Which state law applies to a company that is headquartered in Washington but incorporated in Delaware? Does the exculpatory clause in the Loudeye charter protect its directors from liability?

Loudeye Corporation provided digital music for cell phones and other consumer electronics. It was headquartered in Seattle, Washington, but incorporated in Delaware (where it did not have any offices). As permitted under Delaware law, Loudeye’s charter had an exculpatory clause protecting directors from liability. Such provisions were unenforceable under Washington law.
Loudeye’s directors decided to sell the company because it was not generating enough revenue to compete effectively. Nokia offered a price that was three times market value. After extensive negotiations with Nokia and an unsuccessful search for other buyers, Loudeye’s board accepted Nokia’s bid.
A Loudeye shareholder named Eli Rodriguez filed suit against five members of the board of directors, alleging that the directors had breached their fiduciary duties by failing to obtain the best price. He thought the board should have conducted a formal auction. He also alleged that the board had conflicts of interest and had approved the sale because they would receive special financial benefits (such as severance payments and stock options).
The Loudeye directors filed a motion to dismiss, alleging that the exculpatory clause in the company’s charter protected them from liability. Rodriguez argued that Washington law should apply and, therefore, the clause was invalid. He also argued that, even if the exculpatory clause was valid, it did not apply in this case. The trial court granted the motion to dismiss and Rodriguez appealed.