EXHIBIT 10.1
EXECUTION DOCUMENT
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement"), is made and entered
into as of ______________ , 20 , between COSI, INC., a Delaware corporation (the
"Corporation"), and ____________________, a member of the Corporation's Board of
Directors [an officer of the Corporation] ("Indemnitee").
RECITALS:
WHEREAS, the Corporation and Indemnitee each recognize the ongoing
substantial risk of litigation and other claims being asserted against directors
and officers of public companies arising out of their service to and activities
on behalf of the corporation;
WHEREAS, the Corporation's Amended and Restated Articles of Incorporation
and Amended and Restated Bylaws (individually and collectively, the "Constituent
Documents") provide that the Corporation will indemnify its directors and
officers, and the Corporation's Amended and Restated Bylaws (the "Bylaws")
provide that the Corporation will advance expenses in connection therewith;
WHEREAS, in recognition of the need for protection against such litigation
and claims to enhance Indemnitee's continued effective service to the
Corporation, and Indemnitee's reliance on the aforesaid provisions of the
Constituent Documents, and to provide Indemnitee with express contractual
indemnification, the Corporation wishes to provide in this Agreement for the
indemnification, advancement, reimbursement and insurance of certain liabilities
and expenses of Indemnitee to the fullest extent permitted by law.
AGREEMENT:
NOW, THEREFORE, in consideration of these premises and of Indemnitee's
continuation of service to the Corporation, the parties hereto agree as follows:
1. Indemnification. The Corporation hereby agrees to and shall hold
harmless and indemnify Indemnitee to the fullest extent permitted by law as such
laws exist or may hereafter be amended (but, in the case of any such amendment,
with respect to any action or inaction occurring prior to such amendment, only
to the extent that such amendment permits the Corporation to provide broader
indemnification rights than permitted prior thereto). In furtherance of the
foregoing indemnification, and without limiting the generality thereof:
(a) Proceedings Other than Those by or in the Right of the
Corporation. Indemnitee shall be entitled to the rights of indemnification
provided in this Section 1(a) if, by reason of Indemnitee's Corporate
Status (as defined in Section 13 below), Indemnitee is, or is threatened
to be made, a party to or participant in any Proceeding (as defined in
Section 13 below) other than a Proceeding by or in the right of the
Corporation. Pursuant to this Section 1(a), Indemnitee shall be
indemnified against all Expenses (as defined in Section 13 below),
liability and loss (including, without limitation, attorneys' and other
professionals' fees and Expenses, claims, judgments, fines, ERISA excise
taxes or penalties and amounts paid in settlement) actually and reasonably
incurred by or on behalf of Indemnitee in connection with such Proceeding
or any claim, issue or matter therein, if Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in or not opposed to
the best interests of the Corporation, and with respect to any criminal
Proceeding, had no reasonable cause to believe Indemnitee's conduct was
unlawful. The termination of any Proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that the
conduct was unlawful.
(b) Proceedings by or in the Right of the Corporation. Indemnitee
shall be entitled to the rights of indemnification provided in this
Section 1(b) if, by reason of Indemnitee's Corporate Status, Indemnitee
is, or is threatened to be made, a party to or participant in any
Proceeding brought by or in the right of the Corporation. Pursuant to this
Section 1(b), Indemnitee shall be indemnified against all Expenses
actually and reasonably incurred by or on behalf of Indemnitee in
connection with such Proceeding if the Indemnitee acted in good faith and
in a matter Indemnitee reasonably believed to be in or not opposed to the
best interests of the Corporation except that no indemnification shall be
made in respect of any claim, issue or matter in such Proceeding as to
which Indemnitee shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Court of Chancery of the State of
Delaware or 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 circumstances of the case, such Indemnitee is fairly and
reasonably entitled to indemnity for such Expenses which the Court of
Chancery of the State of Delaware or such other court in which such action
or suit was brought shall deem proper.
(c) Indemnification for Expenses of a Party Who is Wholly or
Partially Successful. Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of Indemnitee's
Corporate Status, a party to and is successful, on the merits or
otherwise, in any Proceeding, Indemnitee shall be indemnified to the
maximum extent permitted by law, as such laws may be amended from time to
time, against all Expenses actually and reasonably incurred by or on
behalf of Indemnitee in connection therewith. If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters
in such Proceeding, the Corporation shall indemnify Indemnitee against all
Expenses actually and reasonably incurred by or on behalf of Indemnitee in
connection with each successfully resolved claim, issue or matter. For
purposes of this Section and without limitation, the termination of any
claim, issue or matter in such a Proceeding by dismissal, with or without
prejudice, shall be deemed to be a successful result as to such claim,
issue or matter.
2. Additional Indemnity. In addition to, and without regard to any
limitations on, the indemnification provided for in Section 1 of this Agreement,
the Corporation shall and hereby does indemnify and hold harmless Indemnitee
against all Expenses, judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by Indemnitee or on Indemnitee's behalf if, by
reason of Indemnitee's Corporate Status, Indemnitee is, or is threatened to be
made, a party to or participant in any Proceeding (including a Proceeding by or
in the right of the Corporation), including, without limitation, all liability
arising out of the negligence or active or passive wrongdoing of Indemnitee. The
only limitation that shall exist upon the Corporation's obligations pursuant to
this Agreement shall be that the Corporation shall not be obligated to make any
payment to Indemnitee that is finally determined (under the procedures, and
subject to the presumptions, set forth in Sections 6 and 7 below) to be
unlawful.
3. Contribution.
(a) Whether or not the indemnification provided in Sections 1 and 2
above is available, in respect of any threatened, pending or completed
action, suit or proceeding in which the Corporation is jointly liable with
Indemnitee (or would be if joined in such action, suit or proceeding), the
Corporation shall pay, in the first instance, the entire amount of any
judgment or settlement of such action, suit or proceeding without
requiring Indemnitee to contribute to such payment and the Corporation
hereby waives and relinquishes any right of contribution it may have
against Indemnitee. The Corporation shall not enter into any settlement of
any action, suit or proceeding in which the Corporation is jointly liable
with Indemnitee (or would be if joined in such action, suit or proceeding)
unless such settlement provides for a full and final release of all claims
asserted against Indemnitee.
(b) Without diminishing or impairing the obligations of the
Corporation set forth in the preceding paragraph, if, for any reason,
Indemnitee shall elect or be required to pay all or any portion of any
judgment or settlement in any threatened, pending or completed action,
suit or proceeding in which the Corporation is jointly liable with
Indemnitee (or would be if joined in such action, suit or proceeding), the
Corporation shall contribute to the amount of Expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred and paid or payable by Indemnitee in proportion to
the relative benefits received by the Corporation and all officers,
directors or employees of the Corporation, other than Indemnitee, who are
jointly liable with Indemnitee (or would be if joined in such action, suit
or proceeding), on the one hand, and Indemnitee on the other hand, from
the transaction from which such action, suit or proceeding arose;
provided, however, that the proportion determined on the basis of relative
benefit may, to the extent necessary to conform to law, be further
adjusted by reference to the relative fault of the Corporation and all
officers, directors or employees of the Corporation other than Indemnitee
who are jointly liable with Indemnitee (or would be if joined in such
action, suit or proceeding), on the one hand, and Indemnitee, on the other
hand, in connection with the events that resulted in such expenses,
judgments, fines or settlement amounts, as well as any other equitable
considerations which the law may require to be considered. The relative
fault of the Corporation and all officers, directors or employees of the
Corporation, other than Indemnitee, who are jointly liable with Indemnitee
(or would be if joined in such action, suit or proceeding), on the one
hand, and Indemnitee, on the other hand, shall be determined by reference
to, among other things, the degree to which their actions were motivated
by intent to gain personal profit or advantage, the degree to which their
liability is primary or secondary and the degree to which their conduct is
active or passive.
(c) The Corporation hereby agrees to fully indemnify and hold
Indemnitee harmless from any claims of contribution which may be brought
by officers, directors or employees of the Corporation, other than
Indemnitee, who may be jointly liable with Indemnitee.
(d) To the fullest extent permissible under applicable law, if the
indemnification provided for in this Agreement is unavailable to
Indemnitee for any reason whatsoever, the Corporation, in lieu of
indemnifying Indemnitee, shall contribute to the amount incurred by
Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts
paid or to be paid in settlement and/or for Expenses, in connection with
any claim relating to an indemnifiable event under this Agreement, in such
proportion as is deemed fair and reasonable in light of all of the
circumstances of such Proceeding in order to reflect (i) the relative
benefits received by the Corporation and Indemnitee as a result of the
event(s) and/or transaction(s) giving cause to such Proceeding; and/or
(ii) the relative fault of the Corporation (and its directors, officers,
employees and agents) and Indemnitee in connection with such event(s)
and/or transaction(s).
4. Indemnification for Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of
Indemnitee's Corporate Status, a witness in any Proceeding to which Indemnitee
is not a party, Indemnitee shall be indemnified against all Expenses actually
and reasonably incurred by or on Indemnitee's behalf in connection therewith.
5. Expenses Payable in Advance. The Corporation shall advance all Expenses
reasonably incurred by or on behalf of Indemnitee in connection with any
Proceeding by reason of Indemntitee's Corporate Status promptly after receipt by
the Corporation of a statement or statements from Indemnitee requesting such
advance or advances from time to time, whether prior to or after final
disposition of such Proceeding. Such statement or statements shall reasonably
evidence the Expenses incurred by Indemnitee and shall include or be preceded or
accompanied by an undertaking by or on behalf of Indemnitee to repay any
Expenses advanced if it shall ultimately be determined that Indemnitee is not
entitled to be indemnified against such Expenses. Any advances and undertakings
to repay pursuant to this Section 3 shall be unsecured and interest free.
6. Procedures and Presumptions for Determination of Entitlement to
Indemnification. It is the intent of this Agreement to secure for Indemnitee
rights of indemnity that are as favorable as may be permitted under the Delaware
General Corporation Law and public policy of the State of Delaware. Accordingly,
the parties agree that the following procedures and presumptions shall apply in
the event of any question as to whether Indemnitee is entitled to
indemnification under this Agreement:
(a) To obtain indemnification under this Agreement, Indemnitee shall
submit to the Corporation a written request, including therein or
therewith such documentation and information as is reasonably available to
Indemnitee and is reasonably necessary to determine whether and to what
extent Indemnitee is entitled to indemnification. The Secretary of the
Corporation shall, promptly upon receipt of such a request for
indemnification, advise the Board of Directors in writing that Indemnitee
has requested indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant
to the first sentence of Section 6(a) above, a determination, if required
by applicable law, with respect to Indemnitee's entitlement thereto shall
be made in the specific case, in a reasonably prompt manner, by one of the
following methods, which shall be at the election of the Corporation's
Board of Directors (the "Board"): (i) by a majority vote of directors who
were not parties to such Proceeding, whether or not they constitute a
quorum of the Board, (ii) by a Board committee designated by a majority
vote of directors who were not parties to such Proceeding, whether or not
they constitute a quorum, (iii) if there are no such directors who were
not parties to such Proceeding, or if such directors so direct, or
following a Change in Control (as defined in Section 13 below), by
Independent Legal Counsel (as defined in Section 13 below) in a written
opinion to the Board, a copy of which shall be delivered to Indemnitee,
(iv) by the stockholders of the Corporation, or (v) as Delaware law may
otherwise permit. Notwithstanding the foregoing in this Section 6(b), to
the extent that Indemnitee has been successful on the merits or otherwise
in defense of any Proceeding, or in defense of any claim, issue or matter
therein, Indemnitee shall be indemnified against Expenses actually and
reasonably incurred by Indemnitee in connection therewith, without the
necessity of authorization in the specific case.
(c) If the determination of entitlement to indemnification is to be
made by Independent Legal Counsel pursuant to Section 6(b)(iii) above, the
Independent Legal Counsel shall be selected as provided in this Section
6(c). The Independent Legal Counsel shall be selected by the Board.
Indemnitee may, within ten (10) days after such written notice of
selection shall have been given, deliver to the Corporation, as the case
may be, a written objection to such selection; provided, however, that
such objection may be asserted only on the ground that the Independent
Legal Counsel so selected does not meet the requirements of "Independent
Legal Counsel" as defined in Section 13 of this Agreement, and the
objection shall set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the person so selected
shall act as Independent Legal Counsel. If a written objection is made and
substantiated, the Independent Legal Counsel selected may not serve as
Independent Legal Counsel unless and until such objection is withdrawn or
a court has determined that such objection is without merit. If, within
twenty (20) days after submission by Indemnitee of a written request for
indemnification pursuant to Section 6(a) hereof, no Independent Legal
Counsel shall have been selected and not objected to, either the
Corporation or Indemnitee may petition the Court of Chancery of the State
of Delaware or other court of competent jurisdiction for resolution of any
objection which shall have been made by Indemnitee to the Corporation's
selection of Independent Legal Counsel and/or for the appointment as
Independent Legal Counsel of a person selected by the court or such other
person as the court shall designate, and the person with respect to whom
all objections are so resolved or the person so appointed shall act as
Independent Legal Counsel under Section 6(b) hereof. The Corporation shall
pay any and all reasonable fees and expenses of Independent Legal Counsel
incurred by such Independent Legal Counsel in connection with acting
pursuant to Section 6(b) hereof, and the Corporation shall pay all
reasonable fees and expenses incident to the procedures of this Section
6(c), regardless of the manner in which such Independent Legal Counsel was
selected or appointed.
(d) In making the determination with respect to entitlement to
indemnification hereunder, the person or persons or entity making such
determination shall presume that Indemnitee is entitled to indemnification
under this Agreement. Anyone seeking to overcome this presumption shall
have the burden of proof and the burden of persuasion by clear and
convincing evidence. Neither the failure of the Corporation (including by
its directors or independent legal counsel) to have made a determination
prior to the commencement of any action pursuant to this Agreement that
Indemnification is proper in the circumstances because Indemnitee has met
the applicable standard of conduct, nor any actual determination by the
Corporation (including by its directors or independent legal counsel) that
Indemnitee has not met such applicable standard of conduct, shall be a
defense to the action or create a presumption that Indemnitee has not met
the applicable standard of conduct.
(e) For purposes of any determination under this Section 6,
Indemnitee shall be deemed to have acted in good faith if Indemnitee's
action is based on (i) the records or books of account of the Corporation
or another enterprise, or on information supplied to Indemnitee by the
officers of the Corporation or another enterprise in the course of their
duties, or (b) the advice of legal counsel for the Corporation or another
enterprise, or on information or records given or reports made to the
Corporation or another enterprise by an independent certified public
accountant, independent financial adviser, appraiser or other expert
selected with reasonable care by the Corporation or other enterprise. In
addition, the knowledge and/or actions, or failure to act, of any
director, officer, agent or employee of the Corporation or other
enterprise shall not be imputed to Indemnitee for purposes of determining
the right to indemnification under this Agreement. Whether or not the
foregoing provisions of this Section 6(e) are satisfied, it shall in any
event be presumed that Indemnitee has at all times acted in good faith and
in a manner Indemnitee reasonably believed to be in or not opposed to the
best interests of the Corporation. Anyone seeking to overcome this
presumption shall have the burden of proof and the burden of persuasion by
clear and convincing evidence.
(f) If the person, persons or entity empowered or selected under
Section 6 to determine whether Indemnitee is entitled to indemnification
shall not have made a determination within 60 days after receipt by the
Corporation of the request therefor, the requisite determination of
entitlement to indemnification shall be deemed to have been made and
Indemnitee shall be entitled to such indemnification absent (i) a
misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitiee's statement not materially
misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law; provided,
however, that such sixty- (60)- day period may be extended for a
reasonable time, not to exceed an additional thirty (30) days, if the
person, persons or entity making such determination with respect to
entitlement to indemnification in good faith requires such additional time
to obtain or evaluate documentation and/or information relating thereto;
and provided, further, that the foregoing provisions of this Section 6(f)
shall not apply if the determination of entitlement to indemnification is
to be made by the stockholders pursuant to Section 6(b) of this Agreement
and if (A) within fifteen (15) days after receipt by the Corporation of
the request for such determination, the Board and the directors who were
not parties to such Proceeding, if appropriate, resolve to submit such
determination to the stockholders for their consideration at an annual
meeting thereof to be held within seventy-five (75) days after such
receipt and such determination is made thereafter, or (B) a special
meeting of stockholders is called within fifteen (15) days after such
receipt for the purposes of making determination, such meeting is held for
such purpose within sixty (60) days after having been so called and such
determination is made thereat.
(g) Indemnitee shall cooperate with the person, persons or entity
making such determination with respect to Indemnitee's entitlement to
indemnification, including providing to such person, persons or entity
upon reasonable advance request any documentation or information which is
not privileged or otherwise protected from disclosure and which is
reasonably available to Indemnitee and reasonably necessary to such
determination. Any Independent Legal Counsel, member of the Board or
stockholder of the Corporation shall act reasonably and in good faith in
making a determination regarding the Indemnitee's entitlement to
indemnification under this Agreement. Any costs or expenses (including
attorneys' fees and disbursements) incurred by Indemnitee in so
cooperating with the person, persons or entity making such determination
shall be borne by the Corporation (irrespective of the determination as to
Indemnitee's entitlement to indemnification) and the Corporation hereby
indemnifies and agrees to hold Indemnitee harmless therefrom.
(h) The Corporation acknowledges that a settlement or other
disposition short of final judgment may be successful if it permits a
party to avoid expense, delay, distraction, disruption and uncertainty. In
the event that any action, claim or proceeding to which Indemnitee is a
party is resolved in any manner other than by adverse judgment against
Indemnitee (including, without limitation, settlement of such action,
claim or proceeding with or without payment of money or other
consideration) it shall be presumed that Indemnitee has been successful on
the merits or otherwise in such action, suit or proceeding. Anyone seeking
to overcome the presumption shall have the burden of proof and the burden
of persuasion by clear and convincing evidence.
(i) The termination of any Proceeding, or of any claim, issue or
matter therein, by judgment, order, settlement or conviction, or upon a
plea of nolo contendere or its equivalent, shall not (except as otherwise
expressly provided in this Agreement) of itself adversely affect the right
of Indemnitee to indemnification or create a presumption that Indemnitee
did not act in good faith and in a manner which Indemnitee believed to be
in or not opposed to the best interests of the Corporation, and, with
respect to any criminal Proceeding, that Indemnitee had reasonable cause
to believe that the conduct was unlawful.
7. Remedies of Indemnitee.
(a) In the event that (i) a determination is made pursuant to
Section 6 of this Agreement that Indemnitee is not entitled to
indemnification under this Agreement, (ii) advancement of Expenses is not
timely made pursuant to Section 5 of this Agreement, (iii) no
determination of entitlement to indemnification is made pursuant to
Section 6(b) of this Agreement within ninety (90) days after receipt by
the Corporation of the request for indemnification, (iv) payment of
indemnification is not made pursuant to this Agreement within thirty (30)
days after receipt by the Corporation of a written request therefor or (v)
payment of indemnification is not made within thirty (30) days after a
determination has been made that Indemnitee is entitled to indemnification
or such determination is deemed to have been made pursuant to Section 6 of
this Agreement, Indemnitee shall be entitled to an adjudication in an
appropriate court of the State of Delaware, or in any other court of
competent jurisdiction, of Indemnitee's entitlement to such
indemnification. Indemnitee shall commence such proceeding seeking an
adjudication within 180 days following the date on which Indemnitee first
has the right to commence such proceeding pursuant to this Section 7(a).
The Corporation shall not oppose Indemnitee's right to seek any such
adjudication.
(b) In the event that a determination shall have been made pursuant
to Section 6(b) of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding commenced pursuant to this
Section 7 shall be conducted in all respects as a de novo trial on the
merits, and Indemnitee shall not be prejudiced by reason of the adverse
determination under Section 6(b).
(c) If a determination shall have been made pursuant to Section 6(b)
of this Agreement that Indemnitee is entitled to indemnification, the
Corporation shall be bound by such determination in any judicial
proceeding commenced pursuant to this Section 7, absent (i) a misstatement
by Indemnitee of a material fact, or an omission of a material fact
necessary to make Indemnitee's misstatement not materially misleading in
connection with the application for indemnification, or (ii) a prohibition
of such indemnification under applicable law.
(d) In the event that Indemnitee, pursuant to this Section 7, seeks
a judicial adjudication of Indemnitee's rights under, or to recover
damages for breach of, this Agreement, or to recover under any directors'
and officers' liability insurance policies maintained by the Corporation,
the Corporation shall pay on Indemnitee's behalf, in advance, any and all
expenses (of the types described in the definition of Expenses in Section
13 of this Agreement) actually and reasonably incurred by Indemnitee in
such judicial adjudication, regardless of whether Indemnitee ultimately is
determined to be entitled to such indemnification, advancement of expenses
or insurance recovery.
(e) The Corporation shall be precluded from asserting in any
judicial proceeding commenced pursuant to this Section 7 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court that the Corporation is
bound by all the provisions of this Agreement. The Corporation shall
indemnify Indemnitee against any and all Expenses and, if requested by
Indemnitee, shall (promptly after receipt by the Corporation of a written
request therefor) advance, to the extent not prohibited by law, such
expenses to Indemnitee, which are incurred by Indemnitee in connection
with any action brought by Indemnitee for indemnification or advance of
Expenses from the Corporation under this Agreement or under any directors'
and officers' liability insurance policies maintained by the Corporation,
regardless of whether Indemnity ultimately is determined to be entitled to
such indemnification, advancement of Epenses or insurance recovery, as the
case may be.
(f) Notwithstanding anything in this Agreement to the contrary, no
determination as to entitlement to indemnification under this Agreement
shall be required to be made prior to the final disposition of the
Proceeding.
8. Non-Exclusivity; Survival of Rights; Insurance; Subordination.
(a) The rights of indemnification as provided by this Agreement
shall not be deemed exclusive of any other rights to which Indemnitee may
at any time be entitled under applicable law, the Constituent Documents,
any agreement, a vote of stockholders, a resolution of directors or
otherwise. No amendment, alteration or repeal of this Agreement or of any
provision hereof shall limit or restrict any right of Indemnitee under
this Agreement in respect of any action taken or omitted by such
Indemnitee in Indemnitee's Corporate Status prior to such amendment,
alteration or repeal. To the extent that a change in the Delaware General
Corporation Law, whether by statute or judicial decision, permits greater
indemnification than would be afforded currently under the Bylaws and this
Agreement, it is the intent of the parties hereto that Indemnitee shall
enjoy by this Agreement the greater benefits so afforded by such change.
No right or remedy herein conferred is intended to be exclusive of any
other right or remedy given hereunder now or hereafter existing at law or
in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.
(b) To the extent the Corporation maintains an insurance policy or
policies providing liability insurance for directors and officers of the
Corporation or of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise that such person serves
at the request of the Corporation, 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 director, officer, employee,
agent or fiduciary under such policy or policies. If, at any time of the
receipt of a notice of a claim pursuant to the terms hereof, the
Corporation has director and officer liability insurance in effect, the
Corporation shall give prompt notice of the commencement of such
proceeding to the insurers in accordance with the procedures set forth in
the respective policies. The Corporation 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 proceeding in
accordance with the terms of such policies.
(c) In the event of any payment under this Agreement, the
Corporation 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 take all action necessary to secure such rights, including
execution of such documents as are necessary to enable the Corporation to
bring suit to enforce such rights.
(d) The Corporation shall not be liable under this Agreement to make
any payment of amounts otherwise indemnifiable hereunder if and to the
extent that Indemnitee has otherwise actually received such payment under
any insurance policy, contract, agreement or otherwise.
(e) The Corporation's obligation to indemnify or advance Expenses
hereunder to Indemnitee who is or was serving at the request of the
Corporation as a director, officer, employee or agent of any other
corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise shall be reduced by any amount Indemnitee has actually
received as indemnification or advance of expenses from such other
corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise.
9. Exception to Right to Indemnification. Notwithstanding any provision in
this Agreement, the Corporation shall not be obligated under this Agreement to
make any indemnity in connection with any clam made against Indemnitee:
(a) for which payment has actually been made to or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except
with respect to any excess beyond the amount paid under any insurance
policy or other indemnity provision; or
(b) for an accounting of profits made from the purchase and sale (or
sale and purchase) by Indemnitee of securities of the Corporation within
the meaning of Section 16(b) of the Securities Exchange Act of 1934, as
amended, or similar provisions of state statutory law or common law; or
(c) in connection with any Proceeding (or any part of any
Proceeding) initiated by Indemnitee, including any Proceeding (or any part
of any Proceeding) initiated by Indemnitee against the Corporation or its
directors, officers, employees or other indemnities, unless (i) the Board
of Directors of the Corporation authorized the Proceeding (or any part of
any Proceeding) prior to its initiation or (ii) the Corporation provides
the indemnification, in its sole discretion, pursuant to the powers vested
in the Corporation under applicable law.
10. Corporation's Right to Defend. Notwithstanding anything to the
contrary contained in this Agreement, in the event the Corporation shall be
obligated to pay the Expenses of Indemnitee with respect to a Proceeding, or any
claim, issue or matter therein, as provided in this Agreement, the Corporation
shall be entitled to assume the defense of such Proceeding, or such claim, issue
or matter therein, with counsel reasonably acceptable to Indemnitee, upon the
delivery to Indemnitee of written notice of by the Corporation 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 Corporation, the Corporation will not
be liable to Indemnitee under this Agreement for any Expenses of counsel
subsequently incurred by Indemnitee with respect to the same Proceeding, or such
claim, issue or matter therein, provided that (a) Indemnitee shall have the
right to employ Indemnitee's own counsel in such action, suit or proceeding at
Indemnitee's expense and (b) if (i) the employment of counsel by Indemnitee has
been previously authorized in writing by the Corporation, (ii) counsel to the
Corporation or Indemnitee shall have reasonably concluded that there may be a
conflict of interest or position, or reasonably believes that a conflict is
likely to arise, on any significant issue between the Corporation and Indemnitee
in the conduct of any such defense or (iii) the Corporation shall not have
employed counsel to assume the defense of such Proceeding, or such claim, issue
or matter therein, then the Expenses of Indemnitee's counsel shall be at the
expense of the Corporation, except as otherwise expressly provided by this
Agreement. The Corporation shall not be entitled, without the consent of
Indemnitee, to assume the defense of any claim brought by or in the right of the
Corporation or as to which counsel for the Corporation or Indemnitee shall have
reasonably made the conclusion provided for in clause (ii) above.
11. Duration of Agreement. All agreements and obligations of the
Corporation contained herein shall continue during the period Indemnitee is an
officer or director of the Corporation (or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise) and shall
continue thereafter so long as Indemnitee shall be subject to any Proceeding (or
any proceeding commenced under Section 7 hereof) by reason of Indemnitee's
Corporate Status, whether or not Indemnitee is acting or serving in any such
capacity at the time any liability or expense is incurred for which
indemnification can be provided under this Agreement. 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 or assets of the Corporation), assigns,
spouses, heirs, executors and personal and legal representatives.
12. Enforcement.
(a) The Corporation expressly confirms and agrees that it has
entered into this Agreement and assumes the obligations imposed on it
hereby in order to induce Indemnitee to continue to serve as an officer or
director of the Corporation, and the Corporation acknowledges that
Indemnitee is relying upon this Agreement in continuing to serve as an
officer or director of the Corporation.
(b) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes
all prior agreements and understandings, oral, written and implied,
between the parties hereto with respect tot the subject matter hereof.
13. Definitions. For purposes of this Agreement:
(a) "Change in Control" shall mean the date on which the earlier of
the following events occur: (a) the acquisition by any entity, person or
group (other than ZAM Holdings, L.P., LJCB Nominees Pty Ltd., Xxxxxxx X.
Xxxxxxxx, or any entity related to any such party) of beneficial
ownership, as that term is defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended, of more than 50% of the outstanding
capital stock of the Corporation entitled to vote for the election of
directors ("Voting Stock"); (b) the merger or consolidation of the
Corporation with one or more corporations or other entity as a result of
which the holders of outstanding Voting Stock of the Corporation
immediately prior to such a merger or consolidation hold less than 60% of
the Voting Stock of the surviving or resulting corporation or any direct
or indirect parent corporation or entity of such surviving or resulting
entity; (c) the sale or transfer of all or substantially all of the
property of the Corporation other than to an entity of which the
Corporation owns at least 80% of the Voting Stock; or (d) during any
period of twenty-four (24) consecutive months, the individuals who, at the
beginning of such period, constitute the Board of Directors (the
"Incumbent Directors") cease for any reason other than death to constitute
at least a majority thereof; provided, however, that a director who was
not a director at the beginning of such 24-month period shall be deemed to
have satisfied such 24-month requirement (and be an Incumbent Director) if
such director was elected by, or on the recommendation of or with the
approval of, at least two-thirds of the directors who then qualified as
Incumbent Directors either actually (because they were directors at the
beginning of such 24-month period) or through the operation of this
proviso. Notwithstanding the foregoing, a Change in Control shall not
include any acquisition in which Indemnitee is a member of the acquiring
group or an officer or owner of the acquiring entity.
(b) "Corporate Status" describes the status of a person who is or
was a director, officer, employee, agent or fiduciary of the Corporation
or of any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise that such person is or was serving at the
express written request of the Corporation.
(c) "Expenses" shall include all reasonable attorneys' fees,
retainers, court costs, transcript costs, fees of experts, witness fees,
travel expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, participating,
or being or preparing to be a witness in a Proceeding. Expenses also shall
include Expenses incurred in connection with any appeal resulting from any
Proceeding, including, without limitation, the premium, security for, and
other costs relating to any cost bond, supersedeas bond, or other appeal
bond or its equivalent. Expenses, however, shall not include amounts paid
in settlement by Indemnitee or the amount of judgments or fines against
Indemnitee.
(d) "Independent Legal Counsel" means a law firm, or a member of a
law firm, that is experienced in matters of corporation law and neither
presently is, nor in the past five (5) years has been, retained to
represent: (i) the corporation or Indemnitee in any matter material to
either such party (other than with respect to matters concerning
Indemnitee under this Agreement, or of other indemnitees under similar
indemnification agreements), or (ii) any other party to the Proceeding
giving rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term "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
corporation or Indemnitee in an action to determine Indemnitee's rights
under this Agreement. The Corporation agrees to pay the reasonable fees of
the Independent Legal Counsel referred to above and to fully indemnify
such counsel against any and all Expenses, claims, liabilities and damages
arising out of or relating to this Agreement or its engagement pursuant
hereto.
(e) "Proceeding" includes any threatened, pending or completed
action, suit, arbitration, alternate dispute resolution mechanism,
investigation, inquiry, administrative hearing or any other actual,
threatened or completed proceeding, whether brought by or in the right of
the Corporation or otherwise and whether civil, criminal, administrative
or investigative, in which Indemnitee was, is or will be involved as a
party or otherwise, by reason of the fact that Indemnitee is or was an
officer or director of the Corporation, by reason of any action taken by
Indemnitee or of any inaction on Indemnitee's part while acting as an
officer or director of the Corporation, or by reason of the fact that
Indemnitee is or was serving at the request of the Corporation as a
director, officer, employee, agent or fiduciary of another corporation,
partnership, joint venture, trust or other enterprise; in each case
whether or not Indemnitee is acting or serving in any such capacity at the
time any liability or expense is incurred for which indemnification can be
provided under this Agreement; including one pending on or before the date
of this Agreement but excluding one initiated by Indemnitee pursuant to
Section 5 above to enforce Indemnitee's rights under this Agreement.
14. Severability. The invalidity or unenforceabilty of any provision
hereof shall in no way affect the validity or enforceability of any other
provision. Without limiting the generality of the foregoing, this Agreement is
intended to confer upon Indemnitee indemnification rights to the fullest extent
permitted by applicable laws. In the event any provision hereof conflicts with
any applicable law, such provision shall be deemed modified, consistent with the
aforementioned intent, to the extent necessary to resolve such conflict.
15. Modification and Waiver. No supplement, modification, termination 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 be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.
16. Notice by Indemnitee. Indemnitee agrees promptly to notify the
Corporation in writing upon being served with or otherwise receiving any
summons, citation, subpoena, complaint, indictment, information or other
document relating to any Proceeding or matter which may be subject to
indemnification covered hereunder. The failure to so notify the Corporation
shall not relieve the Corporation of any obligation which it may have to
Indemnitee under this Agreement or otherwise, unless and only to the extent that
such failure or delay materially prejudices the Corporation.
17. Notices. All notices and other communications given or made pursuant
to this Agreement shall be in writing and shall be deemed effectively given: (a)
upon personal delivery to the party to be notified, (b) when sent by confirmed
electronic mail or facsimile if sent during normal business hours of the
recipient, and if not so confirmed, then on the next business day, (c) five (5)
days after being sent by registered or certified mail, return receipt requested,
postage prepaid, or (d) one (1) business day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent:
(a) To Indemnitee at the address set forth below Indemnitee's
signature hereto; and
(b) To the Corporation at the address set forth below the
Corporation's signature hereto;
or, to such other address as a party hereto shall indicate, by notice to the
other in accordance herewith, from time to time.
18. Counterparts; Facsimile. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute one and the same instrument. This Agreement may also
be executed and delivered by facsimile or other similar electronic transmission
and shall have the same force and effect as an original.
19. Headings. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute a part of
this Agreement or to affect construction thereof.
20. Governing Law and Consent to Jurisdiction. This Agreement and the
legal relations among the parties hereto shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware, without regard
to its conflict of laws rules. The Corporation and Indemnitee each hereby
irrevocably and unconditionally (i) agrees that any action or proceeding arising
out of or in connection with this Agreement shall be brought only in the
Chancery Court of the State of Delaware (the "Delaware Court") and not in any
other state or federal court in the United States of America or any court in any
other country, (ii) consents to submit to the exclusive jurisdiction of the
Delaware Court for purposes of any action or proceeding arising out of or in
connection with this Agreement, (iii) appoints, to the extent such party is not
otherwise subject to service of process in the State of Delaware, irrevocably
[CT Corporation] as its agent in the State of Delaware as such party's agent for
acceptance of legal process in connection with any such action or proceeding
against such party with the same legal force and validity as if served upon such
party personally within the State of Delaware, (iv) waives any objection to the
laying of venue of any such action or proceeding in the Delaware Court, and (v)
waives, and agrees not to plead or to make, any claim that any such action or
proceeding brought in the Delaware Court has been brought in an improper or
inconvenient forum.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as
of the day and year first above written.
CORPORATION: INDEMNITEE:
COSI, INC.
By: Name:
--------------------------------- --------------------------------
Name:
------------------------------
Title:
-----------------------------
Address for Notices: Address for Notices:
-------------------- --------------------
______________________________________
Cosi, Inc. ______________________________________
0000 Xxxx Xxxx Xxxx, 0xx Floor ______________________________________
Xxxxxxxxx, XX 00000 Telephone: ___________________________
Attn: Corporate Secretary Cell Phone:___________________________
Telephone: (000) 000-0000 or Facsimile:____________________________
(000) 000-0000 Email: _______________________________
With a copy to:
---------------
Cosi, Inc.
0000 Xxxx Xxxx Xxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Attn: General Counsel
Telephone: (000) 000-0000 or
(000) 000-0000
Facsimile: (000) 000-0000
