Exhibit 10.11


 


SEMILEDS CORPORATION


 


INDEMNIFICATION AGREEMENT


 


This Indemnification Agreement (this “Agreement”) is made as of
                        
      , by and between SemiLEDs Corporation, a Delaware corporation (the “Company”),
and
              
(“Indemnitee”).


 


RECITALS


 


The
Company and Indemnitee recognize the increasing difficulty in obtaining
liability insurance for directors, officers and key employees, the significant
increases in the cost of such insurance and the general reductions in the
coverage of such insurance.  The Company
and Indemnitee further recognize the substantial increase in corporate
litigation in general, subjecting directors, officers and key employees to
expensive litigation risks at the same time as the availability and coverage of
liability insurance has been severely limited. 
Indemnitee does not regard the current protection available as adequate
under the present circumstances, and Indemnitee may not be willing to continue
to serve in Indemnitee’s current capacity with the Company without additional
protection.  The Company desires to
attract and retain the services of highly qualified individuals, such as
Indemnitee, and to indemnify its directors, officers and key employees so as to
provide them with the maximum protection permitted by law.


 


AGREEMENT


 


In
consideration of the mutual promises made in this Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and Indemnitee hereby agree as follows:


 


1.             Indemnification.


 


(a)           Third-Party Proceedings.  To the fullest extent permitted by applicable
law, the Company shall indemnify Indemnitee, if Indemnitee was, is or is
threatened to be made, a party to or a participant (as a witness or otherwise)
in any Proceeding (other than a Proceeding by or in the right of the Company to
procure a judgment in the Company’s favor), against all Expenses, judgments,
fines and amounts paid in settlement (if such settlement is approved in advance
by the Company, which approval shall not be unreasonably withheld) actually and
reasonably incurred by Indemnitee in connection with such Proceeding if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed
to be in or not opposed to the best interests of the Company and, in the case
of a criminal Proceeding, had no reasonable cause to believe Indemnitee’s
conduct was unlawful.


 


(b)           Proceedings By or in the Right of
the Company.  To the fullest extent permitted by applicable
law, the Company shall indemnify Indemnitee, if Indemnitee was, is or is
threatened to be made a party to or a participant (as a witness or otherwise)
in any Proceeding by or in the right of the Company to procure a judgment in
the Company’s favor, against all Expenses actually and reasonably incurred by
Indemnitee in connection with such Proceeding if Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in or not 


 

















 


opposed to the best interests of the Company, except
that no indemnification shall be made in respect of any claim, issue or matter
as to which Indemnitee shall have been finally adjudicated by court order or
judgment to be liable to the Company unless and only to the extent that the
Court of Chancery or the court in which such Proceeding is or was pending shall
determine upon application that, in view of all the circumstances of the case, Indemnitee
is fairly and reasonably entitled to indemnity for such expenses which such
court shall deem proper.


 


(c)           Success on the Merits.  To the fullest extent permitted by applicable
law and to the extent that Indemnitee has been successful on the merits or
otherwise in defense of any Proceeding referred to in Section 1(a) or
Section 1(b) or the defense of any claim, issue or matter therein, in
whole or in part, the Company shall indemnify Indemnitee against all Expenses
actually and reasonably incurred by Indemnitee in connection therewith.  Without limiting the generality of the
foregoing, if Indemnitee is successful on the merits or otherwise as to one or
more but less than all claims, issues or matters in a Proceeding, the Company
shall indemnify Indemnitee against all Expenses actually and reasonably
incurred by Indemnitee in connection with such successfully resolved claims,
issues or matters to the fullest extent permitted by applicable law.  If any Proceeding is disposed of on the
merits or otherwise (including a disposition without prejudice), without (i) the
disposition being adverse to Indemnitee, (ii) an adjudication that
Indemnitee was liable to the Company, (iii) a plea of guilty by
Indemnitee, (iv) an adjudication that Indemnitee did not act in good faith
and in a manner Indemnitee reasonably believed to be in or not opposed to the
best interests of the Company, and (v) with respect to any criminal
Proceeding, an adjudication that Indemnitee had reasonable cause to believe
Indemnitee’s conduct was unlawful, Indemnitee shall be considered for the
purposes hereof to have been wholly successful with respect thereto.


 


(d)           Witness Expenses.  To the fullest extent
permitted by applicable law and to the extent that Indemnitee is a witness or
otherwise asked to participate in any Proceeding to which Indemnitee is not a
party, the Company shall indemnify Indemnitee against all Expenses actually and
reasonably incurred by Indemnitee in connection with such Proceeding.


 


2.             Indemnification Procedure.


 


(a)           Advancement of Expenses.  To the fullest extent permitted by applicable
law, the Company shall advance all Expenses actually and reasonably incurred by
Indemnitee in connection with a Proceeding within thirty (30) days after
receipt by the Company of a statement requesting such advances from time to
time, whether prior to or after final disposition of any Proceeding.  Such advances shall be unsecured and interest
free and shall be made without regard to Indemnitee’s ability to repay the
Expenses and without regard to Indemnitee’s ultimate entitlement to
indemnification under the other provisions of this Agreement.  Indemnitee shall be entitled to continue to receive
advancement of Expenses pursuant to this Section 2(a) unless and
until the matter of Indemnitee’s entitlement to indemnification hereunder has
been finally adjudicated by court order or judgment from which no further right
of appeal exists.  Indemnitee hereby
undertakes to repay such amounts advanced only if, and to the extent that, it
ultimately is determined that Indemnitee is not entitled to be indemnified by
the Company under the other provisions of this Agreement.  Indemnitee shall qualify for advances upon
the execution and delivery of this Agreement, which shall constitute the
requisite undertaking with respect to 


 


2

















 


repayment of advances made hereunder and no other
form of undertaking shall be required to qualify for advances made hereunder
other than the execution of this Agreement.


 


(b)           Notice and Cooperation by
Indemnitee.  Indemnitee shall promptly notify the Company
in writing upon being served with any summons, citation, subpoena, complaint,
indictment, information or other document relating to any Proceeding or matter
for which indemnification will or could be sought under this Agreement.  Such notice to the Company shall include a
description of the nature of, and facts underlying, the Proceeding, shall be
directed to the Chief Executive Officer of the Company and shall be given in
accordance with the provisions of Section 13(d) below.  In addition, Indemnitee shall give the
Company such additional information and cooperation as the Company may
reasonably request.  Indemnitee’s failure
to so notify, provide information and otherwise cooperate with the Company
shall not relieve the Company of any obligation which it may have to Indemnitee
under this Agreement, except to the extent that the Company is adversely
affected by such failure.


 


(c)           Determination of Entitlement.


 


(i)            Final Disposition.  Notwithstanding any other provision in this
Agreement, no determination as to entitlement to indemnification under this
Agreement shall be required to be made prior to the final disposition of the
Proceeding.


 


(ii)           Determination and Payment.  Subject to the foregoing, promptly after
receipt of a statement requesting payment with respect to the indemnification
rights set forth in Section 1, to the extent required by applicable law,
the Company shall take the steps necessary to authorize such payment in the
manner set forth in Section 145 of the General Corporation Law of
Delaware.  The Company shall pay any
claims made under this Agreement, under any statute, or under any provision of
the Company’s Certificate of Incorporation or Bylaws providing for
indemnification or advancement of Expenses, within thirty(30) days after a
written request for payment thereof has first been received by the Company, and
if such claim is not paid in full within such thirty (30) day-period, Indemnitee
may, but need not, at any time thereafter bring an action against the Company
in the Delaware Court of Chancery to recover the unpaid amount of the claim
and, subject to Section 12, Indemnitee shall also be entitled to be
paid for all Expenses actually and reasonably incurred by Indemnitee in
connection with bringing such action.  It
shall be a defense to any such action (other than an action brought to enforce
a claim for advancement of Expenses under Section 2(a)) that Indemnitee
has not met the standards of conduct which make it permissible under applicable
law for the Company to indemnify Indemnitee for the amount claimed.  In making a determination with respect to
entitlement to indemnification hereunder, the person or persons or entity
making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement and the Company shall have the burden of
proof to overcome that presumption with clear and convincing evidence to the
contrary.  The termination of any
Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that Indemnitee did not act in good faith and in a manner
which Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, or, in the case of a criminal Proceeding, that
Indemnitee had reasonable cause to believe that Indemnitee’s conduct was
unlawful.  In addition, it is the parties’
intention that if the Company contests Indemnitee’s right to indemnification,
the question of Indemnitee’s right to indemnification shall 


 


3

















 


be for the court to decide, and neither the failure
of the Company (including its Board of Directors, any committee or subgroup of
the Board of Directors, independent legal counsel, or its stockholders) to have
made a determination that indemnification of Indemnitee is proper in the circumstances
because Indemnitee has met the applicable standard of conduct required by
applicable law, nor an actual determination by the Company (including its Board
of Directors, any committee or subgroup of the Board of Directors, independent
legal counsel, or its stockholders) that Indemnitee has not met such applicable
standard of conduct, shall create a presumption that Indemnitee has or has not
met the applicable standard of conduct. 
If any requested determination with respect to entitlement to
indemnification hereunder has not been made within ninety (90) days after the
final disposition of the Proceeding, the requisite determination that
Indemnitee is entitled to indemnification shall be deemed to have been made.


 


(d)           Payment Directions.  To the extent payments are required to be
made hereunder, the Company shall, in accordance with Indemnitee’s request (but
without duplication), (i) pay such Expenses on behalf of Indemnitee, (b) advance
to Indemnitee funds in an amount sufficient to pay such Expenses, or (c) reimburse
Indemnitee for such Expenses.


 


(e)           Notice to Insurers.  If, at the time of the receipt of a notice of
a claim pursuant to Section 2(b) hereof, the Company has director and
officer liability insurance in effect, the Company shall give prompt notice of
the commencement of such Proceeding 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 Proceeding in accordance
with the terms of such policies.


 


(f)            Defense of Claim and Selection of
Counsel.  In the event the Company shall be obligated
under Section 2(a) hereof to advance Expenses with respect to any
Proceeding, the Company, if appropriate, shall be entitled to assume the
defense of such Proceeding, with counsel reasonably acceptable to Indemnitee,
upon the delivery to Indemnitee of written notice of its election so to do.  After delivery of such notice, approval of
such counsel by 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
Proceeding, provided that (i) Indemnitee shall have the right to employ
counsel in any such Proceeding at Indemnitee’s expense; and (ii) if
(A) the employment of counsel by Indemnitee has been previously authorized
by the Company, (B) Indemnitee shall have reasonably concluded that there
may be a conflict of interest between the Company and Indemnitee in the conduct
of any such defense or (C) the Company shall not, in fact, have employed
counsel to assume the defense of such Proceeding, then the fees and expenses of
Indemnitee’s counsel shall be at the expense of the Company.  In addition, if there exists a potential, but
not an actual conflict of interest between the Company and Indemnitee, the
actual and reasonable legal fees and expenses incurred by Indemnitee for separate
counsel retained by Indemnitee to monitor the Proceeding (so that such counsel
may assume Indemnitee’s defense if the conflict of interest between the Company
and Indemnitee becomes an actual conflict of interest) shall be deemed to be
Expenses that are subject to indemnification hereunder.  The existence of an actual or potential
conflict of interest, and whether such conflict may be waived, shall be
determined pursuant to the rules of attorney professional conduct and
applicable law.  The Company shall not be
required to obtain the consent of Indemnitee for the settlement of any 


 


4

















 


Proceeding the Company has undertaken to defend if
the Company assumes full and sole responsibility for each such settlement;
provided, however, that the Company shall be required to obtain Indemnitee’s
prior written approval, which shall not be unreasonably withheld, before
entering into any settlement which (1) does not grant Indemnitee a
complete release of liability, (2) would impose any penalty or limitation
on Indemnitee, or (3) would admit any liability or misconduct by
Indemnitee.


 


3.             Additional Indemnification Rights.


 


(a)           Scope.  Notwithstanding any other provision of this
Agreement, 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, such changes shall be deemed to be within the purview of
Indemnitee’s rights and the Company’s obligations under this Agreement.  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, such changes, 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.


 


(b)           Nonexclusivity.  The indemnification provided by this
Agreement shall not be deemed exclusive of 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 members of the Company’s
Board of Directors, the General Corporation Law of Delaware, or otherwise, both
as to action in Indemnitee’s official capacity and as to action in another
capacity while holding such office.


 


(c)           Interest on Unpaid Amounts.  If any payment to be made by the Company to
Indemnitee hereunder is delayed by more than ninety (90) days from the date the
duly prepared request for such payment is received by the Company, interest
shall be paid by the Company to Indemnitee at the legal rate under Delaware law
for amounts which the Company indemnifies or is obligated to indemnify for the
period commencing with the date on which Indemnitee actually incurs such
Expense or pays such judgment, fine or amount in settlement and ending with the
date on which such payment is made to Indemnitee by the Company.


 


(d)           Third-Party Indemnification.  The Company hereby acknowledges that
Indemnitee has or may from time to time obtain certain rights to
indemnification, advancement of expenses and/or insurance provided by one or
more third parties (collectively, the “Third-Party Indemnitors”).  The Company hereby agrees that it is the
indemnitor of first resort (i.e., its
obligations to Indemnitee are primary and any obligation of the Third-Party
Indemnitors to advance expenses or to provide indemnification for the same
expenses or liabilities incurred by Indemnitee are secondary), and that the
Company will not assert that the Indemnitee must seek expense advancement or
reimbursement, or indemnification, from any Third-Party Indemnitor before the
Company must perform its expense advancement and reimbursement, and
indemnification obligations, under this Agreement.  No advancement or payment by the Third-


 


5

















 


Party Indemnitors on behalf of Indemnitee with
respect to any claim for which Indemnitee has sought indemnification from the
Company shall affect the foregoing.  The
Third-Party Indemnitors shall be subrogated to the extent of such advancement
or payment to all of the rights of recovery which Indemnitee would have had
against the Company if the Third-Party Indemnitors had not advanced or paid any
amount to or on behalf of Indemnitee.  If
for any reason a court of competent jurisdiction determines that the Third-Party
Indemnitors are not entitled to the subrogation rights described in the
preceding sentence, the Third-Party Indemnitors shall have a right of
contribution by the Company to the Third-Party Indemnitors with respect to any
advance or payment by the Third-Party Indemnitors to or on behalf of the
Indemnitee.


 


4.             Partial Indemnification.  If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of
the Expenses, judgments, fines or amounts paid in settlement, actually and
reasonably incurred in connection with a Proceeding, but not, however, for the
total amount thereof, the Company shall nevertheless indemnify Indemnitee for
the portion of such Expenses, judgments, fines and amounts paid in settlement
to which Indemnitee is entitled.


 


5.             Director and Officer Liability
Insurance.


 


(a)           D&O Policy.  The Company shall, from time to time, make
the good faith determination whether or not it is practicable for the Company
to obtain and maintain a policy or policies of insurance with reputable
insurance companies providing the directors and officers of the Company with
coverage for losses from wrongful acts, or to ensure the Company’s performance
of its indemnification obligations under this Agreement.  Among other considerations, the Company will
weigh the costs of obtaining such insurance coverage against the protection
afforded by such coverage.  In all
policies of director and officer liability insurance, Indemnitee shall be
named as an insured 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
directors, if Indemnitee is a director; or of the Company’s officers, if
Indemnitee is not a director of the Company but is an officer; or of the
Company’s key employees, if Indemnitee is not an officer or director but is a
key employee.  Notwithstanding the
foregoing, the Company shall have no obligation to obtain or maintain such
insurance if the Company determines in good faith that such insurance is not
reasonably available, if the premium costs for such insurance are
disproportionate to the amount of coverage provided, if the coverage provided
by such insurance is limited by exclusions so as to provide an insufficient
benefit, or if Indemnitee is covered by similar insurance maintained by a
parent or subsidiary of the Company.


 


(b)           Tail Coverage.  In the event of a Change of Control or the
Company’s becoming insolvent (including being placed into receivership or
entering the federal bankruptcy process and the like), the Company shall
maintain in force any and all insurance policies then maintained by the Company
in providing insurance (directors’ and officers’ liability, fiduciary,
employment practices or otherwise) in respect of Indemnitee, for a period of
six years thereafter.


 


6.             Severability.  Nothing in this Agreement is intended to
require or shall be construed as requiring the Company to do or fail to do any
act in violation of applicable law.  The
Company’s inability, pursuant to court order, to perform its obligations under
this 


 


6

















 


Agreement shall not constitute a breach of this
Agreement.  If this Agreement or any
portion hereof shall be invalidated on any ground by any court of competent
jurisdiction, then the Company shall nevertheless indemnify Indemnitee to the
full extent permitted by any applicable portion of this Agreement that shall
not have been invalidated, and the balance of this Agreement not so invalidated
shall be enforceable in accordance with its terms.


 


7.             Exclusions.  Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:


 


(a)           Claims Initiated by Indemnitee.  To indemnify or advance Expenses to
Indemnitee with respect to Proceedings initiated or brought voluntarily by
Indemnitee and not by way of defense, except with respect to Proceedings
brought to establish, enforce or interpret a right to indemnification under
this Agreement or any other statute or law or otherwise as required under
Section 145 of the General Corporation Law of Delaware, but such
indemnification or advancement of Expenses may be provided by the Company in
specific cases if the Board of Directors finds it to be appropriate; provided,
however, that the exclusion set forth in the first clause of this subsection
shall not be deemed to apply to any investigation initiated or brought by
Indemnitee to the extent reasonably necessary or advisable in support of
Indemnitee’s defense of a Proceeding to which Indemnitee was, is or is
threatened to be made, a party;


 


(b)           Lack of Good Faith.  To indemnify Indemnitee for any Expenses
incurred by Indemnitee with respect to any Proceeding instituted by Indemnitee
to establish, enforce or interpret a right to indemnification under this
Agreement or any other statute or law or otherwise as required under
Section 145 of the General Corporation Law of Delaware, 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;


 


(c)           Insured Claims.  To indemnify Indemnitee for Expenses to the
extent such Expenses have been paid directly to Indemnitee by an insurance
carrier under an insurance policy maintained by the Company; or


 


(d)           Certain Exchange Act Claims.  To indemnify Indemnitee in connection with
any claim made against Indemnitee for (i) an accounting of profits made
from the purchase and sale (or sale and purchase) by Indemnitee of securities
of the Company within the meaning of Section 16(b) of the Exchange
Act or any similar successor statute or any similar provisions of state
statutory law or common law, or (ii) any reimbursement of the Company by
Indemnitee of any bonus or other incentive-based or equity-based compensation
or of any profits realized by Indemnitee from the sale of securities of the
Company, as required in each case under the Exchange Act (including any such
reimbursements that arise from an accounting restatement of the Company
pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley
Act”), or the payment to the Company of profits arising from the purchase
and sale by Indemnitee of securities in violation of Section 306 of the
Sarbanes-Oxley Act); provided, however, that to the fullest extent permitted by
applicable law and to the extent Indemnitee is successful on the merits or
otherwise with respect to any such Proceeding, the Expenses actually and
reasonably incurred by Indemnitee in connection with any such Proceeding shall
be deemed to be Expenses that are subject to indemnification hereunder.


 


7














 


8.             Contribution Claims.


 


(a)           If the indemnification
provided in Section 1 is unavailable in whole or in part and may not be
paid to Indemnitee for any reason other than those set forth in Section 7,
then in respect to any Proceeding in which the Company is jointly liable with
Indemnitee (or would be if joined in such Proceeding), to the fullest extent
permitted by applicable law, the Company, in lieu of indemnifying Indemnitee,
shall pay, in the first instance, the entire amount incurred by Indemnitee, whether
for Expenses, judgments, fines or amounts paid in settlement, in connection
with any Proceeding without requiring Indemnitee to contribute to such payment,
and the Company hereby waives and relinquishes any right of contribution it may
have at any time against Indemnitee.


 


(b)           With respect to a Proceeding
brought against directors, officers, employees or agents of the Company (other
than Indemnitee), to the fullest extent permitted by applicable law, the
Company shall indemnify Indemnitee from any claims for contribution that may be
brought by any such directors, officers, employees or agents of the Company
(other than Indemnitee) who may be jointly liable with Indemnitee, to the same
extent Indemnitee would have been entitled to such indemnification under this
Agreement if such Proceeding had been brought against Indemnitee.


 


9.             No Imputation.  The knowledge and/or actions, or failure to
act, of any director, officer, agent or employee of the Company or the Company
itself shall not be imputed to Indemnitee for purposes of determining any
rights under this Agreement.


 


10.           Determination of Good Faith.  For purposes of any determination of good
faith, Indemnitee shall be deemed to have acted in good faith if
Indemnitee’s action is based on the records or books of account of the
Enterprise, including financial statements, or on information supplied to
Indemnitee by the officers of the Enterprise in the course of their duties, or
on the advice of legal counsel for the Enterprise or the Board of Directors of the
Enterprise or any counsel selected by any committee of the Board of Directors
of the Enterprise or on information or records given or reports made to the
Enterprise by an independent certified public accountant or by an appraiser,
investment banker, compensation consultant, or other expert selected with
reasonable care by the Enterprise or the Board of Directors of the Enterprise
or any committee thereof.  The provisions
of this Section 10 shall not be deemed to be exclusive or to limit in any
way the other circumstances in which the Indemnitee may be deemed to have met
the applicable standard of conduct. 
Whether or not the foregoing provisions of this Section are
satisfied, it shall in any event be presumed that Indemnitee has at all times
acted in good faith and in a manner Indemnitee reasonably believed to be in or
not opposed to the best interests of the Company.


 


11.           Defined Terms and Phrases.  For purposes of this Agreement, the following
terms shall have the following meanings:


 


(a)           “Beneficial Owner”
and “Beneficial Ownership” shall have the meanings set forth in Rule 13d-3
promulgated under the Exchange Act as in effect on the date hereof.


 


(b)           “Change of Control”
shall be deemed to occur upon the earliest of any of the following events:


 


8

















 


(i)            Acquisition of Stock by
Third Party.  Any Person
is or becomes the Beneficial Owner, directly or indirectly, of securities of
the Company representing fifteen percent (15%) or more of the combined voting
power of the Company’s then outstanding securities entitled to vote generally
in the election of directors, unless (1) the change in the relative
Beneficial Ownership of the Company’s securities by any Person results solely
from a reduction in the aggregate number of outstanding shares of securities
entitled to vote generally in the election of directors, or (2) such
acquisition was approved in advance by the Continuing Directors and such
acquisition would not constitute a Change of Control under part (iii) of
this definition.


 


(ii)           Change in Board of Directors.  Individuals who, as of the date of this
Agreement, constitute the Company’s Board of Directors (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 still in office who were directors on the date of this Agreement
(collectively, the “Continuing Directors”), cease for any reason to
constitute at least a majority of the members of the Board.


 


(iii)          Corporate Transaction.  The effective date of a reorganization,
merger, or consolidation of the Company (a “Business Combination”), in
each case, unless, following such Business Combination:  (1) all or substantially all of the individuals
and entities who were the Beneficial Owners of securities entitled to vote
generally in the election of directors immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 51% of the
combined voting power of the then outstanding securities of the Company
entitled to vote generally in the election of directors resulting from such
Business Combination (including a corporation which as a result of such
transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially
the same proportions as their ownership, immediately prior to such Business
Combination, of the securities entitled to vote generally in the election of
directors and with the power to elect at least a majority of the Board or other
governing body of the surviving entity; (2) no Person (excluding any
corporation resulting from such Business Combination) is the Beneficial Owner,
directly or indirectly, of 15% or more of the combined voting power of the then
outstanding securities entitled to vote generally in the election of directors
of such corporation except to the extent that such ownership existed prior to
the Business Combination; and (3) at least a majority of the Board of
Directors of the corporation resulting from such Business Combination were
Continuing Directors at the time of the execution of the initial agreement, or
of the action of the Board of Directors, providing for such Business
Combination.


 


(iv)          Liquidation.  The approval by the Company’s stockholders of
a complete liquidation of the Company or an agreement or series of agreements
for the sale or disposition by the Company of all or substantially all of the
Company’s assets, other than factoring the Company’s current receivables or
escrows due (or, if such approval is not required, the decision by the Board to
proceed with such a liquidation, sale or disposition in one transaction or a
series of related transactions).


 


(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 


 


9

















 


response to any similar item or any similar schedule
or form) promulgated under the Exchange Act whether or not the Company is then
subject to such reporting requirement.


 


(c)           “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, and employees or agents, so
that if Indemnitee is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent
corporation as a director, officer, trustee, general partner, managing member,
fiduciary, employee or agent of any other enterprise, 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.


 


(d)           “Enterprise” means
the Company and any other enterprise that Indemnitee was or is serving at the
request of the Company as a director, officer, partner (general, limited or
otherwise), member (managing or otherwise), trustee, fiduciary, employee or
agent.


 


(e)           “Exchange Act” means
the Securities Exchange Act of 1934, as amended.


 


(f)            “Expenses” shall
include all direct and indirect costs, fees and expenses of any type or nature
whatsoever, including all attorneys’ fees and costs, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, fees of
private investigators and professional advisors, duplicating costs, printing
and binding costs, telephone charges, postage, delivery service fees, any
federal, state, local or foreign taxes imposed on Indemnitee as a result of the
actual or deemed receipt of any payment under this Agreement (including taxes
that may be imposed upon the actual or deemed receipt of payments under this
Agreement with respect to the imposition of federal, state, local or foreign
taxes), fax transmission charges, secretarial services and all other
disbursements, obligations or expenses in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, being or preparing
to be a witness in, settlement or appeal of, or otherwise participating in a
Proceeding.  Expenses also shall include
any of the forgoing expenses incurred in connection with any appeal resulting
from any Proceeding, including the principal, premium, security for, and other
costs relating to any costs bond, supersedes bond, or other appeal bond or its
equivalent.  Expenses also shall include
any interest, assessment or other charges imposed thereon and costs incurred in
preparing statements in support of payment requests hereunder.  Expenses, however, shall not include amounts
paid in settlement by Indemnitee or the amount of judgments or fines against
Indemnitee.


 


(g)           “Person” shall have
the meaning as set forth in Section 13(d) and 14(d) of the
Exchange Act as in effect on the date hereof; provided, however, that “Person”
shall exclude: (i) the Company; (ii) any direct or indirect majority
owned subsidiaries of the Company; (iii) any employee benefit plan of the
Company or any direct or indirect majority owned subsidiaries of the Company or
of any corporation owned, directly or indirectly, by the Company’s stockholders
in substantially the same proportions as their ownership of stock of the
Company (an “Employee Benefit Plan”); and (iv) any trustee or other
fiduciary holding securities under an Employee Benefit Plan.


 


10

















 


(h)           “Proceeding” shall
include any actual, threatened, pending or completed action, suit, arbitration,
mediation, alternate dispute resolution mechanism, investigation, inquiry,
administrative hearing or any other actual, threatened or completed proceeding,
whether brought by a third party, a government agency, the Company or its Board
of Directors or a committee thereof, whether in the right of the Company or
otherwise and whether of a civil (including intentional or unintentional tort
claims), criminal, administrative, legislative or investigative (formal or
informal) nature, including any appeal therefrom, in which Indemnitee was, is,
will or might be involved as a party, potential party, non-party witness or
otherwise by reason of the fact that Indemnitee is or was a director, officer,
employee or agent of the Company, by reason of any action (or failure to act)
taken by Indemnitee or of any action (or failure to act) on Indemnitee’s part
while acting as a director, officer, employee or agent of the Company, or by
reason of the fact that Indemnitee is or was serving at the request of the
Company as a director, officer, partner (general, limited or otherwise), member
(managing or otherwise), trustee, fiduciary, employee or agent of any other
enterprise, in each case whether or not serving in such capacity at the time
any liability or expense is incurred for which indemnification, reimbursement
or advancement of expenses can be provided under this Agreement.


 


(i)            In addition, references to “other
enterprise” shall include another corporation, partnership, limited
liability company, joint venture, trust, employee benefit plan or any other
enterprise; references to “fines” shall include any excise taxes assessed
on Indemnitee with respect to an employee benefit plan; references to “serving
at the request of the Company” shall include any service as a director,
officer, employee or agent of the Company which imposes duties on, or involves
services by Indemnitee with respect to an employee benefit plan, its
participants, or 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; references to “include” or “including”
shall mean include or including, without limitation; and references to
Sections, paragraphs or clauses are to Sections, paragraphs or clauses in this
Agreement unless otherwise specified.


 


12.           Attorneys’ Fees.  In the event that any Proceeding is
instituted by Indemnitee under this Agreement to enforce or interpret any of
the terms hereof, the Company shall indemnify Indemnitee against all Expenses
actually and reasonably incurred by Indemnitee in connection with such
Proceeding, unless a court of competent jurisdiction determines that each of
the material assertions made by Indemnitee as a basis for such Proceeding were
not made in good faith or were frivolous. 
In the event of a Proceeding instituted by or in the name of the Company
under this Agreement or to enforce or interpret any of the terms of this
Agreement, the Company shall indemnify Indemnitee against all Expenses actually
and reasonably incurred by Indemnitee in connection with such Proceeding
(including with respect to Indemnitee’s counterclaims and cross-claims made in
such action), unless a court of competent jurisdiction determines that each of
Indemnitee’s material defenses to such action were made in bad faith or were
frivolous.


 


11

















 


13.           Miscellaneous.


 


(a)           Governing Law.  This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
Delaware, without giving effect to principles of conflicts of law.


 


(b)           Entire Agreement; Binding Effect.  Without limiting any of the rights of
Indemnitee described in Section 3(b), this Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter
herein and merges all prior discussions and supersedes any and all previous
agreements between them covering the subject matter herein.  The indemnification provided under this
Agreement applies with respect to events occurring before or after the
effective date of this Agreement, and shall continue to apply even after Indemnitee
has ceased to serve the Company in any and all indemnified capacities.


 


(c)           Amendments and Waivers.  No modification of or amendment to this
Agreement, nor any waiver of any rights under this Agreement, shall be
effective unless in writing signed by the parties to this Agreement.  The failure by either party to enforce any
rights under this Agreement shall not be construed as a waiver of any rights of
such party.


 


(d)           Notices.  Any notice, demand or request required or
permitted to be given under this Agreement shall be in writing and shall be
deemed sufficient when delivered personally or sent by fax or 48 hours after
being sent by nationally-recognized courier or deposited in the U.S. mail, as
certified or registered mail, with postage prepaid, and addressed to the party
to be notified at such party’s address or fax number as set forth below or as
subsequently modified by written notice.


 


(e)           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.


 


(f)            Successors and Assigns.  This Agreement shall be binding upon the
Company and its successors (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) and assigns, and inure to the benefit of
Indemnitee and Indemnitee’s heirs, executors, administrators, legal
representatives and assigns.  The Company
shall require and cause any successor (whether direct or indirect by purchase,
merger, consolidation or otherwise) to all or substantially all 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.


 


(g)           No Employment Rights.  Nothing contained in this Agreement is
intended to create in Indemnitee any right to continued employment.


 


(h)           Company Position.  The Company shall be precluded from
asserting, in any Proceeding brought for purposes of establishing, enforcing or
interpreting any right to indemnification under this Agreement, that the procedures
and presumptions of this Agreement 


 


12

















 


are not valid, binding and enforceable and shall
stipulate in any such court that the Company is bound by all the provisions of
this Agreement and is precluded from making any assertion to the contrary.


 


(i)            Subrogation.  Subject to Section 3(d), 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 to effectively bring suit to enforce such
rights.


 


[Signature Page Follows]


 


13

















 


The
parties have executed this Agreement as of the date first set forth above.


 


	
   

  	
   

  	
  THE COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SEMILEDS CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:
  Trung Doan

  
	
   

  	
   

  	
  Title:
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
  3F,
  No.11 Ke Jung Rd., Chu-Nan Site

  
	
   

  	
   

  	
  Hsinchu
  Science Park, Chu-Nan 350

  
	
   

  	
   

  	
  Miao-Li
  County, Taiwan, R. O. C

  
	
   

  	
   

  	
  Fax:
  +886-37-582688

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  AGREED
  TO AND ACCEPTED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  INDEMNITEE:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Signature)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Fax:

  	
   

  	
   

  	
   

  
					



 


SIGNATURE
PAGE TO SEMILEDS CORPORATION


INDEMNIFICATION
AGREEMENT