Form Of Indemnification Agrmt Directors/officers

FORM OF
INDEMNIFICATION AGREEMENT
FOR DIRECTORS AND OFFICERS


THIS INDEMNIFICATION AGREEMENT ("Agreement") is made as of this ____ day of December, 1996, between Ecogen Inc., a Delaware corporation (the "Company"), and ("Officer" ["Director"]).


WITNESSETH THAT:


WHEREAS, Officer [Director] is an executive officer [a member of the Board of Directors] of the Company and in such capacity is performing a valuable service for the Company; and


WHEREAS, the by-laws of the Company (the "By-laws") provide for the indemnification of its directors and executive officers to the maximum extent authorized by law; and


WHEREAS, Section 145 of the Delaware General Corporation Law (the "DGCL") specifically provides that it shall not be deemed exclusive of any other rights to indemnification or advancement of expenses to which directors or officers may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise; and


WHEREAS, the number of lawsuits and shareholders' derivative lawsuits against corporations, their directors and officers has increased in recent years, such lawsuits frequently are without merit and seek damages in amounts having no reasonable relationship to the amount of compensation received by the directors and officers from the corporation, and such lawsuits whether or not meritorious are expensive and time-consuming to defend; and


WHEREAS, recent developments with respect to the application and interpretation of the business judgment rule and statutory and by-law indemnification provisions have created uncertainty regarding the adequacy and reliability of the protections afforded to directors and officers thereby; and


WHEREAS, adequate directors and officers liability insurance may not be available at a reasonable cost; and


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WHEREAS, the Company wishes to have Officer [Director] continue to serve as an executive officer [a director] of the Company free from undue concern for unpredictable or unreasonable claims for damages by reason of Officer's [Director's] status as an executive officer [a director] of the Company, by reason of Officer's [Director's] decisions or actions on its behalf or by reason of Officer's [Director's] decisions or actions in another capacity while serving as an executive officer [a director] of the Company; and


WHEREAS, Officer [Director] has expressed reluctance to continue to serve as an executive officer [a director] of the Company without assurances that adequate insurance and indemnification is and will continue to be provided; and


WHEREAS, in order to induce Officer [Director] to continue to serve as an executive officer [a director] of the Company, the Company has determined and agreed to enter into this Agreement with Officer [Director];


NOW, THEREFORE, in consideration of Officer's [Director's] continued service as an executive officer [a director] of the Company, the parties agree as follows:


1. Directors and Officers Liability Insurance.


(a) Except as provided in (b) below, the Company hereby agrees to use its best efforts to obtain and maintain directors and officers liability insurance for Officer [Director] for so long as Officer [Director] shall continue to serve as an executive officer [a director] of the Company and thereafter so long as Officer [Director] shall be subject to any possible claim or threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that Officer [Director] was an executive officer [a director] of the Company.


(b) The Company shall have no obligation hereunder to obtain or maintain directors and officers liability insurance if, in the reasonable business judgment of the Board of Directors of the Company, such insurance is not reasonably available, the premium costs for such insurance are disproportionate to the amount of coverage provided, or the coverage provided by such insurance is limited, by exclusions or otherwise, so as to provide an insufficient benefit.


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(c) In all policies of directors and officers liability insurance, Officer [Director] shall be covered as an insured party in such a manner as to provide Officer [Director] the same rights and benefits, subject to the same limitations, as are accorded to the Company's executive officer [director] most favorably insured by such policies.


(d) The Company shall give prompt written notice to Officer [Director] of any amendment or other change or modification, or any proposed amendment, change or modification, to any policy of directors and officers liability insurance maintained by the Company and covering Officer [Director].


2. Indemnification of Officer [Director]. Subject only to the exclusions set forth in this Agreement, the Company hereby agrees to hold harmless and indemnify Officer [Director] to the full extent authorized or permitted by Section 145 of the DGCL, including any amendment thereof, or any other statutory provisions authorizing or permitting such indemnification which are adopted after the date hereof. Notwithstanding the foregoing, the Company shall not be required to indemnify Officer [Director] for any losses to the extent that such losses are covered by directors and officers liability insurance as described in Section 1 above. Without limiting the generality of the foregoing:


(a) Third Party Actions. The Company shall indemnify Officer [Director] if Officer [Director] was or is a party or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Company) by reason of the fact that Officer [Director] is or was or had agreed to serve as (so long as Officer [Director] actually is serving or did so serve) an executive officer [a director] of the Company, or is or was serving or had agreed to serve as an executive officer [a director] (so long as Officer [Director] actually is serving or did so serve) at the request of the Company as a director, officer, employee or agent of another corporation, limited liability company, partnership, joint venture, trust or other enterprise, against any and all expenses (including attorneys' fees), liabilities, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by Officer [Director] or on Officer's [Director's] behalf in connection with such action, suit or proceeding, and any appeal therefrom, if Officer [Director] acted in good faith and in a manner Officer [Director] reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe Officer's [Director's] conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that Officer [Director] did not satisfy the foregoing standard of conduct to the extent applicable thereto.


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(b) Suits By or in the Right of the Company. The Company shall indemnify Officer [Director] if Officer [Director] is or was a party or is threatened to be made a party to any action or suit by or in the right of the Company by reason of the fact that Officer [Director] is or was or had agreed to be (so long as Officer [Director] actually is or did become) an executive officer [a director] of the Company, or is or was serving or had agreed to serve (so long as Officer [Director] actually is or did so serve) at the request of the Company as a director, officer, employee or agent of another corporation, limited liability company, partnership, joint venture, trust or other enterprise, against any and all expenses (including attorneys' fees) and, to the extent permitted by law, amounts paid in settlement actually and reasonably incurred by Officer [Director] or on Officer's [Director's] behalf in connection with the defense or settlement of such action or suit or any appeal therefrom provided that Officer [Director] acted in good faith and in a manner Officer [Director] reasonably believed to be in or not opposed to the best interests of the Company and except that no indemnification shall be made in respect of any claim, issue or matter as to which Officer [Director] shall have been adjudged to be liable to the Company unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Officer [Director] is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper.


(c) Successful Defense. To the extent that Officer [Director] has been successful on the merits or otherwise in the defense of any action, suit or proceeding referred to in subsections (a) or (b) of this Section 2, or in the defense of any claim, issue or matter therein, the Company shall indemnify Officer [Director] against any and all expenses (includi ...