TRANS1 INC. INDEMNIFICATION AGREEMENT
Exhibit 10.7
This Indemnification Agreement (“Agreement”) is entered into as of the th day
of , , by and between TranS1 Inc., a Delaware corporation (the “Company”)
and the Indemnitee identified on the signature page hereto (the “Indemnitee”).
R E C I T A L S
A. The Company and Indemnitee recognize the continued difficulty in obtaining liability
insurance for the Company’s directors, officers, employees, agents and fiduciaries, the significant
increases in the cost of such insurance and the general reductions in the coverage of such
insurance.
B. The Company and Indemnitee further recognize the substantial increase in corporate
litigation in general, subjecting directors, officers, employees, agents and fiduciaries to
expensive litigation risks at the same time as the availability and coverage of liability insurance
has been severely limited.
C. Indemnitee does not regard the current protection available as adequate under the present
circumstances, and Indemnitee and other directors, officers, employees, agents and fiduciaries of
the Company may not be willing to continue to serve in such capacities without additional
protection.
D. The Company (i) desires to attract and retain the services of highly qualified individuals,
such as Indemnitee, to serve the Company and, in part, in order to induce Indemnitee to continue to
provide services to the Company and (ii) wishes to provide for the indemnification and advancing of
expenses to each Indemnitee to the maximum extent permitted by law.
E. In view of the considerations set forth above, the Company desires that Indemnitee be
indemnified by the Company as set forth herein.
NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:
1. Indemnification.
(a) Indemnification of Expenses. The Company shall indemnify and hold harmless Indemnitee
(including his partners, employees and agents) to the fullest extent permitted by law if Indemnitee
was or is or becomes a party to or witness or other participant in, or is threatened to be made a
party to or witness or other participant in, any threatened, pending or completed action, suit,
proceeding or alternative dispute resolution mechanism, or any hearing, inquiry or investigation
that Indemnitee in good faith believes might lead to the institution of any such action, suit,
proceeding or alternative dispute resolution mechanism, whether civil, criminal, administrative,
investigative or other (hereinafter a “Claim”) by reason of (or arising in part out of) any event
or occurrence related to the fact that Indemnitee is or was a director, officer, employee,
controlling person, agent or fiduciary of the Company, or any subsidiary of the Company, or is or
was serving at the request of the Company as a director, officer, employee, controlling person,
agent or fiduciary of another corporation, partnership, joint venture, trust or other enterprise,
or by reason of any action or inaction on the part of Indemnitee while serving in such capacity,
and are directly related to Indemnitee’s service as an officer or director of the Company
including, without limitation, any and
all losses, claims, damages, expenses and liabilities, joint or several (including any
investigation, legal and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit proceeding or any claim asserted) under the Securities Act of 1933,
as amended (the “Securities Act”), the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) or other federal or state statutory law or regulation, at common law or otherwise, which
relate directly or indirectly to the registration, purchase, sale or ownership of any securities of
the Company or to any fiduciary obligation owed with respect thereto (hereinafter an
“Indemnification Event”) against any and all expenses (including attorneys’ fees and all other
costs, expenses and obligations incurred in connection with investigating, defending a witness in
or participating in (including on appeal), or preparing to defend, be a witness in or participate
in, any such action, suit, proceeding, alternative dispute resolution mechanism, hearing, inquiry
or investigation), judgments, fines, penalties and amounts paid in settlement (if such settlement
is approved in advance by the Company, which approval shall not be unreasonably withheld) of such
Claim and any federal, state, local or foreign taxes imposed on Indemnitee as a result of the
actual or deemed receipt of any payments under this Agreement (collectively, hereinafter
“Expenses”), including all interest, assessments and other charges paid or payable in connection
with or in respect of such Expenses. Such payment of Expenses shall be made by the Company as soon
as practicable but in any event no later than five days after written demand by the Indemnitee
therefor is presented to the Company.
(b) Contribution. If the indemnification provided for in Section 1(a) above for any reason is
held by a court of competent jurisdiction to be unavailable to an Indemnitee in respect of any
losses, claims, damages, expenses or liabilities referred to therein, then the Company, in lieu of
indemnifying Indemnitee thereunder, shall contribute to the amount paid or payable by Indemnitee as
a result of such losses, claims, damages, expenses or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the Indemnitee, or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company and the Indemnitee in connection with the action or inaction
which resulted in such losses, claims, damages, expenses or liabilities, as well as any other
relevant equitable considerations. In connection with the registration of the Company’s
securities, the relative benefits received by the Company and the Indemnitee shall be deemed to be
in the same respective proportions that the net proceeds from the offering (before deducting
expenses) received by the Company and the Indemnitee, in each case as set forth in the table on the
cover page of the applicable prospectus, bear to the aggregate public offering price of the
securities so offered. The relative fault of the Company and the Indemnitee shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to information supplied by the
Company or the Indemnitee and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Indemnitee agree that it would not be just and equitable if contribution
pursuant to this Section 1(b) were determined by pro rata or per capita allocation or by
securities, in no event shall an Indemnitee be required to contribute any amount under this Section
1(b) in excess of the lesser of (i) in the case of a director of the Company or any of its
subsidiaries who is not an officer of the Company or any of such subsidiaries, the amount of fees
paid to the director for serving as a director during the 12 months preceding the commencement of
the Claim; or (ii) in the case of a director of the Company or any of its subsidiaries who is also
an officer of the Company or any of such subsidiaries, the amount set forth in clause (i) plus 5%
of the aggregate cash compensation paid to said director for service in such office(s) during the
12 months preceding the
commencement of the Claim; (iii) in the case of an officer of the Corporation or any of its
subsidiaries, 5% of the aggregate cash compensation paid to such officer for service in such
office(s) during the 12 months preceding the commencement of such Claim; (iv) that proportion of
the total of such losses, claims, damages or liabilities indemnified against equal to the
proportion of the total securities sold under such registration statement which is being sold by
such Indemnitee or (v) the proceeds received by Indemnitee from its sale of securities under such
registration statement. No person found guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was
not found guilty of such fraudulent misrepresentation.
(c) Survival Regardless of Investigation. The indemnification and contribution provided for
in this Section 1 will remain in full force and effect regardless of any investigation made by or
on behalf of the Indemnitee or any officer, director, employee, agent or controlling person of the
Indemnitee.
(d) Change in Control. The Company agrees that if there is a Change in Control of the Company
(other than a Change in Control which has been approved by a majority of the Company’s Board of
Directors who were directors immediately prior to such Change in Control) then, with respect to all
matters thereafter arising concerning the rights of Indemnitee to payments of Expenses under this
Agreement or any other agreement or under the Company’s Certificate of Incorporation or Bylaws as
now or hereafter in effect, Independent Legal Counsel (as defined in Section 10(d) hereof) shall be
selected by the Indemnitee and approved by the Company (which approval shall not be unreasonably
withheld). Such counsel, among other things, shall render its written opinion to the Company and
Indemnitee as to whether and to what extent Indemnitee would be permitted to be indemnified under
applicable law. The Company agrees to abide by such opinion and to pay the reasonable fees of the
Independent Legal Counsel referred to above and to fully indemnify such counsel against any and all
expenses (including attorneys’ fees), claims, liabilities and damages arising out of or relating to
this Agreement or its engagement pursuant hereto.
(e) Mandatory Payment of Expenses. Notwithstanding any other provision of this Agreement
other than Section 9 hereof, to the extent that Indemnitee has been successful on the merits or
otherwise, including, without limitation, the dismissal of an action without prejudice, in the
defense of any action, suit, proceeding, inquiry or investigation referred to in Section (1)(a)
hereof or in the defense of any claim, issue or matter therein, Indemnitee shall be indemnified
against all Expenses incurred by Indemnitee in connection therewith.
2. Expenses; Indemnification Procedure.
(a) Advancement of Expenses. The Company shall advance all Expenses incurred by Indemnitee.
The advances to be made hereunder shall be paid by the Company to Indemnitee as soon as practicable
but in any event no later than five days after written demand by Indemnitee therefor to the
Company.
(b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition precedent to
Indemnitee’s right to be indemnified under this Agreement, give the Company notice in writing as
soon as practicable of any Claim made against Indemnitee for which indemnification will or could be
sought under this Agreement. Notice to the Company shall be directed to the Chief Executive
Officer of the Company at the address shown on the signature page of this Agreement (or such other
address as the Company shall designate in writing to Indemnitee). In addition, Indemnitee
shall give the Company such information and cooperation as it may reasonably require and as
shall be within Indemnitee’s power.
(c) No Presumptions; Burden of Proof. For purposes of this Agreement, the termination of any
Claim by judgment, order, settlement (whether with or without court approval) or conviction, or
upon a plea of nolo contendere, or its equivalent, shall not create a presumption that
Indemnitee did not meet any particular standard of conduct or have any particular belief or that a
court has determined that indemnification is not permitted by applicable law. In connection with
any determination as to whether Indemnitee is entitled to be indemnified hereunder, the burden of
proof shall be on the Company to establish that Indemnitee is not so entitled.
(d) Notice to Insurers. If, at the time of the receipt by the Company of a notice of a Claim
pursuant to Section 2(b) hereof, the Company’s liability insurance may cover such Claim, the
Company shall give prompt notice of the commencement of such Claim to the insurers in accordance
with the procedures set forth in the respective policies. The Company shall thereafter take all
necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts
payable as a result of such action, suit, proceeding, inquiry or investigation in accordance with
the terms of such policies.
(e) Selection of Counsel. In the event the Company shall be obligated hereunder to pay the
Expenses of any Claim, the Company shall be entitled to assume the defense of such Claim, with
counsel approved by the Indemnitee, which approval shall not be unreasonably withheld, upon the
delivery to Indemnitee of written notice of its election to do so. After delivery of such notice,
approval of such counsel by the Indemnitee and the retention of such counsel by the Company, the
Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently
incurred by Indemnitee with respect to the same Claim; provided that, (i) the Indemnitee shall have
the right to employ Indemnitee’s counsel in any such Claim at the Indemnitee’s expense and (ii) if
(A) the employment of counsel by the Indemnitee has been previously authorized by the Company, (B)
Indemnitee shall have reasonably concluded that there is a conflict of interest between the Company
and Indemnitee in the conduct of any such defense, or (C) the Company shall not continue to retain
such counsel to defend such Claim or does not diligently prosecute the defense of such Claim, then
the fees and expenses of the Indemnitee’s counsel shall be at the expense of the Company. The
Company shall diligently prosecute the defense of such Claim. The Company shall have the right to
settle any Claim against Indemnitee without the consent of such Indemnitee; provided, that (a) such
settlement provides a full and unconditional release in exchange for the payment of money only, all
of which will be funded by the Company, (b) such settlement does not include an admission of guilt,
and (c) such settlement does not restrict the future activities of Indemnitee or impose any
on-going obligations (other than customary provisions such as confidentiality).
3. Directors’ and Officers’ Insurance.
(a) The Company hereby covenants and agrees that, so long as Indemnitee shall continue to
serve as a director or officer of the Company and thereafter so long as Indemnitee shall be subject
to any possible Claim, the Company shall continue to consider obtaining directors’ and officers’
insurance.
(b) In all policies of directors’ and officers’ insurance, Indemnitee shall be named as an
insured in such a manner as to provide Indemnitee the same rights and benefits, subject to the same
limitations, as are accorded to the Company’s directors or officers most favorably insured by such
policy.
4. Additional Indemnification Rights; Nonexclusivity.
(a) Scope. The Company hereby agrees to indemnify Indemnitee to the fullest extent permitted
by law, notwithstanding that such indemnification is not specifically authorized by the other
provisions of this Agreement, the Company’s Certificate of Incorporation, the Company’s Bylaws or
by statute. In the event of any change after the date of this Agreement in any applicable law,
statute or rule which expands the right of a Delaware corporation to indemnify a member of its
Board of Directors or an officer, employee, agent or fiduciary, it is the intent of the parties
hereto that Indemnitee shall enjoy by this Agreement the greater benefits afforded by such change.
In the event of any change in any applicable law, statute or rule which narrows the right of a
Delaware corporation to indemnify a member of its Board of Directors or an officer, employee, agent
or fiduciary, such change, to the extent not otherwise required by such law, statute or rule to be
applied to this Agreement, shall have no effect on this Agreement or the parties’ rights and
obligations hereunder except as set forth in Section 8(a) hereof.
(b) Nonexclusivity. The indemnification provided by this Agreement shall be in addition to
any rights to which Indemnitee may be entitled under the Company’s Certificate of Incorporation,
its Bylaws, any agreement, any vote of stockholders or disinterested directors, the Delaware
General Corporation Law or otherwise. The indemnification provided under this Agreement shall
continue as to Indemnitee for any action Indemnitee took or did not take while serving in an
indemnified capacity even though the Indemnitee may have ceased to serve in such capacity.
5. No Duplication of Payments. The Company shall not be liable under this Agreement to make
any payment in connection with any Claim made against Indemnitee to the extent such Indemnitee has
otherwise actually received payment (under any insurance policy, Certificate of Incorporation,
Bylaw or otherwise) of the amounts otherwise indemnifiable hereunder.
6. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement
to indemnification by the Company for any portion of Expenses incurred in connection with any
Claim, but not, however, for all of the total amount thereof, the Company shall nevertheless
indemnify Indemnitee for the portion of such Expenses to which Indemnitee is entitled.
7. Mutual Acknowledgement. The Company and Indemnitee acknowledge that in certain instances,
Federal law or applicable public policy may prohibit the Company from indemnifying its directors,
officers, employees, agents or fiduciaries under this Agreement or otherwise. Indemnitee
understands and acknowledges that the Company has undertaken or may be required in the future to
undertake with the Securities and Exchange Commission to submit the question of indemnification to
a court in certain circumstances for a determination of the Company’s rights under public policy to
indemnify the Indemnitee.
8. Liability Insurance. To the extent the Company maintains liability insurance applicable to
employees, control persons, agents or fiduciaries, Indemnitee shall be covered by such policies in
such a manner as to provide Indemnitee the same rights and benefits as are accorded to the
most favorably insured of the Company’s key employees, agents or fiduciaries, if Indemnitee is
not an officer or director but is a key employee, agent, control person, or fiduciary.
9. Exceptions. Any other provision herein to the contrary notwithstanding, the Company shall
not be obligated pursuant to the terms of the this Agreement:
(a) Excluded Action or Omissions. To indemnify Indemnitee for Indemnitee’s acts, omissions or
transactions from which the Indemnitee may not be relieved of liability under applicable law;
(b) Claims Initiated by Indemnitee. To indemnify or advance expenses to Indemnitee with
respect to Claims initiated or brought voluntarily by Indemnitee and not by way of defense, except
(i) with respect to actions or proceedings to establish or enforce a right to indemnify under this
Agreement or any other agreement or insurance policy or under the Company’s Certificate of
Incorporation or Bylaws now or hereafter in effect relating to Claims for Indemnifiable Events,
(ii) in specific cases if the Board of Directors has approved the initiation or bringing of such
Claim, or (iii) as otherwise required under the applicable provisions of the Delaware General
Corporation Law, regardless of whether Indemnitee ultimately is determined to be entitled to such
indemnification, advance expense payment or insurance recovery, as the case may be;
(c) Lack of Good Faith. To indemnify Indemnitee for any expenses incurred by Indemnitee with
respect to any proceeding instituted by Indemnitee to enforce or interpret this Agreement, if a
court of competent jurisdiction determines that each of the material assertions made by Indemnitee
in such proceeding was not made in good faith or was frivolous; or
(d) Claims Under Section 16(b). To indemnify Indemnitee for expenses and the payment of
profits arising from the purchase and sale by Indemnitee of securities in violation of Section
16(b) of the Securities Exchange Act of 1934, as amended or any similar successor statute.
10. Period of Limitations. No legal action shall be brought and no cause of action shall be
asserted by or in the right of the Company against Indemnitee, Indemnitee’s estate, spouse, heirs,
executors or personal or legal representatives after the expiration of two years from the date of
accrual of such cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal action within such
two-year period; provided, however, that if any shorter period of limitations is
otherwise applicable to any such cause of action, such shorter period shall govern.
11. Construction of Certain Phrases.
(a) For purposes of this Agreement, references to the “Company” shall include, in addition to
the resulting corporation, any constituent corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate existence had continued, would have
had power and authority to indemnify its directors, officers, employees, agents or fiduciaries, so
that if Indemnitee is or was a director, officer, employee, agent, control person, or fiduciary of
such constituent corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee, control person, agent or fiduciary or another corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise, each Indemnitee shall
stand in the same position under the provisions of this Agreement with respect to the resulting or
surviving corporation as Indemnitee would have with respect to such constituent corporation if
its separate existence had continued.
(b) For purposes of this Agreement, references to “other enterprises” shall include employee
benefit plans; references to “fines” shall include any excise taxes assessed on Indemnitee with
respect to an employee benefit plan; and references to “serving at the request of the Company”
shall include any service as a director, office, employee, agent or fiduciary of the Company which
imposes duties on, or involves services by, such director, officer, employee, agent or fiduciary
with respect to an employee benefit plan, its participants or its beneficiaries; and if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan, Indemnitee shall be deemed to have
acted in a manner “not opposed to the best interests of the Company” as referred to in this
Agreement.
(c) For purposes of this Agreement a “Change in Control” shall be deemed to have occurred if
(i) any “person” (as such term in used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended), other than a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or a corporation owned directly or indirectly by the stockholders of
the Company in substantially the same proportions as their ownership of stock of the Company, (A)
who is or becomes the beneficial owner, directly or indirectly, of securities of the Company
representing 10% or more of the combined voting power of the Company’s then outstanding Voting
Securities, increases his beneficial ownership of such securities by 5% or more over the percentage
so owned by such person, or (B) becomes the “beneficial owner” (as defined in Rule 13d-3 under said
Act), directly or indirectly, of securities of the Company representing more than 20% of the total
voting power represented by the Company’s then outstanding Voting Securities, (ii) during any
period of two consecutive years, individuals who at the beginning of such period constitute the
Board of Directors of the Company and any new director whose election by the Board of Directors or
nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds
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 a majority thereof, or (iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation 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 80% of the total voting power represented by the
Voting Securities of the Company or such surviving entity outstanding immediately after such merger
or consolidation, or the stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of (in one transaction or a
series of transactions) all or substantially all of the Company’s assets.
(d) For purposes of this Agreement, “Independent Legal Counsel” shall mean an attorney or firm
of attorneys, selected in accordance with the provisions of Section 1(d) hereof, who shall not have
otherwise performed services for the Company or Indemnitee within the last three years (other than
with respect to matters concerning the right of Indemnitee under this Agreement, or of other
indemnitees under similar indemnity agreements). Notwithstanding the foregoing, the term
“Independent Legal Counsel” shall not include any person who, under the applicable standards of
professional conduct then prevailing would have a conflict of interest in representing either the
Company or Indemnitee in an action to determine Indemnitee’s right to indemnification under this
Agreement.
(e) For purposes of this Agreement, “Voting Securities” shall mean any securities of the
Company that vote generally in the election of directors.
12. Remedies. In the event that (a) a determination is made that Indemnitee is not entitled
to indemnification, (b) advances for Expenses are not made when and as required by this Agreement,
(c) payment has not been timely made pursuant to this Agreement or (d) Indemnitee otherwise seeks
enforcement of this Agreement, Indemnitee shall be entitled to a final adjudication in an
appropriate court of the State of Delaware of his entitlement to such indemnification or advance.
Alternatively, Indemnitee at his option may seek an award in arbitration. If the parties are
unable to agree on an arbitrator, the parties shall provide JAMS Endispute (“JAMS”) with a
statement of the nature of the dispute and the desired qualifications of the arbitrator. JAMS will
then provide a list of three available arbitrators. Each party may strike one of the names on the
list, and the remaining person will serve as the arbitrator. If both parties strike the same
person, JAMS will select the arbitrator from the other two names. The arbitration award shall be
made within 90 days following the demand for arbitration. Except as set forth herein, the
provisions of Delaware law shall apply to any such arbitration. The Company shall not oppose
Indemnitee’s right to seek any such adjudication or arbitration award. In any such proceeding or
arbitration Indemnitee shall be presumed to be entitled to indemnification under this Agreement and
the Company shall have the burden of proof to overcome that presumption.
13. Injunctive Relief. The Company and Indemnitee agree herein that a monetary remedy for
breach of this Agreement, at some later date, will be inadequate, impracticable and difficult of
proof, and further agree that such breach would cause Indemnitee irreparable harm. Accordingly,
the Company and Indemnitee agree that Indemnitee shall be entitled to temporary and permanent
injunctive relief to enforce this Agreement without the necessity of proving actual damages or
irreparable harm. The Company and Indemnitee further agree that Indemnitee shall be entitled to
such injunctive relief, including temporary restraining orders, preliminary injunctions and
permanent injunctions, without the necessity of posting bond or other undertaking in connection
therewith. Any such requirement of bond or undertaking is hereby waived by the Company, and the
Company acknowledges that in the absence of such a waiver, a bond or undertaking may be required by
the court.
14. Duration and Scope of Agreement. This Agreement shall continue so long as Indemnitee
shall be subject to any possible Claim eligible for indemnification pursuant to the terms of this
Agreement and shall be applicable to Claims commenced or continued after execution of this
Agreement, whether arising from acts or omissions occurring before or after such execution.
15. Establishment of Trust. In order to secure the obligations of the Company to indemnify
and to advance Expenses to Indemnitee pursuant to this Agreement, upon a Change of Control of the
Company, the Company or its successor or assign shall establish a Trust (the “Trust”) for the
benefit of the Indemnitee, the trustee (the “Trustee”) of which shall be chosen by the Company and
which is reasonably acceptable to the Indemnitee. Thereafter, from time to time, upon receipt of a
written request from Indemnitee, the Company shall fund the Trust in amounts sufficient to satisfy
any and all Liabilities and Expenses reasonably anticipated at the time of such request for which
the Company may indemnify Indemnitee hereunder. The amount or amounts to be deposited in the Trust
pursuant to the foregoing funding obligation shall be determined by mutual agreement of the
Indemnitee and the Company or, if the Company and the Indemnitee are unable to reach such an
agreement, by Independent Counsel selected jointly by the Company and the Indemnitee. The terms of
the Trust shall provide that except upon the consent of the Indemnitee and the Company, (i) the
Trust shall not be revoked or the principal thereof invaded, without the written consent of
the Indemnitee, (ii) the Trustee shall advance to the Indemnitee, within 20 days of a request by
the Indemnitee, any and all Expenses, the Indemnitee hereby agreeing to reimburse the Trustee of
the Trust for all Expenses so advanced if a final determination is made by a court in a final
adjudication from which there is no further right of appeal that the Indemnitee is not entitled to
be indemnified under this Agreement, (iii) the Trust shall continue to be funded by the Company in
accordance with the funding obligations set forth in this Section, (iv) the Trustee shall promptly
pay to the Indemnitee any amounts to which the Indemnitee shall be entitled pursuant to this
Agreement, and (v) all unexpended funds in the Trust shall revert to the Company upon a final
determination by Independent Counsel selected by Indemnitee or a court of competent jurisdiction
that Indemnitee has been fully indemnified with respect to the Proceeding giving rise to the
funding of the Trust under the terms of this Agreement. The establishment of the Trust shall not,
in any way, diminish the Company’s obligation to indemnify Indemnitee against Expenses and Claims
to the full extent required by this Agreement.
16. Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall constitute an original.
17. Binding Effect; Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective successors, assigns,
including any direct or indirect successor by purchase, merger, consolidation or otherwise to all
or substantially all of the business and/or assets of the Company, spouses, heirs, and personal and
legal representatives. The Company shall require and cause any successor (whether direct or
indirect by purchase, merger, consolidation or otherwise) to all, substantially all, or a
substantial part, of the business and/or assets of the Company, by written agreement in form and
substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to perform if no such
succession had taken place. This Agreement shall continue in effect with respect to Claims
relating to Indemnifiable Events regardless of whether Indemnitee continues to serve as a director,
officer, employee, agent, controlling person, or fiduciary of the Company or of any other
enterprise at the Company’s request.
18. Attorneys’ Fees. In the event that any action is instituted by Indemnitee under this
Agreement or under any liability insurance policies maintained by the Company to enforce or
interpret any of the terms hereof or thereof, any Indemnitee shall be entitled to be paid all
Expenses incurred by Indemnitee with respect to such action, regardless of whether Indemnitee is
ultimately successful in such action, and shall be entitled to the advancement of Expenses with
respect to such action, unless, as a part of such action, a court of competent jurisdiction over
such action determines that each of the material assertions made by Indemnitee as a basis for such
action was not made in good faith or was frivolous. In the event of an action instituted by or in
the name of the Company under this Agreement to enforce or interpret any of the terms of this
Agreement, the Indemnitee shall be entitled to be paid all Expenses incurred by Indemnitee in
defense of such action (including costs and expenses incurred with respect to Indemnitee
counterclaims and cross-claims made in such action), and shall be entitled to the advancement of
Expenses with respect to such action, unless, as a part of such action, a court having jurisdiction
over such action determines that each of Indemnitee’s material defenses to such action was made in
bad faith or was frivolous.
19. Notice. All notices and other communications required or permitted hereunder shall be in
writing, shall be effective when given, and shall in any event be deemed to be given (a) five (5)
days after deposit with the U.S. Postal Service or other applicable postal service, if delivered by
first
class mail, postage prepaid, (b) upon delivery, if delivered by hand, (c) one business day
after the business day of deposited with Federal Express or similar overnight courier, freight
prepaid, or (d) one day after the business day of delivery by facsimile transmission, if
deliverable by facsimile transmission, with copy by first class mail, postage prepaid, and shall be
addressed if to Indemnitee, at Indemnitee’s address as set forth beneath the Indemnitee’s signature
to this Agreement and if to the Company at the address of its principal corporate offices
(attention: Secretary) or at such other address as such party may designate by ten days’ advance
written notice to the other party hereto.
20. Consent to Jurisdiction. The Company and Indemnitee each hereby irrevocably consent to
the jurisdiction of the courts of the State of Delaware for all purposes in connection with any
action or proceeding which arises out of or relates to this Agreement and agree that any action
instituted under this Agreement shall be commenced, prosecuted and continued only in the state
courts of the State of Delaware, which shall be the exclusive and only proper forum for
adjudicating such a claim.
21. Severability. The provisions of this Agreement shall be severable in the event that any
of the provisions hereof (including any provision within a single section, paragraph or sentence)
are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and
the remaining provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without
limitations, each portion of this Agreement containing any provision held to be invalid, void or
otherwise unenforceable, that is not itself invalid, void or unenforceable) shall be construed so
as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.
22. Choice of Law. This Agreement shall be governed by and its provisions construed and
enforced in accordance with the laws of the State of Delaware as applied to contracts between
Delaware residents, entered into and to be performed entirely within the State of Delaware without
regard to the conflict of laws principles thereof.
23. Subrogation. In the event of 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 documents required and shall do all acts that may be necessary to secure such rights
and to enable the Company effectively to bring suite to enforce such rights.
24. Amendment and Termination. No amendment, modification, termination or cancellation of
this Agreement shall be effective unless it is in writing signed by all 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.
25. Integration and Entire Agreement. This Agreement sets forth the entire understanding
between the parties hereto and supersedes and merges all previous written and oral negotiations,
commitments, understandings and agreements relating to the subject matter hereof between the
parties hereto.
26. No Construction as Employment Agreement. Nothing contained in this Agreement shall be
construed as giving Indemnitee any right to be retained in the employ of the Company or any of its
subsidiaries.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.
| COMPANY | ||||||
| TranS1 Inc., | ||||||
| a Delaware corporation | ||||||
| By: | ||||||
| INDEMNITEE | ||||||
| Address: | ||||||