Exhibit 10.9
 
 
 
INDEMNIFICATION AGREEMENT
 
This INDEMNIFICATION AGREEMENT (this “Agreement”) is made and entered into this
____ day of _____________, 20___ by and between Pure Bioscience, Inc., a
Delaware corporation (the “Company”), and [ ] (the “Indemnitee”).
 
WHEREAS, the Company believes it is essential to retain and attract qualified
directors and officers;
 
WHEREAS, the Indemnitee is a director and/or officer of the Company;
 
WHEREAS, both the Company and the Indemnitee recognize the increased risk of
litigation and other claims being asserted against directors and officers of
public companies;
 
WHEREAS, the (i) Company’s Certificate of Incorporation (the “Certificate of
Incorporation”) provides that, to the fullest extent permitted by Delaware
statutory or decisional law, no director of the Company shall be personally
liable to the Company or its stockholders for breach of fiduciary duty as a
director and (ii) the Company’s Bylaws (the “Bylaws”) require the Company to
indemnify its directors and officers to the extent permitted by the DGCL (as
hereinafter defined) and permits the Company to advance expenses in connection
therewith;
 
WHEREAS, the Indemnitee has been serving and intends to continue serving as a
director and/or officer of the Company in part in reliance on the Certificate of
Incorporation and Bylaws; and
 
WHEREAS, in recognition of the Indemnitee’s need for (i) substantial protection
against personal liability based on the Indemnitee’s reliance on the Certificate
of Incorporation and Bylaws, (ii) specific contractual assurance that the
protection promised by the Certificate of Incorporation and Bylaws will be
available to the Indemnitee, regardless of, among other things, any amendment to
or revocation of the Bylaws or any change in the composition of the Company’s
Board of Directors (the “Board”) or acquisition transaction relating to the
Company, and (iii) an inducement to continue to provide effective services to
the Company as a director and/or officer thereof, the Company wishes to provide
for the indemnification of the Indemnitee and to advance expenses to the
Indemnitee to the fullest extent permitted by law and as set forth in this
Agreement, and to provide for the continued coverage of the Indemnitee under the
Company’s directors’ and officers’ liability insurance policies.
 
NOW, THEREFORE, in consideration of the premises contained herein and of the
Indemnitee continuing to serve the Company directly or, at its request, with
another enterprise, and intending to be legally bound hereby, the parties hereto
agree as follows:
 
1.  Certain Definitions.
 
(a) A “Change in Control” shall be deemed to have occurred if:
 
(i) any “person,” as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (the “Exchange Act”), other than (a) a trustee or other fiduciary
holding securities under an employee benefit plan of the Company; (b) 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;
or (c) any current beneficial stockholder or group, as defined by Rule 13d-5 of
the Exchange Act, including the heirs, assigns and successors thereof, of
beneficial ownership, within the meaning of Rule 13d-3 of the Exchange Act, of
securities possessing more than 50% of the total combined voting power of the
Company’s outstanding securities; hereafter becomes the “beneficial owner,” as
defined in Rule 13d-3 of the Exchange Act, directly or indirectly, of securities
of the Company representing 20% or more of the total combined voting power
represented by the Company’s then outstanding Voting Securities;
 
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(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board and any new director whose
election by the Board or nomination for election by the Company’s stockholders
was approved by a vote of at least two-thirds of the directors then 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, in one transaction or a series of transactions, of all or substantially
all of the Company’s assets.
 
(b) “DGCL” shall mean the General Corporation Law of the State of Delaware, as
the same exists or may hereafter be amended or interpreted; provided, however,
that in the case of any such amendment or interpretation, only to the extent
that such amendment or interpretation permits the Company to provide broader
indemnification rights than were permitted prior thereto.
 
(c) “Expense” shall mean attorneys’ fees and all other costs, expenses and
obligations paid or incurred in connection with investigating, defending, being
a witness in or participating in (including on appeal), or preparing for any of
the foregoing, any Proceeding relating to any Indemnifiable Event.
 
(d) “Indemnifiable Event” shall mean any event or occurrence that takes place
either prior to or after the execution of this Agreement, related to the fact
that the Indemnitee is or was a director or officer of the Company, or is or was
serving at the request of the Company as a director, officer, employee, or agent
of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, or by
reason of anything done or not done by the Indemnitee in any such capacity.
 
(e) “Proceeding” shall mean any threatened, pending or completed action, suit,
investigation or proceeding, and any appeal thereof, whether civil, criminal,
administrative or investigative and/or any inquiry or investigation, whether
conducted by the Company or any other party, that the Indemnitee in good faith
believes might lead to the institution of any such action.
 
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(f) “Reviewing Party” shall mean any appropriate person or body consisting of a
member or members of the Company’s Board or any other person or body appointed
by the Board (including the special independent counsel referred to in Section
6) who is not a party to the particular Proceeding with respect to which the
Indemnitee is seeking indemnification.
 
(g) “Voting Securities” shall mean any securities of the Company which vote
generally in the election of directors.
 
2.  Indemnification.  In the event the Indemnitee was or is a party to or is
involved (as a party, witness, or otherwise) in any Proceeding by reason of (or
arising in part out of) an Indemnifiable Event, whether the basis of the
Proceeding is the Indemnitee’s alleged action in an official capacity as a
director or officer or in any other capacity while serving as a director or
officer, the Company shall indemnify the Indemnitee to the fullest extent
permitted by the DGCL against any and all Expenses, liability, and loss
(including judgments, fines, ERISA excise taxes or penalties, and amounts paid
or to be paid in settlement, and any interest, assessments, or other charges
imposed thereon, and any federal, state, local, or foreign taxes imposed on any
director or officer as a result of the actual or deemed receipt of any payments
under this Agreement) (collectively, “Liabilities”) reasonably incurred or
suffered by such person in connection with such Proceeding.  The Company shall
provide indemnification pursuant to this Section 2 as soon as practicable, but
in no event later than 30 days after it receives written demand from the
Indemnitee.  Notwithstanding anything in this Agreement to the contrary and
except as provided in Section 5 below, the Indemnitee shall not be entitled to
indemnification pursuant to this Agreement (i) in connection with any Proceeding
initiated by the Indemnitee against the Company or any director or officer of
the Company unless the Company has joined in or consented to the initiation of
such Proceeding or (ii) on account of any suit in which judgment is rendered
against the Indemnitee pursuant to Section 16(b) of the Exchange Act for an
accounting of profits made from the purchase or sale by the Indemnitee of
securities of the Company.
 
3.  Advancement of Expenses.  The Company shall advance Expenses to the
Indemnitee within 30 business days of such request (an “Expense Advance”);
provided, however, that if required by applicable corporate laws such Expenses
shall be advanced only upon delivery to the Company of an undertaking by or on
behalf of the Indemnitee to repay such amount if it is ultimately determined
that the Indemnitee is not entitled to be indemnified by the Company; and
provided further, that the Company shall make such advances only to the extent
permitted by law.  Expenses incurred by the Indemnitee while not acting in
his/her capacity as a director or officer, including service with respect to
employee benefit plans, may be advanced upon such terms and conditions as the
Board, in its sole discretion, deems appropriate.
 
 
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4.  Review Procedure for Indemnification.  Notwithstanding the foregoing, (i)
the obligations of the Company under Sections 2 and 3 above shall be subject to
the condition that the Reviewing Party shall not have determined (in a written
opinion, in any case in which the special independent counsel referred to in
Section 6 hereof is involved) that the Indemnitee would not be permitted to be
indemnified under applicable law, and (ii) the obligation of the Company to make
an Expense Advance pursuant to Section 3 above shall be subject to the condition
that, if, when and to the extent that the Reviewing Party determines that the
Indemnitee would not be permitted to be so indemnified under applicable law, the
Company shall be entitled to be reimbursed by the Indemnitee (who hereby agrees
to reimburse the Company) for all such amounts theretofore paid; provided,
however, that if the Indemnitee has commenced legal proceedings in a court of
competent jurisdiction pursuant to Section 5 below to secure a determination
that the Indemnitee should be indemnified under applicable law, any
determination made by the Reviewing Party that the Indemnitee would not be
permitted to be indemnified under applicable law shall not be binding and the
Indemnitee shall not be required to reimburse the Company for any Expense
Advance until a final judicial determination is made with respect thereto (as to
which all rights of appeal therefrom have been exhausted or have lapsed).  The
Indemnitee’s obligation to reimburse the Company for Expense Advances pursuant
to this Section 4 shall be unsecured and no interest shall be charged
thereon.  The Reviewing Party shall be selected by the Board, unless there has
been a Change in Control, other than a Change in Control which has been approved
by a majority of the Company’s Board who were directors immediately prior to
such Change in Control, in which case the Reviewing Party shall be the special
independent counsel referred to in Section 6 hereof.
 
5.  Enforcement of Indemnification Rights.  If the Reviewing Party determines
that the Indemnitee substantively would not be permitted to be indemnified in
whole or in part under applicable law, or if the Indemnitee has not otherwise
been paid in full pursuant to Sections 2 and 3 above within 30 days after a
written demand has been received by the Company, the Indemnitee shall have the
right to commence litigation in any court in the State of Delaware having
subject matter jurisdiction thereof and in which venue is proper to recover the
unpaid amount of the demand (an “Enforcement Proceeding”) and, if successful in
whole or in part, the Indemnitee shall be entitled to be paid any and all
Expenses in connection with such Enforcement Proceeding.  The Company hereby
consents to service of process for such Enforcement Proceeding and to appear in
any such Enforcement Proceeding.  Any determination by the Reviewing Party
otherwise shall be conclusive and binding on the Company and the Indemnitee.
 
6.  Change in Control.  The Company agrees that if there is a Change in Control
of the Company, other than a Change in Control which has been approved by a
majority of the Company’s Board who were directors immediately prior to such
Change in Control, then with respect to all matters thereafter arising
concerning the rights of the Indemnitee to indemnity payments and Expense
Advances under this Agreement or any other agreement or under applicable law or
the Company’s Certificate of Incorporation or Bylaws now or hereafter in effect
relating to indemnification for Indemnifiable Events, the Company shall seek
legal advice only from special independent counsel selected by the Indemnitee
and approved by the Company, which approval shall not be unreasonably
withheld.  Such special independent counsel shall not have otherwise performed
services for the Company or the Indemnitee, other than in connection with such
matters, within the last five years.  Such independent counsel shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or the Indemnitee in an action to determine the Indemnitee’s rights under this
Agreement.  Such counsel, among other things, shall render its written opinion
to the Company and the Indemnitee as to whether and to what extent the
Indemnitee would be permitted to be indemnified under applicable law.  The
Company agrees to pay the reasonable fees of the special independent 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 the engagement of special independent
counsel pursuant to this Agreement.
 
 
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7.  Partial Indemnity.  If the Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of the
Expenses and Liabilities, but not, however, for all of the total amount thereof,
the Company shall nevertheless indemnify the Indemnitee for the portion thereof
to which the Indemnitee is entitled.  Moreover, notwithstanding any other
provision of this Agreement, to the extent that the Indemnitee has been
successful on the merits or otherwise in defense of any or all Proceedings
relating in whole or in part to an Indemnifiable Event or in defense of any
issue or matter therein, including dismissal without prejudice, the Indemnitee
shall be indemnified against all Expenses incurred in connection therewith.  In
connection with any determination by the Reviewing Party or otherwise as to
whether the Indemnitee is entitled to be indemnified hereunder, the burden of
proof shall be on the Company to establish that the Indemnitee is not so
entitled.
 
8.  Non-exclusivity.  The rights of the Indemnitee hereunder shall be in
addition to any other rights the Indemnitee may have under any statute,
provision of the Company’s Certificate of Incorporation or Bylaws, vote of
stockholders or disinterested directors or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office.  To the extent that a change in the DGCL permits greater indemnification
by agreement than would be afforded currently under the Company’s Certificate of
Incorporation and Bylaws and this Agreement, it is the intent of the parties
hereto that the Indemnitee shall enjoy by this Agreement the greater benefits so
afforded by such change.
 
9.  Liability Insurance.  To the extent the Company maintains an insurance
policy or policies providing directors’ and officers’ liability insurance, the
Indemnitee shall be covered by such policy or policies, in accordance with its
or their terms, to the maximum extent of the coverage available for any director
or officer of the Company.
 
10.  Settlement of Claims.  The Company shall not be liable to indemnify the
Indemnitee under this Agreement (a) for any amounts paid in settlement of any
action or claim effected without the Company’s written consent, which consent
shall not be unreasonably withheld; or (b) for any judicial award if the Company
was not given a reasonable and timely opportunity, at its expense, to
participate in the defense of such action.
 
11.  No Presumption.  For purposes of this Agreement, to the fullest extent
permitted by law, the termination of any Proceeding, action, suit or claim, by
judgment, order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere, or its equivalent, shall not
create a presumption that the Indemnitee 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 applicable law.
 
12.  Period of Limitations.  No legal action shall be brought and no cause of
action shall be asserted by or on behalf of the Company or any affiliate of the
Company against the Indemnitee, the Indemnitee’s spouse, heirs, executors or
personal or legal representatives after the expiration of two years from the
date of accrual of such cause of action, or such longer period as may be
required by state law under the circumstances, and any claim or cause of action
of the Company or its affiliate shall be extinguished and deemed released unless
asserted by the timely filing of a legal action within such period; provided,
however, that if any shorter period of limitations is otherwise applicable to
any such cause of action, such shorter period shall govern.
 
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13.  Consent and Waiver by Third Parties.  The Indemnitee hereby represents and
warrants that he or she has obtained all waivers and/or consents from third
parties which are necessary for his or her employment with the Company on the
terms and conditions set forth herein and to execute and perform this Agreement
without being in conflict with any other agreement, obligation or understanding
with any such third party.  The Indemnitee represents that he or she is not
bound by any agreement or any other existing or previous business relationship
which conflicts with, or may conflict with, the performance of his or her
obligations hereunder or prevent the full performance of his or her duties and
obligations hereunder.
 
14.  Amendment of this Agreement.  No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto.  No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver.  Except as
specifically provided herein, no failure to exercise or any delay in exercising
any right or remedy hereunder shall constitute a waiver thereof.
 
15.  Primacy of Indemnification.  Notwithstanding that the Indemnitee may have
certain rights to indemnification, advancement of expenses and/or insurance
provided by other persons (collectively, the “Other Indemnitors”), the Company:
(i) shall be the indemnitor of first resort (i.e., its obligations to the
Indemnitee are primary and any obligation of the Other Indemnitors to advance
expenses or to provide indemnification for the same expenses or liabilities
incurred by the Indemnitee are secondary); and (ii) shall required to advance
the full amount of expenses incurred by the Indemnitee and shall be liable for
the full amount of all Expenses, without regard to any rights the Indemnitee may
have against any of the Other Indemnitors;  No advancement or payment by the
Other Indemnitors on behalf of the Indemnitee with respect to any claim for
which the Indemnitee has sought indemnification from the corporation shall
affect the immediately preceding sentence, and the Other Indemnitors shall have
a right of contribution and/or be subrogated to the extent of such advancement
or payment to all of the rights of recovery of the Indemnitee against the
Company.  The Company and the Indemnitee agree that the Other Indemnitors are
express third party beneficiaries of the terms of this Section 15.
 
16.  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 the Indemnitee (other than against the Other Indemnitors), who shall
execute all papers required and shall do everything that may be necessary to
secure such rights, including the execution of such documents necessary to
enable the Company effectively to bring suit to enforce such rights.
 
17.  No Duplication of Payments.  Except as otherwise set forth in Section 15
above, the Company shall not be liable under this Agreement to make any payment
in connection with any claim made against Indemnitee to the extent the
Indemnitee has otherwise actually received payment (under any insurance policy,
Bylaw, vote, agreement or otherwise) of the amounts otherwise indemnifiable
hereunder.
 
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18.  Binding Effect.  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
and/or assets of the Company, spouses, heirs, and personal and legal
representatives.  The Company shall require and cause any successor (whether
direct or indirect by purchase, merger, consolidation or otherwise) to all,
substantially all, or a substantial part, of the business and/or assets of the
Company, by written agreement in form and substance satisfactory to the
Indemnitee, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession had taken place.  This Agreement shall continue in effect
regardless of whether the Indemnitee continues to serve as a director or officer
of the Company or of any other enterprise at the Company’s request.
 
19.  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) is 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.
 
20.  Governing Law.  This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in such State without giving effect to the
principles of conflicts of laws.
 
21.  Counterparts.  This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
 
22.  Notices.  All notices, demands, and other communications required or
permitted hereunder shall be made in writing and shall be deemed to have been
duly given if delivered by hand, against receipt, or mailed, postage prepaid,
certified or registered mail, return receipt requested, and addressed to the
Company at:
 
Pure Bioscience, Inc.
1725 Gillespie Way
El Cajon, California  92020
Attention: Chief Executive Officer

and to the Indemnitee at:
 
________________
________________
________________
________________
 
 
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Notice of change of address shall be effective only when done in accordance with
this Section.  All notices complying with this Section shall be deemed to have
been received on the date of delivery or on the third business day after
mailing.
 
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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Agreement as of the day first set forth above.
 
 
 

 
THE COMPANY:
 
PURE BIOSCIENCE, INC.
            By:               Name:               Title:              
 
INDEMNITEE:
     
 
 
      Signature             Print Name    

                             

 
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