(ii)    on or after the date hereof, any “person” (as such term is used in Sections 13(d)and 14(d) of the Securities Exchange Act of 1934, as amended (the “Act”)), other than theCompany, a subsidiary of the Company or the person seeking indemnification, together with its“affiliates” and “associates” (as those terms are defined in Rule 12b-2 under the Act), orany group of persons acting in concert, not including the person seeking indemnification,acquires or becomes the beneficial owner (as so defined in Rule 13d-3), directly orindirectly, of twenty percent or more of the voting power represented by the Company’s thenoutstanding Voting Securities; or(iii)the stockholders of the Company approve a definitive agreement or plan to(A) merge or consolidate the Company with or into another corporation (other than (1) amerger or consolidation with a subsidiary of the Company, or (2) a merger in which theCompany is the surviving corporation and no outstanding Voting Securities of the Company(other than fractional shares) held by stockholders immediately prior to the merger areconverted into cash, securities or other property), (B) exchange, pursuant to a statutoryexchange of shares of voting stock of the Company held by stockholders of the Companyimmediately prior to the exchange, shares of one or more classes or series of voting stock ofthe Company for shares of another corporation, (C) sell or otherwise dispose of all orsubstantially all of the assets of the Company (in one transaction or a series oftransactions), or (D) liquidate or dissolve the Company, unless a majority of the VotingSecurities of the surviving corporation or of any corporation (or other entity) acquiring allor substantially all of the assets of the Company (in the case of a merger, consolidation ordisposition of assets) or the Company (in the case of a statutory share exchange) is,immediately following the merger, consolidation, statutory share exchange or disposition ofassets, beneficially owned by the person seeking indemnification or by a group of persons,including the person seeking indemnification, acting in concert; or(iv)the Company enters into an agreement in principle or a definitive agreementrelating to an event described in clause (i), (ii) or (iii) above which ultimately results inan event described therein, or a tender or exchange offer or proxy contest is commenced whichultimately results in an event described therein.b. “Claim” shall mean any threatened, pending or completed action, suit or proceeding,or any inquiry or investigation, whether instituted by the Company or any other party (including,without limitation, in the right of the Company), that Indemnitee in good faith believes might leadto the institution of any such action, suit or proceeding, whether civil, criminal, administrative,investigative or other.c. “Enterprise” shall mean any enterprise other than the Company, including anycorporation, partnership, joint venture, trust, employee benefit plan or other enterprise.d. “Expenses” shall mean attorneys’ fees and all other costs, expenses and obligationspaid or incurred in connection with investigating, defending, being a witness in or participatingin (including on appeal), or preparing to defend, be a witness in or participate in any Claimrelating to any Indemnifiable Event.e. “Indemnifiable Event” shall mean any event or occurrence related to the fact thatIndemnitee is or was a director or officer of the Company, or is or was serving at the request ofthe Company as a director, officer, employee, trustee, agent or fiduciary of any other Enterprise,or by reason of anything done or not done by Indemnitee in any such capacity.f. “Independent Legal Counsel” shall mean an attorney or firm of attorneys, selectedin accordance with the provisions of Section 3, who shall not have been retained by or otherwiseperformed services for the Company or Indemnitee within the previous three years (other than withrespect to matters concerning the rights of Indemnitee under this Agreement, or of otherindemnitees under similar indemnification agreements).
 
 

 
g. “Reviewing Party” shall mean (i) any appropriate person or body consisting of amember or members of the Company’s Board of Directors or any other person or body appointed by theBoard of Directors who is not a party to the particular Claim for which Indemnitee is seekingindemnification, or (ii) Independent Legal Counsel.h. “Voting Securities” shall mean any securities of the Company which vote generallyin the election of directors.2. BASIC INDEMNIFICATION ARRANGEMENT.a. General Rules. Subject to the provisions of Section 8 hereof, in the eventIndemnitee was, is or becomes a party to or witness or other participant in, or is threatened to bemade a party to or witness or other participant in, a Claim by reason of (or arising in part outof) an Indemnifiable Event, the Company shall indemnify Indemnitee to the fullest extent authorizedand permitted by law, the Company’s By-Laws and the terms of this Agreement, as soon as practicablebut in any event no later than thirty (30) days after written demand is presented to the Company,against any and all Expenses, judgments, fines, penalties and amounts reasonably paid in settlement(including all interest, assessments and other charges paid or payable in connection with or inrespect of such Expenses, judgments, fines, penalties or amounts reasonably paid in settlement) ofsuch Claim.Notwithstanding the foregoing sentence, in no event shall Indemnitee be entitled toindemnification pursuant to this Agreement for any liability under Section 16(b) of the Act orunder federal or state securities laws for “insider trading”, conduct on the part of Indemniteefinally adjudged as constituting active or deliberate dishonesty, willful fraud or willfulillegality, or conduct on the part of Indemnitee finally adjudged as producing an unlawful personalbenefit to Indemnitee; provided, however, to the extent any of the foregoing conduct israised as a defense to indemnification of Indemnitee, such defense shall be permitted only as toClaims specifically and solely involving the foregoing, and to the extent the indemnificationrequest also involves Claims or portions of Claims not involving the foregoing or as to which theforegoing are only a part, the extent of Indemnitee’s indemnification shall be governed by theprovisions of Section 5 hereof.If so requested by Indemnitee, and subject to the provisions of Section 8 hereof, the Companyshall advance (within five business days of such request) any and all Expenses to Indemnitee (an“Expense Advance”).b. Conditions. Notwithstanding the provisions of Section 2(a) hereof:(i) the obligations of the Company to indemnify Indemnitee pursuant to Section 2(a)hereof shall be subject to the condition that a Reviewing Party shall not have determined (ina written opinion, in any case in which the Independent Legal Counsel referred to inSection 3 hereof is involved) that Indemnitee would not be permitted to be indemnified underapplicable law, or under the Company’s By-Laws or this Agreement; and(ii) the obligations of the Company to make an Expense Advance to Indemnitee pursuant toSection 2(a) hereof shall be subject to the condition that, if, when and to the extent that aReviewing Party determines that Indemnitee would not be permitted to be so indemnified underapplicable law, or under the Company’s By-Laws or this Agreement, the Company shall beentitled to reimbursement by Indemnitee (who hereby agrees to reimburse the Company) for allsuch amounts theretofore paid; provided, however, that if Indemnitee has commenced orthereafter commences legal proceedings in a court of competent jurisdiction to secure adetermination that Indemnitee should be indemnified under applicable law, any determinationmade by a Reviewing Party that Indemnitee would not be permitted to be indemnified underapplicable law shall not be binding and Indemnitee shall not be required to reimburse theCompany for any Expense Advance until a final judicial determination is made with respectthereto (as to which all rights of appeal therefrom have been exhausted or lapsed).
 
 

 
c. Selection of Reviewing Party; Judicial Review. For purposes of Section 2(b)hereof, if there has not been a Change in Control, the Reviewing Party shall be selected by theBoard of Directors, and if there has been such a Change in Control (other than a Change in Controlwhich has been approved by a majority of the Company’s Board of Directors who were directorsimmediately prior to such Change in Control), the Reviewing Party shall be the Independent LegalCounsel referred to in Section 3 hereof. If there has been no determination by a Reviewing Partyor if a Reviewing Party determines that Indemnitee substantively would not be permitted to beindemnified in whole or in part under applicable law, Indemnitee shall have the right to commencelitigation in any court in the States of Minnesota or Delaware having subject matter jurisdictionthereof and in which venue is proper seeking an initial determination by the court or challengingany such determination by a Reviewing Party or any aspect thereof, including the legal or factualbases therefor, and the Company hereby consents to service of process and to appear in any suchproceeding. Any determination by a Reviewing Party otherwise shall be conclusive and binding onthe Company and Indemnitee.3. CHANGE IN CONTROL. The Company agrees that if there is a Change in Control of theCompany (other than a Change in Control which has been approved by a majority of the Company’sBoard of Directors who were directors immediately prior to such Change in Control) then withrespect to all matters thereafter arising concerning the rights of Indemnitee to indemnity paymentsand Expense Advances under this Agreement, the Company’s By-Laws or any other agreement now orhereafter in effect relating to Claims for Indemnifiable Events, the Company shall seek legaladvice only from Independent Legal Counsel selected by Indemnitee and approved by the Company(which approval shall not be unreasonably withheld). Such Independent Legal Counsel, among otherthings, shall render its written opinion to the Company and Indemnitee as to whether and to whatextent Indemnitee would be permitted to be indemnified under applicable law. The Company agrees topay the reasonable fees of such Independent Legal Counsel and to fully indemnify such IndependentLegal Counsel against any and all expenses (including attorneys’ fees), claims, liabilities anddamages arising out of or relating to this Agreement or its engagement pursuant hereto.4. INDEMNIFICATION FOR ADDITIONAL EXPENSES. The Company shall indemnify Indemniteeagainst any and all expenses (including attorneys’ fees) and, if requested by Indemnitee, shall(within two business days of such request) advance such expenses to Indemnitee, which are incurredby Indemnitee in connection with any action brought by Indemnitee for (a) indemnification oradvance payment of Expenses by the Company under this Agreement, the Company’s By-Laws or any otheragreement now or hereafter in effect relating to Claims for Indemnifiable Events, and/or(b) recovery under any directors’ and officers’ liability insurance policies maintained by theCompany, regardless of whether Indemnitee ultimately is determined to be entitled to suchindemnification, advance expense payment or insurance recovery, as the case may be.5. PARTIAL INDEMNITY, ETC. If Indemnitee is entitled under any provision of Delawarelaw, the Company’s By-Laws or this Agreement to indemnification by the Company for some or aportion of the Expenses, judgments, fines, penalties and amounts reasonably paid in settlement(including all interest, assessments and other charges paid or payable in connection with or inrespect of such Expenses, judgments, fines, penalties or amounts reasonably paid in settlement) ofa Claim but not, however, for the total amount thereof, the Company shall nevertheless indemnifyIndemnitee for the portion thereof to which Indemnitee is entitled. Moreover, notwithstanding anyother provision of this Agreement, to the extent that Indemnitee has been successful on the meritsor otherwise in defense of any or all Claims relating in whole or in part to an Indemnifiable Eventor in defense of any issue or matter therein, including dismissal without prejudice, Indemniteeshall be indemnified against all Expenses incurred in connection therewith; provided,however, that if such indemnification shall be specifically determined to be unlawful, thenIndemnitee shall be entitled to a fair apportionment of Expenses so that Indemnitee receivesindemnification to the maximum extent lawful.6. BURDEN OF PROOF. In connection with any determination by a Reviewing Party orotherwise as to whether Indemnitee is entitled to be indemnified hereunder, the burden of proofshall be on the Company to establish that Indemnitee is not so entitled.
 
 

 
7. NO PRESUMPTIONS. For purposes of this Agreement, the termination of any Claim,action, suit or proceeding, by judgment, order or reasonable settlement (whether with or withoutcourt approval), shall create a presumption that Indemnitee is entitled to indemnification withrespect to such Claim, action, suit or proceeding unless such judgment, order or settlementspecifically provides or establishes that Indemnitee did not meet any particular standard ofconduct or have any particular belief necessary to indemnification, or specifically states, in thecase of a judgment or court-approved settlement, that the court has determined that indemnificationis not permitted by applicable law. For purposes of this Agreement, the termination of anycriminal action or proceeding by conviction, or upon a plea of nolo contendere or its equivalent,shall not create a presumption that Indemnitee did not meet any particular standard of conduct orhave any particular belief or that the court in such action or proceeding has determined thatindemnification is not permitted by applicable law. In addition, prior to the commencement oflegal proceedings by Indemnitee to secure a judicial determination that Indemnitee should beindemnified under applicable law, neither the failure of a Reviewing Party to have made adetermination as to whether Indemnitee has met any particular standard of conduct or had anyparticular belief, nor an actual determination by a Reviewing Party that Indemnitee has not metsuch standard of conduct or did not have such belief, shall be a defense to Indemnitee’s claim orcreate a presumption that Indemnitee has not met any particular standard of conduct or did not haveany particular belief.8. NOTIFICATION OF ACTION, ETC.; ASSUMPTION BY COMPANY OF CONDUCT OR DEFENSE OF SAME.a. Notification. Promptly after receipt by Indemnitee or the Company, of any noticeor document respecting the commencement of any action, suit, proceeding, inquiry or investigationwhich names, involves or may involve Indemnitee relating to any matter concerning which Indemniteemay be entitled to indemnification or advancement of Expenses pursuant to this Agreement, Delawarelaw or the By-Laws of the Company, the party receiving such notice or document will promptly notifythe other of the receipt of same; provided, however, that the failure on the part ofIndemnitee to so notify the Company will not relieve the Company from any obligation or liabilitywhich it may have to Indemnitee for indemnification or advancement of Expenses pursuant to thisAgreement, Delaware law or the By-Laws of the Company.b. Expense Advance; Assumption of Conduct or Defense. With respect to any suchaction, suit, proceeding, inquiry or investigation:(i) if Indemnitee intends to request an Expense Advance, Indemnitee will provide theCompany with three (3) business days’ prior notice of Indemnitee’s intention to incurExpenses and seek an Expense Advance and shall meet with an executive officer of the Companyduring such three-day period to discuss Indemnitee’s incurring of Expenses if requested to doso; and(ii) except as otherwise provided below, to the extent that it may deem desirable, theCompany, individually, or jointly with any other indemnifying party, may assume the conductor defense of such action, suit, proceeding, inquiry or investigation; provided,however, that if the Company elects to assume the conduct or defense thereof, it willnotify Indemnitee of its choice of legal counsel and offer Indemnitee an opportunity todiscuss such choice of legal counsel with one of the Company’s executive officers. Afternotice from the Company to Indemnitee of the Company’s election to assume the conduct ordefense thereof, the Company will not be liable to Indemnitee under this Agreement for anylegal fees or other expenses subsequently incurred by Indemnitee in connection with thedefense thereof, other than reasonable costs of investigation, except as otherwise approvedby the Company or as provided below in clauses (A), (B) and (C) of this Section 8(b)(ii).Upon the Company’s assumption of the conduct or defense of such action, suit, proceeding,inquiry or investigation as provided herein, Indemnitee shall have the right to employcounsel to represent Indemnitee in such action, suit, proceeding, inquiry or investigationbut the fees and expenses of such counsel incurred after the Company’s assumption of theconduct or defense thereof shall be at the expense of Indemnitee unless (A) there has been aChange in Control of the Company, or (B) Indemnitee has reasonably concluded that there is amaterial conflict of interest betweenthe Company and Indemnitee in the conduct or defense of such action, suit, proceeding,inquiry or investigation, and a Reviewing Party appointed by Indemnitee has concurred inIndemnitee’s conclusion, or (C) the Company has not in fact employed counsel in a timelymanner to assume the conduct or defense of such action, suit, proceeding, inquiry orinvestigation, in each of which cases the Expenses of Indemnitee shall be advanced orreimbursed in accordance with the provisions of this Agreement. The Company shall not settleany action, suit, proceeding, inquiry or investigation in any manner which would impose anypenalty or limitation on Indemnitee without Indemnitee’s written consent.
 
 

 
9. NONEXCLUSIVITY, ETC. The rights of Indemnitee hereunder shall be in addition toany other rights Indemnitee may have under the provisions of the Company’s By-Laws, the DelawareGeneral Company Law or otherwise. To the extent that a change in the Delaware General Company Law(whether by statute or judicial decision) permits greater indemnification by agreement than wouldbe afforded currently under the provisions of the Company’s By-Laws and this Agreement, it is theintent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits soafforded by such change. To the extent that this Agreement creates greater benefits for Indemniteethan are permitted under the Company’s By-Laws or Delaware law, it is the intent of the partieshereto that this Agreement shall be deemed controlling. To the extent that there is a conflictbetween the Company’s By-Laws or the provisions of this Agreement, it is the desire of the partieshereto that such conflict be resolved by affording Indemnitee the broadest indemnificationpermissible under Delaware law, the Company’s By-Laws or the provisions of this Agreement.10. LIABILITY INSURANCE. To the extent the Company maintains an insurance policy orpolicies providing directors’ and officers’ liability insurance, Indemnitee shall be covered bysuch policy or policies, in accordance with its or their terms, to the maximum extent of thecoverage available for any Company director or officer.11. PERIOD OF LIMITATIONS. No legal action shall be brought and no cause of actionshall be asserted by or in the right of the Company against Indemnitee, Indemnitee’s spouse, heirs,executors or personal or legal representatives after the expiration of one year from the date ofaccrual of such cause of action, and any claim or cause of action of the Company shall beextinguished and deemed released unless asserted by the timely filing of a legal action within suchone-year period; provided, however, that if any shorter period of limitations is otherwiseapplicable to any such cause of action such shorter period shall govern.12. ATTRIBUTION OF OTHERS’ ACTIONS OR CONDUCT. In connection with determinationsrespecting Indemnitee’s rights to indemnification and Expense Advances pursuant to Delaware law,the Company’s By-Laws or this Agreement, or Indemnitee’s rights to any other benefits conferredthereunder, the actions or conduct of other persons, including officers of the Company or othermembers of the Company’s Board of Directors, shall not be attributed to Indemnitee absent specificproof that Indemnitee has actual knowledge of such actions or conduct and specifically approvedsuch actions or conduct in writing or at a properly called meeting at which minutes of proceedingswere kept and votes of participants recorded.13. AMENDMENTS, ETC. No supplement, modification or amendment of this Agreement shallbe binding unless executed in writing by both of the parties hereto. No waiver of any of theprovisions of this Agreement shall be deemed or shall constitute a waiver of any other provisionshereof (whether or not similar) nor shall such waiver constitute a continuing waiver.14. SUBROGATION. In the event of payment under this Agreement, the Company shall besubrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shallexecute all necessary documents and take all necessary action to enable the Company to exercisesuch rights.
 
 

 
15. NO DUPLICATION OF PAYMENTS. The Company shall not be liable under this Agreementto make any payment in connection with any Claim made against Indemnitee to the extent Indemniteehas otherwiseactually received payment (under any insurance policy, By-Law or otherwise) of the amountsotherwise indemnifiable hereunder.16. BINDING EFFECT, ETC. This Agreement shall be binding upon and inure to thebenefit 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 allor substantially all of the business and/or assets of the Company, spouses, heirs, executors andpersonal and legal representatives. This Agreement shall continue in effect regardless of whetherIndemnitee continues to serve as an officer or director of the Company, or as a director, officer,employee, trustee, agent or fiduciary of any other Enterprise at the Company’s request.17. SEVERABILITY. The provisions of this Agreement shall be severable in the eventthat any of the provisions hereof (including any provision within a single section, paragraph orsentence) are held by a court of competent jurisdiction to be invalid, void or otherwiseunenforceable in any respect, and the validity and enforceability of any such provision in everyother respect and of the remaining provisions hereof shall not be in any way impaired and shallremain enforceable to the fullest extent permitted by law.18. GOVERNING LAW. This Agreement shall be governed by and construed and enforced inaccordance with the laws of the State of Delaware applicable to contracts made and to be performedin such State without giving effect to the principles of conflicts of laws.IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first writtenabove.      DIGI INTERNATIONAL INC.