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                                                                EXHIBIT 10.38

FORM OF INDEMNIFICATION LETTER BETWEEN COMPLETEL EUROPE N.V. AND THE EMPLOYEES
IDENTIFIED IN SCHEDULE A HERETO

NB: To be addressed to each of the Employees with Loans
to Purchase CompleTel Europe N.V. stock in the IPO]

Re:      Employee Loan

Dear ___________:

Reference is made to the Loan Agreement entered into effective as of the _____
day of March, 2000, (the "N.V. Loan Agreement") under which CompleTel Europe
N.V. ("Europe N.V.") agreed to lend you (the "N.V. Loan") the amount necessary
to pay the interest on the loan being made to you contemporaneously from Paribas
(the "Paribas Loan") to purchase common shares of Europe N.V. in its IPO. The
purpose of this letter is to set forth the understanding among you and Europe
N.V. concerning the repayment of principal and interest on the N.V. Loan and on
the Paribas Loan.

If the Paribas Loan becomes due and payable and the market value (as of the due
date) of your Europe N.V. shares that were purchased with the Paribas Loan and
pledged to Paribas is less than the aggregate outstanding principal and interest
on the Paribas Loan and on the N.V. Loan (such insufficiency is referred to as
the "Shortfall"), Europe N.V. agrees to pay Paribas the amount of the Shortfall
together with interest thereon, provided that you give Europe N.V. prompt notice
of the occurrence of any Shortfall. In addition, in the event that the Paribas
loan becomes due and payable by reason of your failing to comply with
requirements the set forth in Article 12, paragraph 2, subparagraphs 1 and 2
(i.e. undertaking (i) to pay down the loan from the proceeds of the sale of any
and all CompleTel shares (other than those shares pledged under the Paribas
loan) and (ii) 80% margin requirements), Europe N.V. agrees to take all steps
necessary to cure any such default in such undertakings for and on your behalf,
provided that you give Europe N.V. prompt notice of the occurrence of any such
default.

Europe N.V. agrees to reimburse you for any and all taxes incurred by you as a
result of Europe N.V. making payments of principal and interest on the Paribas
Loan and as a result of Europe N.V. forgiving any principal and accrued interest
on the N.V. Loan. It is the intention of Europe N.V. that you shall be fully
held harmless from any additional taxes of any kind associated with such loan
forgiveness and from any payment on the Paribas Loan.

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Capitalized terms used herein that are not otherwise defined shall have the
meanings set forth in the N.V. Loan Agreement.

If you have any questions, please let me know. We appreciate all of your hard
work on behalf of the CompleTel Group.

Very truly yours,

CompleTel Europe N.V.

By: ___________________
By: William H. Pearson
       President and CEO

Acknowledged and agreed:

-----------------------------
Date: _______________________

                                                  SCHEDULE A
AGREEMNTS ENTERED INTO UNDER THE FORM INDEMNIFICATION LETTER

<TABLE>
<CAPTION>

------------------------------------- -----------------------------------
NAME OF EMPLOYEE                      AMOUNT OF PARIBAS LOAN
------------------------------------- -----------------------------------
<S>                                   <C>
Martin Rushe                          (euro) 309,000
------------------------------------- -----------------------------------
Jerome de Vitry                       (euro) 567,000
------------------------------------- -----------------------------------
Hansjoerg Rieder                      (euro) 567,000
------------------------------------- -----------------------------------
</TABLE><PAGE>

                       STATEMENT OF PLEDGE OF A FINANCIAL
                               INSTRUMENTS ACCOUNT

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                       STATEMENT OF PLEDGE OF A FINANCIAL
                               INSTRUMENTS ACCOUNT
(pursuant to article 29 of Law no. 83-1 of January 3, 1983, as amended by Law
no. 96-597 of July 2, 1996)

THE UNDERSIGNED :
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[ Completel Europe NV, a company incorporated under the laws of the Netherlands
and having its registered office at Drentestaat 24, 1083HK Amsterdam, the
Netherlands represented by Anna Lascar, duly authorised to act.

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HEREINAFTER REFERRED TO AS THE "Pledgor"

HEREBY PLEDGES THE FOLLOWING FINANCIAL INSTRUMENTS ACCOUNT:
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Title of the account :
Account number : A COMPLETER

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HEREINAFTER REFERRED TO AS THE "Pledged Account"

OPENED IN THE BOOKS OF :
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BANQUE BNP PARIBAS SA, a Societe Anonyme organised under the laws of France,
having a share capital of EUR 1 772 303 528 registered at the Companies Register
of PARIS under number PARIS B 662 042 449, whose registered office is at 16
boulevard des Italiens, 75009 Paris.

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IN WHICH THE FOLLOWING FINANCIAL INSTRUMENTS HAVE BEEN INITIALLY REGISTERED:
<TABLE>
<CAPTION>

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  Qty    Designation : type, forms, name, nominal value ...                   Currency           Unit value
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<S>     <C>                                                                   <C>                <C>
         A COMPLETER
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-----------------------------------------------------------------------------------------------------------------

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Total estimate in accordance with the latest market prices or values known
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</TABLE>

IN FAVOUR OF THE BENEFICIARY OF THE PLEDGE
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BANQUE BNP PARIBAS SA, a Societe Anonyme organised under the laws of France,
having a share capital of EUR 1 772 303 528 registered at the Companies Register
of PARIS under number PARIS B 662 042 449, whose registered office is at 16
boulevard des Italiens, 75009 Paris.

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HEREINAFTER REFERRED TO AS THE "Beneficiary"

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IN ORDER TO SECURE THE AMOUNTS DUE PURSUANT TO THE FOLLOWING OBLIGATIONS
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nature of  the obligation         : Guarantee issued by Completel  NV
date of  the Agreement         :  March 30, 2000
expiry date                       :December 29, 2001
Amount in principal               :EUR   2, 060, 000

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HEREINAFTER REFERRED TO AS THE "Secured Obligations"

ON THE FOLLOWING TERMS :

In accordance with the provisions of article 29 of Law no. 83-1 of January 3,
1983, as amended by Law no. 96-597 of July 2, 1996, the Pledgor hereby pledges
in favour of the Beneficiary the Pledged Account in order to secure the
payment of all amounts due in principal, together with all interest
(including default interest), indemnities, penalties, expenses, fees, and all
other sums generally due to the Beneficiary pursuant to the Secured
Obligations, the terms of which the Pledgor represents to be fully aware of,
until full payment of all such amounts.

The Pledgor hereby represents and warrants that the Pledged Account, as well
as the financial instruments credited thereto, are free of any charge, lien
or other encumbrances.

The financial instruments credited to the Pledged Account, and any financial
instruments substituted therefore added thereto or deleted thereafter, as
well as all income and proceeds thereof in any currency hereinafter referred
to as the ("Total Financial Instruments ") shall be subject to mechanisms set
forth in the following paragraph and the pledge herein contained:

The Pledgor and the Beneficiary hereby agree to adjust the Total Financial
Instruments upward or downward and/or release and cancel the Total Financial
Instruments as follows:

1.       In the event that the closing share price of the shares of CompleTel
         Europe N.V. listed on the ParisBourse (CTL; 5728) (hereinafter referred
         to as the < < Closing Price > >) falls below an amount equal to eight
         (8) Euros on any business day during the term (as defined hereinabove)
         of the Secured Obligations starting for the first time retroactively
         on September 1, 2000, then the Pledgor agrees to transfer promptly,
         additional Financial Instruments in an amount to be mutually agreed to
         by the parties, but in any event in no less than an amount, so that the
         Total Financial Instruments registered on the Pledged Account be equal
         at any time to at least (thirty (30) percent) of the amount of the
         Secured Obligations.

2.       IN THE EVENT THAT THE CLOSING PRICE IS EQUAL TO OR EXCEEDS AN AMOUNT
         EQUAL TO ELEVEN (11) EUROS ON ANY BUSINESS DAY DURING A PERIOD
         CALCULATED FROM THE 1ST OF EACH MONTH TO THE 28TH OF EACH MONTH DURING
         THE TERM OF THE SECURED OBLIGATIONS AS DEFINED HEREINABOVE (THE
         < < RELEVANT PERIOD > >) STARTING FOR THE FIRST TIME RETROACTIVELY TO
         SEPTEMBER 1, 2000, THEN THE BENEFICIARY AGREES TO RELEASE AND CANCEL
         FROM THE PLEDGE CONTAINED HEREIN FINANCIAL INSTRUMENTS IN AN AMOUNT TO
         BE MUTUALLY AGREED TO BY THE PARTIES, BUT IN ANY EVENT NO LESS THAN AN
         AMOUNT SO THAT THE TOTAL FINANCIAL INSTRUMENTS REGISTERED ON THE
         PLEDGED ACCOUNT SHALL NOT EXCEED (SEVENTEEN (17) PERCENT) OF THE AMOUNT
         OF THE SECURED OBLIGATIONS.

3.       In the event the Closing Price is equal to or exceeds an amount equal
         to fourteen (14) Euros on any business day during any Relevant Period
         starting for the first time retroactively on September 1,2000, the
         Beneficiary agrees to release and cancel from the Pledged Account the
         Total Financial Instruments, subject to the provisions of subparagraph
         4 below.

4.       In the event the Total Financial Instruments are released and cancelled
         as provided for in subparagraph 3 above, the parties agree that if the
         Closing Price again falls below fourteen (14) Euros on each and every
         consecutive business day during any Relevant Period, the parties shall
         again agree on the amount of financial instruments to be registered on
         the Pledged Account in accordance with the provisions of

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         subparagraphs (1) and (2) above, and the provisions of subparagraphs
         (1), (2), (3) shall recommence during the Term of the Secured
         Obligation.

The Pledgor shall not be entitled to deal with the financial instruments
credited to the Pledged Account. However, this may be waived by prior agreement
between the Beneficiary and the Pledgor, or pursuant to an agreement which shall
limitatively list the transaction(s) that the Pledgor will be exceptionally
authorised to do on the Pledged Account. The proceeds of the sale of the
financial instruments, and the financial instruments bought for reinvestment
shall automatically be subject to the pledge.

If the Secured Obligations become due and payable for any reason whatsoever, the
Beneficiary may, at the expiry of a period of three days from the date on which
the Beneficiary sends a written demand to the Pledgor, enforce the pledge in
accordance with applicable law. Under no circumstances shall the Beneficiary be
liable to the Pledgor in connection with the price at which the financial
instruments are sold. The costs of the enforcement of the pledge shall be borne
by he Pledgor and shall be deducted from the proceeds of the sale of the said
financial instruments.

In the event that the financial instruments and/or cash credited to the Pledged
Account are denominated in a different currency from that of the Secured
Obligations, the exchange rate which shall be used to value or enforce the
pledge, shall be the offered rate on the interbank market of the Paris stock
exchange at 11:00 a.m. (Paris time) on the day when such transaction is made, or
if no quotation is available on such day, the first following available
quotation.

The provisions of the pledge shall be binding upon the Beneficiary's successors
and assigns.

The provisions of the pledge shall be binding upon the Pledgor's successors and
assigns.

The pledge herein contained shall be in addition to any other security given by
the Pledgor to the Beneficiary or by any third party.

All expenses incurred hereunder shall be borne by the Pledgor.

This statement of pledge shall be governed by and construed in accordance with
French Law. Any suit, action or proceeding in connection with the validity, the
construction or the performance hereunder shall be brought before the courts of
Paris.

                                       Made in [      ]
                                       on [date]

The Pledgor

 ..............................................
Name:
Title:

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