EXHIBIT 10.5


 


DMRC CORPORATION


 


INDEMNIFICATION
AGREEMENT


 


THIS AGREEMENT is entered into, effective as of                                     ,
        , by and between DMRC
Corporation, a Delaware corporation (the “Company”), and                                       
(“Indemnitee”).


 


WHEREAS, it is essential to the Company to retain and
attract as directors and officers the most capable persons available;


 


WHEREAS, Indemnitee is a director and/or officer of
the Company; and


 


WHEREAS, in recognition of Indemnitee’s need for
substantial protection against personal liability in order to enhance
Indemnitee’s continued and effective service to the Company, and in order to
induce Indemnitee to provide services to the Company as a director and/or
officer, the Company wishes to provide in this Agreement for the
indemnification of and the advancing of expenses to Indemnitee to the fullest
extent (whether partial or complete) permitted by Delaware law and as set forth
in this Agreement, and, to the extent insurance is maintained, for the coverage
of Indemnitee under the Company’s directors’ and officers’ liability insurance
policies.


 


NOW, THEREFORE, in consideration of the above premises
and of Indemnitee’s continuing to serve the Company directly or, at its request,
with another enterprise, and intending to be legally bound hereby, the parties
agree as follows:


 


1.              Certain
Definitions.


 


(a)   Board:  the Board of
Directors of the Company.


 


(b)   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 (the “Act”)), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company 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 (collectively “Excluded
Persons”), is or becomes the “Beneficial Owner” (as defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the Company
representing 30% or more of the total voting power represented by the Company’s
then outstanding Voting Securities, or (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 (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 of the Board, 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 that 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 50% 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 (iv) 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.


 


(c)   Expenses:  any
expense, liability, or loss, including attorneys’ fees, judgments, fines, ERISA
excise taxes and penalties, amounts paid or to be paid in settlement, any
interest, assessments, or other charges imposed thereon, and any federal,
state, local, or foreign taxes imposed as a result of the actual or deemed
receipt of any payments under this Agreement, 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 in, any Proceeding
relating to any Indemnifiable Event.


 


(d)   Indemnifiable  Event:  any event or occurrence that takes place
either prior to or after the effective date of this Agreement, related to the
fact that Indemnitee is or was a director or an officer of the Company, or
while a director or officer is or was serving at the request of the Company as
a director, officer, employee, trustee, agent, or fiduciary of another foreign
or domestic corporation, partnership, joint venture, employee benefit plan,
trust, or other enterprise, or was a director, officer, employee, or agent of a
foreign or domestic corporation that was a predecessor corporation of the
Company or of another enterprise at the request of such predecessor
corporation, or related to anything done or not done by Indemnitee in any such
capacity.


 


(e)   Independent Counsel: 
the person or body appointed in connection with Section 3.


 


(f)    Potential Change In Control: 
shall be deemed to have occurred if (i) the Company enters into an
agreement or arrangement, the consummation of which would result in the
occurrence of a Change in Control, (ii) any person (including the Company)
publicly announces an intention to take or to consider taking actions that, if
consummated, would constitute a Change in Control, (iii) any person (other
than an Excluded Person) who is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing 10% or more of the
combined voting power of the Company’s then outstanding Voting Securities,
increases his beneficial ownership of such securities by 5% or more over the
percentage so owned by such person on the date hereof, or (iv) the Board
adopts a resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control has occurred.


 


(g)   Proceeding:  (i) any
threatened, pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, investigative, or other, or (ii) any inquiry,
hearing, or investigation, whether conducted by the Company or any other party,
that Indemnitee in good faith believes might lead to the institution of any
such action, or proceeding.


 


(h)   Reviewing Party:  the
person or body appointed in accordance with Section 3.


 


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(i)    Voting Securities: any securities of the Company that vote
generally in the election of directors.


 


2.              Agreement To
Indemnify.


 


(a)   General
Agreement.  In the event Indemnitee
was, is, or become a party to or witness or other participant in, or is
threatened to be made a party to or witness or other participant in, a
Proceeding by reason of (or arising in part out of) an Indemnifiable Event, the
Company shall indemnify Indemnitee from and against any and all Expenses to the
fullest extent permitted by law, as the same exists or may hereafter be amended
or interpreted (but 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).


 


(b)   Initiation
Of Proceeding.  Notwithstanding
anything in this Agreement to the contrary, Indemnitee shall not be entitled to
indemnification pursuant to this Agreement in connection with any Proceeding
initiated by Indemnitee against the Company or any director or officer of the Company
unless (i) the Company has joined in or the Board has consented to the
initiation of such Proceeding, (ii) the Proceeding is one to enforce
indemnification rights under Section 5, or (iii) the Proceeding is
instituted after a Change in Control and Independent Counsel has approved its
initiation.


 


(c)   Expense
Advances.  If so requested by
Indemnitee, the Company shall advance (within ten business days of such
request) any and all Expenses to Indemnitee (an “Expense
Advance”); provided that such request shall be accompanied by
reasonable evidence of the expenses incurred by Indemnitee and that, if and to
the extent that the Reviewing Party determines that Indemnitee would not be
permitted to be so indemnified under applicable law, the Company shall be entitled
to be reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for
all such amounts theretofore paid.  If
Indemnitee has commenced legal proceedings in a court of competent jurisdiction
to secure a determination that Indemnitee should be indemnified under
applicable law, as provided in Section 4, any determination made by the
Reviewing Party that Indemnitee would not be permitted to be indemnified under
applicable law shall not be binding and 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).


 


(d)   Mandatory
Indemnification.  Notwithstanding any
other provision of this Agreement (other than Section 2(f) below), to
the extent that Indemnitee has been successful on the merits in defense of any
Proceeding relating in whole or in part to an Indemnifiable Event or in defense
of any issue or matter therein, Indemnitee shall be indemnified against all
Expenses incurred in connection therewith.


 


(e)   Partial
Indemnification.  If Indemnitee is
entitled under any provision of this Agreement to indemnification by the
Company for some or a portion of Expenses, but not, however, for the total
amount thereof, the Company shall nevertheless indemnify Indemnitee for the
portion thereof to which Indemnitee is entitled.


 


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(f)    Prohibited
Indemnification.  No indemnification
pursuant to this Agreement shall be paid by the Company on account of any
Proceeding in which judgment is rendered against Indemnitee for an accounting
of profits made from the purchase or sale by Indemnitee of securities of the
Company pursuant to the provisions of Section 16(b) of the Act or
similar provisions of any federal, state or local laws.


 


3.              Reviewing Party.


 


Prior
to any Change in Control, the Reviewing Party shall be any appropriate person
or body consisting of a member or members of the Board or any other person or
body appointed by the Board who is not a party to the particular Proceeding
with respect to which Indemnitee is seeking indemnification; after a Change in
Control, the Reviewing Party shall be the Independent Counsel referred to
below.  With respect to all matters
arising after a Change in Control (other than a Change in Control approved by a
majority of the directors on the Board who were directors immediately prior to
such Change in Control) concerning the rights of 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 Independent Counsel selected by
Indemnitee and approved by the Company and who has not otherwise performed
services for the Company or the Indemnitee (other than in connection with
indemnification matters) within the last five years.  The 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 Indemnitee in an action to determine Indemnitee’s rights under this
Agreement.  Such counsel, among other
things, shall render its written opinion to the Company and Indemnitee as to
whether and to what extent the Indemnitee should be permitted to be indemnified
under applicable law.  The Company agrees
to pay the reasonable fees of the Independent Counsel and to indemnify fully
such counsel against any and all expenses (including attorney’s fees), claims,
liabilities, loss, and damages arising out of or relating to this Agreement or
the engagement of Independent Counsel pursuant hereto.


 


4.              Indemnification
Process And Appeal.


 


(a)   Suit To
Enforce Rights.  Regardless of any
action by the Reviewing Party, if Indemnitee has not received full
indemnification within 60 days after making a request in accordance with Section 2(c),
Indemnitee shall have the right to enforce its indemnification rights under
this Agreement by commencing litigation, in any appropriate court having
subject matter jurisdiction thereof and in which venue is proper, seeking an
initial determination by the court or challenging any determination by the
Reviewing Party or any aspect thereof, provided, however, that such 60-day
period shall be extended for reasonable time, not to exceed another 60 days, if
the Reviewing Party in good faith requires additional time for the obtaining or
evaluating of documentation and information relating thereto.  The Company hereby consents to service of
process and to appear in any such proceeding. 
Any determination by the Reviewing Party not challenged by the Indemnitee
shall be binding on the Company and Indemnitee. 
The 


 


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remedy provided for in this Section 4 shall be in addition to any
other remedies available to Indemnitee in law or equity.


 


(b)   Defense
To Indemnification, Burden Of Proof, And Presumptions.  It shall be a defense to any action brought
by Indemnitee against the Company to enforce this Agreement (other than an
action brought to enforce a claim for Expenses incurred in defending a
Proceeding in advance of its final disposition where the required undertaking
has been tendered to the Company) that it is not permissible under applicable
law for the Company to indemnify Indemnitee for the amount claimed.  In connection with any such action or any
determination by the Reviewing Party or otherwise as to whether Indemnitee is
entitled to be indemnified hereunder, the burden of proving such a defense or
determination shall be on the Company. 
Neither the failure of the Reviewing Party or the Company (including its
Board, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action by Indemnitee that
indemnification of the claimant is proper under the circumstances because
Indemnitee has met the standard of conduct set forth in applicable law, nor an
actual determination by the Reviewing Party or Company (including its Board,
independent legal counsel, or its stockholders) that the Indemnitee had not met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that the Indemnitee has not met the applicable standard of
conduct.  For purposes of this Agreement,
the termination of any claim, action, suit, or proceeding, by judgment, order,
settlement (whether with or without court approval), conviction, or upon a plea
of nolo contendere, or its equivalent shall not create a presumption that
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.


 


5.              Indemnification
For Expenses Incurred In Enforcing Rights.


 


The
Company shall indemnify Indemnitee against any and all Expenses and, if
requested by Indemnitee, shall (within ten business days of such request),
advance such Expenses to Indemnitee, that are incurred by Indemnitee in
connection with any claim asserted against or covered action brought by
Indemnitee for (i) indemnification of Expenses or Expense Advances by the
Company 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, and or (ii) recovery
under directors’ and officers’ liability insurance policies maintained by the
Company, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, Expense Advances, or insurance recovery, as
the case may be.


 


6.              Notification And
Defense Of Proceeding.


 


(a)   Notice.  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 relieve the Company from any liability that it may have to
Indemnitee, except as provided in Section 6(c).


 


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(b)   Defense.  With respect to any Proceeding as to which
Indemnitee notifies the Company of the commencement thereof, the Company shall
be entitled to participate in the Proceeding at its own expense and except as
otherwise provided below, to the extent the Company so wishes, it may assume
the defense thereof with counsel reasonably satisfactory to Indemnitee.  After notice from the Company to Indemnitee
of its election to assume the defense of any Proceeding, the Company shall not
be liable to Indemnitee under this Agreement or otherwise for any Expenses
subsequently incurred by Indemnitee in connection with the defense of such
Proceeding other than reasonable costs of investigation or as otherwise
provided below.  Indemnitee shall have
the right to employ his or her own legal counsel in such Proceeding, but all
Expenses related thereto incurred after notice from the Company of its
assumption of the defense shall be at Indemnitee’s expense unless:  (i) the employment of legal counsel by
Indemnitee has been authorized by the Company, (ii) Indemnitee has
reasonably determined that there may be a conflict of interest between
Indemnitee and the Company in the defense of the Proceeding, (iii) after a
Change in Control, the employment of counsel by Indemnitee has been approved by
the Independent Counsel, or (iv) the Company shall not in fact have
employed counsel to assume the defense of such Proceeding, in each of which
case all Expenses of the Proceeding shall be borne by the Company.  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 made the determination provided for in (ii) above.


 


(c)   Settlement
Of Claims.  The Company shall not be
liable to indemnify Indemnitee under this Agreement or otherwise for any
amounts paid in settlement of any Proceeding effected without the Company’s
written consent, provided, however, that if a Change in Control has occurred,
the Company shall be liable for indemnification of Indemnitee for amounts paid
in settlement if the Independent Counsel has approved the settlement.  The Company shall not settle any Proceeding
in any manner that would impose any penalty or limitation on Indemnitee without
Indemnitee’s written consent.  The
Company shall not be liable to indemnify the Indemnitee under this Agreement
with regard to 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; the Company’s liability hereunder shall not be excused if participation
in the Proceeding by the Company was barred by this Agreement.


 


7.              Non-Exclusivity.


 


The
rights of Indemnitee hereunder shall be in addition to any other rights
Indemnitee may have under the Company’s Certificate of Incorporation, bylaws,
applicable law, or otherwise.  To the
extent that a change in applicable law (whether by statute or judicial
decision) permits greater indemnification by agreement than would be afforded
currently under the Company’s Certificate of Incorporation, bylaws, applicable
law, or this Agreement, it is the intent of the parties that Indemnitee enjoy
by this Agreement the greater benefits so afforded by such change.


 


8.              Liability
Insurance.


 


To the
extent the Company maintains an insurance policy or policies providing
directors’ and officers’ liability insurance, Indemnitee shall be covered by
such policy or 


 


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policies, in accordance with its or their terms, to
the maximum extent of the coverage available for any Company director or
officer.


 


9.              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 operate as 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.


 


10.       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 Indemnitee, 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.


 


11.       No Duplication Of
Payments.


 


The
Company shall not be liable under this Agreement to make any payment in
connection with any claim made against Indemnitee to the extent Indemnitee has
otherwise received payment (under any insurance policy, bylaw, or otherwise) of
the amounts otherwise indemnifiable hereunder.


 


12.       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 (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), assigns,
spouses, heirs, and personal and legal representatives.  The indemnification provided under this
Agreement shall continue as to Indemnitee for any action taken or not taken
while serving in an indemnified capacity pertaining to an Indemnifiable Event
even though he or she may have ceased to serve in such capacity at the time of
any Proceeding.


 


13.       Severability.


 


If any
provision (or portion thereof) of this Agreement shall be held by a court of
competent jurisdiction to be invalid, void, or otherwise unenforceable, 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, void, or unenforceable.


 


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14.       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.


 


15.       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:


 


Digimarc Corporation

9405 S.W. Gemini Drive

Beaverton, OR  97008


 


Notice
of change of address shall be effective only when given 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.


 


16.       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.


 


IN
WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Indemnification Agreement as of the day specified above.


 


	
   

  	
  DMRC CORPORATION

  
	
   

  	
   

  
	
   

  	
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  INDEMNITEE

  
	
   

  	
   

  
	
   

  	
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