**Exhibit 10.ee**

 

**INDEMNIFICATION AGREEMENT**

 

THIS INDEMNIFICATION AGREEMENT is made and entered into this      day of                    ,          (“Agreement”), by and between Longs Drug StoresCorporation, a Maryland corporation (the “Company”), and                      (“Indemnitee”). 

 

WHEREAS, at the request of the Company, Indemnitee currently serves as anofficer of the Company (“Officer”) and may, therefore, be subjected to claims, suits or proceedings arising as a result of his service; and 

 

WHEREAS, as an inducement to Indemnitee to continue to serve as such Officer, the Company has agreed to indemnify and to advance expenses and costsincurred by Indemnitee in connection with any such claims, suits or proceedings, to the fullest extent permitted by law; and 

 

WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses; 

 

NOW, THEREFORE, in consideration of the premises and the covenants containedherein, the Company and Indemnitee do hereby covenant and agree as follows: 

 

Section 1. Definitions. For purposes of this Agreement: 

 

(a) “Change in Control” means a change in control of the Company occurring after the Effective Date of a nature that would be required to bereported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934 (the “Act”), whether or not the Company is thensubject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if after the Effective Date (i) any “person” (as such term is used in Sections 13(d) and 14(d) ofthe Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of the Company’s then outstandingsecurities without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person attaining such percentage interest; (ii) there occurs a proxy contest, or the Company is a party to amerger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in officeimmediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) during any period of two consecutive years, other than as a result of an event described in clause (a)(ii) of this Section1, individuals who at the beginning of such period constituted the Board of Directors (including for this purpose any new director whose election or nomination for election by the Company’s stockholders was approved by a vote of at leasttwo-thirds of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board of Directors. 

 

(b) “Corporate Status” means the status of a person who is or was a director, trustee, officer, employee or agentof the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the request of the Company. 

(c) “Effective Date” means the date set forth in the first paragraph of this Agreement.

 

(d) “Expenses” shall include all reasonableattorneys’ 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 expensesof the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding. 

 

(e) “Independent Counsel” means a law firm, or a member of a law firm, selected by the Board of Directors by voteas set forth in Section 9(b), that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party, 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 conductthen 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. 

 

(f) “Proceeding” includes any threatened, pending or completed action, suit, arbitration, alternate disputeresolution mechanism, investigation, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative (including on appeal), except one (i) initiated by an Indemnitee pursuant to Section 11 of this Agreementto enforce his rights under this Agreement or (ii) pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee. 

 

Section 2. Services by Indemnitee. Indemnitee will serve as an Officer of the Company. However, this Agreement shallnot impose any obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company beyond any period otherwise required by law or by other agreements or commitments of the parties, if any. 

 

Section 3. Indemnification - General. The Company shall indemnify, andadvance Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise to the fullest extent permitted by Maryland law in effect on the date hereof and as amended from time to time; provided, however, that no change in Maryland lawshall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the date hereof. The rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set forth inthe other sections of this Agreement, including any additional indemnification permitted by the Maryland General Corporation Law (“MGCL”). 

 

Section 4. Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnificationprovided in this Section 4 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed Proceeding, other than a Proceeding by or in the right of the 

 

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Company. Pursuant to this Section 4, Indemnitee shall be indemnified against all Expenses, judgments, penalties, fines and amounts paid in settlementactually and reasonably incurred by him or on his behalf in connection with a Proceeding by reason of his Corporate Status unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to the Proceedingand (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty, (ii) Indemnitee actually received an improper personal benefit in money, property or services, or (iii) in the case of any criminal Proceeding, Indemniteehad reasonable cause to believe that his conduct was unlawful. 

 

Section 5. Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 5 if, by reason of his Corporate Status, he is, or is threatened to be, made a party toor a witness in any threatened, pending or completed Proceeding brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 5, Indemnitee shall be indemnified against all amounts paid in settlement and allExpenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to such a Proceeding and (a) wascommitted in bad faith or (b) was the result of active and deliberate dishonesty or (ii) Indemnitee actually received an improper personal benefit in money, property or services. 

 

Section 6. Court-Ordered Indemnification. Notwithstanding any other provision of this Agreement, a court ofappropriate jurisdiction, upon application of an Officer and such notice as the court shall require, may order indemnification in the following circumstances: 

 

(a) if it determines an Officer is entitled to reimbursement under the MGCL, the court shall order indemnification, in which case the Officer shall beentitled to recover the expenses of securing such reimbursement; or 

 

(b) if it determines that the Officer is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not the Officer (i) has met the standards of conduct set forth in the MGCL or (ii) has beenadjudged liable for receipt of an improper personal benefit under the MGCL, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or inwhich liability shall have been adjudged in the circumstances described in the MGCL shall be limited to Expenses. 

 

Section 7. Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, andwithout limiting any such provision, to the extent that Indemnitee is, by reason of his Corporate Status, made a party to and is successful, on the merits or otherwise, in the defense of any Proceeding, he shall be indemnified for all Expensesactually and reasonably incurred by him or on his behalf 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 mattersin such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter. For purposes of thisSection 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. 

 

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Section 8. Advance of Expenses. The Company shall advance all reasonable Expenses incurred by oron behalf of Indemnitee in connection with any Proceeding to which Indemnitee is, or is threatened to be, made a party or a witness, within ten days after the receipt by the Company of a statement or statements from Indemnitee requesting suchadvance 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 awritten affirmation by Indemnitee of Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertaking by or on behalf ofIndemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse any Expenses advanced to Indemnitee if it shallultimately be determined that such standard of conduct has not been met or as required by Section 7 if Indemnitee is wholly or partly unsuccessful. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalfof Indemnitee and shall be accepted without reference to Indemnitee’s financial ability to repay such advanced Expenses. 

 

Section 9. Procedure for Determination of Entitlement to Indemnification. 

 

(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, includingtherein 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 Company 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 9(a) hereof, a determination, if required byapplicable law, with respect to Indemnitee’s entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board of Directors, a copy of whichshall be delivered to Indemnitee; or (ii) if a Change of Control shall not have occurred, (A) by the Board of Directors (or a duly authorized committee thereof) by a majority vote of a quorum, or (B) if a quorum of the Board of Directors is notobtainable or, even if obtainable, such quorum so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, or (C) if so directed by a majority of the members of the Board ofDirectors, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. 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 notprivileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including reasonable attorneys’ fees and disbursements) incurred byIndemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby agrees toindemnify and hold Indemnitee harmless therefrom. 

 

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Section 10. Presumptions and Effect of Certain Proceedings. 

 

(a) In making a determination with respect to entitlement to indemnificationhereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of thisAgreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption. 

 

(b) The termination of any Proceeding by judgment, order, settlement, conviction, a plea of nolocontendere orits equivalent, or an entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification. 

 

Section 11. Remedies of Indemnitee. 

 

(a) If (i) a determination is made pursuant to Section 9 of this Agreementthat Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant toSection 9(b) of this Agreement within 30 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 7 of this Agreement within ten days after receipt by the Company of awritten request therefor, or (v) payment of indemnification is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court ofthe State of Maryland, or in any other court of competent jurisdiction, of his entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a singlearbitrator pursuant to the commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemniteefirst has the right to commence such proceeding pursuant to this Section 11(a); provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce his rights under Section 7 of this Agreement.

 

(b) In any judicial proceeding or arbitration commencedpursuant to this Section 11 the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be. 

 

(c) If a determination shall have been made pursuant to Section 9(b) of this Agreement that Indemnitee is entitled toindemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 11, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary tomake Indemnitee’s statement not materially misleading, in connection with the request for indemnification. 

 

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(d) In the event that Indemnitee, pursuant to this Section 11, seeks a judicial adjudication of or anaward in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually andreasonably incurred by him in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expensessought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated. 

 

Section 12. Defense of the Underlying Proceeding. 

 

(a) Indemnitee shall notify the Company promptly upon being served with or receiving any summons, citation, subpoena, complaint, indictment, information,notice, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder; provided, however, that the failure to give any such notice shall not disqualify Indemnitee from theright, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company’s ability to defend in such Proceeding or to obtain proceeds under any insurance policy ismaterially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced. 

 

(b) Subject to the provisions of the last sentence of this Section 12(b) and of Section 12(c) below, the Company shall have the right to defend Indemniteein any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section12(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i)includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonablysatisfactory to Indemnitee. This Section 12(b) shall not apply to a Proceeding brought by Indemnitee under Section 11 above or Section 18 below. 

 

(c) Notwithstanding the provisions of Section 12(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s CorporateStatus, (i) Indemnitee reasonably concludes, based upon an opinion of Independent Counsel, that he may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding,(ii) Indemnitee reasonably concludes, based upon an opinion of Independent Counsel, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assumethe defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee’s choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at theexpense of the Company. In 

 

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addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes anyaction to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel ofIndemnitee’s choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company, to represent Indemnitee in connection with any such matter. 

 

Section 13. Non-Exclusivity; Survival of Rights; Insurance;Subrogation. 

 

(a) The rights of indemnification andadvance of Expenses 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 Charter or Bylaws of the Company, any agreement or a resolution of thestockholders entitled to vote generally in the election of directors or of the Board 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 underthis Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. 

 

(b) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery ofIndemnitee, 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 Company to bring suit to enforce such rights. 

 

(c) The Company shall not be liable under this Agreement to make any paymentof 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. 

 

Section 14. Insurance. The Company will use its reasonable bestefforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors of the Company, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee for service as adirector or officer of the Company and covering the Company for any indemnification or advance of expenses made by the Company to Indemnitee for any claims made against Indemnitee for service as a director or officer of the Company. Without in anyway limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments,penalties, fines, settlements and reasonable expenses incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in the previous sentence. 

 

Section 15. Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to theextent that Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party, he shall be advanced all reasonable Expenses and indemnifiedagainst all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. 

 

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Section 16. Duration of Agreement; Binding Effect. 

 

(a) This Agreement shall continue until and terminate ten years after thedate that Indemnitee shall have ceased to serve as a director, trustee, officer, employee, or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee served atthe request of the Company; provided, that the rights of Indemnitee hereunder shall continue until the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advance of Expenseshereunder and of any proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement relating thereto. 

 

(b) The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by theparties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to anIndemnitee who has ceased to be a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at therequest of the Company, and shall inure to the benefit of Indemnitee and his or her spouse, assigns, heirs, devisees, executors and administrators and other legal representatives. 

 

(c) The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation orotherwise) to all, substantially all or a substantial part, of the 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 samemanner and to the same extent that the Company would be required to perform if no such succession had taken place. 

 

Section 17. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reasonwhatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal orunenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of anysection of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby. 

 

Section 18. Exception to Right of Indemnification or Advance ofExpenses. Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to indemnification or advance of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee, unless (a) the Proceeding isbrought to enforce indemnification under this Agreement or otherwise or (b) the Company’s Bylaws, as amended, the Charter, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors oran agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise. 

 

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Section 19. Identical Counterparts. This Agreement may be executed in one or more counterparts,each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidencethe existence of this Agreement. 

 

Section 20. Headings.The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof. 

 

Section 21. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be bindingunless 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 acontinuing waiver. 

 

Section 22. Notice by Indemnitee.Indemnitee shall promptly notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification oradvance of Expenses covered hereunder. 

 

Section 23.Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communicationshall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed: 

 

(a) If to Indemnitee, to: The address set forth on the signature page hereto. 

 

(b) If to the Company to: 

 

Longs Drug Stores Corporation 

141 North Civic Drive 

P.O. Box 5222 

Walnut Creek, CA 94596 

Attn: Corporate Secretary 

 

or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be. 

 

Section 24. Governing Law. The parties agree that this Agreement shallbe governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without regard to its conflicts of laws rules. 

 

Section 25. Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. 

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first abovewritten. 

 

LONGS DRUG STORES CORPORATION

By:
 
 

Its:
 
 

By:
 
 

Its:
 
 

INDEMNITEE

 

Name:

Address:

 

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**EXHIBIT A**

 

FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED 

 

The Board of Directors of Longs Drug Stores Corporation 

 

Re: Undertaking to Repay Expenses Advanced 

 

Ladies and Gentlemen: 

 

This undertaking is being provided pursuant to that certain Indemnification Agreement dated the      day of                    , 200    , by and between Longs Drug Stores Corporation, a Maryland corporation (the“Company”), and the undersigned Indemnitee (the “Indemnification Agreement”), pursuant to which I am entitled to advance of expenses in connection with **[Description of Proceeding]** (the “Proceeding”). 

 

Terms used herein and not otherwise defined shall have the meaningsspecified in the Indemnification Agreement. 

 

I am subject tothe Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm that at all times, insofar as I was involved as an officer of the Company (“Officer”), in any of the factsor events giving rise to the Proceeding, I (1) acted in good faith and honestly, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe thatany act or omission by me was unlawful. 

 

In consideration ofthe advance of expenses by the Company for reasonable attorney’s fees and related expenses incurred by me in connection with the Proceeding (the “Advanced Expenses”), I hereby agree that if, in connection with the Proceeding, it isestablished that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personalbenefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the Advanced Expenses to the Company. 

 

****IN WITNESS WHEREOF, I have executed this Affirmation and Undertakingon this      day of                     , 200    . 

 

WITNESS: