Indemnification Agreement - AgraQuest Inc.


                                AGRAQUEST, INC.

                           INDEMNIFICATION AGREEMENT

     THIS AGREEMENT is entered into, effective as of ____________, 2002 by and
between AgraQuest, Inc., 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
     

                                       1

 
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 imposes 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 complete 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.

                                       2

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

          (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). The parties hereto intend that this
Agreement shall provide for indemnification in excess of that expressly
permitted by statute, including, without limitation, any indemnification
provided by the Company's Amended and Restated Certificate of Incorporation, its
bylaws, vote of its stockholders or disinterested directors, or applicable law.

          (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

                                       3

 
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.

          (f)  Prohibited Indemnification. No indemnification pursuant to this
               --------------------------
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
Amended and Restated 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

                                       4

 
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 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 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 Amended and Restated 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.

                                       5

 
     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).

          (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 Amended and Restated Certificate of

                                       6

 
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 Amended and Restated 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 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.

                                       7

 
     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.

     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:

                                AgraQuest, Inc.
                                1530 Drew Avenue
                                Davis, CA 95616
                                Attention: Chief Executive Officer

     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.

                                       8

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

                                                     AGRAQUEST, INC.       

                                                     By:________________________

                                                     Name:______________________

                                                     Title:_____________________
                                                                           

                                                     INDEMNITEE            

                                                     By:________________________

                                                     Name:______________________
                 

                                       9