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Exhibit 10.1
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (the " Agreement ") dated
as of December , 2006, by and
between Avici Systems Inc., a Delaware corporation (the "
Company "), and
, a director [and/or officer] of the Company (the "
Indemnitee "):
WITNESSETH:
WHEREAS, the Indemnitee is presently serving as a director
[and/or officer] of the Company, and the Company desires the
Indemnitee to continue in such capacity;
WHEREAS, highly competent persons have become more reluctant to
serve corporations as directors, officers 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 corporation;
WHEREAS, it is reasonable, prudent and necessary for the Company
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
Company free from undue concern that they will not be so
indemnified; and
WHEREAS, the Indemnitee is willing, subject to certain
conditions, including the execution and performance of this
Agreement by the Company, to continue in that capacity or in other
capacities on behalf of the Company;
NOW, THEREFORE, to induce the Indemnitee to continue to serve
the Company in various capacities and in consideration of these
premises and the mutual agreements set forth in this Agreement, the
Company and the Indemnitee agree as follows:
1. Continued Service . The Indemnitee will continue to
serve as a director [and/or officer] of the Company so long as he
is duly elected and qualified in accordance with the
Company’s restated by-laws (the " By-Laws ") or until
he resigns in writing or is removed from office in accordance with
applicable law.
2. Definitions . For purposes of this Agreement:
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(a) A " Change in Control " shall be deemed to occur upon
the earliest to occur after the date of this Agreement of any of
the following events:
(i) Acquisition of Stock by Third Party . Any Person is
or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing twenty percent (20%) or
more of the combined voting power of the Company’s then
outstanding securities;
(ii) Change in Board of Directors . During
any 24 month period (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 whose
election by the Board or nomination for election by the
Company’s stockholders was approved by a vote of at least
two-thirds of the directors then in office, cease for any reason to
constitute a least a majority of the members of the
Board;
(iii) Corporate Transactions . The effective date of a
merger of the Company with any other entity, other than a merger
which would result in the voting securities of the Company
outstanding immediately prior to such merger continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 50% 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;
(iv) Liquidation . The approval by the stockholders of
the Company of a complete 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
(v) 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.
(vi) For purposes of this Section 2(a), the following terms
shall have the following meanings:
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" Exchange Act " shall mean the Securities Exchange Act
of 1934, as amended.
" Person " shall have the meaning as set forth in
Sections 13(d) and 14(d) of the Exchange Act; 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.
" 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.
(b) " Corporate Status " describes the
status of a person who is or was a director, officer, employee,
agent or fiduciary of the Company or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise that such person is or was serving at the express
written request of the Company.
(c) " Disinterested Director " means a director of the
Company who is not and was not a party to the Proceeding in respect
of which indemnification is sought by Indemnitee.
(d) " Enterprise " shall mean the Company and any other
corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise that Indemnitee is or was serving at the
express written request of the Company as a director, officer,
employee, agent or fiduciary.
(e) " Expenses " shall include 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, participating, or
being or preparing to be a witness in a Proceeding. Expenses also
shall include 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.
Expenses, however, shall not include amounts paid in settlement by
Indemnitee or the amount of judgments or fines against
Indemnitee.
(f) " Independent Counsel " means a law firm, or a member
of a law firm, that is experienced in matters of corporation law
and neither presently is, nor in the past five years has been,
retained to represent: (i) the Company or Indemnitee in any
matter material to either such party (other than with respect to
matters concerning Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements), or
(ii) any other party to the Proceeding giving rise to a claim
for indemnification hereunder.
(g) " Proceeding " includes any threatened, pending or
completed action, suit, arbitration, alternate dispute resolution
mechanism, investigation, inquiry, administrative hearing or any
other actual, threatened or completed proceeding, whether brought
by or in the right of the Company or otherwise, in which Indemnitee
was, is or will be involved as a party or otherwise, by reason of
the fact that Indemnitee is or was an officer or director of the
Company, by reason of any action taken by him or her or of any
inaction on his or her part while acting as an officer or director
of the Company, or by reason of the fact that he or she is or was
serving at the request of the Company as a director, officer,
employee, agent or fiduciary of another Enterprise; in each case
whether or not he or she is acting or serving in any such capacity
at the time any liability or expense is
incurred for which indemnification can be
provided under this Agreement; including those pending on or before
the date of this Agreement, but excluding those initiated by an
Indemnitee pursuant to Section 5 of this Agreement to
enforce his or her rights under this Agreement.
3. Indemnity of Indemnitee . The Company hereby agrees to
hold harmless and indemnify Indemnitee to the fullest extent
permitted by law, as such may be amended from time to time.
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(a) Proceedings Other Than Proceedings by or in the Right of
the Company . Indemnitee shall be entitled to the rights of
indemnification provided in this Section 3(a) if, by reason of
his Corporate Status, the Indemnitee is, or is threatened to be
made, a party to or participant in any Proceeding other than a
Proceeding by or in the right of the Company. Pursuant to this
Section 3(a), Indemnitee shall be indemnified against all
Expenses, judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by him, or on his
behalf, in connection with such Proceeding or any claim, issue or
matter therein, if the Indemnitee acted in good faith and in a
manner the Indemnitee reasonably believed to be in or not opposed
to the best interests of the Company, and with respect to any
criminal Proceeding, had no reasonable cause to believe the
Indemnitee’s conduct was unlawful.
(b) Proceedings by or in the Right of the Company .
Indemnitee shall be entitled to the rights of indemnification
provided in this Section 3(b) if, by reason of his Corporate
Status, the Indemnitee is, or is threatened to be made, a party to
or participant in any Proceeding brought by or in the right of the
Company. Pursuant to this Section 3(b), Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred
by the Indemnitee, or on the Indemnitee’s behalf, in
connection with such Proceeding if the Indemnitee acted in good
faith and in a manner the Indemnitee reasonably believed to be in
or not opposed to the best interests of the Company; provided,
however, if applicable law so provides, no indemnification against
such Expenses shall be made in respect of any claim, issue or
matter in such Proceeding as to which Indemnitee shall have been
adjudged to be liable to the Company unless and to the extent that
the Court of Chancery of the State of Delaware shall determine that
such indemnification may be made.
(c) Indemnification for Expenses 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 his
Corporate Status, a party to and is successful, on the merits or
otherwise, in any Proceeding, he shall be indemnified to the
maximum extent permitted by law, as such may be amended from time
to time, against all Expenses actually and reasonably incurred by
him or on his 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 against all Expenses actually and reasonably incurred by
him or on his
behalf in connection with each successfully
resolved claim, issue or matter. For purposes of this Section 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
4. Advancement of Expenses . Notwithstanding any other
provision of this Agreement, the Company shall advance all
reasonable Expenses incurred by or on behalf of Indemnitee in
connection with any Proceeding by reason of Indemnitee’s
Corporate Status within thirty (30) days after the receipt by
the Company of a statement or statements from Indemnitee requesting
such advance or advances from time to time, 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
advanced if it shall ultimately be determined that Indemnitee is
not entitled to be indemnified against such Expenses. Any advances
and undertakings to repay pursuant to this Section 4
shall be unsecured and interest free.
5. Procedures and Presumptions for Determination of
Entitlement to Indemnification . It is the intent of this
Agreement to secure for Indemnitee rights of indemnity that are as
favorable as may be permitted under the Delaware General
Corporation Law and public policy of the State of Delaware.
Accordingly, the parties agree that the following procedures and
pre
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