Document:

EX-10.2

 Exhibit 10.2 

TAX MATTERS AGREEMENT 
 By and
Between 
 BARNES & NOBLE, INC. 

and 
 BARNES & NOBLE
EDUCATION, INC. 
 Dated as of [•] 

 TABLE OF CONTENTS 
  

					
		
	 	  	Page	 
	ARTICLE I	  			
		
	Definitions	  			
		
	 SECTION 1.01. Definition of Terms
	  	 	1	  
		
	ARTICLE II	  			
		
	Allocation of Tax Liabilities and Tax Benefits	  			
		
	 SECTION 2.01. B&N Indemnification of BNED
	  	 	5	  
	 SECTION 2.02. BNED Indemnification of B&N
	  	 	5	  
	 SECTION 2.03. Allocation of Transfer Taxes
	  	 	6	  
	 SECTION 2.04. Refunds, Credits and Offsets
	  	 	6	  
	 SECTION 2.05. Carrybacks
	  	 	7	  
		
	ARTICLE III	  			
		
	Tax Returns, Tax Contests and Other Administrative Matters	  			
		
	 SECTION 3.01. Responsibility for Preparing Tax Returns
	  	 	7	  
	 SECTION 3.02. Information Packages
	  	 	8	  
	 SECTION 3.03. Filing of Tax Returns and Payment of Taxes
	  	 	8	  
	 SECTION 3.04. Tax Contests
	  	 	8	  
	 SECTION 3.05. Expenses and Applicability
	  	 	9	  
		
	ARTICLE IV	  			
		
	Tax Matters Relating to the Transactions	  			
		
	 SECTION 4.01. Mutual Representations
	  	 	9	  
	 SECTION 4.02. Mutual Covenants
	  	 	9	  
	 SECTION 4.03. Restricted Actions
	  	 	10	  
	 SECTION 4.04. Consent to Take Certain Restricted Actions
	  	 	11	  
	 SECTION 4.05. Procedures Regarding Opinions and Rulings
	  	 	11	  
	 SECTION 4.06. Notification and Certification Regarding Certain Acquisition Transactions
	  	 	12	  
	 SECTION 4.07. Reporting
	  	 	12	  
	 SECTION 4.08. Tax Treatment of Certain Amounts Paid Pursuant to the EMA
	  	 	12	  

					
	ARTICLE V				
		
	Procedural Matters				
		
	 SECTION 5.01. Cooperation
		 	12	  
	 SECTION 5.02. Interest
		 	13	  
	 SECTION 5.03. Indemnification Claims and Payments
		 	13	  
	 SECTION 5.04. Amount of Indemnity Payments
		 	13	  
	 SECTION 5.05. Treatment of Indemnity Payments
		 	14	  
	 SECTION 5.06. Tax Disputes
		 	14	  
		
	ARTICLE VI				
		
	Miscellaneous				
		
	 SECTION 6.01. Termination
		 	14	  
	 SECTION 6.02. Survival
		 	14	  
	 SECTION 6.03. Separation Agreement
		 	14	  
	 SECTION 6.04. Confidentiality
		 	14	  
	 SECTION 6.05. Counterparts; Entire Agreement; Indemnification
		 	15	  
	 SECTION 6.06. Governing Law; Jurisdiction
		 	15	  
	 SECTION 6.07. Waiver of Jury Trial
		 	15	  
	 SECTION 6.08. Assignability
		 	15	  
	 SECTION 6.09. Third-Party Beneficiaries
		 	16	  
	 SECTION 6.10. Notices
		 	16	  
	 SECTION 6.11. Severability
		 	17	  
	 SECTION 6.12. Headings
		 	17	  
	 SECTION 6.13. Waivers of Default
		 	17	  
	 SECTION 6.14. Specific Performance
		 	17	  
	 SECTION 6.15. Amendments
		 	17	  
	 SECTION 6.16. Interpretation
		 	18	  
	 SECTION 6.17. Compliance by Subsidiaries
		 	18	  

 TAX MATTERS AGREEMENT (this “Agreement”), dated as of [•],
by and between BARNES & NOBLE, INC., a Delaware corporation (“B&N”), and BARNES & NOBLE EDUCATION, INC., a Delaware corporation (“BNED” and, together with B&N, the
“Parties”). 
 W I T N E S S E T H : 

WHEREAS BNED is a wholly-owned subsidiary of B&N and a member of the affiliated group of which B&N is the common parent; 

WHEREAS, pursuant to the Separation Agreement, B&N and BNED have effected or agreed to effect (i) the distribution by BNED of all of
the interests of NOOK Digital LLC, a Delaware limited liability company (“Digital”), to Barnes & Noble Booksellers, Inc., a Delaware corporation (“Booksellers”) (the “Digital
Distribution”); (ii) the distribution by Booksellers of all of its shares of BNED Capital Stock to B&N (the “Internal Distribution”); and (iii) the distribution by B&N to its shareholders all of the shares
of BNED Capital Stock received from Booksellers (the “External Distribution”, and together with the Digital Distribution and the Internal Distribution, the “Transactions”); and 

WHEREAS the Parties intend, with respect to: (i) the Digital Distribution, that it qualifies for non-recognition of income gain or loss
under Section 355 of the Code; (ii) the Internal Distribution, that it qualifies for non-recognition of income gain or loss under Section 355 of the Code; and (iii) the External Distribution, that it qualifies for non-recognition
of income gain or loss under Section 355 of the Code (the “Intended Tax Treatment”); 
 NOW, THEREFORE, in
consideration of the mutual covenants and agreements contained herein, the Parties hereby agree as follows: 
 ARTICLE I 

Definitions 
 SECTION
1.01. Definition of Terms. The following terms shall have the following meanings. Capitalized terms used but not defined in this Agreement shall have the meanings ascribed to them in the Separation Agreement. 

“10% Acquisition Transaction” has the meaning set forth in Section 4.06. 

“Active Trade or Business” means the active conduct (determined in accordance with Section 355(b) of the Code) of the
trade or business described in the Tax Opinion Representations for purposes of satisfying the requirements of Section 355(b) of the Code as it applies to the External Distribution with respect to BNED. 

“Agreement” has the meaning set forth in the preamble. 

“B&N” has the meaning set forth in the preamble. 

 “B&N Consolidated Group” means any consolidated, combined, unitary or
similar group of which (i) any member of the B&N Tax Group is or was a member and (ii) any member of the BNED Tax Group is or was a member. 

“B&N Subsidiary” means, at any time, any Subsidiary of B&N, including, before the External Distribution, BNED and any
BNED Subsidiary. 
 “B&N Tax Group” means the following Persons, taken together: (i) B&N and (ii) any
Person, other than a Member of the BNED Tax Group, that is or was a Subsidiary of B&N as of the External Distribution or at any time prior to the External Distribution. 

“BNED” has the meaning set forth in the preamble. 

“BNED Capital Stock” means (i) all classes or series of capital stock of BNED, (ii) all options, warrants and other
rights to acquire interests described in clause (i) and (iii) all other instruments properly treated as equity of BNED for U.S. Federal income Tax purposes. 

“BNED Subsidiary” means any Subsidiary of BNED, excluding Digital or any Subsidiary of Digital. 

“BNED Tax Group” means the following Persons, taken together: (i) BNED, (ii) any BNED Subsidiary and (iii) any
Person that was an BNED Subsidiary at any time prior to the External Distribution. 
 “Booksellers” has the meaning set
forth in the recitals. 
 “Code” means the Internal Revenue Code of 1986, as amended. 

“Determination” means (i) any final determination of liability in respect of a Tax that, under applicable Law, is not
subject to further appeal, review or modification through proceedings or otherwise (including the expiration of a statute of limitations or period for the filing of claims for refunds, amended Tax Returns or appeals from adverse determinations),
including a “determination” as defined in Section 1313(a) of the Code or execution of an IRS Form 870AD, or (ii) the payment of Tax by a Party (or its Subsidiary) that is responsible for payment of that Tax under applicable
Law, with respect to any item disallowed or adjusted by a Taxing Authority, as long as the responsible Party determines that no action should be taken to recoup that payment and the other Party agrees. 

“Digital” has the meaning set forth in the recitals. 

“Digital Distribution” has the meaning set forth in the recitals. 

“EMA” means the Employee Matters Agreement dated as of the date of this Agreement by and between B&N and BNED, including
the Schedules thereto. 
 “Existing Ruling” means the Ruling issued to B&N and dated as of April 28, 2015. 

“External Distribution” has the meaning set forth in the recitals. 

  
 2 

 “Indemnifying Party” means a Party that has an obligation to make an Indemnity
Payment. 
 “Indemnitee” means a Party that is entitled to receive an Indemnity Payment. 

“Indemnity Payment” means an indemnity payment under the Separation Agreement, this Agreement or any other Ancillary
Agreement. 
 “Intended Tax Treatment” has the meaning set forth in the recitals. 

“Internal Distribution” has the meaning set forth in the recitals. 

“IRS” means the U.S. Internal Revenue Service. 

“Ordinary Course of Business” means an action taken by a Person only if such action is taken in the ordinary course of the
normal day-to-day operations of such Person. 
 “Ordinary Taxes” means Taxes other than (i) Transaction Taxes and
(ii) Transfer Taxes described in Section 2.03. 
 “Other Transactions” means the Digital Distribution, the
Internal Distribution and, in each case, any transfer of assets or Liabilities related thereto. 
 “Parties” has the
meaning set forth in the preamble. 
 “Partnership Returns” mean the partnership Tax Returns (IRS Form 1065 or any foreign,
state or local equivalent) of B&N Education, LLC, a Delaware limited liability company. 
 “Pre-Distribution Tax
Period” means any taxable period (or portion thereof) that ends on or before the date of the External Distribution. 

“Proposed Acquisition Transaction” has the meaning set forth in Section 4.03(b). 

“Records” has the meaning set forth in Section 5.01. 

“Refund Recipient” has the meaning set forth in Section 2.04. 

“Regulations” means the Treasury regulations promulgated under the Code. 

“Restricted Period” has the meaning set forth in Section 4.03(a). 

“Ruling” means a private letter ruling (including any supplemental ruling) issued by the IRS in connection with the
Transactions, whether granted prior to, on or after the date hereof. 
 “Satisfactory Guidance” has the meaning set forth
in Section 4.04(b). 

  
 3 

 “Separate BNED Return” means any Tax Return relating to Taxes described in
Section 2.02(a) for taxable periods ending after the date of the External Distribution. 
 “Separation Agreement”
means the Separation and Distribution Agreement dated as of the date of this Agreement by and between B&N and BNED, including the Schedules thereto. 

“Subsidiary” of any Person means any corporation or other organization, whether incorporated or unincorporated, of which at
least a majority of the securities or interests having by their terms ordinary voting power to elect at least a majority of the board of directors (or others performing similar functions with respect to such corporation or other organization) is
directly or indirectly owned by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries. 

“Tax Advisor” means (i) for purposes of Section 5.06, a local Tax counsel or accountant of recognized national
standing in the relevant jurisdiction and (ii) for all other purposes of this Agreement, a U.S. Tax counsel of recognized national standing. 

“Tax Attribute” has the meaning set forth in Section 2.05(a). 

“Tax Contest” means an audit, review, examination or other administrative or judicial proceeding, in each case by any Taxing
Authority or relating to Taxes. 
 “Tax Dispute” has the meaning set forth in Section 5.06. 

“Tax Opinion Representations” means reasonable and customary representations requested by Cravath, Swaine & Moore
LLP and KPMG LLP regarding certain facts in existence at the applicable time made by B&N and BNED that serve as a basis for the Tax Opinions. 

“Tax Opinions” means the written opinions of Cravath, Swaine & Moore LLP and KPMG LLP, in each case issued to
B&N and BNED, to the effect that each step of the Transactions will qualify for its Intended Tax Treatment. 
 “Tax
Opinions/Rulings” means (i) any Ruling and (ii) any opinion of a Tax Advisor relating to the Transactions, including those issued on the date of the External Distribution or to allow a party to take actions otherwise prohibited
under Section 4.03(a) of this Agreement. 
 “Tax Return” means any return, declaration, statement, report, form,
estimate or information return relating to Taxes, including any amendments thereto and any related or supporting information, required or permitted to be filed with any Taxing Authority. 

“Tax Return Preparer” means (i) with respect to any Tax Return that B&N is responsible for preparing under
Section 3.01(a), B&N, and (ii) with respect to any Tax Return that BNED is responsible for preparing under Section 3.01(b), BNED. 

  
 4 

 “Taxes” means all forms of taxation or duties imposed by any Governmental
Authority, or required by any Governmental Authority to be collected or withheld, including charges, together with any related interest, penalties and other additional amounts. 

“Taxing Authority” means any Governmental Authority charged with the determination, collection or imposition of Taxes. 

“Transaction Tax Contest” means a Tax Contest with the purpose or effect of determining or redetermining Transaction Taxes.

 “Transaction Taxes” means all (i) Taxes imposed on B&N, BNED or any of their respective Subsidiaries
resulting from the failure of any step of the Transactions to qualify for its Intended Tax Treatment, (ii) Taxes imposed on any third party resulting from the failure of any step of the Transactions to qualify for its Intended Tax Treatment for
which B&N, BNED or any of their respective Subsidiaries is or becomes liable for any reason and (iii) reasonable, out-of-pocket legal, accounting and other advisory or court fees incurred in connection with liability for Taxes described in
clause (i) or (ii). 
 “Transactions” has the meaning set forth in the recitals. 

“Transfer Taxes” means all transfer, sales, use, excise, stock, stamp, stamp duty, stamp duty reserve, stamp duty land,
documentary, filing, recording, registration, value-added and other similar Taxes (excluding, for the avoidance of doubt, any income, gains, profit or similar Taxes, however assessed) incurred by the B&N Tax Group and BNED Tax Group as a result
of the Separation or the Other Transactions. 
 “Unqualified Tax Opinion” has the meaning set forth in
Section 4.04(c). 
 ARTICLE II 

Allocation of Tax Liabilities and Tax Benefits 

SECTION 2.01. B&N Indemnification of BNED. After the External Distribution, B&N shall be liable for, and shall indemnify and
hold BNED harmless from, the following Taxes, whether incurred directly by BNED or indirectly through an BNED Subsidiary: 
 (a) Ordinary
Taxes of B&N and B&N Subsidiaries for any taxable period; 
 (b) Transfer Taxes that B&N is required to pay under
Section 2.03; and 
 (c) Transaction Taxes; 

in each case, other than Taxes for which BNED is liable under Section 2.02. 

SECTION 2.02. BNED Indemnification of B&N. After the External Distribution, BNED shall be liable for, and shall indemnify and hold
B&N harmless from, the following Taxes, whether incurred directly by B&N or indirectly through a B&N Subsidiary: 

  
 5 

 (a) Ordinary Taxes of BNED or any BNED Subsidiary (or a consolidated, combined, unitary or
similar group, other than a B&N Consolidated Group, of which BNED or an BNED Subsidiary is a member); 
 (b) Transfer Taxes that BNED is
required to pay under Section 2.03; and 
 (c) Transaction Taxes attributable to: 

(i) any action or omission taken after the External Distribution by BNED or any BNED Subsidiary in breach of the covenants set
forth herein (including those in Section 4.03), in any other Ancillary Agreement or in the Separation Agreement; 
 (ii)
the application of Section 355(e) or 355(f) of the Code to any of the Transactions by virtue of any acquisition of BNED Capital Stock or assets of BNED or any BNED Subsidiary made after the External Distribution; or 

(iii) any other action or omission taken after the External Distribution by BNED or any BNED Subsidiary that could give rise to
Transaction Taxes, except to the extent such action or omission is otherwise expressly required or permitted by this Agreement (other than under Section 4.04), any other Ancillary Agreement or the Separation Agreement; 

provided, that Transaction Taxes that are described in Section 2.02 but also would not have been imposed but for an action, omission or
acquisition taken or omitted after the External Distribution by any member of the B&N Tax Group, such Transaction Taxes shall be allocated between B&N and BNED in proportion to the relative degree of fault of the members of the B&N Tax
Group (and such members’ Affiliates and counterparties to any consummated Proposed Acquisition Transactions of B&N), on the one hand, and the members of the BNED Tax Group (and such members’ Affiliates and counterparties to any
consummated Proposed Acquisition Transactions of BNED), on the other hand. In determining the relative degree of fault for purposes of the immediately preceding proviso, only actions, omissions or acquisitions occurring after the External
Distribution shall be taken into account. 
 SECTION 2.03. Allocation of Transfer Taxes. B&N and BNED shall each pay 50% of all
Transfer Taxes; provided, that if applicable Law imposes any Transfer Taxes solely on one or more members of the B&N Tax Group, B&N shall pay 100% of such Transfer Taxes, and if applicable Law imposes any Transfer Taxes solely on one
or more members of the BNED Tax Group, BNED shall pay 100% of such Transfer Taxes. 
 SECTION 2.04. Refunds, Credits and Offsets.
Subject to Section 2.05, if B&N, BNED or any of their respective Subsidiaries receives any refund of any Taxes for which the other Party is liable under this Article II (a “Refund Recipient”), such Refund Recipient
shall pay to the other Party the entire amount of the refund (including interest, but net of any Taxes imposed with respect to such refund) within 10 business days of receipt or accrual; provided, however, that the other Party, upon
the request of such Refund Recipient, shall repay the amount paid to the other Party (plus any penalties, interest or other charges imposed by the relevant Taxing Authority) in the event such Refund Recipient is required to repay such refund. In the
event a Party would be a Refund Recipient but for the fact it elected to apply a refund to which it 

  
 6 

 
would otherwise have been entitled against a Tax liability arising in a subsequent taxable period, then such Party shall be treated as a Refund Recipient and the economic benefit of so applying
the refund shall be treated as a refund, and shall be paid within 10 business days of the due date of the Tax Return to which such refund is applied to reduce the subsequent Tax liability. 

SECTION 2.05. Carrybacks. If a Tax Return of BNED or any of its Subsidiaries for any taxable period ending after the date of the
External Distribution reflects any net operating loss, net capital loss, excess Tax credit or other Tax attribute (a “Tax Attribute”), then BNED or its applicable Subsidiary shall waive the right to carry back any such Tax Attribute
to a Pre-Distribution Tax Period to the extent permissible under applicable Law. In the event that BNED or any of its Subsidiaries does carry back a Tax Attribute to a Pre-Distribution Tax Period, then (i) no payment with respect to such
carryback shall be due to BNED or any of its Subsidiaries from B&N and (ii) if BNED or any of its Subsidiaries receives any refund, credit or offset of any Taxes in connection with such carryback, BNED shall promptly pay to B&N the full
amount of such refund or the economic benefit of the credit or offset (including interest, but net of any Taxes imposed with respect to such refund). 

ARTICLE III 
 Tax Returns, Tax
Contests and Other Administrative Matters 
 SECTION 3.01. Responsibility for Preparing Tax Returns. (a) Except as provided
in Section 3.01(b), B&N shall timely prepare any Tax Returns of the B&N Tax Group and the BNED Tax Group for any taxable period beginning before the date of the External Distribution. If BNED is responsible for filing any such Tax
Return under Section 3.03(a), B&N shall, subject to Section 3.01(c), promptly deliver such prepared Tax Return to BNED reasonably in advance of the applicable filing deadline. 

(b) BNED shall timely prepare (i) any Partnership Return, and (ii) any Separate BNED Return. If B&N is responsible for filing any
such Tax Return under Section 3.03(a), BNED shall, subject to Section 3.01(c), promptly deliver such prepared Tax Return to B&N reasonably in advance of the applicable filing deadline. 

(c) Except as otherwise described on Schedule 3.01(c), to the extent that any Tax Return described in Section 3.01(a) or (b)
directly relates to matters for which another Party may have an indemnification obligation to the Tax Return Preparer, or that may give rise to a refund to which that other Party would be entitled under this Agreement, the Tax Return Preparer shall
(i) prepare the relevant portions of the Tax Return on a basis consistent with past practice (or refrain from amending such Tax Return if it has already been filed with the Taxing Authority), except (A) as required by applicable Law or to
correct any clear error, (B) as a result of changes or elections made on any Tax Return of a B&N Consolidated Group that do not relate primarily to the BNED Tax Group or (C) as mutually agreed by the Parties; (ii) notify the other
Party of any such portions not prepared on a basis consistent with past practice; (iii) provide the other Party a reasonable opportunity to review the relevant portions of the Tax Return; and (iv) consider in good faith any reasonable
comments made by the other Party. The Parties shall attempt in good faith to resolve any issues arising out of the review of any such Tax Return. 

  
 7 

 SECTION 3.02. Information Packages. Each Party (i) shall provide to the other Party
(in the format reasonably determined by the other Party) all information and assistance requested by the other Party as reasonably necessary to prepare any Tax Return described in Section 3.01(a) or 3.01(b) on a timely basis consistent with the
current practices of B&N and its Subsidiaries in preparing Tax Returns and (ii) in so providing such information and assistance, shall use any systems and third party service providers as are consistent with the current practices of B&N
and its Subsidiaries in preparing Tax Returns. 
 SECTION 3.03. Filing of Tax Returns and Payment of Taxes. (a) Each Party shall
execute and timely file each Tax Return that it is responsible for filing under applicable Law and shall timely pay to the relevant Taxing Authority any amount shown as due on each such Tax Return; provided, that neither BNED nor any of its
Subsidiaries shall file, amend, withdraw, revoke or otherwise alter any Tax Return of any B&N Consolidated Group, in each case without the prior written consent of B&N, which shall not be unreasonably withheld or delayed. The obligation to
make payments pursuant to this Section 3.03(a) shall not affect a Party’s right, if any, to receive payments under Section 3.03(b) or otherwise be indemnified under this Agreement. 

(b) In addition to its obligations under Section 3.01(c), the relevant Tax Return Preparer shall, no later than 5 business days before the
due date (including extensions) of any Tax Return described in Section 3.01(a) or 3.01(b), notify the other Party of any amount (or any portion of any such amount) shown as due on that Tax Return for which the other Party must indemnify the Tax
Return Preparer under this Agreement. The other Party shall pay such amount to the Tax Return Preparer no later than the due date (including extensions) of the relevant Tax Return. A failure by an Indemnitee to give notice as provided in this
Section 3.03(b) shall not relieve the Indemnifying Party’s indemnification obligations under this Agreement, except to the extent that the Indemnifying Party shall have been actually prejudiced by such failure. 

SECTION 3.04. Tax Contests. (a) B&N or BNED, as applicable, shall, within 10 business days of becoming aware of any Tax
Contest (including a Transaction Tax Contest) that could reasonably be expected to cause the other Party to have an indemnification obligation under this Agreement, notify the other Party of such Tax Contest and thereafter promptly forward or make
available to the Indemnifying Party copies of notices and communications relating to the relevant portions of such Tax Contest. A failure by an Indemnitee to give notice as provided in this Section 3.04(a) (or to promptly forward any such
notices or communications) shall not relieve the Indemnifying Party’s indemnification obligations under this Agreement, except to the extent that the Indemnifying Party shall have been actually prejudiced by such failure. 

(b) B&N and BNED each shall have the exclusive right to control the conduct and settlement of any Tax Contest, other than a Transaction Tax
Contest, relating to any Tax Return that it is responsible for preparing pursuant to Section 3.01. Notwithstanding the foregoing, if the conduct or settlement of any portion or aspect of any such Tax Contest could reasonably be expected to
cause a Party to have an indemnification obligation under this Agreement, then (i) the Indemnifying Party shall have the right to share joint control over the conduct and settlement of that portion or aspect and (ii) whether or not the
Indemnifying Party exercises that right, the Indemnitee shall not accept or enter into any settlement without the consent of the Indemnifying Party, which shall not be unreasonably withheld or delayed. 

  
 8 

 (c) B&N and BNED shall have the right to control jointly the conduct and settlement of any
Transaction Tax Contest. Notwithstanding the foregoing, B&N shall be entitled to control exclusively the conduct and settlement of any Transaction Tax Contest if B&N notifies BNED that (notwithstanding the rights and obligations of the
Parties under this Agreement) B&N agrees to pay (and indemnify BNED against) any Transaction Taxes resulting from such Transaction Tax Contest. 

(d) In any case where the Parties control jointly the conduct and settlement of any Tax Contest (or portion or aspect thereof):
(i) neither Party shall accept or enter into any settlement of such Tax Contest (or the relevant portion or aspect thereof) without the consent of the other Party, which shall not be unreasonably withheld or delayed, (ii) both Parties
shall have a right to review and consent, which consent shall not be unreasonably withheld or delayed, to any correspondence or filings to be submitted to any Taxing Authority with respect to such Tax Contest (or the relevant portion or aspect
thereof) and (iii) both Parties shall have the right to attend any formally scheduled meetings with any Taxing Authority or hearings or proceedings before any judicial authority, in each case with respect to such Tax Contest (or the relevant
portion or aspect thereof). 
 SECTION 3.05. Expenses and Applicability. (a) Each Party shall bear its own expenses in the
course of any Tax Contest, other than expenses included in the definition of Transaction Taxes, which shall be governed by Article II. 

(b) This Article III shall not apply before the External Distribution. 

ARTICLE IV 
 Tax Matters
Relating to the Transactions 
 SECTION 4.01. Mutual Representations. Each Party represents that it knows of no fact, and has no
plan or intention to take any action, that it knows or reasonably should expect, after consultation with a Tax Advisor, is inconsistent with the qualification of any step of the Transactions for its Intended Tax Treatment. 

SECTION 4.02. Mutual Covenants. (a) Each Party shall use its reasonable best efforts to cause the Tax Opinions to be issued,
including by executing the Tax Opinion Representations. 
 (b) Except as otherwise expressly required or permitted by the Separation
Agreement, this Agreement or any other Ancillary Agreement, after the External Distribution neither Party shall take or fail to take, or cause or permit its respective Subsidiaries to take or fail to take, any action, if such action or omission
would be inconsistent with its Tax Opinion Representations, the Intended Tax Treatment or the Existing Ruling. 

  
 9 

 SECTION 4.03. Restricted Actions. (a) Subject to Section 4.04, during the period
beginning on the date of the External Distribution and ending on, and including, the last day of the two-year period following the date of the External Distribution (the “Restricted Period”), BNED shall not (and shall not cause or
permit any of its Subsidiaries to), in a single transaction or a series of transactions: 
 (i) enter into any Proposed
Acquisition Transaction; 
 (ii) take any affirmative action that permits a Proposed Acquisition Transaction to occur by
means of an agreement to which neither BNED nor any of its Subsidiaries is a party (including by (A) redeeming rights under a shareholder rights plan, (B) making a determination that a tender offer is a “permitted offer” under
any such plan or otherwise causing any such plan to be inapplicable or neutralized with respect to any Proposed Acquisition Transaction or (C) approving any Proposed Acquisition Transaction, whether for purposes of Section 203 of the
Delaware General Corporate Law or any similar corporate statute, any “fair price” or other provision of BNED’s charter or bylaws or otherwise); 

(iii) liquidate or partially liquidate BNED, whether by merger, consolidation or otherwise; 

(iv) cause or permit BNED to cease to engage in the Active Trade or Business; 

(v) sell or transfer 50% or more of the gross assets of the Active Trade or Business or 50% or more of the consolidated gross
assets that BNED held immediately before the External Distribution; or 
 (vi) redeem or otherwise repurchase (directly or
indirectly) any BNED Capital Stock, except to the extent such redemptions or repurchases meet the requirements of Section 4.05(1)(b) of Revenue Procedure 96-30 (as in effect prior to its amendment by Revenue Procedure 2003-48). 

(b) (i) For purposes of this Agreement, “Proposed Acquisition Transaction” means any transaction or series of
transactions (or any agreement, understanding or arrangement to enter into a transaction or series of transactions) as determined for purposes of Section 355(e) of the Code, in connection with which one or more Persons would (directly or
indirectly) acquire, or have the right to acquire, from any other Person or Persons, an interest in BNED Capital Stock that, when combined with any other acquisitions of BNED Capital Stock that occur after the External Distribution (but excluding
any other acquisition described in clause (ii)) comprises 25% or more of the value or the total combined voting power of all interests that are treated as outstanding equity in BNED for U.S. Federal income Tax purposes immediately after such
transaction or, in the case of a series of related transactions, immediately after any transaction in such series. For this purpose, any recapitalization, repurchase or redemption of BNED Capital Stock and any amendment to the certificate of
incorporation (or other organizational documents) of BNED shall be treated as an indirect acquisition of BNED Capital Stock by any shareholder to the extent such shareholder’s percentage interest in interests that are treated as outstanding
equity in BNED for U.S. Federal income Tax purposes increases by vote or value. 

  
 10 

 (ii) Notwithstanding the foregoing, a Proposed Acquisition Transaction shall not
include (x) the adoption by BNED of a shareholder rights plan that meets the requirements of IRS Revenue Ruling 90-11, (y) transfers on an established market of BNED Capital Stock that are described in Safe Harbor VII of
Section 1.355-7(d) of the Regulations or (z) issuances of BNED Capital Stock that satisfy Safe Harbor VIII (relating to acquisitions in connection with a Person’s performance of services) or Safe Harbor IX (relating to acquisitions by
a retirement plan of an employer) of Section 1.355-7(d) of the Regulations; provided, that such transaction or series of transactions shall constitute a Proposed Acquisition Transaction if meaningful factual diligence is necessary to
establish that Section 4.03(b)(ii)(x), (y) or (z) applies. 
 (c) If BNED merges or consolidates with another entity to form a
new entity, references in this Agreement to BNED shall be to that new entity and BNED Capital Stock shall refer to the capital stock or other relevant instruments or rights of that new entity. 

(d) The provisions of this Section 4.03, including the definition of “Proposed Acquisition Transaction”, are intended to monitor
compliance with Section 355 of the Code and shall be interpreted accordingly. Any clarification of, or change in, Section 355 of the Code or the Regulations thereunder shall be incorporated into this Section 4.03 and its
interpretation. 
 SECTION 4.04. Consent to Take Certain Restricted Actions. (a) BNED may (and may cause or permit its
Subsidiaries to) take an action otherwise prohibited under Section 4.03(a) if B&N consents. B&N shall consent if BNED has provided it with Satisfactory Guidance. 

(b) For purposes of this Agreement, “Satisfactory Guidance” means either a Ruling or an Unqualified Tax Opinion, at the
election of BNED, in either case reasonably satisfactory to B&N in both form and substance, including with respect to any underlying assumptions or representations and any legal analysis contained therein, and concluding that the proposed action
will not cause any step of the Transactions to fail to qualify for its Intended Tax Treatment. 
 (c) For purposes of this Agreement,
“Unqualified Tax Opinion” means an unqualified “will” opinion of a Tax Advisor that permits reliance by B&N. The Tax Advisor, in issuing its opinion, shall be permitted to rely on the validity and correctness, as of
the date given, of any previously issued Tax Opinions/Rulings, unless such reliance would be unreasonable under the circumstances, and shall assume that each step of the Transactions would have qualified for its Intended Tax Treatment if the action
in question did not occur. 
 SECTION 4.05. Procedures Regarding Opinions and Rulings. (a) If BNED notifies B&N that it
wishes to take a restricted action described in Section 4.03(a) and seeks Satisfactory Guidance for purposes of Section 4.04, B&N, at the request of BNED, shall use commercially reasonable efforts to expeditiously obtain, or assist
BNED in obtaining, such Satisfactory Guidance. Notwithstanding the foregoing, B&N shall not be required to take any action pursuant to this Section 4.05(a) if, upon request, BNED fails to certify that all information and representations
relating to BNED or any Subsidiary of BNED in the relevant documents are 

  
 11 

 
true, correct and complete or fails to obtain certification from any counterparty to any Proposed Acquisition Transaction that all information and representations relating to such counterparty in
the relevant documents are true, correct and complete. BNED shall reimburse B&N for all reasonable out-of-pocket costs and expenses incurred by B&N or any Subsidiary of B&N in obtaining Satisfactory Guidance within 10 business days after
receiving an invoice from B&N therefor. 
 (b) Notwithstanding anything herein to the contrary, BNED shall not seek a ruling with respect
to a Pre-Distribution Tax Period (whether or not relating to the Transactions) if B&N determines that there is a reasonable possibility that such action could have a significant adverse impact on B&N or any Subsidiary of B&N. 

SECTION 4.06. Notification and Certification Regarding Certain Acquisition Transactions. If BNED proposes to enter into any 10%
Acquisition Transaction or take any affirmative action to permit any 10% Acquisition Transaction to occur at any time during the 30-month period following the date of the External Distribution, BNED shall undertake in good faith to provide B&N,
no later than 10 business days following the signing of any written agreement with respect to such 10% Acquisition Transaction or obtaining knowledge of the occurrence of any such 10% Acquisition Transaction that takes place without written
agreement, with a written description of such transaction (including the type and amount of BNED Capital Stock to be acquired) and a brief explanation as to why BNED believes that such transaction does not result in the application of
Section 355(e) or 355(f) of the Code to the Transactions. For purposes of this Section 4.06, “10% Acquisition Transaction” means any transaction or series of transactions that would be a Proposed Acquisition Transaction if
the percentage specified in the definition of Proposed Acquisition Transaction were 10% instead of 25%. 
 SECTION 4.07. Reporting.
B&N and BNED shall (i) timely file any appropriate information and statements (including as required by Section 6045B of the Code and Section 1.355-5 of the Regulations) to report each step of the Transactions as qualifying
for its Intended Tax Treatment and (ii) absent a change of Law or an applicable Determination otherwise, not take any position on any Tax Return that is inconsistent with such qualification. 

SECTION 4.08. Tax Treatment of Certain Amounts Paid Pursuant to the EMA. Section 18.02 of the EMA is incorporated by reference.

 ARTICLE V 
 Procedural
Matters 
 SECTION 5.01. Cooperation. Each Party shall cooperate with reasonable requests from the other Party in matters covered
by this Agreement, including in connection with the preparation and filing of Tax Returns, the calculation of Taxes, the determination of the proper financial accounting treatment of Tax items and the conduct and settlement of Tax Contests. Such
cooperation shall include: 

  
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 (i) retaining until the expiration of the relevant statute of limitations
(including extensions) records, documents, accounting data, computer data and other information (“Records”) necessary for the preparation, filing, review, audit or defense of all Tax Returns relevant to an obligation, right or
liability of either Party under this Agreement; 
 (ii) providing the other Party reasonable access to Records and to its
personnel (ensuring their cooperation) and premises during normal business hours to the extent relevant to an obligation, right or liability of the other Party under this Agreement or otherwise reasonably required by the other Party to complete Tax
Returns or to compute the amount of any payment contemplated by this Agreement; and 
 (iii) notifying the other Party prior
to disposing of any relevant Records and affording the other Party the opportunity to take possession or make copies of such Records at its discretion. 

SECTION 5.02. Interest. Any payments required pursuant to this Agreement that are not made within the time period specified in this
Agreement shall bear interest from the end of that period. Interest required to be paid pursuant to this Agreement shall, unless otherwise specified, be computed at the rate and in the manner provided in the Code for interest on underpayments and
overpayments, as applicable, for the relevant period. 
 SECTION 5.03. Indemnification Claims and Payments. (a) An Indemnitee
shall be entitled to make a claim for payment with respect to Taxes under this Agreement when the Indemnitee determines that it is entitled to such payment and is able to calculate with reasonably accuracy the amount of such payment. Except as
otherwise provided in Sections 3.03(b) and 3.04, the Indemnitee shall provide to the Indemnifying Party notice of such claim within 60 business days of the first date on which it so becomes entitled to make such claim. Such notice shall include
a description of such claim and a detailed calculation of the amount claimed. 
 (b) Except as otherwise provided in Section 3.03(b) and
Section 3.04, the Indemnifying Party shall make the claimed payment to the Indemnitee within 30 business days after receiving such notice, unless the Indemnifying Party reasonably disputes its liability for, or the amount of, such payment. 

(c) A failure by an Indemnitee to give notice as provided in Section 3.03(b), 3.04 or 5.03(a) shall not relieve the Indemnifying
Party’s indemnification obligations under this Agreement, except to the extent that the Indemnifying Party shall have been actually prejudiced by such failure. 

(d) Nothing in this Section 5.03 shall prejudice a Party’s right to receive payments pursuant to Section 3.03(b) or 3.04. 

SECTION 5.04. Amount of Indemnity Payments. The amount of any Indemnity Payment shall be (i) reduced to take into account any Tax
benefit actually realized by the Indemnitee resulting from the incurrence of the liability in respect of which the Indemnity Payment is made and (ii) increased to take into account any Tax cost actually realized by the Indemnitee resulting from
the receipt of the Indemnity Payment (including any Tax cost arising from such Indemnity Payment having resulted in income or gain to either Party, for example, under Section 1.1502-19 of the Regulations, and any Taxes imposed on additional
amounts payable pursuant to this clause (ii)). 

  
 13 

 SECTION 5.05. Treatment of Indemnity Payments. Any Indemnity Payment (other than any
portion of a payment that represents interest accruing after the date of the External Distribution) shall be treated by B&N and BNED for all Tax purposes as a distribution from BNED to B&N immediately prior to the External Distribution (if
made by BNED to B&N) or as a contribution from B&N to BNED immediately prior to the External Distribution (if made by B&N to BNED), except as otherwise required by applicable Law or a Determination. 

SECTION 5.06. Tax Disputes. Notwithstanding Section 6.06, this Section 5.06 shall govern the resolution of any dispute
arising between the Parties in connection with this Agreement, other than a dispute (i) relating to liability for Transaction Taxes or (ii) in which the amount of liability in dispute exceeds $20 million (a “Tax Dispute”).
The Parties shall negotiate in good faith to resolve any Tax Dispute for 45 calendar days (unless earlier resolved). Upon notice of either Party after 45 calendar days, the matter will be referred to a Tax Advisor acceptable to both Parties. The Tax
Advisor may, in its discretion, obtain the services of any third party necessary to assist it in resolving the Tax Dispute. The Parties shall instruct the Tax Advisor to furnish notice to each Party of its resolution of the Tax Dispute as soon as
practicable, but in any event no later than 60 calendar days after its acceptance of the matter for resolution. Any such resolution by the Tax Advisor will be binding on the Parties and the Parties shall take, or cause to be taken, any action
necessary to implement the resolution. All fees and expenses of the Tax Advisor shall be shared equally by the Parties. If, having determined that a Tax Dispute must be referred to a Tax Advisor, after 45 calendar days the Parties are unable to find
a Tax Advisor willing to adjudicate the Tax Dispute in question and that the Parties in good faith find acceptable, then this Section 5.06 shall cease to apply to that Tax Dispute. 

ARTICLE VI 
 Miscellaneous

 SECTION 6.01. Termination. This Agreement will terminate without further action at any time before the External Distribution
upon termination of the Separation Agreement. If terminated, no Party will have any Liability of any kind to the other Party or any other Person on account of this Agreement, except as provided in the Separation Agreement. 

SECTION 6.02. Survival. Except as expressly set forth in this Agreement, the covenants and indemnification obligations in this
Agreement shall survive the Spin-Off and shall remain in full force and effect. 
 SECTION 6.03. Separation Agreement. The Parties
agree that, in the event of a conflict between the terms of this Agreement and the Separation Agreement with respect to the subject matter hereof, the terms of this Agreement shall govern. 

SECTION 6.04. Confidentiality. Each Party hereby acknowledges that confidential Information of such Party or its Subsidiaries may be
exposed to employees and agents of the other Party or its Subsidiaries as a result of the activities contemplated by this Agreement. Each Party agrees, on behalf of itself and its Subsidiaries, that such Party’s obligations with respect to
Information and data of the other Party or its Subsidiaries shall be governed by [•] of the Separation Agreement. 

  
 14 

 SECTION 6.05. Counterparts; Entire Agreement; Indemnification. (a) This Agreement may
be executed in one or more counterparts, all of which counterparts shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each Party and delivered to the other Party. This
Agreement may be executed by facsimile or PDF signature and a facsimile or PDF signature shall constitute an original for all purposes. 

(b) This Agreement, the Separation Agreement, the other Ancillary Agreements and the Appendices, Exhibits and Schedules hereto and thereto
contain the entire agreement between the Parties with respect to the subject matter hereof and supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter,
and there are no agreements or understandings between the Parties with respect to the subject matter hereof other than those set forth or referred to herein or therein (including, for the avoidance of doubt, the Tax Sharing Agreement dated as of
October 4, 2014 by and among B&N, BNED and the other wholly-owned subsidiaries of B&N ). 
 SECTION 6.06. Governing Law;
Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the Laws of the State of New York, regardless of the Laws that might otherwise govern under applicable principles of conflicts of laws thereof. Subject to
Section 5.06, each Party irrevocably consents to the exclusive jurisdiction, forum and venue of the Commercial Division of the Supreme Court of the State of New York, New York County and the United States District Court for the Southern
District of New York over any and all claims, disputes, controversies or disagreements between the Parties or any of their respective Subsidiaries, Affiliates, successors and assigns under or related to this Agreement or any document executed
pursuant to this Agreement or any of the transactions contemplated hereby or thereby. 
 SECTION 6.07. Waiver of Jury Trial. EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT THE OTHER PARTY WOULD NOT, IN THE EVENT OF ANY LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY
AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.07. 

SECTION 6.08. Assignability. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be
assigned, in whole or in part, by operation of law or otherwise by either Party without the prior written consent of the other Party. Any purported assignment without such consent shall be void. Subject to the preceding sentences,

  
 15 

 
this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and assigns. Notwithstanding the foregoing, either Party may
assign this Agreement without consent in connection with (a) a merger transaction in which such Party is not the surviving entity and the surviving entity acquires or assumes all or substantially all of such Party’s assets, or (b) the
sale of all or substantially all of such Party’s assets; provided, however, that the assignee expressly assumes in writing all of the obligations of the assigning Party under this Agreement, and the assigning Party provides
written notice and evidence of such assignment and assumption to the non-assigning Party. No assignment permitted by this Section 6.08 shall release the assigning Party from liability for the full performance of its obligations under this
Agreement. 
 SECTION 6.09. Third-Party Beneficiaries. (a) The provisions of this
Agreement are solely for the benefit of the Parties hereto and are not intended to confer upon any Person except the Parties hereto any rights or remedies hereunder and (b) there are no third-party
beneficiaries of this Agreement and this Agreement shall not provide any third Person with any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement. 

SECTION 6.10. Notices. All notices or other communications under this Agreement shall be in writing and shall be provided in the manner
set forth in [•] of the Separation Agreement. In addition, copies of all documents mentioned in the preceding sentence shall also be sent to the address set forth below: 

If to B&N, to: 

Barnes & Noble, Inc. 

122 Fifth Avenue 

New York, NY 10019 

Attn: General Counsel 

with a copy to: 

Cravath, Swaine & Moore LLP 

Worldwide Plaza 

825 Eighth Avenue 

New York, NY 10019 

Attn: J. Leonard Teti II, Esq. 

If to BNED, to: 

Barnes & Noble Education, Inc. 

120 Mountain View Boulevard 

Basking Ridge, NJ 07920 

Attn: General Counsel 

  
 16 

 with a copy to: 

[●] 

Attn: [●] 

Either Party may, by notice to the other Party, change the address to which such copies of documents are to be given. 

SECTION 6.11. Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is determined
by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially
adverse to either Party. Upon any such determination, any such provision, to the extent determined to be invalid, void or unenforceable, shall be deemed replaced by a provision that such court determines is valid and enforceable and that comes
closest to expressing the intention of the invalid, void or unenforceable provision. 
 SECTION 6.12. Headings. The article, section
and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 

SECTION 6.13. Waivers of Default. No failure or delay of either Party (or the applicable member of its Group) in exercising any right
or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude
any other or further exercise thereof or the exercise of any other right or power. Waiver by either Party of any default by the other Party of any provision of this Agreement shall not be deemed a waiver by the waiving Party of any subsequent or
other default. 
 SECTION 6.14. Specific Performance. In the event of any actual or threatened default in, or breach of, any of the
terms, conditions and provisions of this Agreement, B&N shall have the right to specific performance and injunctive or other equitable relief of its rights under this Agreement, in addition to any and all other rights and remedies at law or in
equity, and all such rights and remedies shall be cumulative. BNED shall not oppose the granting of such relief on the basis that money damages are an adequate remedy. The Parties agree that the remedies at law for any breach or threatened breach
hereof, including monetary damages, are inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived. Any requirements for the securing or posting of any bond with
such remedy are waived. The Parties acknowledge and agree that the right of specific enforcement is an integral part of this Agreement and without that right, neither B&N nor BNED would have entered into this Agreement. 

SECTION 6.15. Amendments. No provisions of this Agreement shall be deemed waived, amended, supplemented or modified by either Party,
unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of each Party. 

  
 17 

 SECTION 6.16. Interpretation. The rules of interpretation set forth in Section 12.14
of the Separation Agreement shall be incorporated by reference to this Agreement, mutatis mutandis. NOTWITHSTANDING THE FOREGOING, THE PURPOSE OF ARTICLE IV IS TO ENSURE THAT EACH STEP OF THE TRANSACTIONS QUALIFY FOR ITS INTENDED TAX
TREATMENT AND, ACCORDINGLY, THE PARTIES AGREE THAT THE LANGUAGE THEREOF SHALL BE INTERPRETED IN A MANNER THAT SERVES THIS PURPOSE TO THE GREATEST EXTENT POSSIBLE. 

SECTION 6.17. Compliance by Subsidiaries. The Parties shall cause their respective Subsidiaries to comply with this Agreement. 

  
 18 

 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

  

			
	BARNES & NOBLE, INC.,
		
	by		
			  

			Name:
			Title:

  

			
	BARNES & NOBLE EDUCATION, INC.,
		
	by		
			  

			Name:
			Title:

  
 19ex101to8k07428007_06032015.htm

Exhibit 10.1

 

BIGLARI HOLDINGS INC.

 

INDEMNITY AGREEMENT

 

This Indemnity Agreement (the “Agreement”) is made as of [___] (“Effective Date”) by and between Biglari Holdings Inc., an Indiana corporation (the “Company”), and [___] (“Indemnitee”). This Agreement supersedes and replaces any and all previous agreements between the Company and Indemnitee covering the subject matter of this Agreement.

 

RECITALS

 

WHEREAS, highly competent persons have become more reluctant to serve on publicly-held corporations as directors or officers or in other capacities unless they are provided with adequate protection through indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation.

 

WHEREAS, the Company’s Amended and Restated Articles of Incorporation and Bylaws (collectively, the “Organizational Documents”) require indemnification of the officers and directors of the Company, and Indemnitee may also be entitled to indemnification pursuant to applicable provisions of the Indiana Business Corporation Law (“IBCL”). The Organizational Documents and the IBCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors (the “Board”), officers and other persons with respect to indemnification.

 

WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of directors and officers to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified.

 

WHEREAS, this Agreement is a supplement to and in furtherance of the Organizational Documents and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

 

WHEREAS, the Company has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve or continue to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.

 

WHEREAS, the Indemnitee is willing to serve, continue to serve, and to consider additional service for or on behalf of the Company on the condition that he or she is so indemnified.

 

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

 

1.           Services to the Company. Indemnitee will serve or continue to serve as an officer, director or key employee of the Company for so long as Indemnitee is duly elected or appointed or until Indemnitee tenders his resignation, or is terminated or is no longer affiliated with the Company except as otherwise set forth herein.

 

  

  

  

 

2.           Definitions. As used in this Agreement:

 

(a)           “Corporate Status” describes the status of a person who is or was a director, officer, trustee, partner, member, fiduciary, employee or agent of the Company or of any other Enterprise (as defined below) which such person is or was serving at the request of the Company.

 

(b)           “Disinterested Director” shall mean a director of the Company who is not and was not a party to the Proceeding (as defined below) in respect of which indemnification is sought by Indemnitee.

 

(c)           “Enterprise” shall mean the Company and any other corporation, constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger to which the Company (or any of its wholly owned subsidiaries) is a party, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, partner, member, manager, fiduciary trustee, employee, or agent of another foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan, or other enterprise, whether for profit or not.

 

(d)           “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

(e)           “Expenses” shall mean all costs, expenses, fees and charges, including without limitation, attorneys’ fees and costs, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties, and all other disbursements or expenses in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding (as defined below). Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding (as defined below), including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent.

 

(f)           The term, “IBCL Standard of Conduct” has the same meaning as set forth in the IBCL, as existing and in force as of the Effective Date of this Agreement, including, but not limited to, requiring that the Indemnitee (A) (i) conducted himself or herself in good faith; (ii) reasonably believed that his or her conduct was in the best interests of the Company or in all other cases, at least not opposed to the best interests of the Company; and (iii) in the case of any criminal proceeding, had reasonable cause to believe his or her conduct was lawful, or had no reasonable cause to believe his or her conduct was unlawful; or (B) engaged in conduct for which he or she shall not be liable under any provisions of the Company’s Organizational Documents.

 

(g)           “Indemnity Obligations” shall mean all obligations of the Company to Indemnitee under this Agreement, including the Company’s obligation to provide indemnification to Indemnitee and advance Expenses to Indemnitee under this Agreement.

 

(h)           “Independent Counsel” shall mean 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 years has been, retained to represent (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning other indemnitees under similar indemnification agreements); or (ii) any other party to the Proceeding (as defined below) giving rise to a claim for indemnification hereunder.

 

(i)           “Indiana Court” shall mean an Indiana circuit court or other court of competent jurisdiction.

 

  

2

  

 

(j)           “Liabilities” means all claims, liabilities, damages, losses, judgments, orders, fines, penalties and other amounts payable in connection with, arising out of, or in respect of or relating to any Proceeding, including, without limitation, amounts paid in settlement in any Proceeding and all costs and expenses in complying with any judgment, order or decree issued or entered in connection with any Proceeding or any settlement agreement, stipulation or consent decree entered into or issued in settlement of any Proceeding.

 

(k)           References to “serving at the request of the Company” shall include any service as a director, officer, employee or agent of the Company which imposes duties on such persons, including duties relating to an employee benefit plan, its participants or beneficiaries; and references to “not opposed to the best interest of the corporation” describes the actions of a person who acts in good faith and in a manner he or she reasonably believes to be in the best interests of the participants and beneficiaries of an employee benefit plan.

 

(l)           The term “Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act as in effect on the date hereof; provided, however, that “Person” shall exclude: (i) the Company; (ii) any Subsidiaries (as defined below) of the Company; (iii) any employee benefit plan of the Company or of a Subsidiary (as defined below) of the Company or of any corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company; and (iv) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or of a Subsidiary (as defined below) of the Company or of a corporation owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company.

 

(m)           The term “Proceeding” shall include any threatened, pending or completed action, claim, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal, administrative, investigative, formal or informal nature, including any appeal therefrom, in each case, in which Indemnitee was, is or will be, or is threatened to be, involved as a party, witness or otherwise by reason of the fact that Indemnitee is or was a director, agent or officer of the Company, by reason of any action (or failure to act) taken by him or of any action (or failure to act) on his part while acting as a director, agent  or officer of the Company, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, trustee, partner, member, fiduciary, employee or agent of any other Enterprise, in each case whether or not serving in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement, or advancement of expenses can be provided under this Agreement.  If the Indemnitee believes in good faith that a situation may lead to or culminate in the institution of a Proceeding, such situation shall be considered a Proceeding under this paragraph.

 

(n)           The term “Subsidiary,” with respect to any Person, shall mean any corporation or other entity of which a majority of the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by that Person.

 

3.           Indemnity in Third-Party Proceedings. The Company shall indemnify and hold harmless Indemnitee, to the fullest extent permitted by applicable law, in accordance with the provisions of this Section 3 if Indemnitee was or is a party to or a participant (as a witness or otherwise) in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 3, Indemnitee shall be indemnified against all Liabilities and Expenses incurred by Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee met the IBCL Standard of Conduct.  The parties hereto intend that this Agreement shall provide to the fullest extent permitted by law for indemnification in excess of that expressly permitted by IBCL, including, without limitation, any indemnification provided by the Organizational Documents, vote of its shareholders or disinterested directors or applicable law.

 

  

3

  

 

4.           Indemnity in Proceedings by or in the Right of the Company. The Company shall indemnify and hold harmless Indemnitee, to the fullest extent permitted by applicable law, in accordance with the provisions of this Section 4 if Indemnitee was or is a party to or a participant (as a witness or otherwise) in any Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be indemnified against all Liabilities and Expenses incurred in connection with the Proceeding, if Indemnitee met the IBCL Standard of Conduct. No indemnification for Liabilities and Expenses shall be made under this Section 4 shall be available where the IBCL expressly prohibits such indemnification by reason of any adjudication of liability of the Indemnitee to the Company.

 

5.           Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provisions of this Agreement, and without limiting the rights of Indemnitee under any other provision hereof, to the fullest extent permitted by applicable law, to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify and hold harmless Indemnitee against all Liabilities and Expenses incurred by him in connection therewith. Indemnification pursuant to this Section 5 shall not require a determination pursuant to Section 12 of this Agreement. 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 Company shall indemnify and hold harmless Indemnitee against all Liabilities and Expenses incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter. If the Indemnitee is not wholly successful in such Proceeding, the Company also shall indemnify and hold harmless Indemnitee against all Liabilities and Expenses incurred in connection with a claim, issue or matter related to any claim, issue, or matter on which the Indemnitee was successful. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by settlement, entry of a plea of nolo contendere or by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

 

6.           Indemnification For Expenses of a Witness.  Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness or otherwise asked to participate in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Liabilities and Expenses suffered or incurred by him or on his behalf in connection therewith.

 

7.           Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Liabilities and Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

 

8.           Additional Indemnification. Notwithstanding any limitation in Sections 3, 4, or 5 or any applicable statutory provision, the Company hereby covenants and agrees to indemnify and hold harmless Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all liabilities, obligations to pay a judgment, settlement, penalty, fine (including an excise tax assessed with respect to any employee benefit plan), and Liabilities and Expenses incurred by Indemnitee in connection with the Proceeding.  In furtherance and not in limitation of the foregoing, the Company shall indemnify and hold harmless Indemnitee (i) to the fullest extent permitted by the provision of the IBCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the IBCL, and (ii) to the fullest extent authorized or permitted by any amendments to or replacements of the IBCL adopted after the date of this Agreement that increase the extent to which a limited liability company, corporation or other business enterprise may indemnify its officers and directors.

 

  

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9.           Exclusions. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:

 

(a)           for which payment has actually been received by or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount actually received under any insurance policy, contract, agreement, other indemnity provision or otherwise;

 

(b)          where the Company reasonably determines that Indemnitee clearly violated Section 16(b) of the Exchange Act and must disgorge the profits to the Company, but indemnification shall not be prohibited if Indemnitee ultimately establishes in any Proceeding that no recovery of such profits from Indemnitee is permitted under Section 16(b) of the Exchange Act or similar provisions of any federal, state or local laws; or

 

(c)           except as otherwise provided in Section 14(e) hereof, 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 Company or its directors, officers, employees or other indemnitees, unless the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation.

 

10.           Advances of Expenses; Defense of Claim.  Notwithstanding any provision of this Agreement to the contrary, and to the fullest extent permitted by applicable law, the Company shall advance the Expenses to be incurred by Indemnitee in connection with any Proceeding within ten (10) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding; provided, however, that the payment of such Expenses incurred by Indemnitee in advance of the final deposition of such matter under this Section 10 shall be made only upon receipt of (i) a written affirmation of Indemnitee’s good faith belief that Indemnitee has met the IBCL Standard of Conduct; (ii) an unlimited written undertaking by Indemnitee to repay any Expenses so advanced in the event that it shall ultimately be determined that Indemnitee is not entitled to be indemnified by the Company if and to the extent that it is ultimately determined by a court of competent jurisdiction in a final judgment, not subject to appeal, or, if no such determination is made by a court of competent jurisdiction, then by the Board, that Indemnitee is not entitled to be indemnified by the Company; and (iii) a determination is made that the facts then known to those making the determination would not preclude indemnification under Sections 3 or 4. Advances shall be unsecured and interest free. Advances shall be made without regard to Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement. Advances shall include any and all Expenses incurred pursuing a Proceeding to enforce this right of advancement. No other form of undertaking shall be required other than the execution of this Agreement. This Section 10(a) shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Section 9. Notwithstanding anything else contained in this Section 10, to the extent that the Company is prohibited by applicable law from making payment of Expenses to Indemnitee prior to the Company’s determination that Indemnitee is entitled to indemnification, the Company shall not pay Expenses to the Indemnitee pursuant to this Section.  Nothing herein shall be construed to limit the Company’s right to seek damages from Indemnitee, including but not limited to the full amount of the Expenses paid by the Company hereunder.

 

(a)           The Company will be entitled to participate in the Proceeding at its own expense.

 

  

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11.           Procedure for Notification and Defense of Claim.

 

(a)           Indemnitee shall notify the Company in writing of any Proceeding with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of notice thereof.  The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding.  To obtain indemnification under this Agreement, Indemnitee shall submit to the Company 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 following the final disposition of such action, suit or proceeding.  Any delay or failure by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, and any delay or failure in so notifying the Company shall not constitute a waiver by Indemnitee of any rights under this Agreement.  The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.

 

(b)           In the event Indemnitee is entitled to indemnification and/or advancement of Expenses with respect to any Proceeding, Indemnitee may, at Indemnitee’s option, (i) retain counsel selected by Indemnitee and approved by the Company (which approval shall not be unreasonably withheld, conditioned or delayed) to defend Indemnitee in such Proceeding, at the sole expense of the Company, or (ii) have the Company assume the defense of Indemnitee in such Proceeding, in which case the Company shall assume the defense of such Proceeding with counsel selected by the Company and approved by Indemnitee (which approval shall not be unreasonably withheld, conditioned or delayed) within ten (10) days of the Company’s receipt of written notice of Indemnitee’s election to cause the Company to do so.  If the Company is required to assume the defense of any such Proceeding, it shall engage legal counsel for such defense, and the Company shall be solely responsible for all fees and expenses of such legal counsel and otherwise of such defense.  Such legal counsel may represent both Indemnitee and the Company (and/or any other party or parties entitled to be indemnified by the Company with respect to such matter) unless, in the reasonable opinion of legal counsel to Indemnitee, there is a conflict of interest between Indemnitee and the Company (or any other such party or parties) or there are legal defenses available to Indemnitee that are not available to the Company (or any such other party or parties).  Notwithstanding either party’s assumption of responsibility for defense of a Proceeding, each party shall have the right to engage separate counsel at its own expense.  The party having responsibility for defense of a Proceeding shall provide the other party and its counsel with all copies of pleadings and material correspondence relating to the proceeding.  Indemnitee and the Company shall reasonably cooperate in the defense of any Proceeding with respect to which indemnification is sought hereunder, regardless of whether the Company or Indemnitee assumes the defense thereof.  Indemnitee may not settle or compromise any Proceeding without the prior written consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed.  The Company may not settle or compromise any proceeding without the prior written consent of Indemnitee, which consent shall not be unreasonably withheld, conditioned or delayed.

 

  

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12.           Procedure Upon Application for Indemnification.

 

(a)           A determination, if required by applicable law, with respect to Indemnitee’s entitlement to indemnification shall be made in the specific case by one of the following methods, which shall be at the election of Indemnitee: (i) by a majority vote of a quorum of the Disinterested Directors; or (ii) by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee. The Company promptly will advise Indemnitee in writing with respect to any determination that Indemnitee is or is not entitled to indemnification, including a description of any reason or basis for which indemnification has been denied. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall reasonably 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 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 Company (irrespective of the determination as to Indemnitee's entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.  The Company will not deny any written request for indemnification hereunder made in good faith by Indemnitee unless a determination as to Indemnitee’s entitlement to such indemnification described in this Section 12(a) has been made.  The Company agrees to pay the reasonable fees and expenses of the Independent 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.

 

(b)           In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof, (i) the Independent Counsel shall be selected by the Company within ten (10) days of the Submission Date (as defined below) (the cost of each such counsel to be paid by the Company), (ii) the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected and (iii) Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company Indemnitee’s written objection to such selection.  Absent a timely objection, the person so selected shall act as Independent Counsel.  If a written objection is so made by Indemnitee, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn.  If no Independent Counsel shall have been selected and not objected to before thirty (30) days after the submission by Indemnitee of a written request for indemnification pursuant to Section 12(a) hereof (the “Submission Date”), each of the Company and Indemnitee shall select a law firm or member of a law firm meeting the qualifications to serve as Independent Counsel, and such law firms or members of law firms shall select the Independent Counsel.  Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 14(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

 

13.           Presumptions and Effect of Certain Proceedings.

 

(a)           In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 12(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption.  Neither the failure of the Company (including by its directors or Independent 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 an actual determination by the Company (including by its directors or Independent 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.

 

  

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(b)           Subject to Section 14(f), if the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if (i) the determination is to be made by Independent Counsel and Indemnitee objects to the Company’s selection of Independent Counsel and (ii) the Independent Counsel ultimately selected requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto.

 

(c)           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) 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 he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.

 

(d)           To the greatest extent permitted by applicable law, settlement of any Proceeding without any finding of responsibility, wrongdoing or guilt on the part of the Indemnitee with respect to claims asserted in such Proceeding shall constitute a conclusive determination that Indemnitee is entitled to indemnification hereunder with respect to such Proceeding.

 

(e)           For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected by the Enterprise. The provisions of this Section 13(e) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed or found to have met the applicable standard of conduct set forth in this Agreement.

 

(f)           The knowledge and/or actions, or failure to act, of any other director, officer, trustee, partner, member, fiduciary, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

 

14.           Remedies of Indemnitee.

 

(a)           In the event that (i) a determination is made pursuant to Section 12 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses, to the fullest extent permitted by applicable law, is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 12 of this Agreement within ten (10) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5 or 6 or the last sentence of Section 12(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Section 3, 4 or 8 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by the Indiana Court to such indemnification, contribution or advancement of Expenses.  Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association.  The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

 

  

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(b)           In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial or arbitration proceeding commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial or arbitration on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 14, Indemnitee shall be presumed to be entitled to indemnification under this Agreement and the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be. If Indemnitee commences a judicial proceeding pursuant to this Section 14, Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 10 until a final determination is made with respect to Indemnitee’s entitlement to indemnification (as to which all rights of appeal have been exhausted or lapsed).

 

(c)           If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14, absent a prohibition of such indemnification under applicable law.

 

(d)           The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial or arbitration proceeding commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement.  It is the intent of the Company that the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder.

 

(e)           The Company shall indemnify and hold harmless Indemnitee to the fullest extent permitted by law against all Expenses and, if requested by Indemnitee, shall (within ten (10) days after the Company’s receipt of such written request) advance to Indemnitee, to the fullest extent permitted by applicable law, such Expenses which are incurred by Indemnitee in connection with any judicial proceeding brought by Indemnitee (i) to enforce his rights under, or to recover damages for breach of, this Agreement or any other indemnification, advancement or contribution agreement or provision of the Organizational Documents now or hereafter in effect; or (ii) for recovery or advances under any insurance policy maintained by any person for the benefit of Indemnitee, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advance, contribution 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; provided that, in absence of any such determination with respect to such Proceeding, the Company shall pay Liabilities and advance Expenses with respect to such Proceeding as if the Company had determined the Indemnitee to be entitled to indemnification and advancement of Expenses with respect to such Proceeding.

 

  

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15.           Non-Exclusivity; Survival of Rights; Insurance.

 

(a)           The rights of indemnification and to receive advancement 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 Organizational Documents, any agreement, a vote of shareholders or a resolution of the Board, 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 applicable law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Organizational Documents or 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, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or 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 that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other Enterprise, 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 such director, officer, employee or agent under such policy or policies.  If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has director and officer liability insurance in effect, the Company 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 Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.

 

(c)           The indemnification and contribution provided for in this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of Indemnitee.

 

16.           Duration of Agreement. All agreements and obligations of the Company contained herein shall continue during the period Indemnitee serves as a director, agent  or officer of the Company or as a director, officer, trustee, partner, member, fiduciary, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other Enterprise which Indemnitee serves at the request of the Company and shall continue thereafter until and shall terminate upon the latest to occur of: (i) ten (10) years after the date that Indemnitee shall have ceased to serve as an officer or director of the Company or any other Enterprise and (ii) one (1) year after the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 14 of this Agreement relating thereto (including any rights of appeal thereto) by reason of his Corporate Status, whether or not he is acting in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement, and shall inure to the benefit of the heirs, executors and administrators of Indemnitee.

 

17.           Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence 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.

 

  

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18.           Enforcement and Binding Effect.

 

(a)           Without limiting any of the rights of Indemnitee under the Organizational Documents as they may be amended from time to time, 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 to the subject matter hereof.

 

(b)           The indemnification and advancement of Expenses provided by or granted pursuant to this Agreement shall be binding upon and be enforceable by the parties 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 an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or of any other Enterprise at the Company’s request, 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 or otherwise) 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 same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

 

(d)           The Company and Indemnitee agree herein that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable and difficult of proof, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance Indemnitee shall not be precluded from seeking or obtaining any other relief to which he may be entitled. The Company and Indemnitee further agree that Indemnitee shall be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds or other undertaking in connection therewith. The Company acknowledges that in the absence of a waiver, a bond or undertaking may be required of Indemnitee by a court of competent jurisdiction, and the Company hereby waives any such requirement of such a bond or undertaking.

 

19.           Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by 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 of this Agreement nor shall any waiver constitute a continuing waiver.

 

  

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20.           Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (i) if delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third (3rd) business day after the date on which it is so mailed:

 

(a)           If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide in writing to the Company.

 

(b)           If to the Company, to:

 

17802 W Interstate 10

Suite 400

San Antonio, TX 78257-2509

 

or to any other address as may have been furnished to Indemnitee in writing by the Company.

 

21.           Contribution. 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 Company, 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 other 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 Company 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 Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

 

22.           Applicable Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Indiana, without regard to its conflict of laws rules.  Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Indiana Court, and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Indiana Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) waive any objection to the laying of venue of any such action or proceeding in the Indiana Court, and (iv) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Indiana Court has been brought in an improper or inconvenient forum.

 

23.           Identical Counterparts; Construction. This Agreement may be executed in one or more counterparts (including by facsimile or electronic transmission), 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. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.  For purposes of this agreement, references to any gender include each other gender.

 

***

 

  

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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.

 

	
BIGLARI HOLDINGS INC.,

an Indiana corporation

	  	
INDEMNITEE

	  	  	  
	  	  	  
	
By:

	  	  	  
	  	
Name:

	  	  	
Name:

	  
	  	
Title:

	  	  	
Address:

	  
	  	  	  	  	  	  

 

  [Signature Page to Indemnity Agreement]

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