Document:

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                                                                     EXHIBIT 4.1

                       FIRST AMENDMENT TO RIGHTS AGREEMENT

     This First Amendment to Rights Agreement dated as of October 3, 2000 (this
"AMENDMENT"), to the Preferred Shares Rights Agreement dated as of September 19,
1997 (the "AGREEMENT"), is entered into by and between InnerDyne, Inc., a
Delaware corporation (the "COMPANY"), and American Stock Transfer and Trust
Company (the "RIGHTS AGENT").

     Pursuant to Section 27 of the Agreement, this Amendment is being executed
by the Company and the Rights Agent for the purpose of amending the Agreement as
set forth below:

     The Agreement is hereby amended as follows:

     1.   Section 1(a) shall be amended by inserting the following at the end of
          Section 1(a):

          "Notwithstanding the foregoing or any provision to the contrary in
          this Agreement, none of Tyco International Ltd., a Bermuda company
          ("GUARANTOR"), Tyco Acquisition Corp. X, a Delaware corporation and a
          direct, wholly-owned subsidiary of Guarantor ("PARENT"), VLMS, Inc., a
          Delaware corporation and a direct, wholly-owned subsidiary of Parent
          ("SUB"), or any of their respective subsidiaries, Affiliates or
          Associates is an Acquiring Person pursuant to this Agreement solely by
          virtue of the approval, execution or delivery of the Agreement and
          Plan of Merger of even date herewith among Parent, Sub and the Company
          (the "MERGER AGREEMENT"), consummation of the transactions
          contemplated by the Merger Agreement, including the Offer and the
          Merger (as defined in the Merger Agreement) or any public announcement
          of the foregoing."

     2.   Section 1(h) shall be amended by inserting the following at the end of
          Section 1(h):

          "Notwithstanding the foregoing or any provision to the contrary in
          this Agreement, a Distribution Date shall not occur solely by virtue
          of the approval, execution or delivery of the Merger Agreement,
          consummation of the transactions contemplated by the Merger Agreement,
          including the Offer and the Merger (as defined in the Merger
          Agreement) or any public announcement of the foregoing."

     3.   Section 1(t) shall be amended by inserting the following at the end of
          Section 1(t):

          "Notwithstanding the foregoing or any provision to the contrary in
          this Agreement, a Section 13 Event shall not occur solely by virtue of
          the approval, execution or delivery of the Merger Agreement,
          consummation of the transactions contemplated by the Merger

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          Agreement, including the Offer and the Merger (as defined in the
          Merger Agreement) or any public announcement of the foregoing."

     4.   Section 1(u) shall be amended by inserting the following at the end of
          Section 1(u):

          "Notwithstanding the foregoing or any provision to the contrary in
          this Agreement, a Shares Acquisition Date shall not occur solely by
          virtue of the approval, execution or delivery of the Merger Agreement,
          consummation of the transactions contemplated by the Merger Agreement,
          including the Offer and the Merger (as defined in the Merger
          Agreement) or any public announcement of the foregoing."

     5.   Section 1(y) shall be amended by inserting the following at the end of
          Section 1(y):

          "Notwithstanding the foregoing or any provision to the contrary in
          this Agreement, a Triggering Event shall not occur solely by virtue of
          the approval, execution or delivery of the Merger Agreement,
          consummation of the transactions contemplated by the Merger Agreement,
          including the Offer and the Merger (as defined in the Merger
          Agreement) or any public announcement of the foregoing."

     6.   This Amendment shall be deemed to be entered into under the laws of
the State of New York and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.

     7.   This Amendment may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.

     8.   As amended hereby, the Agreement shall remain in full force and
effect.

                            [SIGNATURE PAGE FOLLOWS]

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     The parties have duly executed this First Amendment to Rights Agreement as
of the day and year first written above.

                                       THE "COMPANY"

                                       INNERDYNE, INC.

                                       By:
                                          --------------------------------------
                                          Name:
                                          Title:

                                      THE "RIGHTS AGENT"

                                      AMERICAN STOCK TRANSFER
                                        AND TRUST COMPANY

                                       By:
                                          --------------------------------------
                                               Authorized Signatory<PAGE>   1

                                                                    EXHIBIT 10.1

                              SILICON ENERGY CORP.

                           INDEMNIFICATION AGREEMENT

        This Indemnification Agreement ("Agreement") is effective as of
_________________, 2000 by and between Silicon Energy Corp., a Delaware
corporation (the "Company"), and ___________________ ("Indemnified Person").

        WHEREAS, the Company desires to attract and retain the services of
highly qualified individuals, such as Indemnified Person, to serve the Company
and its related entities;

        WHEREAS, in order to induce Indemnified Person to continue to provide
services to the Company, the Company wishes to provide for the indemnification
of, and the advancement of expenses to, Indemnified Person to the maximum extent
permitted by law;

        WHEREAS, the Company and Indemnified Person recognize the continued
difficulty in obtaining liability insurance of the Company's directors,
officers, employees, agents and fiduciaries, the significant increases in the
cost of such insurance and the general reductions in the coverage of such
insurance;

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

        WHEREAS, in view of the considerations set forth above, the Company
desires that Indemnified Person shall be indemnified and advanced expenses by
the Company as set forth herein;

        NOW, THEREFORE, the Company and Indemnified Person hereby agree as set
forth below.

        1. Certain Definitions.

           (a) "Change in Control" shall mean, and shall be deemed to have
occurred if, on or after the date of this Agreement, (i) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended), other than a stockholder holding greater than 25% of the total
voting power represented by the Company's outstanding voting securities as of
the first date above written, a trustee or other fiduciary holding securities
under an employee benefit plan of the Company acting in such capacity or a
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company,
becomes the "beneficial owner" (as defined in Rule 13d3 under said Act),
directly or indirectly, of securities of the Company representing more than 50%
of the total voting power represented by the Company's then outstanding Voting
Securities, (ii) during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board of Directors of the Company
and any new director whose election by the Board of Directors or nomination for
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election by the Company's stockholders was approved by a vote of at least two
thirds (2/3) of the directors then still in office who either were directors at
the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof,
or (iii) the stockholders of the Company approve a merger or consolidation of
the Company with any other corporation other than a merger or consolidation
which would result in the Voting Securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into Voting Securities of the surviving
entity) at least 80% of the total voting power represented by the Voting
Securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation, or the stockholders of the Company approve
a plan of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of (in one transaction or a series of related
transactions) all or substantially all of the Company's assets.

          (b)  "Claim" shall mean with respect to a Covered Event: any
threatened, pending or completed action, suit, proceeding or alternative
dispute resolution mechanism, or any hearing, inquiry or investigation that
Indemnified Person in good faith believes might lead to the institution of any
such action, suit, proceeding or alternative dispute resolution mechanism,
whether civil, criminal, administrative, investigative or other.

          (c)  References to the "Company" shall include, in addition to
Silicon Energy Corp. any constituent corporation (including any constituent of
a constituent) absorbed in a consolidation or merger to which Silicon Energy
Corp. (or any of its wholly owned subsidiaries) is a party which, if its
separate existence had continued, would have had power and authority to
indemnify its directors, officers, employees, agents or fiduciaries, so that if
Indemnified Person is or was a director, officer, employee, agent or fiduciary
of such constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee, agent or fiduciary of
another corporation, partnership, joint venture, employee benefit plan, trust
or other enterprise, Indemnified Person shall stand in the same position under
the provisions of this Agreement with respect to the resulting or surviving
corporation as Indemnified Person would have with respect to such constituent
corporation if its separate existence had continued.

          (d)  "Covered Event" shall mean any event or occurrence related to
the fact that Indemnified Person is or was a director, officer, employee, agent
or fiduciary of the Company, or any subsidiary of the Company, or is or was
serving at the request of the Company as a director, officer, employee, agent
or fiduciary of another corporation, partnership, joint venture, trust or other
enterprise, or by reason of any action or inaction on the part of Indemnified
Person while serving in such capacity.

          (e)  "Expenses" shall mean any and all expenses (including attorneys'
fees and all other costs, expenses and obligations incurred in connection with
investigating, defending, being a witness in or participating in (including on
appeal), or preparing to defend, to be a witness in or to participate in, any
action, suit, proceeding, alternative dispute resolution mechanism, hearing,
inquiry or investigation), judgments, fines, penalties and amounts paid in
settlement (if such settlement is approved in advance by the Company, which
approval shall not be unreasonably withheld) of any Claim and any federal,
state, local or foreign taxes imposed on the Indemnified Person as a result of
the actual or deemed receipt of any payments under this Agreement.

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            (f) "Expense Advance" shall mean a payment to Indemnified Person
pursuant to Section 3 of Expenses in advance of the settlement of or final
judgement in any action, suit, proceeding or alternative dispute resolution
mechanism, hearing, inquiry or investigation which constitutes a Claim.

            (g) "Independent Legal Counsel" shall mean an attorney or firm of
attorneys, selected in accordance with the provisions of Section 2(d) hereof,
who shall not have otherwise performed services for the Company or Indemnified
Person within the last three years (other than with respect to matters
concerning the rights of Indemnified Person under this Agreement, or of other
Indemnified Persons under similar indemnity agreements).

            (h) References to "other enterprises" shall include employee benefit
plans; references to "fines" shall include any excise taxes assessed on
Indemnified Person 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, agent or fiduciary of the Company which imposes duties on, or
involves services by, such director, officer, employee, agent or fiduciary with
respect to an employee benefit plan, its participants or its beneficiaries; and
if Indemnified Person acted in good faith and in a manner Indemnified Person
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan, Indemnified Person shall be deemed to have acted in
a manner "not opposed to the best interests of the Company" as referred to in
this Agreement.

            (i) "Reviewing Party" shall mean, subject to the provisions of
Section 2(d), any person or body appointed by the Board of Directors, and
approved by the Indemnified Person, which approval shall not be unreasonably
withheld, in accordance with applicable law to review the Company's obligations
hereunder and under applicable law, which may include a member or members of the
Company's Board of Directors, Independent Legal Counsel or any other person or
body not a party to the particular Claim for which Indemnified Person is seeking
indemnification.

            (j) "Section" refers to a section of this Agreement unless otherwise
indicated.

            (k) "Voting Securities" shall mean any securities of the Company
that vote generally in the election of directors.

      2. Indemnification.

            (a) Indemnification of Expenses. Subject to the provisions of
Section 2(b) below, the Company shall indemnify Indemnified Person for Expenses
to the fullest extent permitted by law if Indemnified Person was or is or
becomes a party to or witness or other participant in, or is threatened to be
made a party to or witness or other participant in, any Claim (whether by reason
of or arising in part out of a Covered Event), including all interest,
assessments and other charges paid or payable in connection with or in respect
of such Expenses.

            (b) Review of Indemnification Obligations. Notwithstanding the
foregoing, in the event any Reviewing Party shall have determined (in a written
opinion, in any case in which Independent Legal Counsel is the Reviewing Party)
that Indemnified Person is not entitled to be indemnified hereunder under
applicable law, (i) the Company shall have no further obligation under

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Section 2(a) to make any payments to Indemnified Person not made prior to such
determination by such Reviewing Party, and (ii) the Company shall be entitled
to be reimbursed by Indemnified Person (who hereby agrees to reimburse the
Company) for all Expenses theretofore paid to Indemnified Person to which
Indemnified Person is not entitled hereunder under applicable law; provided,
however, that if Indemnified Person has commenced or thereafter commences legal
proceedings in a court of competent jurisdiction to secure a determination that
Indemnified Person is entitled to be indemnified hereunder under applicable
law, any determination made by any Reviewing Party that Indemnified Person is
not entitled to be indemnified hereunder under applicable law shall not be
binding and Indemnified Person shall not be required to reimburse the Company
for any Expenses theretofore paid in indemnifying Indemnified Person until a
final judicial determination is made with respect thereto (as to which all
rights of appeal therefrom have been exhausted or lapsed). Indemnified Person's
obligation to reimburse the Company for any Expenses shall be unsecured and no
interest shall be charged thereon.

     (c)  Indemnified Person Rights on Unfavorable Determination; Binding
Effect. If any Reviewing Party determines that Indemnified Person substantively
is not entitled to be indemnified hereunder in whole or in part under
applicable law, Indemnified Person shall have the right to commence litigation
seeking an initial determination by the court or challenging any such
determination by such Reviewing Party or any aspect thereof, including the
legal or factual bases therefor, and, subject to the provisions of Section 15,
the Company hereby consents to service of process and to appear in any such
proceeding. Absent such litigation, any determination by any Reviewing Party
shall be conclusive and binding on the Company and Indemnified Person.

     (d)  Selection of Reviewing Party; Change in Control. If there has not
been a Change in Control, any Reviewing Party shall be selected by the Board of
Directors, and approved by the Indemnified Person, which approval shall not be
unreasonably withheld, and if there has been such a Change in Control (other
than a Change in Control which has been approved by a majority of the Company's
Board of Directors who were directors immediately prior to such Change in
Control), any Reviewing Party with respect to all matters thereafter arising
concerning the rights of Indemnified Person to indemnification of Expenses
under this Agreement or any other agreement or under the Company's Certificate
of Incorporation or Bylaws as now or hereafter in effect, or under any other
applicable law, if desired by Indemnified Person, shall be Independent Legal
Counsel selected by Indemnified Person and approved by the Company (which
approval shall not be unreasonably withheld). Such counsel, among other things,
shall render its written opinion to the Company and Indemnified Person as to
whether and to what extent Indemnified Person would be entitled to be
indemnified hereunder under applicable law and the Company agrees to abide by
such opinion. The Company agrees to pay the reasonable fees of the Independent
Legal Counsel referred to above and to indemnify fully such counsel against any
and all expenses (including attorneys' fees), claims, liabilities and damages
arising out of or relating to this Agreement or its engagement pursuant hereto.
Notwithstanding any other provision of this Agreement, the Company shall not be
required to pay Expenses of more than one Independent Legal Counsel in
connection with all matters concerning a single Indemnified Person, and such
Independent Legal Counsel shall be the Independent Legal Counsel for any or all
other Indemnified Persons unless (i) the Company otherwise determines or (ii)
any Indemnified Person shall provide a written statement setting forth in
detail a reasonable objection to such Independent Legal Counsel representing
other Indemnified Persons.

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                (e)  Mandatory Payment of Expenses. Notwithstanding any other
provision of this Agreement other than Section 10 hereof, to the extent that
Indemnified Person has been successful on the merits or otherwise, including,
without limitation, the dismissal of an action without prejudice, in defense of
any Claim, Indemnified Person shall be indemnified against all Expenses
incurred by Indemnified Person in connection therewith.

        3.  Expense Advances.

                (a)  Obligation to Make Expense Advances. Upon receipt of a
written undertaking by or on behalf of the Indemnified Person to repay such
amounts if it shall ultimately be determined that the Indemnified Person is not
entitled to be indemnified therefore by the Company hereunder under applicable
law, the Company shall make Expense Advances to Indemnified Person.

                (b)  Form of Undertaking. Any obligation to repay any Expense
Advances hereunder pursuant to a written undertaking by the Indemnified Person
shall be unsecured and no interest shall be charged thereon.

                (c)  Determination of Reasonable Expense Advances. The parties
agree that for the purposes of any Expense Advance for which Indemnified Person
has made written demand to the Company in accordance with this Agreement, all
Expenses included in such Expense Advance that are certified by affidavit of
Indemnified Person's counsel as being reasonable shall be presumed conclusively
to be reasonable.

        4.  Procedures for Indemnification and Expense Advances.

                (a)  Timing of Payments. All payments of Expenses (including
without limitation Expense Advances) by the Company to the Indemnified Person
pursuant to this Agreement shall be made to the fullest extent permitted by law
as soon as practicable after written demand by Indemnified Person therefor is
presented to the Company, but in no event later than thirty (30) days after
such written demand by Indemnified Person is presented to the Company, except
in the case of Expense Advances, which shall be made no later than ten (10)
business days after such written demand by Indemnified Person is presented to
the Company.

                (b)  Notice/Cooperation by Indemnified Person. Indemnified
Person shall give the Company notice in writing as soon as practicable of any
Claim made against Indemnified Person for which indemnification and/or Expense
Advances, will or could be sought under this Agreement; provided, however, that
the failure to so notify the Company shall not relieve the Company of its
obligations hereunder except to the extent such failure has materially
prejudiced the Company. 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 Indemnified Person). In addition, each of the Indemnified Person and the
Company shall give the other party such information related to the claim and
cooperation as the other party may reasonably require and as shall be within
such party's power.

                (c)  No Presumptions; Burden of Proof. For purposes of this
Agreement, the termination of any Claim by judgment, order, settlement (whether
with or without court approval) or

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conviction, or upon a plea of nolo contendere, or its equivalent, shall not
create a presumption that Indemnified Person did not meet any particular
standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by this Agreement or
applicable law. In addition, neither the failure of any Reviewing Party to have
made a determination as to whether Indemnified Person has met any particular
standard of conduct or had any particular belief, nor an actual determination
by any Reviewing Party that Indemnified Person has not met such standard of
conduct or did not have such belief, prior to the commencement of legal
proceedings by Indemnified Person to secure a judicial determination that
Indemnified Person should be indemnified under this Agreement under applicable
law, shall be a defense to Indemnified Person's claim or create a presumption
that Indemnified Person has not met any particular standard of conduct or did
not have any particular belief. In connection with any determination by any
Reviewing Party or otherwise as to whether the Indemnified Person is entitled
to be indemnified and/or Expense Advances hereunder under applicable law, the
burden of proof shall be on the Company to establish that Indemnified Person is
not so entitled.

          (d)  Notice to Insurer. If, at the time of the receipt by the Company
of a notice of a Claim pursuant to Section 4(b) hereof, the Company has
liability insurance in effect which may cover such Claim, the Company shall
give prompt notice of the commencement of such Claim 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 Indemnified Person, all amounts payable as a
result of such Claim in accordance with the terms of such policies.

          (e)  Selection of Counsel. In the event the Company shall be
obligated hereunder to provide indemnification for or make any Expense Advances
with respect to the Expenses of any Claim, the Company, if appropriate, shall be
entitled to assume the defense of such Claim with counsel approved by
Indemnified Person (which approval shall not be unreasonably withheld) upon the
delivery to Indemnified Person of written notice of the Company's election to do
so. After delivery of such notice, approval of such counsel by Indemnified
Person and the retention of such counsel by the Company, the Company will not be
liable to Indemnified Person under this Agreement for any fees or expenses of
separate counsel subsequently retained by or on behalf of Indemnified Person
with respect to the same Claim; provided that, (i) Indemnified Person shall have
the right to employ Indemnified Person's separate counsel in any such Claim at
Indemnified Person's expense and (ii) if (A) the employment of separate counsel
by Indemnified Person has been previously authorized by the Company, (B)
Indemnified Person shall have reasonably concluded that there may be a conflict
of interest between the Company and Indemnified Person in the conduct of any
such defense, or (C) the Company shall not continue to retain such counsel to
defend such Claim, then the fees and expenses of Indemnified Person's separate
counsel shall be Expenses for which Indemnified Person may receive
indemnification or Expense Advances hereunder.

     5.   Additional Indemnification Rights; Nonexclusivity.

          (a)  Scope. The Company hereby agrees to indemnify the Indemnified
Person 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

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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,
employee, agent or fiduciary, it is the intent of the parties hereto that
Indemnified Person shall enjoy by this Agreement the greater benefits afforded
by such change. 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, 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 except as set forth in Section 10(a) hereof.

            (b) Nonexclusivity. The indemnification and the payment of Expense
Advances provided by this Agreement shall be in addition to any rights to which
Indemnified Person may be entitled under the Company's Certificate of
Incorporation, its Bylaws, any other agreement, any vote of stockholders or
disinterested directors, the General Corporation Law of the State of Delaware,
or otherwise. The indemnification and the payment of Expense Advances provided
under this Agreement shall continue as to Indemnified Person for any action
taken or not taken while serving in an indemnified capacity even though
subsequent thereto Indemnified Person may have ceased to serve in such capacity.

      6. No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any Claim made against
Indemnified Person to the extent Indemnified Person has otherwise actually
received payment from or on behalf of the Company (under any insurance policy,
provision of the Company's Certificate of Incorporation, Bylaws or otherwise) of
the amounts otherwise payable hereunder.

      7. Partial Indemnification. If Indemnified Person is entitled under any
provision of this Agreement or otherwise to indemnification by the Company for
some or a portion of Expenses incurred in connection with any Claim, but not,
however, for all of the total amount thereof, the Company shall nevertheless
indemnify Indemnified Person for the portion of such Expenses to which
Indemnified Person is entitled.

      8. Mutual Acknowledgment. Both the Company and Indemnified Person
acknowledge that in certain instances, federal law or applicable public policy
may prohibit the Company from indemnifying its directors, officers, employees,
agents or fiduciaries under this Agreement or otherwise. Indemnified Person
understands and acknowledges that the Company has undertaken or may be required
in the future to undertake with the 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
Indemnified Person.

      9. Liability Insurance. To the extent the Company maintains liability
insurance applicable to directors, officers, employees, agents or fiduciaries,
Indemnified Person shall be covered by such policies in such a manner as to
provide Indemnified Person the same rights and benefits as are provided to the
most favorably insured of the Company's directors, if Indemnified Person is a
director; or of the Company's officers if Indemnified Person is not a director
of the Company but is an officer; or of the Company's key employees, agents or
fiduciaries, if Indemnified Person is not an officer or director but is a key
employee, agent or fiduciary.

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     10.  Exceptions. Notwithstanding any other provision of this Agreement, the
Company shall not be obligated pursuant to the terms of this Agreement;

          (a)  Excluded Action or Omissions. To indemnify or make Expense
Advances to Indemnified Person with respect to Claims arising out of acts,
omissions or transactions for which Indemnified Person is prohibited from
receiving indemnification under applicable law.

          (b)  Claims Initiated by Indemnified Person. To indemnify or make
Expense Advances to Indemnified Person with respect to Claims initiated or
brought voluntarily by Indemnified Person and not by way of defense,
counterclaim or crossclaim, except (i) with respect to actions or proceedings
brought to establish or enforce a right to indemnification under this Agreement
or any other agreement or insurance policy or under the Company's Certificate of
Incorporation or Bylaws now or hereafter in effect relating to Claims for
Covered Events, (ii) in specific cases if the Board of Directors has approved
the initiation or bringing of such Claim, or (iii) as otherwise required under
Section 145 of the Delaware General Corporation Law, regardless of whether
Indemnified Person ultimately is determined to be entitled to such
indemnification, Expense Advances, or insurance recovery, as the case may be.

          (c)  Lack of Good Faith. To indemnify Indemnified Person for any
Expenses incurred by the Indemnified Person with respect to any action
instituted (i) by Indemnified Person to enforce or interpret this Agreement, if
a court having jurisdiction over such action determines as provided in Section
13 that each of the material assertions made by the Indemnified Person as a
basis for such action was not made in good faith or was frivolous, or (ii) by or
in the name of the Company to enforce or interpret this Agreement, if a court
having jurisdiction over such action determines as provided in Section 13 that
each of the material defenses asserted by Indemnified Person in such action was
made in bad faith or was frivolous.

          (d)  Claims Under Section 16(b). To indemnify Indemnified Person for
Expenses and the payment of profits arising from the purchase and sale by
Indemnified Person of securities in violation of Section 16(b) of the
Securities Exchange Act of 1934, as amended, or any similar successor statute.

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

     12.  Binding Effect; Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, assigns (including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Company), spouses, heirs and
personal and legal representatives. The Company shall require and cause any
successor (whether direct or indirect, and whether by purchase, merger,
consolidation or otherwise) to all, substantially all, or a substantial part, of
the business or assets of the Company, by written agreement in form and
substance satisfactory to Indemnified Person, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place. This
Agreement shall continue in effect regardless of

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whether Indemnified Person continues to serve as a director, officer, employee,
agent or fiduciary (as applicable) of the Company or of any other enterprise at
the Company's request.

     13.  Expenses Incurred in Action Relating to Enforcement or
Interpretation. In the event that any action is instituted by Indemnified
Person under this Agreement or under any liability insurance policies
maintained by the Company to enforce or interpret any of the terms hereof or
thereof, Indemnified Person shall be entitled to be indemnified for all
Expenses incurred by Indemnified Person with respect to such action (including,
without limitation, attorneys' fees), regardless of whether Indemnified Person
is ultimately successful in such action, unless as a part of such action a
court having jurisdiction over such action makes a final judicial determination
(as to which all rights of appeal therefrom have been exhausted or lapsed) that
each of the material assertions made by Indemnified Person as a basis for such
action was not made in good faith or was frivolous; provided, however, that
until such final judicial determination is made, Indemnified Person shall be
entitled under Section 3 to receive payment of Expense Advances hereunder with
respect to such action. In the event of an action instituted by or in the name
of the Company under this Agreement to enforce or interpret any of the terms of
this Agreement, Indemnified Person shall be entitled to be indemnified for all
Expenses incurred by Indemnified Person in defense of such action (including
without limitation costs and expenses incurred with respect to Indemnified
Person's counterclaims and crossclaims made in such action), unless as a part
of such action a court having jurisdiction over such action makes a final
judicial determination (as to which all rights of appeal therefrom have been
exhausted or lapsed) that each of the material defenses asserted by Indemnified
Person in such action was made in bad faith or was frivolous; provided,
however, that until such final judicial determination is made, Indemnified
Person shall be entitled under Section 3 to receive payment of Expense Advances
hereunder with respect to such action.

     14.  Period of Limitations. No legal action shall be brought and no cause
of action shall be asserted by or in the right of the Company against
Indemnified Person, Indemnified Person's estate, spouse, heirs, executors or
personal or legal representatives after the expiration of two years from the
date of accrual of such cause of action, and any claim or cause of action of
the Company shall be extinguished and deemed released unless asserted by the
timely filing of a legal action within such two year period; provided, however,
that if any shorter period of limitations is otherwise applicable to any such
cause of action, such shorter period shall govern.

     15.  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 signed for by the party addressed, on the date of such
delivery, (ii) if mailed by domestic certified or registered mail with postage
prepaid, on the third business day after the date postmarked, or (iii) if
delivered by facsimile, upon confirmation of receipt by the party addressed.
Addresses and facsimile numbers for notice to either party are as shown on the
signature page of this Agreement, or as subsequently modified by written notice.

     16.  Consent to Jurisdiction. The Company and Indemnified Person each
hereby irrevocably consent to the jurisdiction of the courts of the State of
Delaware 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

                                      -9-
<PAGE>   10
in the Court of Chancery of the State of Delaware in and for New Castle County,
which shall be the exclusive and only proper forum for adjudicating such a
claim.

     17.  Severability. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
(including without limitation each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable, that is not
itself invalid, void or unenforceable) shall be construed so as to give effect
to the intent manifested by the provision held invalid, illegal or
unenforceable.

     18.  Choice of Law. This Agreement, and all rights, remedies, liabilities,
powers and duties of the parties to this Agreement, shall be governed by and
construed in accordance with the laws of the State of Delaware as applied to
contracts between Delaware residents entered into and to be performed entirely
in the State of Delaware without regard to principles of conflicts of laws.

     19.  Subrogation. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnified Person, who shall execute all documents required and
shall do all acts that may be necessary to secure such rights and to enable the
Company effectively to bring suit to enforce such rights.

     20.  Amendment and Termination. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless it is in writing
signed by both the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed to be or shall constitute a waiver of any other
provisions hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver.

     21.  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.

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

                [REMAINDER OF PAGE REMAINS BLANK INTENTIONALLY]

                                      -10-
<PAGE>   11

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

SILICON ENERGY CORP.

By:
   ----------------------------------
Name:
     --------------------------------
Title:
      -------------------------------
Address:

Facsimile:

                                          AGREED TO AND ACCEPTED

                                          INDEMNIFIED PERSON:

                                          By:
                                             ---------------------------------
                                               (Signature)

                                          Name:
                                               -------------------------------
                                               (Print Name)

                                          Address:

                                          Facsimile:

                  SIGNATURE PAGE TO INDEMNIFICATION AGREEMENT

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