FORM OF INDEMNIFICATION AGREEMENT
EXHIBIT 10.1
This
Agreement, made and entered into this ___ day of _________, 2009 (“Agreement”),
by and between TranSwitch Corporation, a Delaware corporation (“Company”), and
__________ (“Indemnitee”).
WHEREAS,
the Company desires to retain the availability of its existing directors and to
be in a position to attract additional persons to serve in such capacity;
and
WHEREAS,
highly competent persons are becoming more reluctant to serve as directors or in
other capacities unless they are provided with adequate protection through
insurance or adequate indemnification against inordinate risks of claims and
actions against them arising out of their service to and activities on behalf of
the Company; and
WHEREAS,
the current impracticability of obtaining adequate insurance and the
uncertainties relating to indemnification have increased the difficulty of
attracting and retaining such persons; and
WHEREAS,
it is reasonable, prudent and necessary for the Company contractually to
obligate itself to indemnify such persons to the maximum extent permitted by
applicable law so that they will serve or continue to serve the Company free
from undue concern that they will not be so indemnified;
WHEREAS,
Indemnitee does not regard the protection available under the Company’s Amended
and Restated Certificate of Incorporation, as amended (“Certificate of
Incorporation”) and Second Amended and Restated By-laws (“By-laws”) as adequate
in the present circumstances, and may not be willing to serve as a director
without adequate protection and the Company desires Indemnitee to serve in such
capacity. Indemnitee is willing to serve, continue to serve and to
take on additional service for or on behalf of the Company on the condition that
Indemnitee be indemnified to the maximum extent permitted by applicable law so
that Indemnitee will serve or continue to serve the Company free from undue
concern that Indemnitee will not be so indemnified;
WHEREAS,
this Agreement is a supplement to and in furtherance of the bylaws of the
Company and any resolutions adopted pursuant thereto, and shall not be deemed a
substitute therefore nor to diminish or abrogate any right of Indemnitee
thereunder; and
NOW,
THEREFORE, in consideration of the premises and the covenants contained herein,
the Company and Indemnitee do hereby covenant and agree as follows:
ARTICLE
I
Definitions
For
purposes of this Agreement the following terms shall have the meanings
indicated:
1.01. “Board” shall mean the
Board of Directors of the Company.
1.02. “Change of Control”
shall be deemed to occur upon the earliest to occur after the date of this
Agreement of any of the following events:
(a) Acquisition of Stock by Third
Party. Any Person (as defined below) is or becomes the
Beneficial Owner (as defined below), directly or indirectly, of securities of
the Company representing fifteen percent (15%) or more of the combined voting
power of the Company’s then outstanding securities;
(b) Change in the
Board. During any period of two (2) consecutive years (not
including any period prior to the execution of this Agreement), individuals who
at the beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into an agreement
with the Company to effect a transaction described in Sections 1.02(a), 1.02(c)
or 1.02(d)) whose election by the Board or nomination for election by the
Company’s stockholders was approved by a vote of a majority of the directors
then still in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved, cease for
any reason to constitute at least a majority of the members of the
Board;
(c) Corporate
Transactions. The effective date of a merger or consolidation
of the Company with any other entity, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior to such merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 51% of the combined voting power of the voting
securities of the surviving entity outstanding immediately after such merger or
consolidation and with the power to elect at least a majority of the board of
directors or other governing body of such surviving entity;
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(d) Liquidation. The
approval by the stockholders of the Company of a 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; and
(e) Other
Events. There occurs any other event of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A (or a response to any similar item on any similar schedule or form)
promulgated under the Exchange Act (as defined below), whether or not the
Company is then subject to such reporting requirement.
For
purposes of this Section 1.02, the following terms shall have the following
meanings:
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(A)
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“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended from time
to time, and the rules and regulations promulgated
thereunder.
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(B)
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“Person”
shall have the meaning as set forth in Sections 13(d) and 14(d) of the
Exchange Act (including without limitation any two or more persons acting
as a group and deemed to be a single person under Section 13(d) pursuant
to Section 13(d)(3) and Rule 13d-5 promulgated thereuder); provided,
however, that Person shall exclude (i) the Company, (ii) any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company, and (iii) any corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.
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(C)
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“Beneficial
Owner” shall have the meaning given to such term in Rule 13d-3 under the
Exchange Act; provided, however, that Beneficial Owner shall exclude any
Person otherwise becoming a Beneficial Owner by reason of the stockholders
of the Company approving a merger of the Company with another
entity.
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1.03. “Corporate Status”
describes the status of a person who is or was a director, officer, employee,
agent, trustee or fiduciary of the Company or of any other corporation, limited
liability company, partnership, joint venture, trust, employee benefit plan or
other enterprise for which such person is or was serving as a director, officer,
employee or agent at the request of the Company.
1.04. “Court” means the
Court of Chancery of the State of Delaware, the court in which the Proceeding in
respect of which indemnification is sought by Indemnitee shall have been brought
or is pending, or another court having subject jurisdiction and personal
jurisdiction over the parties.
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1.05. “Disinterested
Director” means a director of the Company who is not and was not and is
not threatened to be a party to the Proceeding in respect of which
indemnification is sought by Indemnitee.
1.06. “Enterprise” shall
mean the Company and any other corporation, limited liability company,
partnership, joint venture, trust, employee benefit plan or other entity of
which Indemnitee is or was serving at the request of the Company as a director,
officer, employee, agent, trustee or fiduciary.
1.07. “Expenses” shall mean
all reasonable costs and expenses (including, without limitation, all reasonable
attorneys’ fees, retainers, court costs, transcript costs, fees of experts,
witness fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees, and all other disbursements
or expenses of the types customarily) incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating or being or preparing
to be a witness in a Proceeding or otherwise participating in a
Proceeding. Expenses also shall include (i) all reasonable costs
and expenses incurred in connection with any appeal resulting from any
Proceeding, including without limitation the premium, security for, and other
costs relating to any cost bond, supersede as bond, or other appeal bond or its
equivalent, and (ii) for purposes of Section 8.06 only, all reasonable costs and
expenses incurred by Indemnitee in connection with the interpretation,
enforcement or defense of Indemnitee’s rights under this Agreement, by
litigation or otherwise. The parties agree that for the purposes of
any advancement of Expenses for which Indemnitee has made written demand to the
Company in accordance with this Agreement, all Expenses included in such demand
that are certified by affidavit of Indemnitee’s counsel as being reasonable
shall be presumed conclusively to be reasonable. Expenses, however,
shall not include amounts paid in settlement by Indemnitee or the amount of
judgments or fines against Indemnitee.
1.08. “Good Faith” shall
mean Indemnitee having 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 Proceeding which is criminal in nature, having had no reasonable
cause to believe Indemnitee’s conduct was unlawful.
1.09. “Independent Counsel”
means a law firm, or a member of a law firm, that is experienced in matters of
corporation law and may include law firms or members thereof that are regularly
retained by the Company but not any other party to the Proceeding giving rise to
a claim for indemnification hereunder. Notwithstanding the foregoing,
the term “Independent Counsel” shall not include any person who, under the
standards of professional conduct then prevailing and applicable to such
counsel, would have a conflict of interest in representing either the Company or
Indemnitee in an action to determine Indemnitee’s rights under this
Agreement. The Company agrees to pay the reasonable fees and expenses
of the Independent Counsel referred to above and to fully indemnify such counsel
against any and all Expenses, claims, liabilities and damages arising out of or
relating to this Agreement or its engagement pursuant hereto.
1.10. “Proceeding” shall
include any pending, threatened or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation (including any internal
corporate investigation), administrative hearing or any other pending,
threatened or completed proceeding whether civil, criminal, administrative,
legislative or investigative (whether formal or informal), other than one
initiated by Indemnitee including any appeal therefrom in which Indemnitee was,
is or will be involved as a party, potential party, non-party witness or
otherwise by reason of the fact that Indemnitee is or was a director or officer
of the Company, by reason of any action taken by him or of any action on his
part while acting as director or officer of the Company, or by reason of the
fact that he 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, in each case whether or
not serving in such capacity at the time any liability or expense is incurred
for which indemnification, reimbursement, or advancement of Expenses can be
provided under this Agreement. If Indemnitee believes in good faith
that a given situation may lead to or culminate in the institution of a
Proceeding, this shall be considered a Proceeding under this
paragraph. For purposes of this paragraph, a “Proceeding” shall not
be deemed to have been initiated by Indemnitee where Indemnitee seeks pursuant
to Article VIII of this Agreement to enforce Indemnitee’s rights under this
Agreement.
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ARTICLE
II
Term
of Agreement
This
Agreement shall continue until and terminate upon the later of: (i)
ten (10) years after the date that Indemnitee shall have ceased to serve as a
director, officer, employee, agent, trustee or fiduciary of the Company or of
any other Enterprise; or (ii) the final termination of all pending Proceedings
in respect of which Indemnitee is granted rights of indemnification or
advancement of Expenses hereunder and of any proceeding commenced by Indemnitee
pursuant to Article VIII of this Agreement relating thereto.
ARTICLE
III
Services
by Indemnitee, Notice of Proceedings
3.01. Services. Indemnitee
agrees to serve or continue to serve as a director of the Company for so long as
he is duly elected or appointed. Indemnitee may at any time and for
any reason resign from such position (subject to any other contractual
obligation or any obligation imposed by operation of law). This
Agreement shall not be deemed an employment contract between the Company (or any
of its subsidiaries or any Enterprise) and Indemnitee. This Agreement
shall continue in force after Indemnitee has ceased to serve as a director of
the Company.
3.02. Notice of
Proceeding. Indemnitee agrees promptly to notify the Company
in writing upon being served with any summons, citation, subpoena, complaint,
indictment, information or other document relating to any Proceeding or matter
which may be subject to indemnification or advancement of Expenses covered
hereunder, but the omission so to notify the Company shall not relieve the
Company from its obligations hereunder.
ARTICLE
IV
Indemnification
4.01. In
General. In connection with any Proceeding, the Company shall
indemnify and advance Expenses to Indemnitee as provided in this Agreement and
to the maximum extent permitted by applicable law in effect on the date hereof
and including indemnification and advancement of Expenses in excess of that
expressly permitted by statute, including, without limitation, any
indemnification provided by the Company’s Certificate of Incorporation, the
Company’s By-laws, vote of its stockholders or disinterested directors, or
applicable law.
4.02. Proceedings Other Than
Proceedings by or in the Right of the Company. Indemnitee
shall be entitled to the rights of indemnification to the maximum extent not
prohibited by law provided in this Section 4.02 if, by reason of Indemnitee’s
Corporate Status, Indemnitee is, or is threatened to be made, a party to or is
otherwise involved in any Proceeding, other than a Proceeding by or in the right
of the Company to procure a judgment in its favor. Pursuant to this
Section 4.02, Indemnitee shall be indemnified to the maximum extent permitted by
law against Expenses, judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in
connection with such Proceeding or any claim, issue or matter therein, if
Indemnitee acted in Good Faith.
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4.03. Proceedings by or in the
Right of the Company. Indemnitee shall be entitled to the
rights of indemnification to the maximum extent not prohibited by law provided
in this Section 4.03 if, by reason of Indemnitee’s Corporate Status, Indemnitee
is, or is threatened to be made, a party to or is otherwise involved in any
Proceeding brought by or in the right of the Company to procure a judgment in
its favor. Pursuant to this Section 4.03, Indemnitee shall be
indemnified to the maximum extent permitted by applicable law against Expenses,
judgments, penalties, and amounts paid in defense or settlement, actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with
such Proceeding or any claim, issue or matter therein, if Indemnitee acted in
Good Faith. Notwithstanding the foregoing, no such indemnification
for Expenses shall be made in respect of any claim, issue or matter in such
Proceeding as to which Indemnitee shall have been finally adjudged to be liable
to the Company unless and only to the extent that the Court in which the
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 indemnification.
4.04. Indemnification of a Party
Who is Wholly or Partly Successful. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of
Indemnitee’s Corporate Status, a party to or is otherwise involved in and is
successful, on the merits or otherwise, in any Proceeding or in defense of any
claim, issue or matter therein, in whole or in part, Indemnitee shall be
indemnified by the Company to the maximum extent permitted by law, against all
Expenses, judgments, penalties, fines, and amounts paid in defense or
settlement, actually and reasonably incurred by Indemnitee or on Indemnitee’s
behalf in connection therewith. If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as
to one or more but less than all claims, issues or matters in such Proceeding,
the Company shall indemnify Indemnitee to the maximum extent permitted by law,
against all Expenses, judgments, penalties, fines, and amounts paid in defense
or settlement, actually and reasonably incurred by Indemnitee or on Indemnitee’s
behalf in connection with each successfully resolved claim, issue or
matter. For purposes of this Section 4.04 and without limitation, the
termination of any claim, issue or matter in such a Proceeding by dismissal,
with or without prejudice, shall be deemed to be a successful result as to such
claim, issue or matter.
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4.05. Indemnification for Expenses
of a Witness. Notwithstanding any other provision of this
Agreement, to the maximum extent permitted by applicable law and to the extent
that Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness or
otherwise asked to participate in any Proceeding to which Indemnitee is not a
party, Indemnitee shall be indemnified against all Expenses actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection
therewith.
4.06. Partial
Indemnification. If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of
Expenses, but not, however, for the total amount thereof, the Company shall
nevertheless indemnify Indemnitee, to the maximum extent not prohibited by law,
for the portion thereof to which Indemnitee is entitled.
4.07. Additional
Indemnification.
(a) Notwithstanding
any limitation in Sections 4.01, 4.02, 4.03, or 4.04, the Company shall
indemnify Indemnitee to the maximum extent permitted by applicable law if
Indemnitee is a party to or threatened to be made a party to any Proceeding
(including a Proceeding by or in the right of the Company to procure a judgment
in its favor) against all Expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred by Indemnitee in connection with the
Proceeding.
(b) For
purposes of Section 4.07(a), the meaning of the phrase “to the maximum extent
permitted by applicable law” shall include, but not be limited to:
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(A)
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to
the maximum extent permitted by the provision of the General Corporation
Law of the State of Delaware (the “DGCL”) that authorizes or contemplates
additional indemnification by agreement or pursuant to the Company’s
Certificate of Incorporation or By-laws, or the corresponding provision of
any amendment to or replacement of the DGCL,
and
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(B)
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to
the maximum extent authorized or permitted by any amendments to or
replacements of the DGCL adopted after the date of this Agreement that
increase the extent to which a corporation may indemnify its officers and
directors.
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4.08. Exclusions. Notwithstanding
any provision in this Agreement, the Company shall not be obligated under this
Agreement to make any indemnity in connection with any claim made against
Indemnitee:
(a) for
which payment has actually been made to or on behalf of Indemnitee under any
insurance policy, contract, agreement or other indemnity provision or
arrangement (whether with the Company or any other corporation, limited
liability company, partnership, joint venture, trust, employee benefit plan or
other entity), except with respect to any excess beyond the amount actually paid
under any insurance policy contract, agreement or other indemnity provision or
arrangement; or
(b) for
(i) an accounting of profits made from the purchase and sale (or sale and
purchase) by Indemnitee of securities of the Company within the meaning of
Section 16(b) of the Exchange Act (as defined in Section 1.02 hereof) or similar
provisions of state statutory law or common law, or (ii) any reimbursement of
the Company by Indemnitee of any bonus or other incentive-based or equity-based
compensation or of any profits realized by Indemnitee from the sale of
securities of the Company, as required in each case under the Exchange Act
(including any such reimbursements that arise from an accounting restatement of
the Company pursuant to Section 304 of the Xxxxxxxx-Xxxxx Act of 2002 (the
“Xxxxxxxx-Xxxxx Act”), or the payment to the Company of profits arising from the
purchase and sale by Indemnitee of securities in violation of Section 306 of the
Xxxxxxxx-Xxxxx Act); or
(c) except
as provided in Section 8.06 of this Agreement, in connection with any Proceeding
(or any part of any Proceeding) initiated by Indemnitee, including any
Proceeding (or any part of any Proceeding) initiated by Indemnitee against the
Company or its directors, officers, employees or other indemnitees, unless (i)
the Board authorized the Proceeding (or any part of any Proceeding) prior to its
initiation or (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable
law.
ARTICLE
V
Advancement
of Expenses
Notwithstanding
any provision to the contrary in this Agreement, the Company shall, to the
maximum extent not prohibited by law, advance all reasonable Expenses which, by
reason of Indemnitee’s Corporate Status, were incurred by or on behalf of
Indemnitee in connection with any Proceeding, within thirty (30) days after the
receipt by the Company of a statement or statements from Indemnitee requesting
such advance or advances of Expenses, whether prior to or after final
disposition of such Proceeding. Such statement or statements shall
reasonably evidence the Expenses incurred by Indemnitee and shall include or be
preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay
any Expenses if it shall ultimately be determined that Indemnitee is not
entitled to be indemnified against such Expenses. Any advance and
undertakings to repay pursuant to this Article V shall be unsecured and interest
free and without reference to the financial ability of Indemnitee to make such
repayment or to Indemnitee’s ultimate entitlement to indemnification under other
provisions of this Agreement. Advancement of Expenses pursuant to
this Article V shall not require approval of the Board or the stockholders of
the Company, or of any other person or body. The Secretary of the
Company shall promptly advise the Board in writing of the request for
advancement of Expenses, of the amount and other details of the advancement and
of the undertaking to make repayment pursuant to this Article
V. Advances shall include any and all reasonable Expenses incurred
pursuing an action to enforce this right of advancement, including Expenses
incurred preparing and forwarding statements to the Company to support the
advances claimed. This Article V shall not apply to any claim made by
Indemnitee for which indemnification is excluded pursuant to Section
4.08.
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ARTICLE
VI
Procedures
for Determination of Entitlement to Indemnification
6.01. Initial
Request. To obtain indemnification under this Agreement (other
than advancement of Expenses pursuant to Article V), Indemnitee shall submit to
the Company a written request, including therein or therewith such documentation
and information as is reasonably available to Indemnitee and is reasonably
necessary to determine whether and to what extent Indemnitee is entitled to
indemnification including, but not limited to, a description of the nature of
the Proceeding and the facts underlying the Proceeding. The Secretary
of the Company shall promptly advise the Board in writing that Indemnitee has
requested indemnification. The omission by Indemnitee to notify the
Company hereunder will not relieve the Company from any liability which it may
have to Indemnitee hereunder or otherwise than under this Agreement, and any
delay in so notifying the Company shall not constitute a waiver by Indemnitee of
any rights under this Agreement.
6.02. Method of
Determination. Upon written request by Indemnitee pursuant to
Section 6.01, a determination (if required by applicable law) with respect to
Indemnitee’s entitlement to indemnification shall be made as
follows:
(a) if
a Change in Control has occurred, unless Indemnitee shall request in writing
that such determination be made in accordance with clause (b) of this Section
6.02, the determination shall be made by Independent Counsel in a written
statement to the Board, a copy of which shall be delivered to Indemnitee;
or
(b) if
a Change of Control has not occurred, and subject to Section 6.05, the
determination shall be made by (i) the Board by a majority vote of a quorum
consisting of Disinterested Directors (or pursuant to unanimous written consent
in lieu of a meeting if all of the Company’s Directors are
Disinterested). In the event that a quorum of the Board consisting of
Disinterested Directors is not obtainable or, even if obtainable, such quorum of
Disinterested Directors so directs, the determination shall be made by
Independent Counsel in a written opinion to the Board, a copy of which shall be
delivered to Indemnitee, (ii) a committee of Disinterested Directors designated
by a majority vote of the Disinterested Directors, even though less than a
quorum of the Board, (iii) if there are no such Disinterested Directors or, if
such Disinterested Directors so direct, by Independent Counsel in a written
opinion to the Board, a copy of which shall be delivered to Indemnitee, or (iv)
if so directed by the Board, by the stockholders of the Company.
6.03. Selection, Payment,
Discharge, of Independent Counsel. In the event the
determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 6.02 of this Agreement, the Independent Counsel
shall be selected, paid, and discharged in the following manner:
(a) If
a Change of Control has not occurred, the Independent Counsel shall be selected
by the Board, and the Company shall give written notice to Indemnitee advising
Indemnitee of the identity of the Independent Counsel so selected.
(b) If
a Change of Control has occurred, the Independent Counsel shall be selected by
Indemnitee (unless Indemnitee shall request that such selection be made by the
Board, in which event clause (a) of this section shall apply), and Indemnitee
shall give written notice to the Company advising it of the identity of the
Independent Counsel so selected.
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(c) Following
the initial selection described in clauses (a) and (b) of this Section 6.03,
Indemnitee or the Company, as the case may be, may, within seven (7) days after
such written notice of selection has been given, deliver to the other party a
written objection to such selection. Such objection may be asserted
only on the ground that the Independent Counsel so selected does not meet the
requirements of “Independent Counsel” as defined in Section 1.09 of this
Agreement, and the objection shall set forth with particularity the factual
basis of such assertion. Absent a proper and timely objection, the
person so selected shall act as Independent Counsel. If such written
objection is made, the Independent Counsel so selected may not serve as
Independent Counsel unless and until a court has determined that such objection
is without merit.
(d) Either
the Company or Indemnitee may petition a Court if the parties have been unable
to agree on the selection of Independent Counsel within thirty (30) days after
submission by Indemnitee of a written request for indemnification pursuant to
Section 6.01 of this Agreement. Such petition may request a
determination whether an objection to the party’s selection is without merit
and/or seek the appointment as Independent Counsel of a person selected by the
Court or by such other person as the Court shall designate. A person
so appointed shall act as Independent Counsel under Section 6.02 of this
Agreement.
(e) The
Company shall pay any and all reasonable fees and expenses of Independent
Counsel incurred by such Independent Counsel in connection with acting pursuant
to this Agreement, and the Company shall pay all reasonable fees and expenses
incident to the procedures of this Section 6.03, regardless of the manner in
which such Independent Counsel was selected or appointed.
(f) Upon
the due commencement of any judicial proceeding or arbitration pursuant to
Section 8.01(c) of this Agreement, Independent Counsel shall be discharged and
relieved of any further responsibility in such capacity (subject to the
applicable standards of professional conduct then prevailing).
6.04. Cooperation. Indemnitee
shall cooperate with the person, persons or entity making the determination with
respect to Indemnitee’s entitlement to indemnification under this Agreement,
including providing to such person, persons or entity upon reasonable advance
request any documentation or information which is not privileged or otherwise
protected from disclosure and which is reasonably available to Indemnitee and
reasonably necessary to such determination. Any costs or expenses
(including attorneys’ fees and disbursements) incurred by Indemnitee in so
cooperating with the person, persons or entity making such determination shall
be borne by the Company (irrespective of the determination as to Indemnitee’s
entitlement to indemnification), and the Company hereby indemnifies and agrees
to hold Indemnitee harmless therefrom.
6.05. Payment. If
it is determined that Indemnitee is entitled to indemnification, payment to
Indemnitee shall be made within ten (10) days after such
determination.
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ARTICLE
VII
Presumptions
and Effect of Certain Proceedings
7.01. Burden of
Proof. In making a determination with respect to entitlement
to indemnification hereunder, the person, persons or entity making such
determination shall presume that Indemnitee is entitled to indemnification under
this Agreement if Indemnitee has submitted a request for indemnification in
accordance with Article VI of this Agreement, and the Company shall, to the
maximum extent not prohibited by law, have the burden of proof to overcome that
presumption in connection with the making by any person, persons or entity of
any determination contrary to that presumption. Neither the failure
of the Company (including by its directors or Independent Counsel) to have made
a determination prior to the commencement of any action pursuant to this
Agreement that indemnification is proper in the circumstances because Indemnitee
has met the applicable standard of conduct, nor an actual determination by the
Company (including by its directors or Independent Counsel) that Indemnitee has
not met such applicable standard of conduct, shall be a defense to the action or
create a presumption that Indemnitee has not met the applicable standard of
conduct.
7.02. Effect of Other
Proceedings. The termination of any Proceeding or of any
claim, issue or matter therein, by judgment, order, settlement or conviction, or
upon a plea of guilty or of nolo contendere or
its equivalent, shall not (except as otherwise expressly provided in this
Agreement) of itself adversely affect the right of Indemnitee to indemnification
or create a presumption that Indemnitee did not act in Good Faith.
7.03. Reliance as Safe
Harbor. For purposes of any determination of Good Faith,
Indemnitee shall be deemed to have acted in Good Faith if Indemnitee’s action is
based on the records or books of account of the Enterprise, including financial
statements, or on information supplied to Indemnitee by the officers of the
Enterprise in the course of their duties, or on the advice of legal counsel for
the Enterprise or on information or records given or reports made to the
Enterprise by an independent certified public accountant or by an appraiser or
other expert selected with reasonable care by the Enterprise. The
provisions of this Section 7.03 shall not be deemed to be exclusive or to limit
in any way the other circumstances in which Indemnitee may be deemed to have met
the applicable standard of conduct set forth in this Agreement.
7.04. Actions of
Others. The knowledge and/or actions, or failure to act, of
any director, officer, employee, agent, trustee or fiduciary of the Enterprise
shall not be imputed to Indemnitee for purposes of determining the right to
indemnification hereunder.
ARTICLE
VIII
Remedies
of Indemnitee
8.01. Application. This
Article VIII shall apply in the event of a Dispute. For purposes of
this Article, “Dispute”, shall mean any of the following events:
(a) a
determination is made pursuant to Article VI of this Agreement that Indemnitee
is not entitled to indemnification under this Agreement;
(b) advancement
of Expenses is not timely made pursuant to Article V of this
Agreement;
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(c) the
determination of entitlement to be made pursuant to Section 6.02 of this
Agreement has not been made within ninety (90) days after receipt by the Company
of the request for indemnification;
(d) payment
of indemnification is not made pursuant to Section 4.05 of this Agreement within
ten (10) days after receipt by the Company of a written request
therefor;
(e) payment
of indemnification is not made within ten (10) days after a determination has
been made that Indemnitee is entitled to indemnification or such determination
is deemed to have been made pursuant to Article VI of this Agreement;
or
(f) the
event that the Company or any other person takes or threatens to take any action
to declare this Agreement void or unenforceable, or institutes any litigation or
other action or Proceeding designed to deny, or to recover from, Indemnitee the
benefits provided or intended to be provided to Indemnitee hereunder, Indemnitee
shall be entitled to an adjudication by a court of his entitlement to such
indemnification or advancement of Expenses.
8.02. Adjudication. In
the event of a Dispute, Indemnitee shall be entitled to an adjudication in an
appropriate Court of Indemnitee’s entitlement to such indemnification or
advancement of Expenses. Alternatively, Indemnitee, at Indemnitee’s
option, may seek an award in arbitration to be conducted by a single arbitrator
pursuant to the rules of the American Arbitration
Association. Indemnitee shall commence such proceeding seeking an
adjudication or an award in arbitration within one hundred eighty (180) days
following the date on which a Dispute arose. The Company shall not
oppose Indemnitee’s right to seek any such adjudication or award in
arbitration.
8.03. De Novo
Review. In the event that a determination shall have been made
pursuant to Article VI of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration commenced pursuant to
this Article VIII shall be conducted in all respects as a de novo trial, or
arbitration, on the merits and Indemnitee shall not be prejudiced by reason of
that adverse determination. In any such proceeding or arbitration,
the Company shall have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.
8.04. Company
Bound. If a determination shall have been made or deemed to
have been made pursuant to Article VI of this Agreement that Indemnitee is
entitled to indemnification, the Company shall be bound by such determination in
any judicial proceeding or arbitration absent (i) a misstatement by Indemnitee
of a material fact, or any omission of a material fact necessary to make
Indemnitee’s statement not materially misleading, in connection with
Indemnitee’s request for indemnification, or (ii) a prohibition of such
indemnification under applicable law.
8.05. Procedures
Valid. The Company shall be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to this Article VIII that
the procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.
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8.06. Expenses of
Adjudication. The Company shall, to the maximum extent not
prohibited by law, be precluded from asserting in any judicial proceeding or
arbitration commenced pursuant to this Section 8.06 that the procedures and
presumptions of this Agreement are not valid, binding and enforceable and shall
stipulate in any such court or before any such arbitrator that the Company is
bound by all the provisions of this Agreement. It is the intent of
the Company that, to the maximum extent permitted by law, Indemnitee not be
required to incur legal fees or other Expenses associated with the
interpretation, enforcement or defense of Indemnitee’s rights under this
Agreement by litigation or otherwise because the cost and expense thereof would
substantially detract from the benefits intended to be extended to Indemnitee
hereunder. The Company shall, to the maximum extent permitted by law,
indemnify Indemnitee against any and all Expenses and, if requested by
Indemnitee, shall (within ten (10) days after receipt by the Company of a
written request therefor) advance, to the extent not prohibited by law, such
Expenses to Indemnitee, which are incurred by Indemnitee in connection with any
action brought by Indemnitee for indemnification or advance of Expenses from the
Company under this Agreement or under any directors’ and officers’ liability
insurance policies maintained by the Company if Indemnitee is wholly successful
on the underlying claims; if Indemnitee is not wholly successful on the
underlying claims, then such indemnification and advancement shall be only to
the extent Indemnitee is successful on such underlying claims or otherwise as
permitted by law, whichever is greater.
ARTICLE
IX
Non-Exclusivity,
Insurance, Subrogation
9.01. Non-Exclusivity. The
rights of indemnification and to receive advancement of Expenses as provided by
this Agreement shall not be deemed exclusive of any other rights to which
Indemnitee may at any time be entitled under applicable law, the Company’s
Certificate of Incorporation, the Company’s By-Laws, any agreement, a vote of
shareholders or a resolution of Disinterested Directors, or
otherwise. No amendment, alteration, rescission or replacement of
this Agreement or any provision hereof shall be effective as to Indemnitee with
respect to any action taken or omitted by such Indemnitee in Indemnitee’s
Corporate Status prior to such amendment, alteration, rescission or
replacement. To the extent that a change in Delaware law, whether by
statute or judicial decision, or a change in the Company’s By-laws or
Certificate of Incorporation, permits greater indemnification or advancement of
Expenses than would be afforded currently under the Company’s By-laws,
Certificate of Incorporation and this Agreement, it is the intent of the parties
hereto that Indemnitee shall enjoy by this Agreement the greater benefits so
afforded by such change.
9.02. Insurance. The
Company may maintain, at its expense, an insurance policy or policies to protect
itself and Indemnitee against liability arising out of the subject matter of
this Agreement or otherwise.
9.03. Subrogation. In
the event of any payment under this Agreement, the Company shall be subrogated
to the extent of such payment to all of the rights of recovery of Indemnitee,
who shall execute all papers required and take all action necessary to secure
such rights, including execution of such documents as are necessary to enable
the Company to bring suit to enforce such rights.
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ARTICLE
X
General
Provisions
10.01. Successors and
Assigns. This Agreement shall be binding upon the Company and
its successors and assigns and shall inure to the benefit of Indemnitee and
Indemnitee’s legal representatives, heirs, executors and
administrators.
10.02. Severability. If
any provision or provisions of this Agreement shall be held to be invalid,
illegal or unenforceable for any reason whatsoever:
(a) the
validity, legality and enforceability of the remaining provisions of this
Agreement (including without limitation, each portion of any Section of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby; and
(b) to
the maximum extent possible, the provisions of this Agreement (including,
without limitation, each portion of any section of this Agreement containing any
such provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall be construed so as to give effect to
the intent manifested by the provision held invalid, illegal or
unenforceable.
10.03. No Adequate
Remedy. The parties declare that it is impossible to measure
in money the damages which will accrue to either party by reason of a failure to
perform any of the obligations under this Agreement. Therefore, if
either party shall institute any action or proceeding to enforce the provisions
hereof, such party against whom such action or proceeding is brought hereby
waives the claim or defense that such party has an adequate remedy at law, and
such party shall not urge in any such action or proceeding the claim or defense
that the other party has an adequate remedy at law.
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10.04. Headings. The
headings of the paragraphs of this Agreement are inserted for convenience only
and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.
10.05. Modification and
Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
10.06. Notices. All
notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given if (i) delivered by hand and
receipted for by the party to whom said notice or other communication shall have
been directed, or (ii) mailed by certified or registered mail with postage
prepaid, on the third business day after the date on which it is so
mailed:
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If
to Indemnitee, to:
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As
shown with Indemnitee’s
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signature
below.
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If
to the Company, to:
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TranSwitch
Corporation
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0
Xxxxxxxxxx Xxxxx
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Xxxxxxx,
XX 00000
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or to
such other address as may have been furnished to Indemnitee by the Company or to
the Company by Indemnitee, as the case may be.
10.07. Governing
Law. The parties agree that this Agreement shall be governed
by, and construed and enforced in accordance with, the laws of the State of
Delaware without application of the conflict of laws principles
thereof.
10.08. Entire
Agreement. This Agreement constitutes the entire agreement and
understanding between the parties hereto in reference to all the matters herein
agreed upon. This Agreement replaces in full all prior
indemnification agreements or understandings of the parties hereto, and any all
such prior agreements or understandings are hereby rescinded by mutual
agreement.
[Remainder of Page
Intentionally Left Blank]
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and
year first above written.
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TRANSWITCH
CORPORATION
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ATTEST:
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By:
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By:
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Name:
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Title:
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INDEMNITEE
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Name:
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Address:
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Schedule
to Indemnification Agreement
The
following is a list of our directors who are party to the Indemnification
Agreement, the form of which is filed herewith:
Xx. Xxxxxxx
Xxx
Xx.
Xxxxxx X. Xxxxxx
Xx. Xxxxx
Hultzsch
Xx. Xxxxxx
Xxxxxxxxx
Xx. Xxxxx X.
Xxxxx
Xx. Xxxxxx X. Xxxxxxxx
Xx.
Xxxxxx X. Xxxx
Xx.
Xxxxxxx Xxxx
Xx. Xxxxx
Xxxxxx
Xx. Xxx
Xxxxxxxxxx
Mr. Xxxxxxx
Xxxxxxxx
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