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Exhibit 10.1




INDEMNIFICATION AGREEMENT




     This INDEMNIFICATION AGREEMENT (this “Agreement”) is made and entered into this ______
day of ______, 20______(the “Effective Date”) by and between Terayon Communication Systems,
Inc., a Delaware corporation (the “Company”), and ______
 (the “Indemnitee”).



     WHEREAS, the Company believes it is essential to retain and attract qualified directors and
officers;



WHEREAS, the Indemnitee [is/has been asked to be] a director and/or officer of the Company;




     WHEREAS, both the Company and the Indemnitee recognize the increased risk of litigation and
other claims being asserted against directors and officers of public companies;



     WHEREAS, the Company’s Certificate of Incorporation (the “Certificate of
Incorporation”) and Bylaws (the “Bylaws”) require the Company to indemnify and advance
expenses to its directors and officers to the extent permitted by the DGCL (as hereinafter defined)
and other applicable laws;



     [WHEREAS, the Indemnitee has been serving and intends to continue serving as a director and/or
officer of the Company in part in reliance on the Company’s obligation to indemnify and advance
expenses, as set forth in this Agreement; and]



     WHEREAS, in recognition of the Indemnitee’s need for (i) substantial protection against
personal liability, (ii) protection against personal liability, regardless of, among other things,
any amendment to or revocation of the Certificate of Incorporation or the Bylaws, any change in the
composition of the Company’s Board of Directors (the “Board”) or acquisition transaction
relating to the Company, and (iii) an inducement to continue to provide effective services to the
Company as a director and/or officer thereof, the Company wishes to provide for the indemnification
of the Indemnitee and to advance expenses to the Indemnitee to the fullest extent permitted by law
and as set forth in this Agreement, and, to the extent insurance is maintained by the Company, to
provide for the continued coverage of the Indemnitee under the Company’s directors’ and officers’
liability insurance policies; [and]



     [WHEREAS, the Indemnitee is relying upon the rights afforded under this Agreement in accepting
Indemnitee’s position as a director, officer or employee of the Company;]



     NOW, THEREFORE, in consideration of the premises contained herein and of the Indemnitee
[agreeing/continuing] to serve the Company directly or, at its request, with another enterprise,
and intending to be legally bound hereby, the parties hereto agree as follows:



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     1. Certain Definitions.



          (a) An “Affiliate” is any entity that is controlled, controlled by or under common
control with the Company. “Control” for the purposes of the foregoing means director or indirect
ownership interest or control of more than fifty percent (50%) of the outstanding voting securities
of an entity.




          (b) A “Change in Control” shall be deemed to have occurred if:




               (i) any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder (the “Exchange Act”),
other than (a) a trustee or other fiduciary holding securities under an employee benefit plan of
the Company; (b) 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; or (c) any current
beneficial stockholder or group, as defined by Rule 13d-5 of the Exchange Act, including the heirs,
assigns and successors thereof, of beneficial ownership, within the meaning of Rule 13d-3 of the
Exchange Act, of securities possessing more than 50% of the total combined voting power of the
Company’s outstanding securities; hereafter becomes the “beneficial owner,” as defined in Rule
13d-3 of the Exchange Act, directly or indirectly, of securities of the Company representing 20% or
more of the total combined 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 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 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, in one transaction or a series of transactions, of all or substantially
all of the Company’s assets.



          (c) “DGCL” shall mean the General Corporation Law of the State of Delaware, as the
same exists or may hereafter be amended or interpreted; provided, however, that in the case of any
such amendment or interpretation, only to the extent that such amendment or interpretation permits
the Company to provide broader indemnification rights than were permitted prior thereto.




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          (d) “Expense” shall mean attorneys’ fees and all other costs, expenses and obligations
paid or incurred in connection with investigating, defending, being a witness in or participating
in (including on appeal), or preparing for any of the foregoing, any Proceeding relating to any
Indemnifiable Event.




          (e) “Indemnifiable Event” shall mean any event or occurrence that takes place either
prior to or after the execution of this Agreement, related to the fact that the Indemnitee is or
was a director or officer of the Company, or is or was serving at the request of the Company as a
director, officer, employee, or agent of an Affiliate, another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to employee benefit plans,
or by reason of anything done or not done by the Indemnitee in any such capacity.




          (f) “Proceeding” shall mean any threatened, pending or completed action, suit,
investigation or proceeding, and any appeal thereof, whether civil, criminal, administrative or
investigative and/or any inquiry or investigation, whether conducted by the Company or any other
party, that the Indemnitee in good faith believes might lead to the institution of any such action.




          (g) “Reviewing Party” shall mean any appropriate person or body consisting of a member
or members of the Company’s Board or any other person or body appointed by the Board (including the
special independent counsel referred to in Section 6) who is not a party to the particular
Proceeding with respect to which the Indemnitee is seeking indemnification.




          (h) “Voting Securities” shall mean any securities of the Company, which vote generally
in the election of directors.




     2. Indemnification. In the event the Indemnitee was or is a party to or is involved (as a
party, witness, or otherwise) in any Proceeding by reason of (or arising in part out of) an
Indemnifiable Event, whether the basis of the Proceeding is the Indemnitee’s alleged action in an
official capacity as a director or officer or in any other capacity while serving as a director or
officer, the Company shall indemnify the Indemnitee to the fullest extent permitted by the DGCL
against any and all Expenses, liability, and loss (including judgments, fines, ERISA excise taxes
or penalties, and amounts paid or to be paid in settlement, and any interest, assessments, or other
charges imposed thereon, and any federal, state, local, or foreign taxes imposed on any director or
officer as a result of the actual or deemed receipt of any payments under this Agreement)
(collectively, “Liabilities”) reasonably incurred or suffered by such person in connection
with such Proceeding. The Company shall provide indemnification pursuant to this Section 2 as soon
as practicable, but in no event later than 30 days after it receives written demand from the
Indemnitee. Notwithstanding anything in this Agreement to the contrary and except as provided in
Section 5 below, the Indemnitee shall not be entitled to indemnification pursuant to this Agreement
(i) in connection with any Proceeding initiated by the Indemnitee against the Company or any
director or officer of the Company unless the Company has joined in or consented to the initiation
of such Proceeding or (ii) on account of any suit in which judgment is rendered against the
Indemnitee pursuant to Section 16(b) of the Exchange Act for an accounting of profits made from the
purchase or sale by the Indemnitee of securities of the Company.



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     3. Advancement of Expenses. The Company shall advance Expenses to the Indemnitee within 30
business days of such request (an “Expense Advance”); provided, however, that if required
by applicable corporate laws such Expenses shall be advanced only upon delivery to the Company of
an undertaking by or on behalf of the Indemnitee to repay such amount if it is ultimately
determined that the Indemnitee is not entitled to be indemnified by the Company; and provided
further, that the Company shall make such advances only to the extent permitted by law.



     4. Review Procedure for Indemnification. Notwithstanding the foregoing, (i) the obligations
of the Company under Sections 2 and 3 above shall be subject to the condition that the Reviewing
Party shall not have determined (in a written opinion, in any case in which the special independent
counsel referred to in Section 6 hereof is involved) that the Indemnitee would not be permitted to
be indemnified under applicable law, and (ii) the obligation of the Company to make an Expense
Advance pursuant to Section 3 above shall be subject to the condition that, if, when and to the
extent that the Reviewing Party determines that the Indemnitee would not be permitted to be so
indemnified under applicable law, the Company shall be entitled to be reimbursed by the Indemnitee
(who hereby agrees to reimburse the Company) for all such amounts theretofore paid; provided,
however, that if the Indemnitee has commenced legal proceedings in a court of competent
jurisdiction pursuant to Section 5 below to secure a determination that the Indemnitee should be
indemnified under applicable law, any determination made by the Reviewing Party that the Indemnitee
would not be permitted to be indemnified under applicable law shall not be binding and the
Indemnitee shall not be required to reimburse the Company for any Expense Advance until a final
judicial determination is made with respect thereto (as to which all rights of appeal therefrom
have been exhausted or have lapsed). The Indemnitee’s obligation to reimburse the Company for
Expense Advances pursuant to this Section 4 shall be unsecured and no interest shall be charged
thereon. If there has not been a Change in Control, the Reviewing Party shall be selected by the
Board, and if there has been such a Change in Control, other than a Change in Control which has
been approved by a majority of the Company’s Board who were directors immediately prior to such
Change in Control, the Reviewing Party shall be the special independent counsel referred to in
Section 6 hereof.



     5. Enforcement of Indemnification Rights. If the Reviewing Party determines that the
Indemnitee substantively would not be permitted to be indemnified in whole or in part under
applicable law, or if the Indemnitee has not otherwise been paid in full pursuant to Sections 2 and
3 above within 30 days after a written demand has been received by the Company, the Indemnitee
shall have the right to commence litigation in any court having subject matter jurisdiction thereof
and in which venue is proper to recover the unpaid amount of the demand (an “Enforcement
Proceeding”) and, if successful in whole or in part, the Indemnitee shall be entitled to be
paid any and all Expenses in connection with such Enforcement Proceeding. The Company hereby
consents to service of process for such Enforcement Proceeding and to appear in any such
Enforcement Proceeding. Any determination by the Reviewing Party otherwise shall be conclusive and
binding on the Company and the Indemnitee.



     6. 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



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Company’s Board who were directors immediately prior to such Change in Control, then with
respect to all matters thereafter arising concerning the rights of the Indemnitee to indemnity
payments and Expense Advances under this Agreement or any other agreement or under applicable law
or the Company’s Certificate of Incorporation or Bylaws now or hereafter in effect relating to
indemnification for Indemnifiable Events, the Company shall seek legal advice only from special
independent counsel selected by the Indemnitee and approved by the Company, which approval shall
not be unreasonably withheld. Such special independent counsel shall not have otherwise performed
services for the Company or the Indemnitee, other than in connection with such matters, within the
last five years. Such independent 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 the Indemnitee in an action to determine the Indemnitee’s rights
under this Agreement. Such counsel, among other things, shall render its written opinion to the
Company and the Indemnitee as to whether and to what extent the Indemnitee would be permitted to be
indemnified under applicable law. The Company agrees to pay the reasonable fees of the special
independent counsel referred to above and to indemnify fully such counsel against any and all
expenses (including attorneys’ fees), claims, liabilities and damages arising out of or relating to
this Agreement or the engagement of special independent counsel pursuant to this Agreement.




     7. Partial Indemnity. If the Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of the Expenses and Liabilities, but not,
however, for all of the total amount thereof, the Company shall nevertheless indemnify the
Indemnitee for the portion thereof to which the Indemnitee is entitled. Moreover, notwithstanding
any other provision of this Agreement, to the extent that the Indemnitee has been successful on the
merits or otherwise in defense of any or all Proceedings relating in whole or in part to an
Indemnifiable Event or in defense of any issue or matter therein, including dismissal without
prejudice, the Indemnitee shall be indemnified against all Expenses incurred in connection
therewith. In connection with any determination by the Reviewing Party or otherwise as to whether
the Indemnitee is entitled to be indemnified hereunder, the burden of proof shall be on the Company
to establish that the Indemnitee is not so entitled.



     8. Non-exclusivity. The rights of the Indemnitee hereunder shall be in addition to any other
rights the Indemnitee may have under any statute, provision of the Company’s Certificate of
Incorporation or Bylaws, vote of stockholders or disinterested directors or otherwise, both as to
action in an official capacity and as to action in another capacity while holding such office. To
the extent that a change in the DGCL permits greater indemnification by agreement than would be
afforded currently under the Company’s Certificate of Incorporation and Bylaws and this Agreement,
it is the intent of the parties hereto that the Indemnitee shall enjoy by this Agreement the
greater benefits so afforded by such change.



     9. Liability Insurance. To the extent the Company maintains an insurance policy or policies
providing directors’ and officers’ liability insurance, the Indemnitee shall be covered by such
policy or policies, in accordance with its or their terms, to the maximum extent of the coverage
available for any director or officer of the Company.



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     10. Settlement of Claims. The Company shall not be liable to indemnify the Indemnitee under
this Agreement (a) for any amounts paid in settlement of any action or claim effected without the
Company’s written consent, which consent shall not be unreasonably withheld; or (b) for any
judicial award if the Company was not given a reasonable and timely opportunity, at its expense, to
participate in the defense of such action.



     11. No Presumption. For purposes of this Agreement, to the fullest extent permitted by law,
the termination of any Proceeding, action, suit or 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 the 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.



     12. Period of Limitations. No legal action shall be brought and no cause of action shall be
asserted by or on behalf of the Company or any affiliate of the Company against the Indemnitee, the
Indemnitee’s spouse, heirs, executors or personal or legal representatives after the expiration of
two years from the date of accrual of such cause of action, or such longer period as may be
required by state law under the circumstances, and any claim or cause of action of the Company or
its affiliate shall be extinguished and deemed released unless asserted by the timely filing of a
legal action within such period; provided, however, that if any shorter period of limitations is
otherwise applicable to any such cause of action, such shorter period shall govern.



     13. Amendment of this Agreement. 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. Except as
specifically provided herein, no failure to exercise or any delay in exercising any right or remedy
hereunder shall constitute a waiver thereof.



     14. 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 the Indemnitee, who
shall execute all papers required and shall do everything that may be necessary to secure such
rights, including the execution of such documents necessary to enable the Company effectively to
bring suit to enforce such rights.



     15. 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 the Indemnitee has
otherwise actually received payment (under any insurance policy, Bylaw, vote, agreement or
otherwise) of the amounts otherwise indemnifiable hereunder.



     16. Binding Effect. 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



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the business and/or assets of the Company, by written agreement in form and substance
satisfactory to the 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 regardless of whether the Indemnitee
continues to serve as a director or officer of the Company or of any other enterprise at the
Company’s request.




     17. 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)
is 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
limitation, 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.



     18. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware applicable to contracts made and to be performed
in such State without giving effect to the principles of conflicts of laws.



     19. Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same
instrument.



     20. Notices. All notices, demands, and other communications required or permitted hereunder
shall be made in writing and shall be deemed to have been duly given if delivered by hand, against
receipt, or mailed, postage prepaid, certified or registered mail, return receipt requested, and
addressed to the Company at:



	 	 	 	 	 	 	 
	 

	 	 	 	Terayon Communication Systems, Inc.
	 	 
	

	 	 	 	4988 Great America Parkway	 	 
	

	 	 	 	Santa Clara, CA 95054	 	 
	

	 	 	 	Attn: General Counsel	 	 
	

	 	 	 	Fax: 408.486.5271	 	 
	 
	 	 	 	 	 	 
	 	 	and to the Indemnitee at:	 	 
	 
	 	 	 	 	 	 
	

	 	 	 	
	 	 
	

	 	 	 	
	 	 
	

	 	 	 	
	 	 
	

	 	 	 	
	 	 






     Notice of change of address shall be effective only when done in accordance with this Section.
All notices complying with this Section shall be deemed to have been received on the date of
delivery or on the third business day after mailing.



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     IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of
the day first set forth above.



	 	 	 	 	 	 	 
	 	 	THE COMPANY:	 	 
	 
	 	 	 	 	 	 
	 	 	TERAYON COMMUNICATION SYSTEMS, INC.	 	 
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	

	 	Name:	 	 	 	 
	

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	

	 	Title:	 	 	 	 
	

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	INDEMNITEE:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	

	 	 	 	Signature	 	 
	 
	 	 	 	 	 	 
	 	 	Print Name:	 	 
	

	 	 	 	 	 	 






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