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Exhibit 10.7  

 
 

Form of
  FAO, INC.
  STOCK OPTION AGREEMENT
  (Granted under the 2001 Employee Stock Option Plan)    
  

Option No. ***  

        This Stock Option Agreement (this "Agreement") is entered into as
of                        , (the
"Grant Date"), by and between FAO, Inc., a Delaware corporation (the "Company"), and  *** (the
"Optionee") pursuant to the Company's 2001 Employee Stock Option Plan (the
"Plan"). All initially capitalized terms not expressly defined herein shall have the meanings assigned thereto in the Plan. 

        1.    Grant of Option.    The Company hereby grants to the Optionee an option (this
"Option") to purchase all or any portion of a total of *** shares (the
"Shares") of the common stock of the Company, no par value (the "Stock") at a purchase price of
$[      ] per share (the "Exercise Price"), subject to the terms and
conditions set forth herein. This Option is [not] intended to qualify as an "incentive stock option" as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"). [Notwithstanding such designation, however, to the extent that the aggregate Fair Market Value (determined as of the
Grant Date) of the Stock with respect to which incentive stock options, including this Option, first become exercisable by Optionee during any calendar year (under the Plan and any other incentive
stock option plan(s) of the Company or any Affiliate) exceeds $100,000, all later granted incentive stock options, including, if applicable, this Option, shall be treated as a Nonqualified Option. In
making this determination, incentive stock options shall be taken into account in the order in which they were granted.] 

        2.    Vesting of Option.    The right to exercise this Option shall vest in installments, and this Option shall be
exercisable from time to time in whole or in part as to any vested installment, as follows: 

[DURING THE PERIOD COMMENCING ONE YEAR FROM THE GRANT DATE, THIS OPTION MAY BE EXERCISED FOR 25% OF THE SHARES SUBJECT TO THIS OPTION AND, THEREAFTER, ON EACH
SUCCEEDING ANNIVERSARY OF SUCH DATE, THIS OPTION MAY BE EXERCISED FOR AN ADDITIONAL 25% OF THE SHARES SUBJECT TO THIS OPTION SUCH THAT THIS OPTION SHALL BE FULLY EXERCISABLE ON AND AFTER
OCTOBER 31, 2005].

No
additional shares shall vest after the date of termination of the Optionee's employment relationship with the Company, but this Option shall continue to be exercisable in accordance with  Section 3 below with respect to that number of shares that have vested as of the date of termination of such employment relationship. 

        3.    Term of Option.    The Optionee's right to exercise this Option shall terminate upon the earliest of: 

        (a)  the
expiration of ten (10) years from the Grant Date; 

        (b)  one
(1) day less than three months after the date of the termination of the employment relationship between the Optionee and the Company and all Affiliates for
any reason other than the death, Disability or Retirement of the Optionee; 

Whether
authorized leave of absence, absence on military or government service, or any other absence from service shall constitute a termination of the employment relationship between the Optionee and
the Company and all Affiliates shall be determined by the committee appointed by the Board of 

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Directors of the Company, or, to the extent it chooses to operate as the committee, the Board of Directors of the Company (the "Committee") at the time
thereof; 

        (c)  in
the event of the severance of the employment relationship between the Optionee and the Company and all Affiliates due to death, one hundred eighty (180) days
after the Holder's death; 

        (d)  in
the event of the severance of the employment relationship between the Optionee and the Company and all Affiliates due to Disability, one hundred eighty
(180) days after such termination. Disability means a medically determinable mental or physical impairment which, in the opinion of a
physician selected by the Committee, shall prevent the Optionee from engaging in any substantial gainful activity and which can be expected to result in death or which has lasted or can be expected to
last for a continuous period of not less than twelve (12) months and which: (a) was not contracted, suffered or incurred while the Optionee was engaged in, or did not result from having
engaged in, a felonious criminal enterprise; (b) did not result from alcoholism or addiction to narcotics; (c) did not result from an injury incurred while a member of the Armed Forces
of the United States for which the Optionee receives a military pension; and (d) did not result from an intentionally self-inflicted injury; 

        (e)  in
the event of the severance of the employment relationship between the Optionee and the Company and all Affiliates due to Retirement, one (1) day less than
three (3) months after the date of such termination. Retirement means the termination of Optionee's employment relationship with the Company and
all Affiliates after attaining the age of 55; 

        A
transfer by the Optionee, without an intervening period, between the Company and a subsidiary or parent of the Company, or between subsidiaries and/or parents, shall not be considered
a termination the employment relationship between the Company and Optionee. Notwithstanding anything contained in the Plan to the contrary, in the event of severance of the employment relationship
between the Optionee and the Company and all Affiliates as described in Section 3(c) or (d), this Option shall become immediately and fully exercisable. 

        4.    Exercise of Option.    Subject to Section 3, the portion
of this Option that has vested may be exercised in whole or in part by the Optionee (or, after his or her death, by the person designated in  Section 5) by delivery of the following to the Company
at its principal executive offices: 

        (a)  written
notice to the Committee setting forth the number of shares of Stock with respect to which this Option is to be exercised and specifying the address to which the
certificates for the shares are to be mailed; 

        (b)  (i)
cash, certified check, bank draft or postal or express money order payable to the order of the Company for an amount equal to the exercise price under the Option; 

        (ii)  Mature
Shares with a Fair Market Value on the date of exercise equal to the exercise price under the Option; provided that the aggregate Fair Market Value of the shares
of Stock tendered must be equal to or less than the aggregate exercise price of the shares being purchased upon exercise of the Option, and any difference must be paid by cash, certified check, bank
draft or postal or express money order payable to the order of the Company and provided further that the Optionee must deliver to the Company certificates registered in the name of the Optionee
representing a number of shares of Stock legally and beneficially owned by the Optionee free of all liens, claims and encumbrances of every kind, accompanied by stock powers duly endorsed in blank by
the record holder of the shares represented by the certificates (with signature guaranteed by a commercial bank or trust company or by a brokerage firm having a membership on a registered national
stock exchange) and the Optionee must provide the
Company with the information the Company reasonably requests pertaining to exercise, sale or other disposition; 

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        (iii)  an
election to make a cashless exercise through a registered broker-dealer (if approved in advance by the Committee or an executive officer of the Company); or 

        (iv)  except
as specified in the Plan, any other form of payment which is acceptable to the Committee; 

        (c)  cash
or by check within ten days after the date of exercise of this Option in an amount sufficient to pay any sums required by federal, state or local tax law to be
withheld with respect to the grant or exercise of this Option (unless and to the extent the Company or an Affiliate have arranged with the Optionee to deduct such amounts from other compensation
payable to the Optionee or the Committee and the Optionee have agreed to have the Company reduce the number of shares of Stock issued to the Optionee upon exercise of this Option to satisfy the tax
withholding obligations of the Company or an Affiliate). 

        The
Committee may permit the Optionee to elect to pay the exercise price upon exercise of this Option by authorizing a third-party broker to sell all or a portion of the shares of Stock
acquired upon exercise of this Option and remit to the Company a sufficient portion of the sale proceeds to pay the exercise price and any applicable tax withholding resulting from such exercise. 

        This
Option may not be exercised for a fraction of a share of Stock. 

        5.    Non-Transferability; Death of Optionee.    This Option is not transferable by the Optionee other
than by will or under the laws of descent and distribution, and is exercisable, during the Optionee's lifetime, only by him or her. In the discretion of the Committee, any attempt to transfer this
Option other than under the terms of the Plan and this Agreement may terminate this Option. After the death of the Optionee, the Optionee's executors, administrators or any person or persons to whom
this Option may be transferred by will or by the laws of descent and distribution, shall have the right, at any time prior to the termination of this Option to exercise this Option, in respect to the
number of shares that the Optionee would have been entitled to exercise if the Optionee exercised this Option prior to the Optionee's death. 

        6.    Representations, Warranties and Acknowledgments of Optionee.    

        (a)  The
Optionee represents and warrants that this Option is being acquired by the Optionee for his or her personal account, for investment purposes only, and not with a
view to the distribution, resale or other disposition thereof. 

        (b)  The
Optionee acknowledges that no Options or Shares are required to be granted or issued under the Plan unless legal counsel for the Company shall be satisfied that such
issuance or grant will be in compliance with all applicable federal and state securities laws and regulations and any other applicable laws or regulations. The Optionee acknowledges that the Committee
may require, as a condition of any payment or share issuance pursuant to the Plan, that such agreements, undertakings, representations, certificates, and/or information as the Committee may deem
necessary or advisable, be executed or provided to the Company to assure compliance with all such applicable laws or regulations, including receipt of an opinion of counsel satisfactory to the Company
to the effect that any proposed transfer complies with applicable law. The Optionee acknowledges that certificates for Shares delivered upon exercise of this Option may be subject to such stock
transfer orders and such other restrictions as the Committee may deem advisable under the rules, regulations, or other requirements of the Securities and Exchange Commission, any stock exchange or any
interdealer quotation system upon which the Stock is then listed, and any applicable federal or state securities law. In addition, if, at any time specified herein for, (i) the granting of any
Option or the making of any determination, (ii) the issuance or other distribution of Stock, or (iii) the payment of amounts to or through the Optionee with respect to this Option, any
law, rule, regulation or other requirement of any governmental authority or agency shall require either the Company, any Affiliate or the Optionee (or any estate, designated beneficiary or 

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other legal representative thereof) to take any action in connection therewith, the Optionee acknowledges that the granting of such Option, the making of such determination, the issuance or
distribution of Stock or such payment, as the case may be, shall be deferred until such required action is taken. 

        7.    Limitation of Company's Liability for Nonissuance.    The Company shall not be required to sell or issue any
Stock under this Option if issuing that Stock would constitute or result in a violation by the Optionee or the Company of any provision of any law, statute or regulation of any governmental authority.
The determination by the Committee on this matter shall be final, binding and conclusive. The Company may, but shall in no event be obligated to, register any Stock covered by the Plan pursuant to
applicable securities laws of any country or any political subdivision. In the event the Stock issuable on exercise of this Option is not registered, the Company may imprint on the certificate
evidencing the Stock any legend that counsel for the Company considers necessary or advisable to comply with applicable law. The Company shall not be obligated to take any other affirmative action in
order to cause the exercise of an Option, or the issuance of shares pursuant thereto, to comply with any law or regulation of any governmental authority. 

        8.    Adjustments Upon Changes in Capital Structure, Merger, Etc.    

        (a)  The
existence of this Option shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Stock or its rights, the dissolution or liquidation of the Company, any sale or transfer of all or any part of its assets or business or any other corporate
act or proceeding, whether of a similar character or otherwise. 

        (b)  If
the Company shall effect a subdivision or consolidation of shares or other capital readjustment, the payment of a stock dividend, or other increase or reduction of
the number of shares of Stock outstanding, without receiving compensation for money, services or property, then the number, class or series and per share price of shares of Stock subject to this
Option shall be appropriately adjusted in such a manner as to entitle Optionee to receive upon exercise of this Option, for the same aggregate cash consideration, the equivalent total number and class
or series of shares the Optionee would have received had the Optionee exercised this Option in full immediately prior to the event requiring the adjustment. 

        (c)  Notwithstanding
anything contained in the Plan to the contrary, if this Option remains outstanding and a Change in Control occurs, (i) this Option shall become
immediately and fully exercisable and (ii) the Optionee will be permitted to (A) exercise this Option in whole or in part and exchange the Shares received on exercise for the
consideration received by holders of the Company's Stock in the Change in Control Transaction or (B) surrender for cancellation within ninety (90) days after such Change in Control, this
Option or portion of this Option to the extent not yet exercised and the Optionee will be entitled to receive a cash payment per Share subject to this Option or portion thereof surrendered in the
amount equal to the excess, if any, of (x) the Fair Market Value, on the date of surrender, of such Share over (y) the aggregate purchase price for such Share. 

        "Change in Control" means the occurrence during the term of the Plan of: 

          (i)  The
acquisition by any "Person" (as the term person is used for purposes of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended (the "1934 Act")) of "Beneficial Ownership" (within the
meaning of Rule 13d-3 promulgated under the 1934 Act) of any securities of the Company which generally entitles the holder thereof to vote for the election of directors of the
Company (the "Voting Securities") which, when added to the 

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Voting Securities then "Beneficially Owned" by such person, would result in such Person "Beneficially Owning" fifty percent (50%) or more of the combined voting power of the Company's then
outstanding Voting Securities; or 

        (ii)  Individuals
who are members of the Board of Directors of the Company as a result of election by, or at the request of, Fred Kayne, Ric Kayne or their Affiliates (the
"Selected Board"), cease for any
reason to constitute at least three of seven of the Board of Directors of the Company (or one less than a majority if the size of the Board of Directors of the Company is changed); or 

        (iii)  a
merger, consolidation or reorganization involving the Company (a "Business Combination") that has not been approved
by a Selected Board; or 

        (iv)  the
occurrence of a Corporate Change. 

        Notwithstanding
the foregoing, if an Optionee's employment is terminated and the Optionee reasonably demonstrates that such termination (x) was at the request of a third party who
has indicated an intention or taken steps reasonably calculated to effect a Change in Control and who effectuates a Change in Control or (y) otherwise occurred in connection with, or in
anticipation of, a Change in Control which actually occurs, then for all purposes hereof, the date of a Change in Control with respect to the Optionee shall mean the date immediately prior to the date
of such termination of employment. 

        A
Change in Control shall not be deemed to occur solely because fifty percent (50%) or more of the then outstanding Voting Securities is Beneficially Owned by (x) a trustee or
other fiduciary holding securities under one or more employee benefit plans or arrangements (or any trust forming a part thereof) maintained by the Company or any Controlled Entity or (y) any
corporation which, immediately prior to its acquisition of such interest, is owned directly or indirectly by the stockholders of the Company in the same proportion as their ownership of stock in the
Company immediately prior to such acquisition. Notwithstanding any other provision hereof, a merger by the Company with and into a wholly-owned subsidiary shall not be deemed a Change in Control. 

        9.    No Employment Contract Created.    The granting of this Option shall not constitute an employment contract,
express or implied, nor impose upon the Company or any Affiliate any obligation to employ or continue to employ, or utilize the services of, Optionee. The right of the Company or any Affiliate to
terminate the employment of Optionee shall not be diminished or affected by reason of the fact that this Option has been granted Optionee. 

        10.    Rights as Shareholder.    The Optionee (or a Successor pursuant to  Section 5) shall have no rights as a stockholder
with respect to Stock covered by this Option until the date a stock certificate is issued for
the Stock. 

        11.    Interpretation.    This Option is subject to the terms and conditions of the Plan, a copy of which is
incorporated herein by reference. In the event of inconsistency or conflict between the Plan and this Agreement, the terms and provisions of the Agreement shall control. 

        12.    Notices.    Any notice, demand or request required or permitted to be given under this Agreement shall be in
writing and shall be deemed given when delivered personally or three (3) days after being deposited in the United States mail as certified or registered mail, with postage prepaid, or one
(1) day after being delivered to a private next day delivery service, with mailing charges paid, and addressed, if to the Company, at its principal place of business, Attention: Chief Financial
Officer, and if to the Optionee, at his or her most recent address as shown in the employment or stock records of the Company. 

        13.    Forfeiture.    Notwithstanding any other provisions of the Plan, if and only if (a) the Optionee is
convicted of a felony involving moral turpitude or, (ii) the Optionee is guilty of willful gross neglect 

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or continued willful gross misconduct as determined by a court of competent jurisdiction and resulting, in either case, in material economic harm to the Company, unless such act, or failure to act,
was believed by the Optionee, in good faith, to be in the best interests of the Company, then the Optionee shall forfeit this Option, and all exercised options granted under the Plan if the Company
has not yet delivered a stock certificate to the Optionee with respect thereto. 

        14.    Legend.    All certificates representing any of the shares of Stock subject to the provisions of this Agreement
may have endorsed thereon the following legend or such other legends as the Company deems necessary or desirable: 

"THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED." 

        15.    Registration.    The Company agrees that it shall maintain a registration statement permitting the resale of
all Shares for which Optionee's exercise rights under this Option have vested unless resale is otherwise permitted pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended,
or by any successor rule. 

        16.    Governing Law.    The validity, construction, interpretation and effect of this Option shall be governed by and
determined in accordance with the laws of the State of Pennsylvania. 

        17.    Severability.    Should any provision or portion of this Agreement be held to be unenforceable or invalid for
any reason, the remaining provisions and portions of this Agreement shall be unaffected by such holding. 

        18.    Counterparts.    This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original and all of which together shall be deemed one instrument. 

        19.    Entire Agreement.    This Agreement, together with the Plan, constitutes the entire agreement between the
parties pertaining to its subject matter and supersedes all prior written or oral agreements and understandings of the parties, either expressed or implied. 

[Remainder
of Page Intentionally Left Blank] 

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

	 	 	FAO, INC.
	

 	
 	

By:	
 	

 
	 	 	 	 	
 Jerry R. Welch
 Chief Executive Officer

        The
Optionee hereby accepts this Option subject to all terms and provisions hereof. The Optionee hereby acknowledges receipt of a copy of the Plan. The Optionee hereby agrees to accept
as binding, conclusive and final all decisions or interpretations of the Committee regarding all questions arising under the Plan. The Optionee authorizes the Company to withhold in accordance with
applicable law from any compensation payable to him or her all taxes required to be withheld by federal, state or local law as a result of the exercise of this Option. 

	 	 	OPTIONEE
	

 	
 	

 ***

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Exhibit 10.6    
  

 
  FORM OF
  INDEMNIFICATION AGREEMENT    
  

        THIS INDEMNIFICATION AGREEMENT (the "Agreement") is made and
entered into this 6th day of September, 2002, between Fischer Imaging Corporation, a Delaware corporation (the "Company"), and
                                         
        ("Indemnitee").
 

        A.    Indemnitee,
as a member of the Company's Board of Directors and/or an officer of the Company, performs valuable services for the Company; 

        B.    The
Company and Indemnitee recognize the continued difficulty in obtaining liability insurance for corporate directors, officers, employees, controlling persons, agents
and fiduciaries, the significant increases in the cost of such insurance and the general reductions in the coverage of such insurance. 

        C.    The
Company and Indemnitee further recognize the substantial increase in corporate litigation in general, subjecting directors, officers, employees, controlling persons,
agents and fiduciaries to expensive litigation risks at the same time as the availability and coverage of liability insurance has been severely limited. 

        D.    The
stockholders of the Company have adopted Bylaws (the "Bylaws") providing for the indemnification of the officers,
directors, agents and employees of the Company to the maximum extent authorized by Section 145 of the Delaware Corporations Code, as amended
("Code"). 

        E.    Indemnitee
does not regard the current protection available for the Company's directors, officers, employees, controlling persons, agents and fiduciaries as adequate
under the present circumstances, and Indemnitee and other directors, officers, employees, controlling persons, agents and fiduciaries of the Company may not be willing to serve or continue to serve in
such capacities without additional protection. 

        F.    The
Bylaws and the Code, by their non-exclusive nature, permit contracts between the Company and its directors, officers, employees, controlling persons,
agents or fiduciaries with respect to indemnification of such directors. 

        G.    The
Company (i) desires to attract and retain the involvement of highly qualified individuals, such as Indemnitee, to serve the Company and, in part, in order to
induce Indemnitee to be involved with the Company, and (ii) wishes to provide for the indemnification and advancing of expenses to Indemnitee to the maximum extent permitted by law. 

        H.    In
view of the considerations set forth above, the Company desires that Indemnitee be indemnified by the Company as set forth herein. 

        NOW, THEREFORE, in consideration of Indemnitee's service to the Company, the parties hereto agree as follows: 

        1.    Indemnity of Indemnitee.    The Company
hereby agrees to indemnify Indemnitee to the fullest extent permitted by law, even if such indemnification is not specifically authorized by the other provisions of this Agreement, the Company's
Certificate of Incorporation (the "Certificate"), the Company's Bylaws or by statute. In the event of any change after the date of this Agreement in any
applicable law, statute or rule which expands the right of a Delaware corporation to indemnify a member of its Board of Directors or an officer, employee, controlling person, agent or fiduciary, it is
the intent of the parties hereto that Indemnitee 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 9(a) hereof. 

 

        2.    Additional Indemnity.    The Company
hereby agrees to hold harmless and indemnify the Indemnitee: 

        (a)  against
any and all expenses incurred by Indemnitee, as set forth in Section 3(a) below; and 

        (b)  otherwise
to the fullest extent not prohibited by the Certificate, the Bylaws or the Code. 

        3.    Indemnification Rights.    

        (a)    Indemnification of Expenses.    The Company shall indemnify and hold harmless Indemnitee, together with
Indemnitee's partners, affiliates, employees, agents and spouse and each person who controls any of them or who may be liable within the meaning of Section 15 of the Securities Act of 1933, as
amended (the "Securities Act"), or Section 20 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), to the fullest extent permitted by law if Indemnitee 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 threatened, pending or completed action, suit, proceeding or alternative dispute resolution mechanism, or any hearing, inquiry or investigation that Indemnitee and
the Company believe might lead to the institution of any such action, suit, proceeding or alternative dispute resolution mechanism, whether civil, criminal, administrative, investigative or other
(hereinafter a "Claim") against 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, be a witness in or participate in, any such 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 such Claim and any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement
(collectively, hereinafter "Expenses")), including all interest, assessments and other charges paid or payable in connection with or in respect of such
Expenses, incurred by Indemnitee by reason of (or arising in part out of) any event or occurrence related to the fact that Indemnitee is or was a director, officer, employee, controlling person, 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, controlling person, 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 Indemnitee while serving in such capacity including, without limitation, any
and all losses, claims, damages, expenses and liabilities, joint or several (including any investigation, legal and other expenses incurred in connection with, and any amount paid in settlement of,
any action, suit, proceeding or any claim asserted) under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, which relate directly
or indirectly to the registration, purchase, sale or ownership of any securities of the Company or to any fiduciary obligation owed with respect thereto (hereinafter an
"Indemnification Event"). Such payment of Expenses shall be made by the Company as soon as practicable but in any event no later than 5 days
after written demand by Indemnitee therefor is presented to the Company. 

        (b)    Reviewing Party.    Notwithstanding the foregoing, (i) the obligations of the Company under
Section 2 shall be subject to the condition that the Reviewing Party (as described in Section 11(e) hereof) shall not have determined (in a written opinion, in any case in which the
Independent Legal Counsel as defined in Section 11(d) hereof is involved) that Indemnitee would not be permitted to be indemnified under applicable law, and (ii) and Indemnitee
acknowledges and agrees that the obligation of the Company to make an advance payment of Expenses to Indemnitee pursuant to Section 4(a) (an
"Expense Advance") shall be subject to the condition that, if, when and to the extent that the Reviewing Party determines that Indemnitee would not be 

2

 

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;
provided, however, that if Indemnitee has commenced or thereafter commences legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee should be indemnified under
applicable law, 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 lapsed). Indemnitee's
obligation to reimburse the Company for any Expense Advance shall be unsecured and no interest shall be charged thereon. If there has not been a Change in Control (as defined in Section 11(c)
hereof), the Reviewing Party shall be selected by the Board of Directors, 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), the Reviewing Party shall be the Independent Legal Counsel referred to in Section 3(e) hereof. If
there has been no determination by the Reviewing Party or if the Reviewing Party determines that Indemnitee substantively would not be permitted to be indemnified in whole or in part under applicable
law, Indemnitee shall have the right to commence litigation seeking an initial determination by the court or challenging any such determination by the Reviewing Party or any aspect thereof, including
the legal or factual bases therefor, and the Company hereby consents to service of process and to appear in any such proceeding. Any determination by the Reviewing Party otherwise shall be conclusive
and binding on the Company and Indemnitee. 

        (c)    Contribution.    If the indemnification provided for in Section 3(a) above for any reason is held by a
court of competent jurisdiction to be unavailable to an Indemnitee in respect of any losses, claims, damages, expenses or liabilities referred to therein, then the Company, in lieu of indemnifying
Indemnitee thereunder, shall contribute to the amount paid or payable by Indemnitee as a result of such losses, claims, damages, expenses or liabilities (i) in such proportion as is appropriate
to reflect the relative benefits received by the Company and Indemnitee, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and Indemnitee in connection with the action or inaction
which resulted in such losses, claims, damages, expenses or liabilities, as well as any other relevant equitable considerations. In connection with the registration of the Company's securities, the
relative benefits received by the Company and Indemnitee shall be deemed to be in the same respective proportions that the net proceeds from the offering (before deducting expenses) received by the
Company and the Indemnitee, in each case as set forth in the table on the cover page of the applicable prospectus, bear to the aggregate public offering price of the securities so offered. The
relative fault of the Company and Indemnitee shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company or Indemnitee and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. 

        The
Company and Indemnitee agree that it would not be just and equitable if contribution pursuant to this Section 3(c) were determined by pro rata or per capita allocation or by
any other method of allocation which does not take account of the equitable considerations referred to in the immediately
preceding paragraph. In connection with the registration of the Company's securities, in no event shall an Indemnitee be required to contribute any amount under this Section 3(c) in excess of
the lesser of (i) that proportion of the total of such losses, claims, damages or liabilities indemnified against equal to the proportion of the total securities sold under such registration
statement which is being sold by Indemnitee or (ii) the proceeds received by 

3

 

Indemnitee from its sale of securities under such registration statement. No person found guilty of fraudulent misrepresentation (within the meaning of Section 10(f) of the Securities Act)
shall be entitled to contribution from any person who was not found guilty of such fraudulent misrepresentation. 

        (d)    Survival Regardless of Investigation.    The indemnification and contribution provided for herein will remain
in full force and effect regardless of any investigation made by or on behalf of Indemnitee or any officer, director, employee, agent or controlling person of Indemnitee. 

        (e)    Change in Control.    After the date hereof, 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 of Directors who were directors immediately prior to such Change in Control) then, with respect to
all matters thereafter arising concerning the rights of Indemnitee to payments of Expenses under this Agreement or any other agreement or under the Company's Certificate or Bylaws as now or hereafter
in effect, Independent Legal Counsel (as defined in Section 11(d) hereof) shall be selected by Indemnitee 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 Indemnitee as to whether and to what extent Indemnitee would be permitted to be indemnified under applicable law. The
Company agrees to abide by such opinion and to pay the reasonable fees of the Independent Legal Counsel referred to above and to fully indemnify such counsel against any and all reasonable expenses
(including attorneys' fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto. 

        (f)    Mandatory Payment of Expenses.    Notwithstanding any other provision of this Agreement, to the extent that
Indemnitee has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in the defense of any action, suit, proceeding, inquiry or
investigation referred to in Section 3(a) hereof or in the defense of any claim, issue or matter therein, Indemnitee shall be indemnified against all Expenses incurred by Indemnitee in
connection herewith. 

        4.    Expenses; Indemnification Procedure.    

        (a)    Advancement of Expenses.    The Company shall advance all Expenses incurred by Indemnitee. The advances to be
made hereunder shall be paid by the Company to Indemnitee as soon as practicable but in any event no later than five business days after written demand by Indemnitee therefor to the Company. 

        (b)    Notice/Cooperation by Indemnitee.    Indemnitee shall give the Company notice in writing in accordance with
Section 15 of this Agreement as soon as practicable of any Claim made against Indemnitee for which indemnification will or could be sought under this Agreement. In addition, Indemnitee shall
give the Company such information and cooperation as it may reasonably require and as shall be within Indemnitee's power. 

        (c)    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 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. In addition, neither the failure of the Reviewing
Party to have made a determination as to whether Indemnitee has met any particular standard of conduct or had any particular belief, nor an actual determination by the Reviewing Party that Indemnitee
has not met such standard of conduct or did not have such belief, prior to the commencement of legal proceedings by Indemnitee to secure a judicial determination that Indemnitee should be indemnified
under applicable law, shall be a defense to 

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Indemnitee's claim or create a presumption that Indemnitee has not met any particular standard of conduct or did not have any particular belief. In connection with any determination by the Reviewing
Party or otherwise as to whether Indemnitee is entitled to be indemnified hereunder, the burden of proof shall be on the Company to establish that Indemnitee is not so entitled. 

        (d)    Notice to Insurers.    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 each of the Company's policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee,
all amounts payable as a result of such action, suit, proceeding, inquiry or investigation in accordance with the terms of such policies. 

        (e)    Selection of Counsel.    In the event the Company shall be obligated hereunder to pay the Expenses of any
Claim, the Company shall be entitled to assume the defense of such Claim, with counsel approved by the Indemnitee (which approval shall not be unreasonably withheld) upon the delivery to Indemnitee of
written notice of its election to do so. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same Claim; provided that (i) Indemnitee shall have the right to employ
Indemnitee's counsel in any such Claim at Indemnitee's expense and (ii) if (A) the employment of counsel by Indemnitee has been previously authorized by the Company,
(B) Indemnitee shall have reasonably concluded that there is a conflict of interest between the Company and Indemnitee 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 Indemnitee's counsel shall be at the expense of the Company. 

        5.    Nonexclusivity.    The indemnification
provided by this Agreement shall be in addition to any rights to which Indemnitee may be entitled under the Company's Certificate of Incorporation, its Bylaws, any agreement, any vote of stockholders
or disinterested directors, the General Corporation Law of the State of Delaware, or otherwise. The indemnification provided under this Agreement shall continue as to Indemnitee for any action
Indemnitee took or did not take while serving in an indemnified capacity even though Indemnitee 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 any Indemnitee to the extent Indemnitee has otherwise actually received payment (under
any insurance policy, Certificate of Incorporation, Bylaw or otherwise) of the amounts otherwise indemnifiable hereunder. 

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

        8.    Mutual Acknowledgement.    The Company
and Indemnitee acknowledge that in certain instances, Federal law or applicable public policy may prohibit the Company from indemnifying its directors, officers, employees, controlling persons, agents
or fiduciaries under this Agreement or otherwise. Each Indemnitee 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 rights under public policy to indemnify Indemnitee. 

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

        (a)    Claims Initiated by Indemnitee.    To indemnify or advance expenses to any Indemnitee with respect to Claims
initiated or brought voluntarily by Indemnitee and not by way of defense, except (i) with respect to actions or proceedings to establish or enforce a right to indemnify 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 Indemnifiable 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 Indemnitee ultimately is determined to be entitled to such indemnification, advance expense payment or insurance recovery, as the case may be; or 

        (b)    Claims Under Section 16(b).    To indemnify Indemnitee for expenses and the payment of profits arising
from the purchase and sale by Indemnitee of securities in violation of Section 16(b) of the Exchange Act or any similar successor statute; or 

        (c)    Claims Excluded Under Section 145 of the Delaware General Corporation Law.    To indemnify Indemnitee if
(i) Indemnitee did not act in good faith or in a manner reasonably believed by such Indemnitee to be in or not opposed to the best interests of the Company, or (ii) with respect to any
criminal action or proceeding, Indemnitee had reasonable cause to believe Indemnitee's conduct was unlawful, or (iii) Indemnitee shall have been adjudged to be liable to the Company unless and
only to the extent the court in which such action was brought shall permit indemnification as provided in Section 145(b) of the Delaware General Corporation Law. 

        10.    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 any Indemnitee, any Indemnitee's estate, spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of occurrence 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. 

        11.    Construction of Certain Phrases.    

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

        (b)  For
purposes of this Agreement, references to "other enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on any Indemnitee with respect to an employee benefit plan; and references to
"serving at the request of the Company" shall include any service as a director, officer, employee, 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 any Indemnitee acted in
good faith and in a manner Indemnitee reasonably believed to be in the interests of the 

6

 

participants and beneficiaries of an employee benefit plan, Indemnitee shall be deemed to have acted in a manner "not opposed to the best interests of the Company" as referred to in this Agreement. 

        (c)  For
purposes of this Agreement a "Change in Control" shall be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d)(3) and 14(d)(2) of the Exchange 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, (A) 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 or her beneficial ownership of such securities by 5% or more over the percentage so owned by such person, or (B) becomes the "beneficial
owner" (as defined in Rule 13d-3 under said Exchange Act), directly or indirectly, of securities of the Company representing more than 20% 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 election by the Company's stockholders was approved by a vote of at least
two-thirds 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 transactions) all or substantially all of the Company's assets. 

        (d)  For
purposes of this Agreement, "Independent Legal Counsel" shall mean an attorney or firm of attorneys, selected in
accordance with the provisions of Section 3(d) hereof, who shall not have otherwise performed services for the Company or any Indemnitee within the last three years (other than with respect to
matters concerning the right of any Indemnitee under this Agreement, or of other indemnitees under similar indemnity agreements). 

        (e)  For
purposes of this Agreement, a "Reviewing Party" shall mean any appropriate person or body consisting of a member or
members of the Company's Board of Directors or any other person or body appointed by the Board of Directors who is not a party to the particular Claim for which Indemnitee is seeking indemnification,
or Independent Legal Counsel. 

        (f)    For
purposes of this Agreement, "Voting Securities" shall mean any securities of the Company that vote generally in the
election of directors. 

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

        13.    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 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 

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business and/or assets of the Company, by written agreement in form and substance satisfactory to 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 with respect to Claims relating to Indemnifiable Events
regardless of whether any Indemnitee continues to serve as a director, officer, employee, agent, controlling person, or fiduciary of the Company or of any other enterprise, including subsidiaries of
the Company, at the Company's request. 

        14.    Attorneys' Fees.    In the event that
any action is instituted by an Indemnitee under this Agreement or under any liability insurance policies maintained by the Company to enforce or interpret any of the terms hereof or thereof, any
Indemnitee shall be entitled to be paid all Expenses incurred by Indemnitee with respect to such action if Indemnitee is ultimately successful in such action, and shall be entitled to the advancement
of Expenses with respect to such action, unless, as a part of such action, a court of competent jurisdiction over such action determines that the material assertions made by Indemnitee as a basis for
such action were not made in good faith or were frivolous. In the event of an action instituted by or in the name of the Company under this Agreement to enforce or interpret any of the terms of this
Agreement, Indemnitee shall be entitled to be paid all Expenses incurred by Indemnitee in defense of such action (including costs and expenses incurred with respect to Indemnitee counterclaims and
cross-claims made in such action), and shall be entitled to the advancement of Expenses with respect to such action, unless, as a part of such action, a court having jurisdiction over such action
determines that the Indemnitee's material defenses to such action were made in bad faith or were frivolous. 

        15.    Notice.    All notices and other
communications required or permitted hereunder shall be in writing, shall be effective when given, and shall in any event be deemed to be given (a) five calendar days after deposit with the
U.S. Postal Service or other applicable postal service, if delivered by first class mail, postage prepaid, (b) upon delivery, if delivered by hand, (c) one business day after the
business day of deposit with Federal Express or similar overnight courier, freight prepaid, or (d) one day after the business day of delivery by facsimile transmission, if deliverable by
facsimile transmission, with copy by first class mail, postage prepaid, and shall be addressed if to Indemnitee, at Indemnitee's address as set forth beneath Indemnitee's signature to this Agreement
and if to the Company at the address of its principal corporate offices (attention: Chief Executive Officer) or at such other address as such party may designate by ten calendar days' advance written
notice to the other party hereto. 

        16.    Consent to Jurisdiction.    The Company
and Indemnitee 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 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 limitations, 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 shall
be governed by and its provisions construed and enforced in accordance with the laws of the State of Delaware, as applied to contracts between 

8

 

Delaware residents, entered into and to be performed entirely within the State of Delaware, without regard to the conflict of laws principles thereof. 

        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 Indemnitee 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 all 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. 

        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 the Indemnitee any right to be retained in the employ of the Company or any of its
subsidiaries. 

        23.    Corporate Authority.    The Board of
Directors of the Company has approved the terms of this Agreement. 

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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:
	

 	
 	

 	

 
	 	 	FISCHER IMAGING CORPORATION

a Delaware corporation
	

 	
 	

 	

 
	 	 	By:	

	

 	
 	

 	

 
	

 	
 	

 	

 
	 	 	INDEMNITEE:
	

 	
 	

 	

 
	 	 	Signature:	

	 	 	Name:	 

10

QuickLinks

Exhibit 10.6

FORM OF INDEMNIFICATION AGREEMENT

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