Instruments may from time to time be
      amended (but, in the case of any such amendment, only to the extent such
      amendment broadens the range or amount of liabilities that may be paid,
      reimbursed or indemnified to an Indemnitee relative to the range or amounts
      permitted before such amendment).

     

    (iii)  “Proceeding”
      shall mean any and all threatened, pending or completed actions, suits or
      proceedings, whether civil, criminal, administrative or investigative and
      whether formal or informal.

     

    2.  Limitations
      on Indemnification. No indemnity pursuant to Section 1 above shall be paid
      by the Company:

     

    (a)  on
      account of any suit in which judgment in a final, non-appealable decision is
      rendered against Indemnitee for an accounting of profits made from the purchase
      or sale by Indemnitee of securities of the Company within the meaning of Section
      16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange
      Act”), or similar provisions of federal or state law;

     

    (b)  for
      Expenses incurred by or on behalf of Indemnitee, as a plaintiff, in a suit
      against the Company or against one or more other directors and/or officers
      of
      the Company (other than a suit brought by Indemnitee to enforce Indemnitee’s
      rights to indemnification pursuant to this Agreement or as otherwise provided
      in
      Section 6 below), unless such suit is authorized by the Board of Directors
      or
      such indemnification is required by law;

     

    (c)  if
      a
      final, non-appealable decision by a court having jurisdiction in the matter
      shall determine that such indemnification is not lawful; or

     

    (d)  for
      amounts paid by Indemnitee in settlement of any Proceeding without the Company’s
      written consent, which consent shall not be unreasonably withheld, delayed
      or
      conditioned.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    3.  Indemnification
      Procedures.

     

    (a)  Notice
      to the Company. Promptly after receipt by Indemnitee of notice of the
      commencement of any Proceeding, Indemnitee shall, if a claim in respect thereof
      is to be made against the Company under this Agreement, notify the Company
      of
      the commencement thereof. Such notice shall set forth in reasonable detail
      the
      events giving rise to such claim and the amount requested, if known. Failure
      of
      Indemnitee to provide such notice shall not relieve the Company of its
      obligations under this Agreement except to the extent such failure has a
      material and adverse effect on the ability of the Company to meet such
      obligations.

     

    (b)  Notice
      to Insurers. If, at the time of receipt of such notice, the Company has
      directors and officers liability insurance in effect, the Company shall give
      prompt notice of the commencement of such Proceeding to the insurer or insurers
      in accordance with the procedures set forth in the respective policy or policies
      in favor of Indemnitee. The Company shall thereafter take all necessary or
      desirable action to cause such insurer or insurers to pay, on behalf of
      Indemnitee, all Expenses and Liabilities payable as a result of such Proceeding
      in accordance with the terms of such policy or policies.

     

    (c)  Advancement
      of Expenses. Subject to Sections 3(d) and 3(e) below, the Expenses
      reasonably incurred by Indemnitee or on Indemnitee’s behalf in investigating,
      defending or appealing any Proceeding covered by Section 1 above, or in
      enforcing Indemnitee’s rights under any provisions of this Agreement, shall be
      paid by the Company within 20 days of Indemnitee’s written request therefor even
      if there has been no final disposition of such Proceeding. Indemnitee’s written
      request shall state the amount requested and shall be accompanied by copies
      of
      the invoices or other relevant documentation.

     

    (d)  Undertaking
      to Repay Advances. Indemnitee undertakes and agrees, if and to the extent
      required by applicable law, that Indemnitee shall reimburse the Company for
      all
      advances of Expenses paid by the Company to or for the account of Indemnitee
      under this Agreement with respect to any Proceeding in the event and only to
      the
      extent that it shall ultimately be determined that Indemnitee was not entitled
      to be indemnified under this Agreement with respect to such
      Proceeding.

     

    (e)  Assumption
      of Defense by the Company. Except as otherwise provided below, the Company,
      jointly with any other indemnifying party similarly notified, will be entitled
      to assume the defense of any Proceeding of which it has been notified by
      Indemnitee pursuant to Section 3(a) above, with counsel reasonably satisfactory
      to Indemnitee; provided, however that, without the prior written
      consent of Indemnitee, the Company shall not settle, compromise or consent
      to
      the entry of any judgment in any such Proceeding if and to the extent the
      claimant seeks any non-monetary relief from Indemnitee.  After notice
      from the Company to Indemnitee of its election to assume the defense thereof,
      the Company will not be liable to Indemnitee under this Agreement for any legal
      or other Expenses subsequently incurred by Indemnitee; provided,
however, that Indemnitee shall have the right to employ Indemnitee’s own
      counsel in such Proceeding at the expense of the Company if, at any time after
      such notice from the Company, (i) the employment of counsel by Indemnitee has
      been authorized by the Company, (ii) Indemnitee shall have reasonably concluded
      that there may be a conflict of interest between the Company and Indemnitee
      in
      the conduct of such defense, or (iii) the Company shall not in fact have
      employed counsel to assume the defense of such Proceeding, in each of which
      cases the Expenses of Indemnitee’s counsel shall be subject to reimbursement
      in

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    accordance
      with the terms of this Agreement.  The Company shall not be entitled
      to assume Indemnitee’s defense of any Proceeding brought by the Company or as to
      which Indemnitee shall have made the conclusion provided for in clause (ii)
      of
      the preceding sentence.

     

    (f)  Determination
      of Right to Entitlement.

     

    (i)  In
      the
      event that Indemnitee incurs liability for any Liabilities (or, to the extent
      not previously advanced pursuant to Section 3(c) above, Expenses), and
      indemnification is sought under this Agreement, the Company shall pay (or
      provide for payment if so required by the terms of any judgment or settlement)
      the amount of such liability within 20 days of Indemnitee’s written request
      therefor unless a determination is made within such 20 day period that the
      claims giving rise to such request are excluded or indemnification is otherwise
      not due under this Agreement. Such determination, and any determination required
      by applicable law as to whether Indemnitee has met the standard of conduct
      required to qualify and entitle Indemnitee, partially or fully, to
      indemnification under Section 1 of this Agreement, shall be made, at the
      Company’s discretion, (x) by the Board of Directors by a majority vote of the
      directors who were not parties to such Proceeding even though less than a
      quorum, or (y) if such a majority is not obtainable, or even if obtainable
      a
      majority of the disinterested directors so directs, by written opinion of
“independent legal counsel” (as defined below) selected by the Company and
      reasonably satisfactory to Indemnitee, or (z) by the Company’s shareholders;
provided, however, that if a “change of control” (as defined
      below) has occurred such determination shall be made by written opinion of
      independent legal counsel selected by Indemnitee or, if requested by Indemnitee,
      by the Company.

     

    (A)           The
      term “change of control” shall mean: (x) the consummation of any transaction
      after which any “person” or “group” (as such terms are used in Sections 3(a)(9),
      13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the “Exchange
      Act”)) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the
      Exchange Act), directly or indirectly, of securities, or possesses the power
      to
      vote or control the vote of securities, of the Company representing 20% or
      more
      of the combined voting power of the Common Stock or, if greater, all outstanding
      securities, of the Company; or (y) the consummation of any merger or
      consolidation of the Company with any other corporation or entity, 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 a majority of the combined voting power of the voting
      securities of the Company or such surviving entity outstanding immediately
      after
      such merger or consolidation, or the shareholders of the Company approve a
      plan
      of complete liquidation of the Company or an agreement for the sale or
      disposition by the Company of all or substantially all of the Company’s
      assets.

     

    (B)           The
      term “independent legal counsel” shall mean for this purpose an attorney or firm
      of attorneys experienced in matters of
                               

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    corporation
      law that is not now nor has within the previous three years been retained to
      represent Indemnitee, the Company or any other party to the Proceeding giving
      rise to the claim for indemnification hereunder; provided that “independent
      legal counsel” shall not include any person who under applicable standards of
      professional conduct would have a conflict of interest in representing
      Indemnitee or the Company in an action to determine Indemnitee’s rights under
      this Agreement.

     

    (ii)  Notwithstanding
      the foregoing, Indemnitee may within 60 days after a determination adverse
      to
      Indemnitee has been made as provided above, or if no determination has been
      made
      within 20 days of Indemnitee’s written request for payment, petition the Court
      of Common Pleas of Allegheny County, Pennsylvania or any other court of
      competent jurisdiction, or may seek an award in arbitration to be conducted
      by a
      single arbitrator pursuant to the rules of the American Arbitration Association,
      which award shall be deemed final, unappealable and binding, to determine
      whether Indemnitee is entitled to indemnification under this Agreement, and
      such
      court or arbitrator, as the case may be, shall thereupon have the exclusive
      authority to make such determination unless and until such court or arbitrator
      dismisses or otherwise terminates such action without having made a
      determination. The court or arbitrator, as the case may be, shall make an
      independent determination of entitlement irrespective of any prior determination
      made by the Board of Directors, independent legal counsel or shareholders.
      In
      any such action before the court or arbitrator, Indemnitee shall be presumed
      to
      be entitled to indemnification and the Company shall have the burden of proving
      that indemnification is not required under this Agreement. All fees and expenses
      of any arbitrator pursuant to this provision shall be paid by the
      Company.

     

    (g)  Enforcement
      Expenses. In the event that Indemnitee brings suit or takes any other action
      to enforce Indemnitee’s rights or to collect monies due under this Agreement,
      and if Indemnitee is successful therein (or if not successful, Indemnitee
      nevertheless acted in good faith in bringing such suit or taking such other
      action), the Company shall reimburse (to the extent not previously advanced)
      Indemnitee for all of Indemnitee’s reasonable Expenses in any such suit or
      action.

     

    4.  Continuation
      of Indemnification. The Company’s obligations to indemnify Indemnitee
      hereunder shall continue throughout the period Indemnitee is a director and/or
      an officer of the Company (or is serving at the Company’s request in any one or
      more of the capacities described in Sections 1(a) and 1(b) above) and thereafter
      so long as Indemnitee shall be subject to any possible claim or Proceeding
      by
      reason of the fact that Indemnitee was a director and/or an officer of the
      Company (or was serving in such other capacities).

     

    5.  Successors
      and Assigns. This Agreement shall be binding upon the Company, its
      successors and assigns (including, without limitation, any transferee of all
      or
      substantially all of its assets and any successor by merger or otherwise by
      operation of law), and shall inure to the benefit of Indemnitee and Indemnitee’s
      heirs, personal representatives, executors and administrators and shall be
      binding upon Indemnitee and Indemnitee’s successors in interest under this
      Agreement.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    6.  Rights
      Not Exclusive. The rights provided hereunder shall not be deemed exclusive
      of any other rights to which Indemnitee may be entitled under any provision
      of
      law, the Governing Instruments, other agreement, vote of shareholders or of
      disinterested directors or otherwise.

     

    7.  Subrogation.
      Upon payment of any amount under this Agreement, the Company shall be subrogated
      to the extent of such payment to all of Indemnitee’s rights of recovery therefor
      and Indemnitee shall take all reasonable actions requested by the Company to
      secure such rights, including, without limitation, execution of all documents
      necessary to enable the Company to enforce such rights.

     

    8.  Severability.
      In the event that any provision of this Agreement shall be held by a court
      of
      competent jurisdiction to be invalid, illegal or unenforceable for any reason,
      such provision shall be limited or modified in its application to the minimum
      extent necessary to avoid a violation of law, and, as so limited or modified,
      such provision and the balance of this Agreement shall be enforceable in
      accordance with their terms.

     

    9.  Integration.
      This Agreement embodies the entire agreement and understanding between the
      parties hereto with respect to the subject matter hereof and supersedes all
      prior agreements and understandings relating to the subject matter
      hereof.

     

    10.  Modification.
      No amendment, modification, termination or cancellation of this Agreement shall
      be effective unless in writing signed by both parties hereto.

     

    11.  Notices.
      All notices given under this Agreement shall be in writing and delivered either
      (i) personally, (ii) by registered or certified mail (postage prepaid, return
      receipt requested), (iii) by recognized overnight courier service or (iv) by
      telecopy (if promptly followed by a copy delivered as provided in clauses (i),
      (ii) or (iii) above), as follows:

     

    If
      to
      Indemnitee:                   [NAME]

    [ADDRESS]

     

    If
      to the
      Company:                North
      Pittsburgh Systems, Inc.

    4008
      Gibsonia Road

    Gibsonia,
      PA 15044-9311

    Attention:
      President and
      Treasurer

     

    Notices
      hereunder given as provided above shall be deemed to be duly given upon delivery
      if delivered personally, three business days after mailing if by registered
      or
      certified mail, one business day after mailing if by overnight courier service
      and upon confirmation of transmission if by telecopy.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    12.  Interpretation.  Section
      references are to this Agreement, unless otherwise specified.  The
      captions in this Agreement are for convenience only and shall not in any way
      affect the meaning or construction of any provisions of this
      Agreement.

     

    13.  Counterparts.  This
      Agreement may be executed in counterparts, all of which, taken together, shall
      be considered one and the same agreement, it being understood that counterparts
      may be delivered by facsimile.

     

    14.  Governing
      Law. This Agreement shall be interpreted and enforced in accordance with the
      laws of the Commonwealth of Pennsylvania without regard to principles of
      conflicts of laws.

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      day
      and year first above written.

     

    

    
      	 	
              NORTH
                PITTSBURGH SYSTEMS, INC.

            
	 	 
	 	 
	 	
              By:

            	 
	 	 	
              Name:1

            	 
	 	 	
              Title:

            	 
	 	 
	 	 
	 	 
	 	 	 
	 	 	
              [NAME
                OF DIRECTOR/OFFICER]

            

    

    

    

    

    

    

    

    

    

    

     

    
 

    

    

    

    __________________

    1           Harry
      R. Brown, President, except in the case of the agreement in which Harry R.
      Brown
      is the Indemnitee, Allen P. Kimble, Senior Vice President.

     

     

    
      -10-

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