Exhibit 10.5


 


INDEMNIFICATION AGREEMENT


 


THIS INDEMNIFICATION AGREEMENT,
made and executed this       day of                     ,
2007, by and between Transoma Medical, Inc., a Delaware corporation (the “Company”),
and                               ,
an individual resident of the State of                      
(the “Indemnitee”).


 


WHEREAS, the Company is aware that, in order to induce highly competent
persons to serve the Company as directors or officers or in other capacities,
the Company must provide such persons with adequate protection through
insurance and indemnification against inordinate risks of claims and actions
against them arising out of their service to and activities on behalf of the
Company;


 


WHEREAS, the Company recognizes that the increasing difficulty in
obtaining directors’ and officers’ liability insurance, the increases in the
cost of such insurance and the general reductions in the coverage of such
insurance have increased the difficulty of attracting and retaining such
persons;


 


WHEREAS, the Board of Directors of the Company has determined that it
is essential to the best interests of the Company’s stockholders that the
Company act to assure such persons that there will be increased certainty of
such protection in the future;


 


WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify such persons to the fullest
extent permitted by applicable law so that they will continue to serve the
Company free from undue concern that they will not be so indemnified; and


 


WHEREAS, the Indemnitee is willing to serve, continue to serve, and
take on additional service for or on behalf of the Company or any of its direct
or indirect subsidiaries on the condition that he/she be so indemnified.


 


NOW, THEREFORE, in consideration of the premises and the mutual
promises and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Company and the Indemnitee do hereby agree as follows:


 


1.             Service by the Indemnitee. The Indemnitee agrees to serve
and/or continue to serve as a director or officer of the Company faithfully and
will discharge his/her duties and responsibilities to the best of his/her
ability so long as the Indemnitee is duly elected or qualified in accordance
with the provisions of the Amended and Restated Certificate of Incorporation,
as amended (the “Certificate”), and Amended and Restated Bylaws, as amended
(the “Bylaws”) of the Company and the General Corporation Law of the State of
Delaware, as amended (the “DGCL”), or until his/her earlier death, resignation
or removal. The Indemnitee may at any time and for any reason resign from such
position (subject to any other contractual obligation or other obligation imposed
by operation by law), in which event the Company shall have no obligation under
this Agreement to continue to retain the Indemnitee in any such position.
Nothing in this Agreement shall confer upon the Indemnitee the right to
continue in the employ of the Company or as a director of the Company or affect
the right of the Company to terminate the Indemnitee’s


 

















 


employment or service at any time in the sole
discretion of the Company, with or without cause, subject to any contract
rights of the Indemnitee created or existing otherwise than under this
Agreement.


 


2.             Indemnification. The Company shall indemnify the
Indemnitee against all Expenses (as defined below), judgments, fines and
amounts paid in settlement actually and reasonably incurred by the Indemnitee
as provided in this Agreement to the fullest extent permitted by the
Certificate, Bylaws and DGCL or other applicable law in effect on the date of
this Agreement and to any greater extent that applicable law may in the future
from time to time permit. Without diminishing the scope of the indemnification
provided by this Section 2, the rights of indemnification of the
Indemnitee provided hereunder shall include, but shall not be limited to, those
rights hereinafter set forth, except that no indemnification shall be paid to
the Indemnitee:


 


(a)           on
account of any action, suit or proceeding in which judgment is rendered against
the Indemnitee for disgorgement of profits made from the purchase or sale by
the Indemnitee of securities of the Company pursuant to the provisions of
Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Act”),
or similar provisions of any federal, state or local statutory law;


 


(b)           on
account of conduct of the Indemnitee which is finally adjudged by a court of competent
jurisdiction to have been knowingly fraudulent or to constitute willful
misconduct;


 


(c)           in
any circumstance where such indemnification is expressly prohibited by
applicable law;


 


(d)           with
respect to liability for which payment is actually made to the Indemnitee under
a valid and collectible insurance policy or under a valid and enforceable
indemnity clause, By-law or agreement (other than this Agreement), except in
respect of any liability in excess of payment under such insurance, clause,
By-law or agreement;


 


(e)           if
a final decision by a court having jurisdiction in the matter shall determine
that such indemnification is not lawful (and, in this respect, both the Company
and the Indemnitee have been advised that it is the position of the Securities
and Exchange Commission that indemnification for liabilities arising under the
federal securities laws is against public policy and is, therefore,
unenforceable, and that claims for indemnification should be submitted to the
appropriate court for adjudication); or


 


(f)            in
connection with any action, suit or proceeding by the Indemnitee against the
Company or any of its direct or indirect subsidiaries or the directors,
officers, employees or other Indemnitees of the Company or any of its direct or
indirect subsidiaries, (i) unless such indemnification is expressly
required to be made by law, (ii) unless the proceeding was authorized by
the Board of Directors of the Company, (iii) unless such indemnification
is provided by the Company, in its sole discretion,


 


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pursuant to the
powers vested in the Company under applicable law, or (iv) except as
provided in Sections 11 and 13 hereof.


 


3.             Actions or Proceedings Other Than an Action
by or in the Right of the Company. The Indemnitee shall be entitled to the indemnification rights
provided in this Section 3 if the Indemnitee was or is a party or witness
or is threatened to be a party or witness to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative in nature, other than an action by or in the right of the
Company, by reason of the fact that the Indemnitee is or was a director,
officer, employee, agent or fiduciary of the Company, or any of its direct or
indirect subsidiaries, or is or was serving at the request of the Company, or
any of its direct or indirect subsidiaries, as a director, officer, employee,
agent or fiduciary of any other entity, including, but not limited to, another
corporation, partnership, limited liability company, employee benefit plan,
joint venture, trust or other enterprise, or by reason of any act or omission
by him/her in such capacity. Pursuant to this Section 3, the Indemnitee
shall be indemnified against all Expenses, judgments, penalties (including
excise and similar taxes), fines and amounts paid in settlement which were
actually and reasonably incurred by the Indemnitee in connection with such
action, suit or proceeding (including, but not limited to, the investigation,
defense or appeal thereof), if the Indemnitee acted in good faith and in a
manner the Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his/her conduct was unlawful.


 


4.             Actions by or in the Right of the Company. The Indemnitee shall be entitled to
the indemnification rights provided in this Section 4 if the Indemnitee
was or is a party or witness or is threatened to be made a party or witness to
any threatened, pending or completed action, suit or proceeding brought by or
in the right of the Company to procure a judgment in its favor by reason of the
fact that the Indemnitee is or was a director, officer, employee, agent or
fiduciary of the Company, or any of its direct or indirect subsidiaries, or is
or was serving at the request of the Company, or any of its direct or indirect
subsidiaries, as a director, officer, employee, agent or fiduciary of another
entity, including, but not limited to, another corporation, partnership,
limited liability company, employee benefit plan, joint venture, trust or other
enterprise, or by reason of any act or omission by him/her in any such
capacity. Pursuant to this Section 4, the Indemnitee shall be indemnified
against all Expenses actually and reasonably incurred by him/her in connection
with the defense or settlement of such action, suit or proceeding (including,
but not limited to the investigation, defense or appeal thereof), if the Indemnitee
acted in good faith and in a manner the Indemnitee reasonably believed to be in
or not opposed to the best interests of the Company; provided however, that no
such indemnification shall be made in respect of any claim, issue, or matter as
to which the Indemnitee shall have been adjudged to be liable to the Company,
unless and only to the extent that the Court of Chancery of the State of
Delaware or the court in which such action, suit or proceeding was brought
shall determine upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, the Indemnitee is fairly and
reasonably entitled to be indemnified against such Expenses actually and
reasonably incurred by him/her which such court shall deem proper.


 


5.             Good Faith Definition. For purposes of this Agreement, the
Indemnitee shall be deemed to have acted in good faith and in a manner the
Indemnitee reasonably believed to be in


 


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or not opposed to the best interests of the Company,
or, with respect to any criminal action or proceeding to have had no reasonable
cause to believe the Indemnitee’s conduct was unlawful, if such action was
based on (i) the records or books of the account of the Company or other
enterprise, including financial statements; (ii) information supplied to
the Indemnitee by the officers of the Company or other enterprise in the course
of their duties; (iii) the advice of legal counsel for the Company or
other enterprise; or (iv) information or records given in reports made to
the Company or other enterprise by an independent certified public accountant
or by an appraiser or other expert selected with reasonable care by the Company
or other enterprise.


 


6.             Indemnification for Expenses of Successful
Party. Notwithstanding
the other provisions of this Agreement, to the extent that the Indemnitee has
served on behalf of the Company, or any of its direct or indirect subsidiaries,
as a witness or other participant in any class action or proceeding, or has
been successful, on the merits or otherwise, in defense of any action, suit or
proceeding referred to in Section 3 and 4 hereof, or in defense of any
claim, issue or matter therein, including, but not limited to, the dismissal of
any action without prejudice, the Indemnitee shall be indemnified against all
Expenses actually and reasonably incurred by the Indemnitee in connection
therewith, regardless of whether or not the Indemnitee has met the applicable
standards of Section 3 or 4 and without any determination pursuant to
Section 8.


 


7.             Partial Indemnification. If the Indemnitee is entitled under
any provision of this Agreement to indemnification by the Company for some or a
portion of the Expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred by the Indemnitee in connection with the
investigation, defense, appeal or settlement of such suit, action,
investigation or proceeding described in Section 3 or 4 hereof, but is not
entitled to indemnification for the total amount thereof, the Company shall
nevertheless indemnify the Indemnitee for the portion of such Expenses,
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by the Indemnitee to which the Indemnitee is entitled.


 


8.             Procedure
for Determination of Entitlement to Indemnification.


 


(a)           To
obtain indemnification under this Agreement, the Indemnitee shall submit to the
Company a written request, including documentation and information which is
reasonably available to the Indemnitee and is reasonably necessary to determine
whether and to what extent the Indemnitee is entitled to indemnification. The
Secretary of the Company shall, promptly upon receipt of a request for
indemnification, advise the Board of Directors in writing that the Indemnitee
has requested indemnification. Any Expenses incurred by the Indemnitee in
connection with the Indemnitee’s request for indemnification hereunder shall be
borne by the Company. The Company hereby indemnifies and agrees to hold the
Indemnitee harmless for any Expenses incurred by the Indemnitee under the
immediately preceding sentence irrespective of the outcome of the determination
of the Indemnitee’s entitlement to indemnification.


 


(b)           Upon
written request by the Indemnitee for indemnification pursuant to
Section 3 or 4 hereof, the entitlement of the Indemnitee to
indemnification pursuant to the terms of this Agreement shall be determined by
the following person or persons, who shall be empowered to make such determination:
(i) if a Change in Control (as hereinafter 


 


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defined) shall
have occurred, by Independent Counsel (as hereinafter defined) (unless the
Indemnitee shall request in writing that such determination be made by the
Board of Directors (or a committee thereof) in the manner provided for in
clause (ii) of this Section 8(b)) in a written opinion to the Board
of Directors, a copy of which shall be delivered to the Indemnitee; or
(ii) if a Change in Control shall not have occurred, (A)(1) by the Board
of Directors of the Company, by a majority vote of Disinterested Directors (as
hereinafter defined) even though less than a quorum, or (2) by a committee
of Disinterested Directors designated by majority vote of Disinterested
Directors, even though less than a quorum, or (B) if there are no such
Disinterested Directors or, even if there are such Disinterested Directors, if
the Board of Directors, by the majority vote of Disinterested Directors, so
directs, by Independent Counsel in a written opinion to the Board of Directors,
a copy of which shall be delivered to the Indemnitee. Such Independent Counsel
shall be selected by the Board of Directors and approved by the Indemnitee.
Upon failure of the Board of Directors to so select, or upon failure of the
Indemnitee to so approve, such Independent Counsel shall be selected by the
Chancellor of the State of Delaware or such other person as the Chancellor
shall designate to make such selection. Such determination of entitlement to indemnification
shall be made not later than 45 days after receipt by the Company of a
written request for indemnification. If the person making such determination
shall determine that the Indemnitee is entitled to indemnification as to part
(but not all) of the application for indemnification, such person shall
reasonably prorate such part of indemnification among such claims, issues or
matters. If it is so determined that the Indemnitee is entitled to
indemnification, payment to the Indemnitee shall be made within ten days after
such determination.


 


9.             Presumptions
and Effect of Certain Proceedings.


 


(a)           In
making a determination with respect to entitlement to indemnification, the
Indemnitee shall be presumed to be entitled to indemnification hereunder and
the Company shall have the burden of proof in the making of any determination
contrary to such presumption.


 


(b)           If
the Board of Directors, or such other person or persons empowered pursuant to
Section 8 to make the determination of whether the Indemnitee is entitled
to indemnification, shall have failed to make a determination as to entitlement
to indemnification within 45 days after receipt by the Company of such
request, the requisite determination of entitlement to indemnification shall be
deemed to have been made and the Indemnitee shall be absolutely entitled to
such indemnification, absent actual and material fraud in the request for
indemnification or a prohibition of indemnification under applicable law. The
termination of any action, suit, investigation or proceeding described in
Section 3 or 4 hereof by judgment, order, settlement or conviction, or
upon a plea of nolo contendere or
its equivalent, shall not, of itself: (a) create a presumption that the
Indemnitee did not act in good faith and in a manner which he/she reasonably
believed to be in or not opposed to the best interests of the Company, and,
with respect to any criminal action or proceeding, that the Indemnitee has
reasonable cause to believe that the Indemnitee’s conduct was unlawful; or
(b) otherwise adversely affect the rights of the Indemnitee to
indemnification, except as may be provided herein.


 


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10.           Advancement of Expenses. All reasonable Expenses actually
incurred by the Indemnitee in connection with any threatened or pending action,
suit or proceeding shall be paid by the Company in advance of the final
disposition of such action, suit or proceeding, if so requested by the
Indemnitee, within 20 days after the receipt by the Company of a statement
or statements from the Indemnitee requesting such advance or advances. The
Indemnitee may submit such statements from time to time. The Indemnitee’s
entitlement to such Expenses shall include those incurred in connection with
any proceeding by the Indemnitee seeking an adjudication or award in
arbitration pursuant to this Agreement. Such statement or statements shall
reasonably evidence the Expenses incurred by the Indemnitee in connection
therewith and shall include or be accompanied by a written affirmation by the
Indemnitee of the Indemnitee’s good faith belief that the Indemnitee has met
the standard of conduct necessary for indemnification under this Agreement and
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
against such Expenses by the Company pursuant to this Agreement or otherwise.
Each written undertaking to pay amounts advanced must be an unlimited general
obligation but need not be secured, and shall be accepted without reference to
financial ability to make repayment.


 


11.           Remedies of the Indemnitee in Cases of
Determination not to Indemnify or to Advance Expenses. In the event that a determination is
made that the Indemnitee is not entitled to indemnification hereunder or if the
payment has not been timely made following a determination of entitlement to
indemnification pursuant to Sections 8 and 9, or if Expenses are not advanced
pursuant to Section 10, the Indemnitee shall be entitled to a final
adjudication in an appropriate court of the State of Delaware or any other
court of competent jurisdiction of the Indemnitee’s entitlement to such
indemnification or advance. Alternatively, the Indemnitee may, at the
Indemnitee’s option, seek an award in arbitration to be conducted by a single
arbitrator pursuant to the rules of the American Arbitration Association, such
award to be made within 60 days following the filing of the demand for
arbitration. The Company shall not oppose the Indemnitee’s right to seek any
such adjudication or award in arbitration or any other claim. Such judicial
proceeding or arbitration shall be made de
novo, and the Indemnitee shall not be prejudiced by reason of a
determination (if so made) that the Indemnitee is not entitled to
indemnification. If a determination is made or deemed to have been made
pursuant to the terms of Section 8 or Section 9 hereof that the
Indemnitee is entitled to indemnification, the Company shall be bound by such
determination, and shall be precluded from asserting that such determination
has not been made or that the procedure by which such determination was made is
not valid, binding and enforceable. The Company further agrees to stipulate in
any such court or before any such arbitrator that the Company is bound by all
the provisions of this Agreement and is precluded from making any assertions to
the contrary. If the court or arbitrator shall determine that the Indemnitee is
entitled to any indemnification hereunder, the Company shall pay all reasonable
Expenses actually incurred by the Indemnitee in connection with such
adjudication or award in arbitration (including, but not limited to, any
appellate proceedings).


 


12.           Notification and Defense of Claim. Promptly after receipt by the
Indemnitee of notice of the commencement of any action, suit or proceeding, the
Indemnitee will, if a claim in respect thereof is to be made against the
Company under this Agreement, notify the Company in writing of the commencement
thereof; but the omission to so notify the Company will not relieve the Company
from any liability that it may have to the Indemnitee otherwise than under this


 


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Agreement or otherwise, except to the extent that the
Company may suffer material prejudice by reason of such failure.
Notwithstanding any other provision of this Agreement, with respect to any such
action, suit or proceeding as to which the Indemnitee gives notice to the
Company of the commencement thereof:


 


(a)           The
Company will be entitled to participate therein at its own expense.


 


(b)           Except
as otherwise provided in this Section 12(b), to the extent that it may
wish, the Company, jointly with any other indemnifying party similarly
notified, shall be entitled to assume the defense thereof with counsel
reasonably satisfactory to the Indemnitee. After notice from the Company to the
Indemnitee of its election to so assume the defense thereof, the Company shall
not be liable to the Indemnitee under this Agreement for any legal or other
Expenses subsequently incurred by the Indemnitee in connection with the defense
thereof other than reasonable costs of investigation or as otherwise provided
below. The Indemnitee shall have the right to employ the Indemnitee’s own counsel
in such action or lawsuit, but the fees and Expenses of such counsel incurred
after notice from the Company of its assumption of the defense thereof shall be
at the expense of the Indemnitee unless (i) the employment of counsel by
the Indemnitee has been authorized by the Company, (ii) the Indemnitee
shall have reasonably concluded that there may be a conflict of interest
between the Company and the Indemnitee in the conduct of the defense of such
action and such determination by the Indemnitee shall be supported by an
opinion of counsel, which opinion shall be reasonably acceptable to the
Company, or (iii) the Company shall not in fact have employed counsel to
assume the defense of the action, in each of which cases the fees and Expenses
of counsel shall be at the expense of the Company. The Company shall not be
entitled to assume the defense of any action, suit or proceeding brought by or
on behalf of the Company or as to which the Indemnitee shall have reached the
conclusion provided for in clause (ii) above.


 


(c)           The
Company shall not be liable to indemnify the Indemnitee under this Agreement
for any amounts paid in settlement of any action, suit or proceeding effected
without its written consent, which consent shall not be unreasonably withheld.
The Company shall not be required to obtain the consent of the Indemnitee to
settle any action, suit or proceeding which the Company has undertaken to
defend if the Company assumes full and sole responsibility for such settlement
and such settlement grants the Indemnitee a complete and unqualified release in
respect of any potential liability.


 


(d)           If,
at the time of the receipt of a notice of a claim pursuant to this
Section 12, 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 the Indemnitee,
all amounts payable as a result of such proceeding in accordance with the terms
of the policies.


 


13.           Other Right to Indemnification. The indemnification and advancement
of Expenses provided by this Agreement are cumulative, and not exclusive, and
are in addition to


 


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any other rights to which the Indemnitee may now or in
the future be entitled under any provision of the Bylaws or Certificate of the
Company, any vote of stockholders or Disinterested Directors, any provision of
law or otherwise. Except as required by applicable law, the Company shall not
adopt any amendment to its Bylaws or Certificate the effect of which would be
to deny, diminish or encumber the Indemnitee’s right to indemnification under
this Agreement.


 


14.           Director and Officer Liability Insurance. The Company shall maintain directors’
and officers’ liability insurance for so long as the Indemnitee’s services are
covered hereunder, provided and to the extent that such insurance is available
on a commercially reasonable basis. In the event the Company maintains
directors’ and officers’ liability insurance, the Indemnitee shall be named as
an insured in such manner as to provide the Indemnitee the same rights and
benefits as are accorded to the most favorably insured of the Company’s
officers or directors. However, the Company agrees that the provisions hereof
shall remain in effect regardless of whether liability or other insurance
coverage is at any time obtained or retained by the Company, except that any
payments made to, or on behalf of, the Indemnitee under an insurance policy
shall reduce the obligations of the Company hereunder.


 


15.           Spousal Indemnification. The Company will indemnify the
Indemnitee’s spouse to whom the Indemnitee is legally married at any time the
Indemnitee is covered under the indemnification provided in this Agreement
(even if the Indemnitee did not remain married to him or her during the entire
period of coverage) against any pending or threatened action, suit, proceeding
or investigation for the same period, to the same extent and subject to the
same standards, limitations, obligations and conditions under which the
Indemnitee is provided indemnification herein, if the Indemnitee’s spouse (or
former spouse) becomes involved in a pending or threatened action, suit,
proceeding or investigation solely by reason of his or her status as the
Indemnitee’s spouse, including, without limitation, any pending or threatened
action, suit, proceeding or investigation that seeks damages recoverable from
marital community property, jointly-owned property or property purported to
have been transferred from the Indemnitee to his/her spouse (or former spouse).
The Indemnitee’s spouse or former spouse also may be entitled to advancement of
Expenses to the same extent that the Indemnitee is entitled to advancement of
Expenses herein. The Company may maintain insurance to cover its obligation
hereunder with respect to the Indemnitee’s spouse (or former spouse) or set
aside assets in a trust or escrow fund for that purpose.


 


16.           Intent. This Agreement is intended to be broader than any statutory
indemnification rights applicable in the State of Delaware and shall be in
addition to any other rights the Indemnitee may have under the Company’s
Certificate, Bylaws, applicable law or otherwise. To the extent that a change
in applicable law (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under the Company’s
Certificate, Bylaws, applicable law or this Agreement, it is the intent of the
parties that the Indemnitee enjoy by this Agreement the greater benefits so
afforded by such change. In the event of any change in 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, employee, agent or fiduciary, such
change, 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.


 


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17.           Attorney’s Fees and Other Expenses to Enforce
Agreement. In the
event that the Indemnitee is subject to or intervenes in any action, suit or
proceeding in which the validity or enforceability of this Agreement is at
issue or seeks an adjudication or award in arbitration to enforce the
Indemnitee’s rights under, or to recover damages for breach of, this Agreement
the Indemnitee, if he/she prevails in whole or in part in such action, shall be
entitled to recover from the Company and shall be indemnified by the Company
against any actual expenses for attorneys’ fees and disbursements reasonably
incurred by the Indemnitee.


 


18.           Effective Date. The provisions of this Agreement
shall cover claims, actions, suits or proceedings whether now pending or
hereafter commenced and shall be retroactive to cover acts or omissions or
alleged acts or omissions which heretofore have taken place. The Company shall
be liable under this Agreement, pursuant to Sections 3 and 4 hereof, for all
acts of the Indemnitee while serving as a director and/or officer,
notwithstanding the termination of the Indemnitee’s service, if such act was
performed or omitted to be performed during the term of the Indemnitee’s
service to the Company.


 


19.           Duration of Agreement. This Agreement shall survive and
continue even though the Indemnitee may have terminated his/her service as a
director, officer, employee, agent or fiduciary of the Company or as a
director, officer, employee, agent or fiduciary of any other entity, including,
but not limited to another corporation, partnership, limited liability company,
employee benefit plan, joint venture, trust or other enterprise or by reason of
any act or omission by the Indemnitee in any such capacity. This Agreement
shall be binding upon the Company and its successors and assigns, including,
without limitation, any corporation or other entity which may have acquired all
or substantially all of the Company’s assets or business or into which the
Company may be consolidated or merged, and shall inure to the benefit of the
Indemnitee and his/her spouse, successors, assigns, heirs, devisees, executors,
administrators or other legal representations. The Company shall require any
successor or assignee (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 reasonably
satisfactory to the Company and 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 or assignment had
taken place.


 


20.           Disclosure of Payments. Except as expressly required by any
Federal or state securities laws or other Federal or state law, neither party
shall disclose any payments under this Agreement unless prior approval of the
other party is obtained.


 


21.           Severability. If any provision or provisions of
this Agreement shall be held invalid, illegal or unenforceable for any reason
whatsoever, (a) the validity, legality and enforceability of the remaining
provisions of this Agreement (including, but not limited to, all portions of
any Sections of this Agreement containing any such provision held to be
invalid, illegal or unenforceable) shall not in any way be affected or impaired
thereby and (b) to the fullest extent possible, the provisions of this
Agreement (including, but not limited to, all portions of any paragraph of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
be construed so as to give effect to the intent manifest by the provision held
invalid, illegal or unenforceable.


 


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22.           Counterparts. This Agreement may be executed by
one or more counterparts, each of which shall for all purposes be deemed to be
an original but all of which together shall constitute one and the same
Agreement. Only one such counterpart signed by the party against whom
enforceability is sought shall be required to be produced to evidence the
existence of this Agreement.


 


23.           Captions. The captions and headings used in this Agreement are inserted
for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.


 


24.           Definitions. For purposes of this Agreement:


 


(a)           “Change in Control” shall mean the occurrence of any one of the
following:


 


(i)            the
sale, lease, exchange or other transfer, directly or indirectly, of
substantially all of the assets of the Company (in one transaction or in a
series of related transactions) to a person or entity that is not controlled by
the Company; or


 


(ii)           the
approval of stockholders of the Company of any plan or proposal for the
liquidation or dissolution of the Company; or


 


(iii)          a merger or consolidation to which the
Company is a party if the stockholders of the Company immediately prior to the
effective date of such merger or consolidation have “beneficial ownership” (as
defined in Rule 13d-3 under the Exchange Act), immediately following the
effective date of such merger or consolidation, of securities of the surviving
corporation representing less than 50% of the combined voting power of the
surviving corporation’s then outstanding securities ordinarily having the right
to vote at elections of directors;


 


(iv)          any
person, other than the Company, or any trustee or other fiduciary holding
securities under any employee benefit plan of the Company, becomes, after the
Effective Date, the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of 50% or more of the combined voting
power of the Company’s outstanding securities ordinarily having the right to
vote at elections of directors; or


 


(v)           the
Incumbent Directors cease for any reason to constitute at least a majority of
the Board;


 


provided, however, that a transaction
or series of transactions resulting in the separation of the human and animal
product businesses of the Company or a similar reorganization, recapitalization
or spinoff shall not constitute a “Change in Control” for the purposes hereof.


 


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(b)           “Disinterested
Director” shall mean a director of the Company who is not or was not a party to
the action, suit, investigation or proceeding in respect of which
indemnification is being sought by the Indemnitee.


 


(c)           “Expenses”
shall include all attorneys’ fees, retainers, court costs, transcript costs,
fees of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees, and all other
disbursements or expenses incurred in connection with prosecuting, defending,
preparing to prosecute or defend, investigating or being or preparing to be a
witness in any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative in nature.


 


(d)           “Independent
Counsel” shall mean a law firm or a member of a law firm that neither is
presently nor in the past five years has been retained to represent
(i) the Company or the Indemnitee in any matter material to either such
party or (ii) any other party to the action, suit, investigation or
proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term “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 right to
indemnification under this Agreement.


 


(e)           “Incumbent Directors”
of the Company will mean any individuals who are members of the Board on the
effective date of this Agreement and any individual who subsequently becomes a
member of the Board whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the Incumbent
Directors (either by specific vote or by approval of the Company’s proxy
statement in which such individual is named as a nominee for director without
objection to such nomination).


 


25.           Entire Agreement, Modification and Waiver. This Agreement constitutes the
entire agreement and understanding of the parties hereto regarding the subject
matter hereof, and no supplement, modification or amendment of this Agreement
shall be binding unless executed in writing by both 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. No supplement, modification or amendment
of this Agreement shall limit or restrict any right of the Indemnitee under
this Agreement in respect of any act or omission of the Indemnitee prior to the
effective date of such supplement, modification or amendment unless expressly
provided therein.


 


26.           Notices. All notices, requests, demands or other communications hereunder
shall be in writing and shall be deemed to have been duly given if
(i) delivered by hand with receipt acknowledged by the party to whom said
notice or other communication shall have been directed, (ii) mailed by
certified or registered mail, return receipt requested with postage prepaid, on
the date shown on the return receipt or (iii) delivered by facsimile
transmission on the date shown on the facsimile machine report:


 


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(a)           If
to the Indemnitee to:


 


                                                                          


 


                                                                          


 


(b)           If
to the Company, to:


 


Transoma Medical, Inc.


4211 Lexington Avenue
North, Suite 2244


St. Paul, Minnesota  55126-6164


Attn: Chief Executive
Officer


Fax:  (651) 481-7417


 


with a copy to:


 


Oppenheimer Wolff &
Donnelly LLP


3300 Plaza VII


45 South Seventh Street


Minneapolis, Minnesota 55402


Attn:       Thomas A. Letscher, Esq.


Fax:         (612) 607-7100


 


or to such other address as may be furnished to the Indemnitee by the
Company or to the Company by the Indemnitee, as the case may be.


 


27.           Governing Law. The parties hereto agree that this
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of Delaware, applied without giving effect to any
conflicts-of-law principles.


 


IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.


 


	
   

  	
  TRANSOMA MEDICAL, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INDEMNITEE:

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
						



 


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