INDEMNITY AGREEMENT
Exhibit 10.36
INDEMNITY AGREEMENT
This Indemnity Agreement (the “Agreement”) is made and entered into this ___day of
, 2006 by and between Veraz Networks, Inc., a Delaware corporation (the
“Corporation”), and (“Agent”).
Recitals
Whereas, Agent has performed and performs a valuable service to the Corporation in
his capacity as of the Corporation;
Whereas, the stockholders of the Corporation have adopted bylaws (the “Bylaws”)
providing for the indemnification of the directors, officers, employees and other agents of the
Corporation, including persons serving at the request of the Corporation in such capacities with
other corporations or enterprises, as authorized by the Delaware General Corporation Law, as
amended (the “Code”);
Whereas, the Bylaws and the Code, by their non-exclusive nature, permit contracts
between the Corporation and its agents, officers, employees and other agents with respect to
indemnification of such persons;
Whereas, the Corporation believes that it is reasonable, prudent and necessary for
the Corporation contractually to obligate itself to indemnify, and to advance expenses on behalf
of, such persons to the fullest extent permitted by applicable law so that they will serve or
continue to serve the Corporation free from undue concern that they will not be so indemnified; and
Whereas, in consideration for Agent’s past service and in order to induce Agent to
continue to serve as of the Corporation, the Corporation has determined and agreed to
enter into this Agreement with Agent.
Now, Therefore, in consideration of Agent’s past service and/or continued service as
after the date hereof, the parties hereto agree as follows:
Agreement
1. Services to the Corporation. Agent will serve, at the will of the Corporation or under
separate contract, if any such contract exists, as of the Corporation or as a director,
officer or other fiduciary of an affiliate of the Corporation (including any employee benefit plan
of the Corporation) faithfully and to the best of his ability so long as he is duly elected and
qualified in accordance with the provisions of the Bylaws or other applicable charter documents of
the Corporation or such affiliate; provided, however, that Agent may at any time and for any reason
resign from such position (subject to any contractual obligation that Agent may have assumed apart
from this Agreement) and that the Corporation or any affiliate shall have no obligation under this
Agreement to continue Agent in any such position.
2. Indemnity of Agent. The Corporation hereby agrees to hold harmless and indemnify Agent to
the fullest extent authorized or permitted by the provisions of the Bylaws and
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the Code, as the same may be amended from time to time (but, only to the extent that such
amendment permits the Corporation to provide broader indemnification rights than the Bylaws or the
Code permitted prior to adoption of such amendment).
3. Additional Indemnity. In addition to and not in limitation of the indemnification
otherwise provided for herein, and subject only to the exclusions set forth in Section 4 hereof,
the Corporation hereby further agrees to hold harmless and indemnify Agent:
(a) against any and all expenses (including attorneys’ fees); witness fees; damages;
judgments; fines; premiums and security for, and other costs relating to, any costs bond,
supersedes bond, or other appeal bond or its equivalent; any amounts paid in settlement and any
other amounts that Agent becomes legally obligated to pay because of any claim or claims made
against or by him in connection with any threatened, pending or completed action, suit, proceeding,
or any appeal of the foregoing, whether civil, criminal, arbitrational, administrative or
investigative (including an action by or in the right of the Corporation or in any instance that
Agent is asked to give or forced to give witness testimony where neither Agent nor the Corporation
is a party but in which the request is being made by virtue of Agent’s affiliation to the
Corporation), whether formal or informal, to which Agent is, was or at any time becomes a party, or
is threatened to be made a party, by reason of the fact that Agent is, was or at any time becomes a
director, officer, employee or other agent of Corporation, or is or was serving or at any time
serves at the request of the Corporation as a director, officer, employee or other agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other enterprise; and
(b) otherwise to the fullest extent as may be provided to Agent by the Corporation under the
non-exclusivity provisions of the Code and the Bylaws.
4. Limitations on Additional Indemnity. No indemnity pursuant to Section 3 hereof shall be
paid by the Corporation:
(a) on account of any claim against Agent solely for an accounting of profits made from the
purchase or sale by Agent of securities of the Corporation pursuant to the provisions of Section
16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any
federal, state or local statutory law;
(b) on account of Agent’s conduct that is established by a final judgment as knowingly
fraudulent or deliberately dishonest or that constituted willful misconduct;
(c) on account of Agent’s conduct that is established by a final judgment as constituting a
breach of Agent’s duty of loyalty to the Corporation or resulting in any personal profit or
advantage to which Agent was not legally entitled;
(d) for which payment is actually made to Agent under a valid and collectible insurance policy
or under a valid and enforceable indemnity clause, bylaw or agreement, except in respect of any
excess beyond payment under such insurance, clause, bylaw or agreement;
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(e) if indemnification is not lawful (and, in this respect, both the Corporation and Agent
have been advised that the Securities and Exchange Commission believes that indemnification for
liabilities arising under the federal securities laws is against public policy and is, therefore,
unenforceable and that claims for indemnification should be submitted to appropriate courts for
adjudication); or
(f) in connection with any proceeding (or part thereof) initiated by Agent, or any proceeding
by Agent against the Corporation or its directors, officers, employees or other agents, unless (i)
such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by
the Board of Directors of the Corporation, (iii) such indemnification is provided by the
Corporation, in its sole discretion, pursuant to the powers vested in the Corporation under the
Code, or (iv) the proceeding is initiated pursuant to Section 11 hereof.
5. Liability Insurance. For the duration of Agent’s service as a director and/or officer of
the Corporation, and thereafter for so long as Agent shall be subject to any pending or possible
claim (as set forth in Section 3), the Corporation shall use commercially reasonable efforts
(taking into account the scope and amount of coverage available relative to the cost thereof) to
cause to be maintained in effect policies of directors’ and officers’ liability insurance providing
coverage for directors and/or officers of the Corporation that is at least substantially comparable
in scope and amount to that provided by the Corporation’s current policies of directors’ and
officers’ liability insurance. The minimum AM Best rating for the insurance carriers of such
insurance carrier shall be not less than A- VI.
6. Continuation of Indemnity.
(a) All agreements and obligations of the Corporation contained herein shall continue during
the period Agent is a director, officer, employee or other agent of the Corporation (or is or was
serving at the request of the Corporation as a director, officer, employee or other agent of
another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise)
and shall continue thereafter so long as Agent shall be subject to any possible claim or
threatened, pending or completed action, suit or proceeding, whether civil, criminal,
arbitrational, administrative or investigative, by reason of the fact that Agent was serving in the
capacity referred to herein.
(b) The Corporation shall require any successor to the Corporation (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all, substantially all, or a
substantial part of the business or assets of the Corporation, by written agreement in form and
substance reasonably satisfactory to the Corporation, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Corporation would be required to
perform if no such succession had taken place.
7. Partial Indemnification. Agent shall be entitled under this Agreement to indemnification
by the Corporation for a portion of the expenses (including attorneys’ fees), witness fees,
damages, judgments, fines and amounts paid in settlement and any other amounts that Agent becomes
legally obligated to pay in connection with any action, suit or proceeding referred to in Section 3
hereof even if not entitled hereunder to indemnification for the total
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amount thereof, and the Corporation shall indemnify Agent for the portion thereof to which
Agent is entitled.
8. Notification and Defense of Claim. Not later than thirty (30) days after receipt by Agent
of notice of the commencement of any action, suit or proceeding, Agent will, if a claim in respect
thereof is to be made against the Corporation under this Agreement, notify the Corporation of the
commencement thereof; but the omission so to notify the Corporation will not relieve it from any
liability which it may have to Agent otherwise than under this Agreement. With respect to any such
action, suit or proceeding as to which Agent notifies the Corporation of the commencement thereof:
(a) the Corporation will be entitled to participate therein at its own expense;
(b) except as otherwise provided below, the Corporation may, at its option and jointly with
any other indemnifying party similarly notified and electing to assume such defense, assume the
defense thereof, with counsel reasonably satisfactory to Agent. After notice from the Corporation
to Agent of its election to assume the defense thereof, the Corporation will not be liable to Agent
under this Agreement for any legal or other expenses subsequently incurred by Agent in connection
with the defense thereof except for reasonable costs of investigation or otherwise as provided
below. Agent shall have the right to employ separate counsel in such action, suit or proceeding
but the fees and expenses of such counsel incurred after notice from the Corporation of its
assumption of the defense thereof shall be at the expense of Agent unless (i) the employment of
counsel by Agent has been authorized by the Corporation, (ii) Agent shall have reasonably
concluded, and so notified the Corporation, that there is an actual conflict of interest between
the Corporation and Agent in the conduct of the defense of such action or (iii) the Corporation
shall not in fact have employed counsel to assume the defense of such action, in each of which
cases the fees and expenses of Agent’s separate counsel shall be at the expense of the Corporation.
The Corporation shall not be entitled to assume the defense of any action, suit or proceeding
brought by or on behalf of the Corporation or as to which Agent shall have made the conclusion
provided for in clause (ii) above; and
(c) the Corporation shall not be liable to indemnify Agent under this Agreement for any
amounts paid in settlement of any action or claim effected without its written consent, which shall
not be unreasonably withheld. The Corporation shall be permitted to settle any action except that
it shall not settle any action or claim in any manner which would impose any penalty or limitation
on Agent without Agent’s written consent, which may be given or withheld in Agent’s sole
discretion.
9. Expenses. To the extent not prohibited by law, the Corporation shall advance the expenses
incurred by Agent in connection with any proceeding, and such advancement shall be made within ten
(10) business days after the receipt by the Corporation of a statement or statements requesting
such advances (which shall include invoices received by Agent in connection with such expenses but,
in the case of invoices in connection with legal services, any references to legal work performed
or to expenditures made that would cause Agent to waive any privilege accorded by applicable law
shall not be included with the invoice) from time to time, whether prior to or after final
disposition of any proceeding. Advances shall be unsecured,
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interest free and without regard to Agent’s ability to repay the expenses. Advances shall be
made without regard to Agent’s ultimate entitlement to indemnification under the other provisions
of this Agreement. Advances shall include any and all expenses actually and reasonably incurred by
Agent pursuing an action to enforce his right to indemnification under this Agreement, or otherwise
and this right of advancement, including expenses incurred preparing and forwarding statements to
the Corporation to support the advances claimed. The Agent shall qualify for advances upon the
execution and delivery to the Corporation of this Agreement which shall constitute an undertaking
providing that the Agent shall, to the fullest extent required by law, repay the advance if and to
the extent that it is ultimately determined by a court of competent jurisdiction in a final
judgment, not subject to appeal, that Agent is not entitled to be indemnified by the Corporation.
The payment of advances pursuant to this Section 9 shall include any and all reasonable expenses
incurred pursuing an action to enforce the rights herein, including expenses incurred preparing and
forwarding statements to the Corporation to support the advances claimed. The right to advances
under this Section shall continue until final disposition of any proceeding, including any appeal
therein. This Section 9 shall not apply to any claim made by Agent for which indemnity is excluded
pursuant to Section 4(f).
10. Presumptions Regarding Agent’s Conduct.
(a) With respect to Section 3 hereof, the Agent shall be conclusively presumed to have acted
in good faith and in a manner Agent reasonably believed to be in, or not opposed to, the best
interests of the Corporation, and, with respect to any criminal proceeding to have had no
reasonable cause to believe Agent’s conduct was unlawful, unless a determination is made that the
Agent has not acted in accordance with the standards set forth above: (i) by the Board of Directors
by a majority vote of a quorum thereof consisting of Directors who were not parties to the
proceeding the basis of which a claim is made under this Agreement; (ii) by the stockholders of the
Corporation by a majority vote of stockholders who were not parties to such a proceeding; or (iii)
in a written opinion of independent counsel, selection of whom has been approved by the Agent in
writing.
(b) In making a determination with respect to entitlement to indemnification hereunder, the
Directors, stockholders and independent legal counsel making such determination shall presume that
Agent is entitled to indemnification under this Agreement if Agent has submitted a request for
indemnification in accordance with the terms of this Agreement, and the Corporation shall have the
burden of proof, by clear and convincing evidence, to overcome that presumption. For the purposes
of any determination of good faith, Agent shall be deemed to have acted in good faith if Agent’s
action is based on the records or books of account, including financial statements of the
Corporation or any subsidiary, or on information supplied to Agent by the officers, and employees
of the Corporation or any subsidiary, in the course of their duties, or on the advice of legal
counsel for the Corporation or any subsidiary, or for the Board of Directors or counsel selected by
any committee of the Board of Directors or on information or records given or reports made to the
Corporation or any subsidiary, by an independent certified public accountant or by an appraiser,
investment banker or other expert selected by the Corporation or the Board of Directors or any
committee thereof. The knowledge and/or actions, or failure to act, of any director, officer,
agent or employee of the Corporation or any subsidiary shall not be imputed to Agent for purposes
of determining Agent’s right to indemnification under this
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Agreement. The provisions of this Section 10 shall not be exclusive or limit in any way the
other circumstances in which the Agent may be deemed to have met the requisite standard of conduct
set forth in this Agreement.
11. Enforcement. Any right to indemnification or advances granted by this Agreement to Agent
shall be enforceable by or on behalf of Agent in any court of competent jurisdiction if (i) the
claim for indemnification or advances is denied, in whole or in part, or (ii) no disposition of
such claim is made within ninety (90) days of request therefor. Agent, in such enforcement action,
if successful in whole or in part, shall be entitled to be paid also the expense of prosecuting his
claim. It shall be a defense to any action for which a claim for indemnification is made under
Section 3 hereof (other than an action brought to enforce a claim for expenses pursuant to Section
9 hereof, provided that the required undertaking has been tendered to the Corporation) that Agent
is not entitled to indemnification because of the limitations set forth in Section 4 hereof.
Neither the failure of the Corporation (including its Board of Directors or its stockholders) to
have made a determination prior to the commencement of such enforcement action that indemnification
of Agent is proper in the circumstances, nor an actual determination by the Corporation (including
its Board of Directors or its stockholders) that such indemnification is improper shall be a
defense to the action or create a presumption that Agent is not entitled to indemnification under
this Agreement or otherwise.
12. Sharing of Information. In the event Agent is the subject of, or is implicated in any way
during, an investigation, whether formal or informal, the Corporation shall share with Agent any
information it has turned over to any third parties concerning such investigation.
13. Subrogation. In the event of payment under this Agreement, the Corporation shall be
subrogated to the extent of such payment to all of the rights of recovery of Agent, who shall
execute all documents required and shall do all acts that may be necessary to secure such rights
and to enable the Corporation effectively to bring suit to enforce such rights.
14. No Imputation. The knowledge and/or actions, or failure to act, of any director, officer,
agent or employee of the Corporation or the Corporation itself shall not be imputed to Agent for
purposes of determining the right to indemnification under this Agreement.
15. Non-Exclusivity of Rights. The rights conferred on Agent by this Agreement shall not be
exclusive of any other right which Agent may have or hereafter acquire under any statute, provision
of the Corporation’s Certificate of Incorporation or Bylaws, agreement, vote of stockholders or
directors, or otherwise, both as to action in his official capacity and as to action in another
capacity while holding office.
16. Survival of Rights.
(a) The rights conferred on Agent by this Agreement shall continue after Agent has ceased to
be a director, officer, employee or other agent of the Corporation or to serve at the request of
the Corporation as a director, officer, employee or other agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise and shall inure to the
benefit of Agent’s heirs, executors and administrators.
6.
(b) The Corporation shall require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business or assets of the
Corporation, expressly to assume and agree to perform this Agreement in the same manner and to the
same extent that the Corporation would be required to perform if no such succession had taken
place.
17. Separability. Each of the provisions of this Agreement is a separate and distinct
agreement and independent of the others, so that if any provision hereof shall be held to be
invalid for any reason, such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof. Furthermore, if this Agreement shall be invalidated
in its entirety on any ground, then the Corporation shall nevertheless indemnify Agent to the
fullest extent provided by the Bylaws, the Code or any other applicable law.
18. Governing Law. This Agreement shall be interpreted and enforced in accordance with the
laws of the State of Delaware.
19. Amendment and Termination. No amendment, modification, termination or cancellation of
this Agreement shall be effective unless in writing signed by both parties hereto.
20. Identical Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall for all purposes be deemed to be an original but all of which together shall
constitute but one and the same Agreement. Only one such counterpart need be produced to evidence
the existence of this Agreement.
21. Headings. The headings of the sections of this Agreement are inserted for convenience
only and shall not be deemed to constitute part of this Agreement or to affect the construction
hereof.
22. Notices. All notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given (i) upon delivery if delivered by hand to the
party to whom such communication was directed or (ii) upon the third business day after the date on
which such communication was mailed if mailed by certified or registered mail with postage prepaid:
(a) If to Agent, at the address indicated on the signature page hereof.
(b) If to the Corporation, to:
or to such other address as may have been furnished to Agent by the Corporation.
7.
In Witness Whereof, the parties hereto have executed this Indemnity Agreement on and
as of the day and year first above written.
| Veraz Networks, Inc. |
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| By: | ||||
| Agent |
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| By: | ||||
| Name: | ||||
| Address: | ||||
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