EXHIBIT 10.26
INDEMNIFICATION
AGREEMENT
THIS
INDEMNIFICATION AGREEMENT is made and entered into this 21st day of
June 2004, (the “Agreement”), by and between Voxware,
Inc., a Delaware corporation (the “Company,” which term
shall include, where appropriate, any Entity (as hereinafter
defined) controlled directly or indirectly by the Company), and
Paul Commons (the “Indemnitee”):
WHEREAS, the
Company desires Indemnitee to be its Vice President and Chief
Financial Officer;
WHEREAS,
applicable state and federal rules and regulations and increased
corporate and securities litigation have subjected public company
chief financial officers to litigation risks and expenses, and the
limitations on the availability of directors and officers liability
insurance have made it increasingly difficult for the Company to
attract and retain such persons;
WHEREAS, the
Company’s Amended and Restated Certificate of Incorporation
(the “Certificate of Incorporation”) require it to
indemnify its officers and directors,
subject to reservation of right to amend or repeal any provision of
the Certificate of Incorporation, and permit it to make other
indemnification arrangements and agreements;
WHEREAS, the
Company desires to provide Indemnitee with specific contractual
assurance of Indemnitee’s rights to full indemnification
against litigation risks and expenses (regardless, among other
things, of any amendment to or revocation of the Certificate of
Incorporation or any change in the ownership of the Company or the
composition of its Board of Directors) and absolute indemnification
with respect to events occurring prior to his commencement of
employment on June 21, 2004;
WHEREAS, the
Company intends that this Agreement provide Indemnitee with greater
protection than that which is provided by the Company’s
Certificate of Incorporation; and
WHEREAS,
Indemnitee is relying upon the rights afforded under this Agreement
in becoming and remaining as an officer of the Company.
NOW, THEREFORE,
in consideration of the promises and the covenants contained
herein, the Company and Indemnitee do hereby covenant and agree as
follows:
1.
Definitions.
(a)
“Corporate Status” describes the status of a person who
is serving or has served (i) as an officer or director of the
Company, (ii) in any capacity with
respect to any employee benefit plan of the Company, or
(iii) as a director, partner, trustee, officer, employee, or
agent of any other Entity at the request of the Company. For
purposes of subsection (iii) of this Section 1(a), if Indemnitee
is serving or has served as a director,
partner, trustee, officer, employee or agent of a Subsidiary,
Indemnitee shall be deemed to be serving at the request of the
Company.
(b)
“Entity” shall mean any corporation, partnership,
limited liability company, joint venture, trust, foundation,
association, organization or other legal entity.
(c)
“Expenses” shall mean all fees, costs and expenses
incurred by Indemnitee in connection with any Proceeding (as
defined below), including, without limitation, attorneys’
fees, disbursements and retainers (including, without limitation,
any such fees, disbursements and retainers incurred by Indemnitee
pursuant to Sections 10 and 11(c) of this Agreement), fees and
disbursements of expert witnesses, private investigators and
professional advisors (including, without limitation, accountants
and investment bankers), court costs, transcript costs, fees of
experts, travel expenses, duplicating, printing and binding costs,
telephone and fax transmission charges, postage, delivery services,
secretarial services, and other disbursements and
expenses.
(d)
“Indemnifiable Expenses,”“Indemnifiable
Liabilities” and “Indemnifiable Amounts” shall
have the meanings ascribed to those terms in Section 3(a)
below.
(e)
“Liabilities” shall mean judgments, damages,
liabilities, losses, penalties, excise taxes, fines and amounts
paid in settlement.
(f)
“Prior Event” shall mean any claim, threatened claim or
facts giving rise to a future claim that was present as of June 21,
2004 and shall include without limitation certification by
Indemnitee of any financial statements that includes periods ending
on or prior to December 31, 2003.
(g)
“Proceeding” shall mean any threatened, pending or
completed claim, action, suit, arbitration, alternate dispute
resolution process, investigation, administrative hearing, appeal,
or any other proceeding, whether civil, criminal, administrative,
arbitrative or investigative, whether formal or informal, including
a proceeding initiated by Indemnitee pursuant to Section 10 of
this Agreement to enforce Indemnitee’s rights
hereunder.
(h)
“Subsidiary” shall mean any corporation, partnership,
limited liability company, joint venture, trust or other Entity of
which the Company owns (either directly or through or together with
another Subsidiary of the Company) either (i) a general partner,
managing member or other similar interest or (ii) (A) 50% or more
of the voting power of the voting capital equity interests of such
corporation, partnership, limited liability company, joint venture
or other Entity, or (B) 50% or more of the outstanding voting
capital stock or other voting equity interests of such corporation,
partnership, limited liability company, joint venture or other
Entity.
2.
Services of Indemnitee. In consideration of the Company’s
covenants and commitments hereunder, Indemnitee agrees to serve or
continue to serve as an officer of the Company. However, this
Agreement shall not impose any obligation on Indemnitee or the
Company to continue Indemnitee’s service to the Company
beyond any period otherwise required by law or by other agreements
or commitments of the parties, if any.
3.
Agreement to Indemnify. The Company agrees to indemnify Indemnitee as
follows:
(a)
Proceedings Other Than By or In the Right of the Company .
Subject to the exceptions contained in Section 4(a) below, if
Indemnitee was or is a party or is threatened to be made a party to
any Proceeding (other than an action by or in the right of the
Company) by reason of Indemnitee’s Corporate Status or in any
way relating to a Prior Event, Indemnitee shall be indemnified by
the Company against all Expenses and Liabilities incurred or paid
by Indemnitee in connection with such Proceeding (referred to
herein as “Indemnifiable Expenses” and
“Indemnifiable Liabilities,” respectively, and
collectively as “Indemnifiable Amounts”).
(b)
Proceedings By or In the Right of the Company . Subject to
the exceptions contained in Section 4(b) below, if Indemnitee was
or is a party or is threatened to be made a party to any Proceeding
by or in the right of the Company by reason of Indemnitee’s
Corporate Status, Indemnitee shall be indemnified by the Company
against all Indemnifiable Expenses.
(c)
Conclusive Presumption Regarding Standard of Care . In
making any determination required to be made under Delaware law or
other law 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 submitted a request therefor in accordance
with Section 5 of this Agreement, and the Company shall 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.
4.
Exceptions to Indemnification. Indemnitee shall be entitled to indemnification
under Sections 3(a) and 3(b) above in all circumstances other
than with respect to any specific claim, issue or matter involved
in the Proceeding out of which Indemnitee’s claim for
indemnification has arisen, as follows:
(a)
Proceedings Other Than By or In the Right of the Company .
If indemnification is requested under Section 3(a) and it has
been finally adjudicated by a court of competent jurisdiction that,
in connection with such specific claim, issue or matter, Indemnitee
failed to act (i) in good faith and (ii) in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests
of the Company, or, with respect to any criminal action or
proceeding, Indemnitee had reasonable cause to believe that
Indemnitee’s conduct was unlawful, Indemnitee shall not be
entitled to payment of Indemnifiable Amounts hereunder.
(b)
Proceedings By or In the Right of the Company . If
indemnification is requested under Section 3(b) and
(i)
it has been finally adjudicated by a court of competent
jurisdiction that, in connection with such specific claim, issue or
matter, Indemnitee failed to act (A) in good faith and (B) in a
manner Indemnitee reasonably believed to be in or not opposed to
the best interests of the Company, Indemnitee shall not be entitled
to payment of Indemnifiable Expenses hereunder; or
(ii)
it has been finally adjudicated by a court of competent
jurisdiction that Indemnitee is liable to the Company with respect
to such specific claim, no Indemnifiable Expenses shall be paid
with respect to such claim, issue or matter unless a court of
competent jurisdiction in which such Proceeding was brought shall
determine upon application that, despite the adjudication of
liability, but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnification for
such Indemnifiable Expenses which such court shall deem proper;
or
(iii)
it has been finally adjudicated by a court of competent
jurisdiction that Indemnitee is liable to the Company for an
accounting of profits made from the purchase or sale by the
Indemnitee of securities of the Company pursuant to the provisions
of Section 16(b) of the Securities Exchange Act of 1934, the rules
and regulations promulgated thereunder and amendments thereto or
similar provisions of any federal, state or local statutory
law.
(c)
Insurance Proceeds . To the extent payment is actually made
to the Indemnitee under a valid and collectible insurance policy in
respect of Indemnifiable Amounts or Indemnifiable Expenses in
connection with such specific claim, issue or matter, Indemnitee
shall not be entitled to payment of Indemnifiable Amounts or
Indemnifiable Expenses, as the case may be, hereunder except in
respect of any excess beyond the amount of payment under such
insurance. In the event the Company makes any payments of
Indemnifiable Amounts or Indemnifiable Expenses to the Indemnitee
and the Indemnitee is subsequently reimbursed from the proceeds of
insurance, the Indemnitee shall promptly refund such of
Indemnifiable Amounts or Indemnifiable Expenses to the Corporation
to the extent of such insurance reimbursement.
5.
Request for Payment of Indemnifiable Liabilities.
Indemnitee shall submit to the
Company a written request specifying the Indemnifiable Liabilities
for which Indemnitee seeks payment under Section 3 of this
Agreement and such documentation and information as are reasonably
available to Indemnitee and necessary to establish that Indemnitee
is entitled to indemnification hereunder.
6.
Indemnification for Expenses of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provision of this
Agreement, and without limiting any such provision, to the extent
that Indemnitee is, by reason of Indemnitee’s Corporate
Status, a party to and is successful, on
