Document:

<PAGE>

                                                                    EXHIBIT 10.3

January 15, 2000

Howard A. Bain III
234 Vista del Monte
Los Gatos,  CA  93032

Dear Howard:

     It is a distinct pleasure to offer you employment with Vicinity Corporation
as of January 16, 2000.  From January 16, 2000 to March 31, 2000 you will have
the position of Director, Strategy.  As of April 1, 2000, you will assume the
position of Executive Vice President and Chief Financial Officer for Vicinity
Corporation with responsibilities for finance, investor relations, legal and
internal systems planning (e.g. ERP, financial planning and reporting).  In this
capacity you will report to Emerick Woods, President and Chief Executive
Officer.

     Upon commencement of your regular employment by Vicinity, you will be
eligible for the comprehensive benefits package that we offer to our full time
employees.  Additionally, you will accrue PTO (paid time off) at a rate of 13.32
hours per month  (4 weeks per year). Details of this package will be reviewed
with you in your orientation on your first day of regular employment.

     In accordance with current federal law, you will be asked to provide
documentation proving your eligibility to work in the United States.  Please
review the enclosed notice regarding the Immigration Reform and Control Act and
bring proper documentation with you on your first day.

     Your salary through March 31, 2000 will be a total of $11,000 taking into
consideration your pre-scheduled time-off.  Your annualized base salary as of
April 1, 2000 will be $225,000, which represents $9,375 semi-monthly.  Pay
periods are the 15th and last day of the month.  You will also be paid a one-
time signing bonus of $100,000.  This signing bonus will be repayable to
Vicinity based on a reducing pro-rata formula should you resign within 12 months
of receiving this reimbursement.

     In addition to your base salary, you will be eligible to earn an annual
performance bonus of up to $150,000 per fiscal year.  One-half of this amount,
or $75,000, will be paid quarterly ($37,250 per quarter) based on achievement of
mutually agreed upon objectives.  The remaining amount, or up to $75,000, will
be paid in September of each year following the close of each fiscal year based
upon achievement of Company objectives.  This amount will be pro-rated for the
period beginning on January 16, 2000 and ending on July 31, 2000.

     In addition to the above compensation you will be granted an option to
purchase 350,000 shares of the Vicinity Corporation stock under the Company's
2000 Equity Participation Plan.  These options will be non-qualified stock
options and will be granted upon consummation of Vicinity's IPO at 85% of the
IPO price.  The options will vest over the four (4) year period beginning on
January 16, 2000 with 25% vesting after twelve months, and 2.0833% vesting on
the first day of each of the next 36 months.  Other details of the 2000 Equity
participation Plan are available upon request.

Special Terms

Termination without Cause
-------------------------

     In the event you are terminated without Cause (as defined below) the
following will apply:

     .  Salary and Benefits Continuance: 12 months based on current base salary
        paid per Vicinity normal pay periods
<PAGE>

     .  Options Vesting Continuance: Accelerated vesting of 12 months beyond the
        date of termination

     .  Definition of Cause: "Cause" means:

        1.  your failure or refusal to carry out any proper direction by an
            officer of the Company with respect to services to be rendered by
            you, which failure remains uncured for a period of 10 days following
            delivery of notice to you by the CEO of the Company or the Board of
            Directors of the Company specifically identifying the basis of such
            failure or refusal;

        2.  your committing any act involving willful misconduct or gross
            negligence in the performance of your duties to the Company;

        3.  a willful act by you that the Employee which constitutes gross
            negligence in the performance of his duties hereunder and is
            injurious to the Company and which remains uncured for a period of
            30 days following delivery of notice by the Board of Directors of
            the Company to the Employee;

        4.  your convicted of a crime involving moral turpitude or any offense
            constituting a felony under the laws of any state or of the United
            States; or

        5.  your commission of an act of fraud or embezzlement involving the
            Company or which results in a material loss, damage or injury to the
            Company.

Change of Control Event
-----------------------

     In the event that the Company enters into a transaction or series of
related transactions in which (i) the Company consolidates or merges with any
other corporation or business entity, after which the holders of the Company's
outstanding shares immediately before such consolidation or merger do not,
immediately after such consolidation or merger, retain stock or other equity
interests representing a majority of the voting power of the surviving
corporation or business entity or (ii) all or substantially all of the assets or
capital stock of the Company are sold (each a "Change of Control Event"), then
all of the shares remaining subject to vesting shall immediately vest; provided
that you remain an employee of the entity that acquires the Company pursuant to
a Change of Control Event for a period of 12 months following such Change of
Control Event or you are terminated without Cause (as defined above) during such
12 month period ("Accelerated Vesting").  In the event such Accelerated Vesting
affects pooling or affects the Company's ability to enter into a Change of
Control Event, then the Options subject to Accelerated Vesting above shall not
vest and/or be released from the Company's repurchase option on an accelerated
basis.  All Options not subject to Accelerated Vesting shall be subject to the
terms and conditions of the 2000 Equity Participation Plan.  In the event the
Company enters into a Change of Control Event, you will have the right to elect
either the Accelerated Vesting set forth in this paragraph or accelerated
vesting under any similar provisions set forth in the 2000 Equity Participation
Plan.

     In addition, in the event that you are terminated without Cause within 12
months following a Change of Control Event, your salary and benefits will
continue for a period of 12 months following such termination based upon your
then current base salary and will be paid per Vicinity normal pay periods

     If any payment or benefit you would receive under this severance in
connection with a Change in Control when combined with any other payment or
benefit you receive pursuant to the termination of your employment with Vicinity
would constitute a "parachute payment" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"), and be subject to the
excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then such
payment shall be either (1) the full amount of such payment or 2) such lesser
amount  (with cash payments being reduced before stock option compensation) as
would result in no portion of the payment being subject to the Excise Tax,
whichever of the foregoing amounts, taking into account the applicable federal,
state and local employment taxes, income taxes and the
<PAGE>

Excise Tax results in your receipt, on an after-tax basis, of the greatest
amount of the payment notwithstanding that all or some portion of the payment
may be subject to the Excise Tax.

     This letter does not constitute a guarantee of employment or a contract,
and either you or the Company may terminate your employment with Vicinity
Corporation at any time and for any reason.  This offer supersedes all prior
offers, both verbal and written.

     Please confirm your acceptance of this position by signing one copy of this
letter, which will indicate your acceptance of our offer and return them to me.

Cordially,

    /s/  Emerick M. Woods
------------------------------------------
Emerick M. Woods
President and Chief Executive Officer

I have read and accept the above offer:

    /s/  Howard Bain
------------------------------------------
Howard Bain

cc:    Human Resources
       Accounting<PAGE>

                                                                     EXHIBIT 4.1

Incorporated under the Laws                          of the State of California

                                [LOGO OF EAGLE]
NUMBER                                                                SHARES

                                                                   COMMON STOCK

 THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
     MORE PARTICULARLY SET FORTH ON THE REVERSE SIDE OF THIS CERTIFICATE.

THIS CERTIFIES that_______________________________________________________is the
registered holder of______________________________________________________Shares

transferable only on the books of the Corporation by the holder hereof in person
or by Attorney upon surrender of this certificate properly endorsed.
       In Witness Whereof, the said Corporation has caused this Certificate to
be signed by its duly authorized officers and its Corporate Seal to be hereunto
affixed this__________day of______________A.D._______

                                    [SEAL]
______________________________                     _____________________________
                     SECRETARY                                        PRESIDENT<PAGE>

                                                                    EXHIBIT 10.1

                                LANTRONIX, INC.

                           INDEMNIFICATION AGREEMENT

     This Indemnification Agreement ("Agreement") is made as of ___________,
_____ by and between Lantronix, Inc., a Delaware corporation (the "Company"),
and ___________________ ("Indemnitee").

     WHEREAS, the Company and Indemnitee recognize the increasing difficulty in
obtaining directors' and officers' liability insurance, the significant
increases in the cost of such insurance and the general reductions in the
coverage of such insurance;

     WHEREAS, the Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting officers and directors
to expensive litigation risks at the same time as the availability and coverage
of liability insurance has been severely limited;

     WHEREAS, the Company and Indemnitee desire to have in place the additional
protection provided by an indemnification agreement, to provide indemnification
and advancement of expenses to the Indemnitee to the maximum extent permitted by
Delaware law; and

     WHEREAS, the Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve as officers and directors of
the Company and to indemnify its officers and directors so as to provide them
with the maximum protection permitted by law.

     NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:

     1.   Indemnification.
          ---------------

          (a)  Third Party Proceedings.  The Company shall indemnify Indemnitee
               -----------------------
if Indemnitee is or was a party or is threatened to be made a party to any
threatened, pending or completed action or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
Company) by reason of the fact that Indemnitee is or was a director, officer,
employee or agent of the Company, or any subsidiary of the Company, by reason of
any action or inaction on the part of Indemnitee while an officer or director,
by reason of the fact that Indemnitee is or was a director or officer 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, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), 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 action or 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, with respect to any criminal
action or proceeding, had no reasonable cause to believe Indemnitee's conduct
was unlawful. The termination of any action or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
                                          ---------------
shall not, of itself, create a presumption
<PAGE>

that (i) 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 (ii) with respect to any criminal action or proceeding, Indemnitee
had reasonable cause to believe that Indemnitee's conduct was unlawful.

          (b)  Proceedings By or in the Right of the Company. The Company shall
               ---------------------------------------------
indemnify Indemnitee if Indemnitee was or is a party or is threatened to be made
a party to any threatened, pending or completed action or proceeding by or in
the right of the Company or any subsidiary of the Company to procure a judgment
in its favor by reason of the fact that Indemnitee is or was a director,
officer, employee or agent of the Company, or any subsidiary of the Company, by
reason of any action or inaction on the part of Indemnitee while an officer or
director or by reason of the fact that Indemnitee is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees) and, to the fullest extent permitted by
law, amounts paid in settlement, in each case to the extent actually and
reasonably incurred by Indemnitee in connection with the defense or settlement
of such action or 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 its stockholders, except that no indemnification shall be
made in respect of any claim, issue or matter as to which Indemnitee shall have
been adjudged to be liable to the Company in the performance of Indemnitee's
duty to the Company and its stockholders unless and only to the extent that the
Delaware Court of Chancery or the court in which such action or proceeding was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, Indemnitee is fairly
and reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.

     2.   Expenses; Indemnification Procedure.
          -----------------------------------

          (a)  Advancement of Expenses.  The Company shall advance all expenses
               -----------------------
incurred by Indemnitee in connection with the investigation, defense, settlement
or appeal of any civil or criminal action or proceeding referenced in Section
1(a) or (b) hereof (but not amounts actually paid in settlement of any such
action or proceeding, which shall be governed by Section 1(a)). Indemnitee
hereby undertakes to repay such amounts advanced only if, and to the extent
that, it shall ultimately be determined that Indemnitee is not entitled to be
indemnified by the Company as authorized hereby. The advances to be made
hereunder shall be paid by the Company to Indemnitee within twenty (20) days
following delivery of a written request therefor by Indemnitee to the Company.

          (b)  Notice/Cooperation by Indemnitee.  Indemnitee shall, as a
               --------------------------------
condition precedent to his right to be indemnified under this Agreement, give
the Company notice in writing as soon as practicable of any claim made against
Indemnitee for which indemnification will or could be sought under this
Agreement, provided however, that a delay in giving such notice shall not
           -------- -------
deprive Indemnitee of any right to be indemnified under this Agreement unless,
and then only to the extent that, such delay is materially prejudicial to the
defense of such claim. Notice to the Company shall be directed to the Chief
Executive Officer of the Company at the address shown on the signature page of
this Agreement (or such other address as the Company shall designate in writing
to Indemnitee).

                                      -2-
<PAGE>

Notice shall be deemed received three business days after the date postmarked if
sent by domestic certified or registered mail, properly addressed; otherwise
notice shall be deemed received when such notice shall actually be received by
the Company. In addition, Indemnitee shall give the Company such information and
cooperation as it may reasonably require and as shall be within Indemnitee's
power.

          (c)  Procedure.  Any indemnification provided for in Section 1 shall
               ---------
be made no later than forty-five (45) days after receipt of the written request
of Indemnitee. If a claim under this Agreement, under any statute, or under any
provision of the Company's Certificate of Incorporation or Bylaws providing for
indemnification, is not paid in full by the Company within forty-five (45) days
after a written request for payment thereof has first been received by the
Company, Indemnitee may, but need not, at any time thereafter bring an action
against the Company to recover the unpaid amount of the claim and, subject to
Section 13 of this Agreement, Indemnitee shall also be entitled to be paid for
the expenses (including attorneys' fees) of bringing such action. It shall be a
defense to any such action (other than an action brought to enforce a claim for
expenses incurred in connection with any action or proceeding in advance of its
final disposition) 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, but the burden of proving such defense shall be on the
Company, and Indemnitee shall be entitled to receive interim payments of
expenses pursuant to Subsection 2(a) unless and until such defense may be
finally adjudicated by court order or judgment from which no further right of
appeal exists. It is the parties' intention that if the Company contests
Indemnitee's right to indemnification, the question of Indemnitee's right to
indemnification shall 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.

          (d)  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 the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.

          (e)  Selection of Counsel.  In the event the Company shall be
               --------------------
obligated under Section 2(a) hereof to pay the expenses of any proceeding
against Indemnitee, the Company, if appropriate, shall be entitled to assume the
defense of such proceeding, with counsel approved by Indemnitee, which approval
shall not be unreasonably withheld, 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

                                      -3-
<PAGE>

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 his 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.

     3.   Additional Indemnification Rights; Nonexclusivity.
          -------------------------------------------------

          (a)  Scope.  Notwithstanding any other provision of this Agreement,
               -----
the Company hereby agrees to indemnify the 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, ipso facto, within the
                                                         ---- -----
purview of Indemnitee's rights and 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 directors, the General Corporation Law of
the State of Delaware, or otherwise, both as to action in Indemnitee's official
capacity and as to action in another capacity while holding such office. The
indemnification provided under this Agreement shall continue as to Indemnitee
for any action taken or not taken while serving in an indemnified capacity even
though he may have ceased to serve in such capacity at the time of any action or
other covered proceeding.

     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 penalties actually or reasonably
incurred by him in the investigation, defense, appeal or settlement of any civil
or criminal action or proceeding, but not, however, for the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for the portion of
such expenses, judgments, fines or penalties to which Indemnitee is entitled.

     5.   Mutual Acknowledgment.  Both the Company and Indemnitee acknowledge
          ---------------------
that in certain instances, Federal law or applicable public policy may prohibit
the Company from indemnifying its directors and officers under this Agreement or
otherwise. Indemnitee understands and acknowledges that the Company has
undertaken or may be required in the future to undertake with the

                                      -4-
<PAGE>

Securities and Exchange Commission to submit the question of indemnification to
a court in certain circumstances for a determination of the Company's right
under public policy to indemnify Indemnitee.

     6.   Directors' and Officers' Liability Insurance.  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 officers and
directors 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 directors' and officers' 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. 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 subsidiary or parent of the Company.

     7.   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 Agreement shall not constitute a breach of
this Agreement. The provisions of this Agreement shall be severable as provided
in this Section 7. 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.

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

          (a)  Excluded Acts.  To indemnify Indemnitee for any acts or omissions
               -------------
or transactions from which a director may not be indemnified under applicable
law; or

          (b)  Claims Initiated by Indemnitee.  To indemnify or advance expenses
               ------------------------------
to Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except with respect to
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as required under
Section 145 of the Delaware General Corporation Law, but such indemnification or
advancement of expenses may be provided by the Company in specific cases if the
Board of Directors has approved the initiation or bringing of such suit; or

                                      -5-
<PAGE>

          (c)  Lack of Good Faith.  To indemnify Indemnitee for any expenses
               ------------------
incurred by the Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such proceeding was not made in good faith or was frivolous; or

          (d)  Insured Claims.  To indemnify Indemnitee for expenses or
               --------------
liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise taxes or penalties, and amounts paid in settlement) which
have been paid directly to Indemnitee by an insurance carrier under a policy of
directors' and officers' liability insurance maintained by the Company; or

          (e)  Claims Under Section 16(b).  To indemnify Indemnitee for expenses
               --------------------------
and the payment of profits inuring to and recoverable by the Company pursuant to
Section 16(b) of the Securities Exchange Act of 1934, as amended, or any similar
successor statute.

     9.   Effectiveness of Agreement.  To the extent that the indemnification
          --------------------------
permitted under the terms of certain provisions of this Agreement exceeds the
scope of the indemnification provided for in the Delaware General Corporation
Law, such provisions shall not be effective unless and until the Company's
Certificate of Incorporation authorize such additional rights of
indemnification.  In all other respects, the balance of this Agreement shall be
effective as of the date set forth on the first page and may apply to acts or
omissions of Indemnitee which occurred prior to such date if Indemnitee was an
officer, director, employee or other agent of the Company, or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, at the time
such act or omission occurred.

     10.  Construction of Certain Phrases.
          -------------------------------

          (a)  For purposes of this Agreement, references to the "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, 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, employee or agent of another corporation, partnership,
joint venture, trust or 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.

          (b)  For purposes of this Agreement, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on Indemnitee with respect to an employee benefit plan;
and 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, such director, officer, employee or agent
with respect to an employee benefit plan, its participants, or beneficiaries.

                                      -6-
<PAGE>

     11.  Counterparts.  This Agreement may be executed in one or more
          ------------
counterparts, each of which shall constitute an original.

     12.  Successors and Assigns.  This Agreement shall be binding upon the
          ----------------------
Company and its successors and assigns, and shall inure to the benefit of
Indemnitee and Indemnitee's estate, heirs, legal representatives and assigns.

     13.  Attorneys' Fees.  In the event that any action is instituted by
          ---------------
Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court costs and expenses, including
reasonable attorneys' fees, incurred by Indemnitee with respect to such action,
unless as a part of such action, the court of competent jurisdiction determines
that each of the material assertions made by Indemnitee as a basis for such
action were not made in good faith or were frivolous. In the event of an action
instituted by or in the name of the Company under this Agreement or to enforce
or interpret any of the terms of this Agreement, Indemnitee shall be entitled to
be paid all court costs and expenses, including attorneys' fees, incurred by
Indemnitee in defense of such action (including with respect to Indemnitee's
counterclaims and cross-claims made in such action), unless as a part of such
action the court determines that each of Indemnitee's material defenses to such
action were made in bad faith or were frivolous.

     14.  Notice.  All notices, requests, demands and other communications
          -------
under this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee, on the date of such
receipt, or (ii) if mailed by domestic certified or registered mail with postage
prepaid, on the third business day after the date postmarked. Addresses for
notice to either party are as shown on the signature page of this Agreement, or
as subsequently modified by written notice.

     15.  Consent to Jurisdiction.  The Company and Indemnitee each hereby
          ------------------------
irrevocably consent to the jurisdiction of the courts of the State of California
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be commenced, prosecuted and continued only in the state courts
of the State of California, in the County of Orange, which shall be the
exclusive and only proper forum for adjudicating such a claim.

     16.  Choice of Law.  This Agreement shall be governed by and its provisions
          -------------
construed in accordance with the laws of the State of California as applied to
contracts between California residents entered into and to be performed entirely
within California.

     17.  Integration and Entire Agreement.  This Agreement sets forth the
          --------------------------------
entire understanding between the parties hereto and supersedes and merges all
previous written and oral negotiations, commitments, understandings and
agreements relating to the subject matter hereof between the parties hereto.

                                      -7-
<PAGE>

     18.  No Construction as Employment Agreement.  Nothing contained in this
          ---------------------------------------
Agreement shall be construed as giving Indemnitee any right to be retained in
the employ of the Company or any of its subsidiaries or affiliated entities.

                                      -8-
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.

                                       LANTRONIX, INC.

                                       By:______________________________

                                       Title:___________________________

                                       Address:_________________________

     AGREED TO AND ACCEPTED:

     INDEMNITEE:

     ____________________________

     Address:  __________________
               __________________
               __________________

                                      -9-

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