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EXHIBIT 10.6
EDEN BIOSCIENCE CORPORATION
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT (this "Agreement") dated as of
___________, 2000 is made between EDEN BIOSCIENCE CORPORATION, a Washington
corporation (the "Company"), and ______________________ ("Indemnitee").
RECITALS
A. Indemnitee is a director or officer of the Company and, in such
capacity, is performing valuable services for the Company.
B. The Company and Indemnitee recognize the difficulty in obtaining
directors' and officers' liability insurance and the significant cost of such
insurance.
C. The Company and Indemnitee further recognize the substantial increase
in litigation, subjecting directors and officers to expensive litigation risks
at the same time that such liability insurance has been severely limited.
D. The Company has adopted Second Amended and Restated Bylaws (the
"Bylaws") providing for indemnification of the officers, directors, agents and
employees of the Company to the full extent permitted by the Washington Business
Corporation Act (the "Statute").
E. The Bylaws and the Statute specifically provide that they are not
exclusive, and thereby contemplate that contracts may be entered into between
the Company and its directors and officers with respect to indemnification of
such directors and officers.
F. To induce Indemnitee to serve or continue to serve as a director or
officer of the Company, the Company desires to confirm the contract
indemnification rights provided in the Bylaws and agrees to provide the
Indemnitee with the benefits contemplated by this Agreement.
AGREEMENT
In consideration of the recitals above, the mutual covenants and
agreements herein contained, and Indemnitee's continued service as a director or
officer, as the case may be, of the Company after the date hereof, the parties
to this Agreement agree as follows:
1. INDEMNIFICATION OF INDEMNITEE
1.1. SCOPE
The Company agrees to hold harmless and indemnify Indemnitee to the full
extent provided under the provisions of the Company's Amended and Restated
Articles of
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Incorporation (the "Articles of Incorporation") and the Bylaws, and to the full
extent permitted by law, notwithstanding that the basis for such indemnification
is not specifically enumerated in this Agreement, the Articles of Incorporation,
the Bylaws, any statute or otherwise. In the event of any change, after the date
of this Agreement, in any applicable law, statute or rule regarding the right of
a Washington corporation to indemnify a member of its board of directors or an
officer, such change, to the extent that it would expand Indemnitee's rights
hereunder, shall be included within Indemnitee's rights and the Company's
obligations hereunder, and, to the extent that it would narrow Indemnitee's
rights or the Company's obligations hereunder, shall not affect or limit the
scope of this Agreement; provided, however, that in no event shall any part of
this Agreement be construed so as to require indemnification when such
indemnification is not permitted by then applicable law.
1.2. NONEXCLUSIVITY
The indemnification provided by this Agreement shall not be deemed
exclusive of any rights to which Indemnitee may be entitled under the Articles
of Incorporation, the Bylaws, any agreement, any vote of shareholders or
disinterested directors, the Statute, or otherwise, whether as to action in
Indemnitee's official capacity or otherwise.
1.3. INCLUDED COVERAGE
If Indemnitee was or is made a party, or is threatened to be made a
party, to or is otherwise involved (including, without limitation, as a witness)
in any Proceeding (as defined in Section 1.4 below), the Company shall hold
harmless and indemnify Indemnitee from and against any and all losses, claims,
damages (compensatory, exemplary, punitive or otherwise), liabilities or
expenses, including, without limitation, attorneys' fees, costs, judgments,
fines, ERISA excise taxes or penalties, witness fees, amounts paid in settlement
and other expenses incurred in connection with the investigation, defense,
settlement or approval of such Proceeding (collectively, "Damages").
1.4. DEFINITION OF PROCEEDING
For purposes of this Agreement, "Proceeding" shall mean any completed,
actual, pending or threatened action, suit, claim, hearing or proceeding,
whether civil, criminal, arbitrative, administrative, investigative or pursuant
to any alternative dispute resolution mechanism (including an action by or in
the right of the Company) and whether formal or informal, in which Indemnitee
is, was or becomes involved by reason of the fact that Indemnitee is or was a
director, officer, employee, trustee or agent of the Company or that, being or
having been such a director, officer, employee, trustee or agent, Indemnitee is
or was serving at the request of the Company as a director, officer, employee,
trustee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise (collectively, a "Related Company"), including service
with respect to an employee benefit plan, whether the basis of such proceeding
is alleged action (or inaction) by Indemnitee in an official capacity as a
director, officer, employee, trustee or agent or in any other capacity while
serving as a director, officer, employee, trustee or agent; provided, however,
that, except with respect to an Enforcement Action (as defined in Section 3.1
below), an action challenging the Company's determination that Indemnitee is not
entitled to indemnification pursuant to
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Section 1.5 of this Agreement, and any other action to enforce the provisions of
this Agreement, "Proceeding" shall not include any action, suit, claim or
proceeding instituted by or at the direction of Indemnitee unless such action,
suit, claim or proceeding is or was authorized by the Company's Board of
Directors.
1.5. DETERMINATION OF ENTITLEMENT
In the event that a determination of Indemnitee's entitlement to
indemnification is required pursuant to Section 23B.08.550 of the Statute or any
successor provision of the Statute or pursuant to other applicable law, the
appropriate decision-maker shall make such determination; provided, however,
that Indemnitee shall initially be presumed in all cases to be entitled to
indemnification, that Indemnitee may establish a conclusive presumption of any
fact necessary to such a determination by delivering to the Company a
declaration made under penalty of perjury that such fact is true and that,
unless the Company shall deliver to Indemnitee written notice of a determination
that Indemnitee is not entitled to indemnification within twenty (20) calendar
days after the Company's receipt of Indemnitee's initial written request for
indemnification, such determination shall conclusively be deemed to have been
made in favor of the Company's provision of indemnification, and that the
Company hereby agrees not to assert otherwise.
1.6. CONTRIBUTION
If the indemnification provided under Section 1.1 of this Agreement is
unavailable by reason of a court decision, based on grounds other than any of
those set forth in paragraphs (b) through (d) of Section 4.1 of this Agreement,
then, in respect of any Proceeding in which the Company is jointly liable with
Indemnitee (or would be if joined in such Proceeding), the Company shall
contribute to the amount of Damages (including attorneys' fees) actually and
reasonably incurred and paid or payable by Indemnitee in such proportion as is
appropriate to reflect (i) the relative benefits received by the Company on the
one hand and Indemnitee on the other from the transaction from which such
Proceeding arose and (ii) the relative fault of the Company on the one hand and
of Indemnitee on the other in connection with the events that resulted in such
Damages as well as any other relevant equitable considerations. The relative
fault of the Company on the one hand and of Indemnitee on the other shall be
determined by reference to, among other things, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent the
circumstances resulting in such Damages. The Company agrees that it would not be
just and equitable if contribution pursuant to this Section 1.6 were determined
by pro rata allocation or any other method of allocation that does not take
account of the foregoing equitable considerations.
1.7. SURVIVAL
The indemnification and contribution provided under this Agreement shall
apply to any and all Proceedings, notwithstanding that Indemnitee has ceased to
serve the Company or a Related Company and shall continue so long as Indemnitee
shall be subject to any possible Proceeding, whether civil, criminal or
investigative, by reason of the fact that Indemnitee was
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a director or officer of the Company or serving in any other capacity referred
to in Section 1.4 of this Agreement.
2. EXPENSE ADVANCES
2.1. GENERALLY
The right to indemnification of Damages conferred by Section 1 of this
Agreement shall include the right to have the Company pay Indemnitee's expenses
in any Proceeding as such expenses are incurred and in advance of such
Proceeding's final disposition (such right, an "Expense Advance").
2.2. CONDITIONS TO EXPENSE ADVANCE
The Company's obligation to provide an Expense Advance is subject to the
following conditions:
2.2.1. UNDERTAKING
If the Proceeding arose in connection with Indemnitee's service as
a director or an officer of the Company (and not in any other capacity in which
Indemnitee rendered service, including service to any Related Company), then
Indemnitee or Indemnitee's representative shall have executed and delivered to
the Company an undertaking, which need not be secured and shall be accepted
without reference to Indemnitee's financial ability to make repayment, by or on
behalf of Indemnitee to repay all Expense Advances if it shall ultimately be
determined by a final, unappealable decision rendered by a court having
competent jurisdiction that Indemnitee is not entitled to be indemnified under
this Agreement or otherwise.
2.2.2. COOPERATION
Indemnitee shall give the Company such information and cooperation
as it may reasonably request and as shall be within Indemnitee's legal power to
so provide.
2.2.3. AFFIRMATION
Indemnitee shall furnish, upon request by the Company and if
required under applicable law, a written affirmation of Indemnitee's good faith
belief that any applicable standards of conduct have been met by Indemnitee.
3. PROCEDURES FOR ENFORCEMENT
3.1. ENFORCEMENT
In the event that any claim for indemnification, whether an Expense
Advance or otherwise, is made hereunder and is not paid in full within thirty
(30) calendar days after written notice of such claim is delivered to the
Company, Indemnitee may, but need not, at
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any time thereafter bring suit against the Company to recover the unpaid amount
of the claim (an "Enforcement Action").
3.2. PRESUMPTIONS IN ENFORCEMENT ACTION
In any Enforcement Action, the following presumptions (and limitation on
presumptions) shall apply:
(a) The Company expressly affirms and agrees that it has entered into
this Agreement and assumed the obligations imposed on it hereunder to induce
Indemnitee to continue as a director or officer, as the case may be, of the
Company;
(b) Neither (i) the failure of the Company (including the Company's
Board of Directors, independent or special legal counsel or the Company's
shareholders) to have made a determination prior to the commencement of the
Enforcement Action that indemnification of Indemnitee is proper in the
circumstances nor (ii) an actual determination by the Company, its Board of
Directors, independent or special legal counsel or shareholders that Indemnitee
is not entitled to indemnification shall be a defense to the Enforcement Action
or create a presumption that Indemnitee is not entitled to indemnification
hereunder; and
(c) If Indemnitee is or was serving as a director or officer of a
corporation of which a majority of the shares entitled to vote in the election
of its directors is held by the Company or as a partner, trustee or otherwise in
an executive or management capacity in a partnership, joint venture, trust or
other enterprise of which the Company or a wholly owned subsidiary of the
Company is a general partner or has a majority ownership, then such corporation,
partnership, joint venture, trust or other enterprise shall conclusively be
deemed a Related Company and Indemnitee shall conclusively be deemed to be
serving such Related Company at the Company's request.
3.3. ATTORNEYS' FEES AND EXPENSES FOR ENFORCEMENT ACTION
In the event Indemnitee is required to bring an Enforcement Action, the
Company shall pay all of Indemnitee's reasonable fees and expenses in bringing
and pursuing the Enforcement Action (including reasonable attorneys' fees at any
stage, including on appeal); provided, however, that the Company shall not be
required to provide such payment for such attorneys' fees or expenses if a court
of competent jurisdiction determines that each of the material assertions made
by Indemnitee in such Enforcement Action was not made in good faith.
4. LIMITATIONS ON INDEMNITY; MUTUAL ACKNOWLEDGMENT
4.1. LIMITATION ON INDEMNITY
No indemnity pursuant to this Agreement shall be provided by the
Company:
(a) On account of any suit in which a final, unappealable judgment is
rendered against Indemnitee for an accounting of profits made from the purchase
or sale by Indemnitee
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of securities of the Company in violation of the provisions of Section 16(b) of
the Securities Exchange Act of 1934, as amended;
(b) For Damages that have been paid directly to Indemnitee by an
insurance carrier under a policy of insurance maintained by the Company;
(c) With respect to remuneration paid to Indemnitee if it shall be
determined by a final judgment or other final adjudication that such
remuneration was or will be in violation of law;
(d) On account of Indemnitee's conduct which is finally adjudged by a
court having competent jurisdiction in the matter to have been intentional
misconduct, a knowing violation of law or RCW 23B.08.310 or any successor
provision of the Statute, or a transaction from which Indemnitee derived an
improper personal benefit; or
(e) If a final decision by a court having competent jurisdiction in the
matter with no further right of appeal shall determine that such indemnification
is not lawful.
4.2. PARTIAL INDEMNIFICATION
If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of any Damages in
connection with a Proceeding, but not, however, for the total amount thereof,
the Company shall nevertheless indemnify Indemnitee for the portion of such
Damages to which Indemnitee is entitled.
4.3. MUTUAL ACKNOWLEDGMENT
The Company and Indemnitee acknowledge that, in certain instances,
federal law or public policy may override applicable state law and prohibit the
Company from indemnifying Indemnitee under this Agreement or otherwise. For
example, the Company and Indemnitee acknowledge that the Securities and Exchange
Commission (the "SEC") has taken the position that indemnification is not
permissible for liabilities arising under certain federal securities laws, and
federal legislation prohibits indemnification for certain ERISA violations.
Furthermore, Indemnitee understands and acknowledges that the Company has
undertaken or may be required in the future to undertake with the SEC 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.
5. NOTIFICATION AND DEFENSE OF CLAIM
5.1. NOTIFICATION
Promptly after receipt by Indemnitee of notice of the commencement of
any Proceeding, Indemnitee shall, if a claim in respect thereof is to be made
against the Company under this Agreement, notify the Company of the commencement
thereof; but the omission so to notify the Company will not, however, relieve
the Company from any liability which it
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may have to Indemnitee under this Agreement unless and only to the extent that
such omission can be shown to have prejudiced the Company's ability to defend
the Proceeding.
If, at the time of the receipt of a notice of a claim pursuant to this
Section 5.1, 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 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.
5.2. DEFENSE OF CLAIM
With respect to any such Proceeding as to which Indemnitee notifies the
Company of the commencement thereof:
(a) The Company may participate therein at its own expense;
(b) The Company, jointly with any other indemnifying party similarly
notified, may assume the defense thereof, with counsel satisfactory to
Indemnitee. After notice from the Company to Indemnitee of its election so to
assume the defense thereof, the Company shall not be liable to Indemnitee under
this Agreement for any legal or other expenses (other than reasonable costs of
investigation) subsequently incurred by Indemnitee in connection with the
defense thereof unless (i) the employment of counsel by Indemnitee has been
authorized by the Company, (ii) Indemnitee shall have reasonably concluded that
there may be a conflict of interest between the Company (or any other person or
persons included in the joint defense) and Indemnitee in the conduct of the
defense of such action, (iii) the Company shall not, in fact, have employed
counsel to assume the defense of such action, in each of which cases the fees
and expenses of counsel shall be at the Company's expense, or (iv) the Company
is not financially or legally able to perform its indemnification obligations.
The Company shall not be entitled to assume the defense of any proceeding
brought by or on behalf of the Company or as to which Indemnitee shall have
reasonably made the conclusion provided for in (ii) or (iv) above;
(c) The Company shall not be liable to indemnify Indemnitee under this
Agreement for any amounts paid in settlement of any Proceeding effected without
its written consent;
(d) The Company shall not settle any action or claim in any manner that
would impose any penalty or limitation on Indemnitee without Indemnitee's
written consent; and
(e) Neither the Company nor Indemnitee will unreasonably withhold or
delay its, his or her consent to any proposed settlement.
6. SEVERABILITY
Nothing in this Agreement is intended to require or shall be construed
as requiring the Company to do or to fail to do any act in violation of
applicable law. The Company's
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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 6. 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 or make
contribution to Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated, and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.
7. GOVERNING LAW; BINDING EFFECT; AMENDMENT AND TERMINATION
(a) This Agreement shall be interpreted and enforced in accordance with
the laws of the State of Washington without regard to principles of conflicts of
law.
(b) This Agreement shall be binding on Indemnitee and on the Company and
its successors and assigns (including any transferee of all or substantially all
its assets and any successor by merger or otherwise by operation of law), and
shall inure to the benefit of Indemnitee and Indemnitee's heirs, personal
representatives and assigns and to the benefit of the Company and its successors
and assigns. The Company shall not effect any merger, consolidation, sale of all
or substantially all of its assets or other reorganization in which it is not
the surviving entity, unless the surviving entity agrees in writing to assure
all of the Company's obligations under this Agreement.
(c) No amendment, modification, termination or cancellation of this
Agreement shall be effective unless in writing and signed by both parties
hereto.
8. ENTIRE AGREEMENT
This Agreement is the entire agreement of the parties regarding its
subject matter and supersedes all prior written or oral communications or
agreements.
9. COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one instrument.
10. WAIVERS
No waiver of any breach or default shall be considered valid unless in
writing, and no such waiver shall be deemed a waiver of any subsequent breach or
default.
11. NOTICES
All notices, claims and other communications hereunder shall be in
writing and made by hand delivery, registered or certified mail (postage
prepaid, return receipt requested), facsimile or overnight air courier
guaranteeing next-day delivery:
(a) If to the Company, to: with a copy to:
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EDEN Bioscience Corporation Xxxxxxx Coie LLP
00000 Xxxxx Xxxxx Xxxxxxx X. 0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000-0000 Xxxxxxx, XX 00000
Attn:______________________ Attn: ____________________
(b) If to Indemnitee, to the address specified on the last page of this
Agreement or to such other address as either party may from time to time furnish
to the other party by a notice given in accordance with the provisions of this
Section 11. All such notices, claims and communications shall be deemed to have
been duly given if (i) personally delivered, at the time delivered, (ii) mailed
via U.S. Mail, proper postage prepaid, five days after dispatched, (iii) sent by
facsimile transmission, upon confirmation of receipt, and (iv) sent by any other
means, upon receipt.
12. DIRECTORS' AND OFFICERS' INSURANCE
(a) The Company hereby covenants and agrees that, subject to the
provisions of Section 12(c) below, the Company shall, from a date no later than
the closing date of the Company's first registered public offering of the
Company's Common Stock pursuant to an effective registration statement under the
Securities Act of 1933, as amended, maintain directors' and officers' insurance
in full force and effect so long as Indemnitee continues to serve as a director
or officer of the Company and thereafter so long as Indemnitee shall be subject
to any possible Proceeding.
(b) In all policies of directors' and officers' insurance, Indemnitee
shall be named as an insured in such a manner as to provide Indemnitee the same
rights and benefits, subject to the same limitations, as are accorded to the
Company's directors or officers most favorably insured by such policy.
(c) Notwithstanding the foregoing provisions of this Section 12, the
Company shall have no obligation to maintain directors' and officers' insurance
if the Company determines in good faith that such insurance is not reasonably
available, the premium costs for such insurance are disproportionate to the
amount of coverage provided, or the coverage provided by such insurance is
limited by exclusions so as to provide an insufficient benefit.
13. SPECIFIC PERFORMANCE
The Company and Indemnitee agree that a monetary remedy for breach of
this Agreement, at some later date, will be inadequate, impracticable and
difficult of proof, and further agree that such breach would cause Indemnitee
irreparable harm. Accordingly, the Company and Indemnitee agree that Indemnitee
shall be entitled to temporary and permanent injunctive relief to enforce this
Agreement without the necessity of proving actual damages or irreparable harm.
The Company and Indemnitee further agree that Indemnitee shall be entitled to
such injunctive relief, including temporary restraining orders, preliminary
injunctions and permanent injunctions, without the necessity of posting bond or
other undertaking in connection therewith. Any such requirement of bond or
undertaking is hereby waived by the Company, and the Company acknowledges that
in the absence of such a waiver, a bond or undertaking may be required by the
court.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.
COMPANY:
EDEN BIOSCIENCE CORPORATION
By
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Its
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INDEMNITEE:
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Print name:
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Address:
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