Document:

Exhibit 10.27

 

[FORM OF EXECUTIVE OFFICER]

CHANGE IN CONTROL SEVERANCE AGREEMENT

 

THIS
CHANGE IN CONTROL SEVERANCE AGREEMENT (this “Agreement”), effective as
of                              
                            ,
              (the
“Effective Date”), is made by and between FARMER BROS. CO., a Delaware
corporation (the “Company”), and
                                          
(the “Executive”).

 

WHEREAS,
the Company considers it essential to foster the continued employment of well
qualified, senior executive management personnel; and

 

WHEREAS,
the Company has determined that appropriate steps should be taken to foster
such continued employment by setting forth the benefits and compensation to be
awarded to such personnel in the event of a voluntary or involuntary
termination within the meaning of this Agreement; and

 

WHEREAS,
the Company further recognizes that the possibility of a Change in Control of
the Company exists and that such possibility, and the uncertainty and questions
that it may raise among executive management, may result in the departure or
distraction of executive personnel to the detriment of the Company; and

 

WHEREAS,
the Company has further determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of
the Company’s executive management, including the Executive, to their assigned
duties without distraction in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control;

 

NOW,
THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the Company and the Executive hereby agree as follows:

 

1.                                       Term of
Agreement.  The term of
this Agreement shall commence as of the date hereof and expire on the close of
business on
                                ,
20      ; provided, however, that (i) commencing
on January 1,
                                
and each January 1 thereafter, the term of this Agreement will
automatically be extended for an additional year unless, not later than September 30
of the immediately preceding year, the Company (provided no Change in Control
has occurred and no Threatened Change in Control is pending) or the Executive
shall have given notice that it or the Executive, as the case may be, does not
wish to have the Term extended; (ii) if, prior to a Change in Control, the
Executive ceases for any reason to be an employee of the Company, thereupon
without further action the Term shall be deemed to have expired and this
Agreement will immediately terminate and be of no further effect.

 

2.                                       Definitions

 

(a)                                  “Base Salary”
shall mean the Executive’s salary, which excludes Bonuses, at the rate in
effect when an event triggering benefits under Section 3 of this Agreement
occurs.

 

(b)                                 “Beneficial
Owner” or “Beneficial Ownership” shall have the meaning ascribed to
such term in Rule 13d-3 of the Exchange Act.

 

(c)                                  “Board”
or “Board of Directors” shall mean the Board of Directors of Farmer
Bros. Co., or its successor.

 

(d)                                 “Bonus(es)”
shall mean current cash compensation over and above Base Salary whether awarded
under the Company’s Incentive Compensation Plan or otherwise awarded.

 

1

 

(e)                                  “Cause”
shall mean:

 

(i)                                     the Executive’s
material fraud, malfeasance, or gross negligence, willful and material neglect
of Executive’s employment duties or Executive’s willful and material misconduct
with respect to business affairs of the Company or any subsidiary of the
Company or

 

(ii)                                  Executive’s
conviction of or failure to contest prosecution for a felony or a crime
involving moral turpitude.

 

A
termination of Executive for “Cause” based on clause (i) of the preceding
sentence can be made only by delivery to Executive of a resolution duly adopted
by the affirmative vote of not less than three quarters of the Board then in
office at a meeting of the Board called and held for such purpose, after
reasonable notice to the Executive and an opportunity for the Executive,
together with the Executive’s counsel (if the Executive chooses to have counsel
present at such meeting), to be heard before the Board, finding that, in the
good faith opinion of the Board, the Executive had committed an act
constituting “Cause” as herein defined and specifying the particulars thereof
in detail.  Nothing herein will limit the right of the Executive or
[his/her] beneficiaries to contest the validity or propriety of any such
determination.   A termination for Cause based on clause (ii) above
shall take effect immediately upon giving of the termination notice. No act or
omission shall be deemed “willful” if it was due primarily to an error in
judgment or ordinary negligence.

 

(f)                                    “Change in
Control” shall mean:

 

(i)                                     An acquisition
by any Person (as such term is defined in Section 3(a)(9) of the
Exchange Act and used in Sections 13(d) and 14(d) thereof, including
a “group” as defined in Section 13(d) thereof) of Beneficial
Ownership of the Shares then outstanding (the “Company Shares Outstanding”)
or the voting securities of the Company then outstanding entitled to vote
generally in the election of directors (the “Company Voting Securities
Outstanding”), if such acquisition of Beneficial Ownership results in the
Person beneficially owning (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) fifty percent (50%) or more of the Company Shares
Outstanding or fifty percent (50%) or more of the combined voting power of the
Company Voting Securities Outstanding; excluding, however, any such acquisition
by a trustee or other fiduciary holding such Shares under one or more employee
benefit plans maintained by the Company or any of its subsidiaries; or

 

(ii)                                  The approval of
the stockholders of the Company of a reorganization, merger, consolidation,
complete liquidation, or dissolution of the Company, the sale or disposition of
all or substantially all of the assets of the Company or any similar corporate
transaction (in each case referred to in this Section 2(f) as a “Corporate
Transaction”), other than a Corporate Transaction that would result in the
outstanding common stock of the Company immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into common
stock of the surviving entity or a parent or affiliate thereof) at least fifty
percent (50%) of the outstanding common stock of the Company or such surviving
entity or parent or affiliate thereof immediately after such Corporate
Transaction; provided, however, if the consummation of such Corporate
Transaction is subject, at the time of such approval by stockholders, to the consent
of any government or governmental agency, the Change in Control shall not occur
until the obtaining of such consent (either explicitly or implicitly); or

 

(iii)                               A change in the
composition of the Board such that the individuals who, as of the Effective
Date, constitute the Board (such Board shall be hereinafter referred to as the “Incumbent
Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, for purposes of this Section 2(f) that any
individual who becomes a member of the Board 

 

2

 

subsequent
to the Effective Date whose election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least a majority of those
individuals who are members of the Board and who were also members of the
Incumbent Board (or deemed to be such pursuant to this proviso) shall be
considered as though such individual were a member of the Incumbent Board; but,
provided, further, that any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest (as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act, including any successor to such Rule), or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board, shall not be so considered as a member of the Incumbent Board.

 

(g)                                 “Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time.

 

(h)                                 “Disability”
shall mean the Executive’s inability as a result of physical or mental
incapacity to substantially perform [his/her] duties for the Company on a
full-time basis for a period of six (6) months.

 

(i)                                     “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended from time
to time, or any successor act thereto.

 

(j)                                     “Involuntary
Termination” shall mean a termination of the Executive’s employment by the
Company that occurs for reasons other than for Cause, Disability or death.

 

(k)                                  “Threatened
Change in Control” shall mean any bona fide pending tender offer for any
class of the Company’s outstanding Shares, or any pending bona fide offer to
acquire the Company by merger or consolidation, or any other pending action or
plan to effect, or which would lead to, a Change in Control of the Company as
determined by the Incumbent Board. A Threatened Change in Control Period shall
commence on the first day the actions described in the preceding sentence
become manifest and shall end when such actions are abandoned or the Change in
Control occurs.

 

(l)                                     “Shares”
shall mean the shares of common stock of the Company.

 

(m)                               “Resignation
for Good Reason” shall mean a termination of the Executive’s employment by
the Executive due to:

 

(i)                                     a significant
reduction of the Executive’s responsibilities, duties or authority;

 

(ii)                                  a material
reduction in the Executive’s Base Salary; or

 

(iii)                               a
Company-required material relocation of the Executive’s principal place of
employment;

 

provided,
however, that any such condition shall not constitute “Good Reason” unless both
(x) the Executive provides written notice to the Company describing the
condition claimed to constitute Good Reason in reasonable detail within ninety
(90) days of the initial existence of such condition, and (y) the Company
fails to remedy such condition within thirty (30) days of receiving such
written notice thereof; and provided, further, that in all events the
termination of the Executive’s employment with the Company shall not be treated
as a termination for “Good Reason” unless such termination occurs not more than
one (1) year following the initial existence of the condition claimed to
constitute “Good Reason.

 

3

 

3.                                       Events That
Trigger Benefits Under This Agreement.  The Executive shall be eligible for the
compensation and benefits described in Section 4 of this Agreement as
follows:

 

(a)                                  A Change in
Control occurs and Executive’s employment is Involuntarily Terminated or
terminated by Resignation for Good Reason within twenty-four (24) months
following the occurrence of the Change in Control; or

 

(b)                                 A Threatened
Change in Control occurs and the Executive’s employment is Involuntarily
Terminated or terminated by Resignation for Good Reason during the Threatened
Change in Control Period.

 

4.                                       Benefits Upon
Termination.  If the
Executive becomes eligible for benefits under Section 3 above, the Company
shall pay or provide to the Executive the following compensation and benefits:

 

(a)                                  Salary.  The Executive will receive as severance an
amount equal to [his/her] Base Salary at the rate in effect on the date of
termination for a period of twenty-four (24) months, such payment to be made in
installments in accordance with the Company’s standard payroll practices, such
installments to commence, subject to Section 9(j)(ii), in the month
following the month in which the Executive’s Separation from Service
occurs.  The Executive shall also receive
a payment equal to one hundred percent (100%) of the Executive’s target Bonus
for the fiscal year in which the date of termination occurs (or, if no target
Bonus has been assigned to the Executive as of the date of termination, the
average Bonus paid by the Company to the Executive for the last three (3) completed
fiscal years or for the number of completed fiscal years that Executive has
been in the employ of the Company if fewer than three, prior to the termination
date), such payment to be made, subject to Section 9(j)(ii), in a lump sum
within thirty (30) days after the end of the Company’s fiscal year in which the
Executive’s date of termination occurs. 
As used herein, a “Separation from Service” occurs when the
Executive dies, retires, or otherwise has a termination of employment with the
Company that constitutes a “separation from service” within the meaning of
Treasury Regulation Section 1.409A-1(h)(1), without regard to the optional
alternative definitions available thereunder.

 

(b)                                 Qualified and
Non-Qualified Plan Coverage.  Subject to the eligibility provisions of the
plans, the Executive shall continue to participate in the tax-qualified and
non-qualified retirement, savings and employee stock ownership plans of the
Company during the twenty four (24) month period following the Executive’s date
of termination unless the Executive commences Employment prior to the end of
the twenty four (24) month period, in which case, such participation shall end
on the date of [his/her] new employment. The Executive shall inform the Company
promptly upon commencing new employment.

 

(c)                                  Health, Dental,
and Life Insurance Coverage.  The health, dental, and life insurance
benefits coverage provided to the Executive at [his/her] date of termination
shall be continued by the Company during the twenty-four (24) month period
following the Executive’s date of termination unless the Executive commences
employment prior to the end of the twenty four (24) month period and qualifies
for substantially equivalent insurance benefits with the Executive’s new
employer , in which case, such insurance coverages shall end on the date of
qualification.  The Executive shall inform the Company promptly of
[his/her] qualification for any of such insurance coverages.  . The
Company shall provide for such insurance coverages at its expense at the same
level and in the same manner as if the Executive’s employment had not
terminated (subject to the customary changes in such coverages if the Executive
retires under a Company retirement plan, reaches age 65, or similar events and
subject to Executive’s right to make any changes in such coverages that an
active employee is permitted to make). 

 

4

 

Any
additional coverages the Executive had at termination, including dependent
coverage, will also be continued for such period on the same terms, to the
extent permitted by the applicable policies or contracts. Any costs the
Executive was paying for such coverages at the time of termination shall be
paid by the Executive by separate check payable to the Company each month in advance.
If the terms of any benefit plan referred to in this Section do not permit
continued participation by the Executive, the Company will arrange for other
coverage at its expense providing substantially similar benefits. If the
Executive is covered by a split-dollar or similar life insurance program at the
date of termination, [he/she] shall have the option in [his/her] sole
discretion to have such policy transferred to him upon termination, provided
that the Company is paid for its interest m the policy upon such transfer.

 

(d)                                 Outplacement
Services.  The Company
shall provide the Executive with outplacement services by a firm selected by
the Executive, at the expense of the Company, in an amount up to $25,000.

 

(e)                                  No Mitigation
Obligation.  The Company
hereby acknowledges that it will be difficult and may be impossible for the
Executive to find reasonably comparable employment following termination of
Executive’s employment by the Company and that the non-solicitation covenant
contained in Section 6 may further limit the employment opportunities for
the Executive.  Accordingly, the payment of the compensation and benefits
by the Company to the Executive in accordance with the terms of this Agreement
is hereby acknowledged by the Company to be reasonable, and the Executive will
not be required to mitigate the amount of any payment provided for this
Agreement by seeking other employment or otherwise, nor will any profits,
income, earnings or other benefits from any source whatsoever create any
mitigation, offset, reduction or any other obligation on the part of the
Executive hereunder or otherwise, except as expressly provided in the first
sentence of Section 4(c).

 

5.                                       Parachute
Payments. 
Notwithstanding anything contained in this Agreement to the contrary, in
the event that the compensation and benefits provided for in this Agreement to
Executive together with all other payments and the value of any benefit
received or to be received by Executive:

 

(a)                                  constitute “parachute
payments” within the meaning of Section 280G of the Code, and

 

(b)                                 but for this
Section, would be subject to the excise tax imposed by Section 4999 of the
Code, the Executive’s compensation and benefits pursuant to the terms of this
Agreement shall be payable either:

 

(i)                                     in full, or

 

(ii)                                  in such lesser
amount which would result in no portion of such compensation and benefits being
subject to excise tax under Section 4999 of the Code, whichever of the
foregoing amounts, taking into account the applicable federal, state and local
income taxes and the excise tax imposed by Section 4999, results in the
receipt by Executive on an after-tax basis, of the greatest amount of
compensation and benefits under this Agreement, notwithstanding that all or
some portion of such compensation and benefits may be subject to the excise tax
imposed under Section 4999 of the Code.  Unless the Company and
Executive otherwise agree in writing, any determination required under this Section 5
shall be made in writing by the Company’s independent public accountants serving
immediately before the Change in Control (the “Accountants”), whose
determination shall be conclusive and binding upon Executive and the Company
for all purposes.  For purposes of making the calculations required by
this Section 5, the Accountants may make reasonable assumptions and
approximations concerning applicable taxes and may rely on reasonable good
faith interpretations concerning the applications of Section 280G and 4999
of the Code.  The Company shall cause the Accountants to 

 

5

 

provide
detailed supporting calculations of its determination to Executive and the
Company.  Executive and the Company shall furnish to the Accountants such
information and documents as the Accountants may reasonably request in order to
make a determination under this Section. The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations
contemplated by this Section 5.

 

6.                                       Obligation Not
to Solicit

 

(a)                                  Executive
hereby agrees that while Executive is receiving compensation and benefits under
this Agreement, Executive shall not in any manner attempt to induce or assist
others to attempt to induce any officer, employee, customer or client of the
Company to terminate its association with the Company, nor do anything directly
or indirectly to interfere with the relationship between the Company and any
such persons or concerns.

 

(b)                                 In the event
that the Executive engages in any activity in violation of Section 6(a),
all compensation and benefits described in Section 4 shall immediately
cease.

 

7.                                       Confidentiality.  The terms of this Agreement are to be of the
highest confidentiality. In order to insure and maintain such confidentiality,
it is agreed that neither party, including all persons and entities under a
party’s control, shall, directly or indirectly, publicize or disclose to third
persons the terms of this Agreement or the substance of negotiations with
respect to it; provided, however, that nothing herein shall be construed to
prevent disclosures which are reasonably necessary to enforce the terms of this
Agreement or which are otherwise required by law to be made to governmental
agencies or others; moreover, nothing herein shall be construed to prevent the
parties hereto, or their attorneys, from making such disclosures for legitimate
business purposes to their respective insurers, financial institutions,
accountants and attorneys or, in the case of a corporation, limited liability
company or partnership, to its respective officers, directors, employees,
managers, members and agents or any of its respective subsidiaries, group or
divisions, provided that each such recipient of such disclosures agrees to be
bound by the requirements concerning disclosure of confidential information as
set forth in this Paragraph 7.

 

8.                                       Settlement of
Disputes; Arbitration

 

(a)                                  All disputes
arising under or in connection with this Agreement, shall be submitted to
binding arbitration in Los Angeles County before an arbitrator selected by
mutual agreement of the parties.  If the parties are unable to agree
mutually on an arbitrator within thirty (30) days after a written demand for
arbitration is made, the matter shall be submitted to JAMS/ENDISPUTE (“JAMS”)
or successor organization for binding arbitration in Los Angeles County by a
single arbitrator who shall be a former California Superior Court judge. 
The arbitrator shall be selected by JAMS in an impartial manner determined by
it.  Except as may be otherwise provided herein, the arbitration shall be
conducted under the California Arbitration Act, Code of Civil Procedure §1280
et seq.  The parties shall have the discovery rights provided in Code of
Civil Procedure §§1283.05 and 1283.1.  The arbitration hearing shall be
commenced within ninety (90) days of the appointment of the arbitrator, and a
decision shall be rendered by the arbitrator within thirty (30) days of the
conclusion of the hearing.  The arbitrator shall have complete authority
to render any and all relief, legal and equitable, appropriate under California
law, including the award of punitive damages where legally available and
warranted.  The arbitrator shall award costs of the proceeding, including
reasonable attorneys’ fees, to the party or parties determined to have
substantially prevailed, but such award for attorneys’ fees shall not exceed
One Hundred Thousand Dollars ($100,000).  Judgment on the award can be
entered in a court of competent jurisdiction.

 

(b)                                 The foregoing
notwithstanding, if the amount in controversy exceeds $200,000, exclusive of
attorneys’ fees and costs, the matter shall be litigated in the Los Angeles
County Superior 

 

6

 

Court
as a regular civil action except that a former California Superior Court Judge
selected by JAMS in an impartial manner shall be appointed as referee to
determine, sitting without a jury (a jury being waived by all parties hereto),
all issues pursuant to California Code of Civil Procedure §638(1). 
Judgment entered on the decision of the referee shall be appealable as a
judgment of the Superior Court.  The prevailing party shall be entitled to
receive its reasonable attorneys’ fees and costs from the other party, but such
award for attorneys’ fees shall not exceed One Hundred Thousand Dollars
($100,000).

 

9.                                       Miscellaneous

 

(a)                                  Notices. Any
notice or other communication required or permitted under this Agreement shall
be effective only if it is in writing and shall be deemed to have been duly
given when delivered personally or seven days after mailing if mailed first
class by registered or certified mail, postage prepaid, addressed as follows:

 

	
  If
  to the Company:

  	
  Farmer
  Bros. Co

  
	
   

  	
  20333
  South Normandie Avenue

  
	
   

  	
  Torrance,
  CA 90502

  
	
   

  	
  Attn:
  Chief Executive Officer

  
	
   

  	
   

  
	
  with
  a copy to:

  	
  John
  M. Anglin, Esq.

  
	
   

  	
  Anglin,
  Flewelling, Rasmussen, Campbell & Trytten LLP

  
	
   

  	
  199
  South Los Robles Avenue, Suite 600

  
	
   

  	
  Pasadena,
  CA 91101-2459

  
	
   

  	
   

  
	
  If
  to the Executive:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

or
to such other address as any party may designate by notice to the others.

 

(b)                                 Assignment.  This Agreement shall inure to the benefit of
and shall be binding upon the parties hereto and their respective executors,
administrators, heirs, personal representatives, and successors, but, except as
hereinafter provided, neither this Agreement nor any right hereunder may be
assigned or transferred by either party thereto, or by any beneficiary or any
other person, nor be subject to alienation, anticipation, sale, pledge,
encumbrance, execution, levy, or other legal process of any kind against the Executive,
[his/her] beneficiary or any other person. Notwithstanding the foregoing, any
person or business entity succeeding to substantially all of the business of
the Company by purchase, merger, consolidation, sale of assets, or otherwise,
shall be bound by and shall adopt and assume this Agreement and the Company
shall cause the assumption of this Agreement by such successor. If Executive
shall die while any amount would still be payable to Executive hereunder (other
than amounts that, by their terms, terminate upon the death of Executive) if
Executive had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
executors, personal representatives or administrators of Executive’s estate.

 

(c)                                  No Obligation
to Fund.  The agreement of the Company
(or its successor) to make payments to the Executive hereunder shall represent
solely the unsecured obligation of the Company (and its successor), except to
the extent the Company (or its successors) in its sole discretion elects in
whole or in part to fund its obligations under this Agreement pursuant to a
trust arrangement or otherwise.

 

7

 

(d)                                 Applicable Law.  This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of California,
without giving effect to conflict of law principles.

 

(e)                                  Amendment.  This Agreement may only be amended by a
written instrument signed by the parties hereto, which makes specific reference
to this Agreement.

 

(f)                                    Severability.  If any provision of this Agreement shall be
held invalid or unenforceable by any court of competent jurisdiction, such
holding shall not invalidate or render unenforceable any other provisions
hereof.

 

(g)                                 Withholding.  The Company shall have the right to withhold
any and all local, state and federal taxes which may be withheld in accordance
with applicable law.

 

(h)                                 Other Benefits.  Nothing in this Agreement shall limit or
replace the compensation or benefits payable to Executive, or otherwise
adversely affect Executive’s rights, under any other benefit plan, program, or
agreement to which Executive is a party.

 

(i)                                     Employment
Rights.  Nothing expressed or implied
in this Agreement will create any right or duty on the part of the Company or
the Executive to have the Executive remain in the employment of the Company or
any Subsidiary prior to or following any Change in Control.  The Company
and Executive are parties to an Employment Agreement executed concurrently
herewith.  Except as provided in [Section 11] of the Employment
Agreement, the provisions of the Employment Agreement and this Agreement are
cumulative.

 

(j)                                     Section 409A

 

(i)                                     It is intended
that any amounts payable under this Agreement shall either be exempt from or
comply with Section 409A of the Code (including the Treasury regulations
and other published guidance relating thereto) (“Code Section 409A”)
so as not to subject the Executive to payment of any additional tax, penalty or
interest imposed under Code Section 409A. 
The provisions of this Agreement shall be construed and interpreted to
avoid the imputation of any such additional tax, penalty or interest under Code
Section 409A yet preserve (to the nearest extent reasonably possible) the
intended benefit payable to the Executive.

 

(ii)                                  Notwithstanding
any provision of this Agreement to the contrary, if the Executive is a “specified
employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as
of the date of the Executive’s Separation from Service, the Executive shall not
be entitled to any payment or benefit pursuant to Section 4 until the
earlier of (i) the date which is six (6) months after the Executive’s
Separation from Service for any reason other than death, or (ii) the date
of the Executive’s death.  Any amounts
otherwise payable to the Executive upon or in the six (6) month period
following the Executive’s Separation from Service that are not so paid by
reason of this Section 9(j)(ii) shall be paid (without interest) as
soon as practicable (and in all events within thirty (30) days) after the date
that is six (6) months after the Executive’s Separation from Service (or,
if earlier, as soon as practicable, and in all events within thirty (30) days,
after the date of the Executive’s death). 
The provisions of this Section 9(j)(ii) shall only apply if,
and to the extent, required to avoid the imputation of any tax, penalty or
interest pursuant to Code Section 409A.

 

(iii)                               To the extent
that any benefits or reimbursements pursuant to Section 4(c) or Section 4(d) are
taxable to the Executive, any reimbursement payment due to the Executive
pursuant to any such provision shall be paid to the Executive on or before the
last day of the Executive’s 

 

8

 

taxable
year following the taxable year in which the related expense was incurred.  The benefits and reimbursements pursuant to
such provisions are not subject to liquidation or exchange for another benefit
and the amount of such benefits and reimbursements that the Executive receives
in one taxable year shall not affect the amount of such benefits or
reimbursements that the Executive receives in any other taxable year.

 

[SIGNATURES FOLLOW]

 

9

 

IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed on its
behalf by its duly authorized officers and the Executive has hereunder set
[his/her] hand, as of the date first above written.

 

	
  Company:

  	
  FARMER
  BROS. CO.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Executive:

  	
   

  
	
   

  	
  [Name of Executive]

  

 

10

 

SCHEDULE OF EXECUTIVE OFFICERS

 

Roger
M. Laverty III

Drew
H. Webb

John
E. Simmons

Heidi
L. Modaro

Hortensia
R. Gomez

 

11Exhibit
10.28

 

[FORM OF]

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION
AGREEMENT (this “Agreement”) is made and entered into as of                         , by and between Farmer
Bros. Co., a Delaware corporation (the “Company”), and
                          
(“Indemnitee”).

 

RECITALS

 

WHEREAS, highly competent
persons have become more reluctant to serve publicly-held corporations as
directors, officers or in other capacities unless they are provided with
adequate protection through insurance or adequate 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 Board of
Directors of the Company (the “Board”) has determined that, in order to
attract and retain qualified individuals, the Company will attempt to maintain
on an ongoing basis, at its sole expense, liability insurance to protect
persons serving the Company and its subsidiaries from certain liabilities.
Although the furnishing of such insurance has been a customary and widespread
practice among United States-based corporations and other business enterprises,
the Company believes that, given current market conditions and trends, such
insurance may be available to it in the future only at higher premiums and with
more exclusions. At the same time, directors, officers and other persons in
service to corporations or business enterprises are being increasingly
subjected to expensive and time-consuming litigation relating to, among other
things, matters that traditionally would have been brought only against the
Company or business enterprise itself. The Certificate of Incorporation (the “Charter”)
and the Bylaws of the Company require indemnification of the officers and
directors of the Company. Indemnitee may also be entitled to indemnification
pursuant to applicable provisions of the Delaware General Corporation Law (the “DGCL”).
The Charter, the Bylaws and the DGCL 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, officers and other persons with respect to indemnification;

 

WHEREAS, the
uncertainties relating to such insurance and to indemnification have increased
the difficulty of attracting and retaining such persons;

 

WHEREAS, the Board has
determined that the increased difficulty in attracting and retaining such
persons is detrimental to the best interests of the Company’s stockholders and
that the Company should act to assure such persons that there will be increased
certainty of such protection in the future;

 

WHEREAS, it is
reasonable, prudent and necessary for the Company contractually to obligate
itself to indemnify, and to advance expenses on behalf of, such persons 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 Charter, the Bylaws of the Company
and any resolutions adopted pursuant thereto, and shall not be deemed a
substitute therefor, nor diminish or abrogate any rights of Indemnitee
thereunder; and

 

WHEREAS, Indemnitee does
not regard the protection available under the Company’s Charter, Bylaws and
insurance as adequate in the present circumstances, and may not be willing to
serve as an officer or director without adequate protection, and the Company
desires Indemnitee to serve in such capacity. Indemnitee is willing to serve,
continue to serve and to take on additional service for or on behalf of the
Company on the condition that he or she be so indemnified;

 

NOW, THEREFORE, in
consideration of the premises and the covenants contained herein and Indemnitee’s
agreement to serve as a director or officer after the date hereof, the Company
and Indemnitee do hereby covenant and agree as follows:

 

 

1.                                       Definitions. 
As used in this Agreement:

 

(a)                                  References to “agent” shall mean
any person who is or was a director, officer, or employee of the Company or a
Subsidiary of the Company or other person authorized by the Company to act for
the Company, to include such person serving in such capacity as a director,
officer, employee, fiduciary or other official of another corporation,
partnership, limited liability company, joint venture, trust or other
enterprise at the request of, for the convenience of, or to represent the
interests of the Company or a Subsidiary of the Company.

 

(b)                                 The terms “Beneficial Owner” and “Beneficial
Ownership” shall have the meanings set forth in Rule 13d-3 promulgated
under the Exchange Act as in effect on the date hereof.

 

(c)                                  A “Change in Control” shall be
deemed to occur upon the earliest to occur after the date of this Agreement of
any of the following events:

 

(i)                                     Acquisition of Stock by Third Party. 
Any Person is or becomes the Beneficial Owner, directly or indirectly,
of securities of the Company representing fifteen percent (15%) or more of the
combined voting power of the Company’s then outstanding securities entitled to
vote generally in the election of directors, unless (1) the change in the
relative Beneficial Ownership of the Company’s securities by any Person results
solely from a reduction in the aggregate number of outstanding shares of
securities entitled to vote generally in the election of directors, or (2) such
acquisition was approved in advance by the Continuing Directors and such
acquisition would not constitute a Change in Control under part (iii) of this
definition;

 

(ii)                                  Change in Board of Directors. 
Individuals who, as of the date hereof, constitute the Board, and any
new director whose election by the Board or nomination for election by the
Company’s stockholders was approved by a vote of at least two thirds of the
directors then still in office who were directors on the date hereof or whose
election for nomination for election was previously so approved (collectively,
the “Continuing Directors”), cease for any reason to constitute at least
a majority of the members of the Board;

 

(iii)                               Corporate Transactions. 
The effective date of a reorganization, merger or consolidation of the
Company (a “Business Combination”), in each case, unless, following such
Business Combination: (1) all or substantially all of the individuals and
entities who were the Beneficial Owners of securities entitled to vote
generally in the election of directors immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 51% of the
combined voting power of the then outstanding securities of the Company
entitled to vote generally in the election of directors resulting from such
Business Combination (including, without limitation, a corporation which as a
result of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more Subsidiaries) in
substantially the same proportions as their ownership, immediately prior to
such Business Combination, of the securities entitled to vote generally in the
election of directors; (2) no Person (excluding any corporation resulting from
such Business Combination) is the Beneficial Owner, directly or indirectly, of
15% or more of the combined voting power of the then outstanding securities
entitled to vote generally in the election of directors of such corporation
except to the extent that such ownership existed prior to the Business
Combination; and (3) at least a majority of the Board of Directors of the
corporation resulting from such Business Combination were Continuing Directors
at the time of the execution of the initial agreement, or of the action of the
Board of Directors, providing for such Business Combination;

 

(iv)                              Liquidation. 
The approval by the stockholders of the Company of a complete liquidation
of the Company or an agreement or series of agreements for the sale or
disposition by the Company of all or substantially all of the Company’s assets
(or, if such approval is not required, the decision by the Board to proceed
with such a liquidation, sale, or disposition in one transaction or a series of
related transactions); or

 

(v)                                 Other Events. 
There occurs any other event of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a
response to any similar item on any similar schedule or form) promulgated under
the Exchange Act, whether or not the Company is then subject to such reporting
requirement.

 

2

 

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

 

(e)                                  “Delaware Court” shall mean the
Court of Chancery of the State of Delaware.

 

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

 

(g)                                 “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, trustee, general partner, managing member,
fiduciary, employee or agent.

 

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

 

(i)                                     “Expenses” shall include all
direct and indirect costs, fees and expenses of any type or nature whatsoever,
including, without limitation, attorneys’ fees and costs, retainers, court costs,
transcript costs, fees and disbursements of experts, witness fees, fees and
disbursements of private investigators and professional advisors, travel
expenses, duplicating costs, printing and binding costs, telephone and fax
transmission charges, postage, delivery service fees, secretarial services,
reasonable compensation for time spent by Indemnitee for which he is not
otherwise compensated for by the Company or any third party, 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 or enforcing a right to
indemnification under this Agreement. Expenses also shall include Expenses
incurred in connection with any appeal resulting from any Proceeding, including
without limitation the premium, security for, and other costs relating to any
cost bond, supersedeas bond, or other appeal bond or its equivalent. Expenses,
however, shall not include amounts paid in settlement by Indemnitee or the
amount of judgments or fines against Indemnitee.

 

(j)                                     “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 Indemnitee
under this Agreement, or of other indemnitees under similar indemnification agreements);
or (ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term “Independent
Counsel” shall not include any person who, under the applicable standards
of professional conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement. The Company agrees to pay the
reasonable fees 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.

 

(k)                                  References to “fines” shall
include any excise tax assessed on Indemnitee with respect to any employee
benefit plan; references to “serving at the request of the Company”
shall include any service as a director, officer, employee, agent or fiduciary
of the Company which imposes duties on, or involves services by, such director,
officer, employee, agent or fiduciary with respect to an employee benefit plan,
its participants or beneficiaries; and if Indemnitee acted in good faith and in
a manner Indemnitee reasonably believed to be in the best interests of the
participants and beneficiaries of an employee benefit plan, Indemnitee shall be
deemed to have acted in a manner “not opposed to the best interests of the
Company” as referred to in this Agreement.

 

(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 Subsidiary of the Company; (iii) any
employee benefit plan of the Company including, without limitation, the Company’s
Employee Stock Ownership Plan, or of any Subsidiary of the Company, or any
Person or entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan; (iv) a corporation owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their 

 

3

 

ownership of stock of the
Company; and (v) Roy F. Farmer, deceased, his widow Emily Farmer and their
descendants (collectively, “Farmer Family Members”), the estates of
Farmer Family Members and the personal representatives thereof, and trusts,
partnerships and other entities created by or for the benefit of Farmer Family
Members and the trustees, partners and members thereof.

 

(m)                               A “Potential Change in Control”
shall be deemed to have occurred if: (i) the Company enters into an agreement
or arrangement, the consummation of which would result in the occurrence of a
Change in Control; (ii) any Person or the Company publicly announces an intention
to take or consider taking actions which if consummated would constitute a
Change in Control; (iii) any Person who becomes the Beneficial Owner, directly
or indirectly, of securities of the Company representing 5% or more of the
combined voting power of the Company’s then outstanding securities entitled to
vote generally in the election of directors increases its Beneficial Ownership
of such securities by 5% or more over the percentage so owned by such Person on
the date hereof; or (iv) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control has occurred.

 

(n)                                 The term “Proceeding” shall
include any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation, inquiry, administrative
hearing or any other actual, threatened or completed proceeding, whether
brought in the right of the Company or otherwise and whether of a civil
(including intentional or unintentional tort claims), criminal, administrative
or investigative nature, in which Indemnitee was, is or will be involved as a
party or otherwise by reason of the fact that Indemnitee is or was a director
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
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, general partner,
managing 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.

 

(o)                                 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.

 

2.                                       Agreement To Serve. Indemnitee agrees to serve and/or
continue to serve as an agent of the Company, at its will (or under separate
agreement, if such agreement exists), in the capacity Indemnitee currently
serves as an agent of the Company; provided, however, that nothing contained in
this Agreement is intended to or shall (i) restrict the ability of Indemnitee
to resign at any time and for any reason from any current or future position or
positions, (ii) create any right to continued employment of Indemnitee in any
current or future position or positions, or (iii) restrict the ability of the
Company to terminate the employment or agency of Indemnitee at any time and for
any reason (subject to compliance with the terms of any employment or other
applicable agreement to which the Company (or any of its Subsidiaries) and
Indemnitee are parties).

 

3.                                       Indemnification in Third-Party
Proceedings.  The Company shall indemnify and hold harmless
Indemnitee in accordance with the provisions of this Section 3 if, by reason of
his Corporate Status, Indemnitee was, is, or is threatened to be made, 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
Expenses, judgments, penalties, fines and amounts paid in settlement (including
all interest, assessments and other charges paid or payable in connection with
or in respect of such Expenses, judgments, fines, penalties and amounts paid in
settlement) actually and reasonably incurred by Indemnitee or on his behalf in
connection with such Proceeding or any claim, issue or matter therein, if
Indemnitee acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the Company and, in the case of a
criminal Proceeding, had no reasonable cause to believe that his conduct was
unlawful.

 

4.                                       Indemnification in Proceedings by or in
the Right of the Company.  The Company shall indemnify
and hold harmless Indemnitee in accordance with the provisions of this Section 4
if, by reason of his Corporate Status, Indemnitee was, is, or is threatened to
be made, a party to or a participant (as a witness or otherwise) in any
Proceeding brought 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 Expenses actually and reasonably incurred by Indemnitee or on his 

 

4

 

behalf in connection with
such Proceeding or any claim, issue or matter therein, if Indemnitee acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Company. Notwithstanding the foregoing, no
indemnification shall be made under this Section 4 in respect of any claim,
issue or matter as to which Indemnitee shall have been finally adjudged by a
court to be liable to the Company, unless and only to the extent that any court
in which the Proceeding was brought or the Delaware Court shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnification for such Expenses as the court shall deem proper.

 

5.                                       Indemnification for Expenses of a Party
Who is Wholly or Partly Successful. 
Notwithstanding any other provisions of this Agreement, to the extent
that Indemnitee is, by reason of his Corporate Status, 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
Expenses actually and reasonably incurred by him or on his behalf in connection
therewith. If Indemnitee is not wholly successful in such Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in such Proceeding, the Company shall indemnify and
hold harmless Indemnitee against all Expenses actually and reasonably incurred
by him or on his behalf in connection with each successfully resolved claim,
issue or matter. If Indemnitee is not wholly successful in such Proceeding, the
Company also shall indemnify and hold harmless Indemnitee against all Expenses
reasonably incurred in connection with a claim, issue or matter related to any
claim, issue or matter on which Indemnitee was successful. For purposes of this
Section and without limitation, the termination of any claim, issue or matter
in such a Proceeding by dismissal, with or without prejudice, shall be deemed
to be a successful result as to such claim, issue or matter.

 

6.                                       Indemnification for Expenses of a Witness. 
Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee is, by reason of his Corporate Status, a witness in any
Proceeding to which Indemnitee is not a party, he shall be indemnified and held
harmless against all Expenses actually and reasonably incurred by him or on his
behalf in connection therewith.

 

7.                                       Additional Indemnification

 

(a)                                  Notwithstanding any limitation in
Sections 3, 4 or 5, the Company shall indemnify and hold harmless Indemnitee
if, by reason of his Corporate Status, Indemnitee is a party to or threatened
to be made a party to or participant in any Proceeding (including a Proceeding
by or in the right of the Company to procure a judgment in its favor) against
all Expenses, judgments, fines, penalties and amounts paid in settlement
(including all interest, assessments and other charges paid or payable in
connection with or in respect of such Expenses, judgments, fines, penalties and
amounts paid in settlement) actually and reasonably incurred by Indemnitee in
connection with the Proceeding. No indemnity shall be made under this Section 7(a)
on account of Indemnitee’s conduct which constitutes a breach of Indemnitee’s
duty of loyalty to the Company or its stockholders or is an act or omission not
in good faith or which involves intentional misconduct or a knowing violation
of the law.

 

(b)                                 Notwithstanding any limitation in
Sections 3, 4, 5 or 7(a), the Company shall indemnify and hold harmless
Indemnitee 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 Expenses, judgments, fines, penalties and
amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect of such Expenses,
judgments, fines, penalties and amounts paid in settlement) actually and
reasonably incurred by Indemnitee in connection with the Proceeding.

 

8.                                       Contribution

 

(a)                                  Whether or not the indemnification
provided in Sections 3, 4, 5 and 7 hereof is available, in respect of any
threatened, pending or completed action, suit or proceeding in which the
Company is jointly liable with Indemnitee (or would be if joined in such
action, suit or proceeding), the Company shall pay, in the first instance, the
entire amount of any judgment or settlement of such action, suit or proceeding
without requiring Indemnitee to contribute to such payment and the Company
hereby waives and relinquishes any right of contribution it may have against
Indemnitee.  The Company shall not enter
into any settlement of any action, suit or proceeding in which the Company is
jointly liable with Indemnitee (or would be if joined in such action, suit or
proceeding) unless such settlement provides for a full and final release of all
claims asserted against Indemnitee.

 

5

 

(b)                                 Without diminishing or impairing the
obligations of the Company set forth in the preceding subparagraph, if, for any
reason, Indemnitee shall elect or be required to pay all or any portion of any
judgment or settlement in any threatened, pending or completed action, suit or
proceeding in which the Company is jointly liable with Indemnitee (or would be
if joined in such action, suit or proceeding), the Company shall contribute to
the amount of expenses (including attorneys’ fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred and paid or payable
by Indemnitee in proportion to the relative benefits received by the Company
and all officers, directors or employees of the Company, other than Indemnitee,
who are jointly liable with Indemnitee (or would be if joined in such action,
suit or proceeding), on the one hand, and Indemnitee, on the other hand, from
the transaction from which such action, suit or proceeding arose; provided,
however, that the proportion determined on the basis of relative benefit may,
to the extent necessary to conform to law, be further adjusted by reference to
the relative fault of the Company and all officers, directors or employees of
the Company other than Indemnitee who are jointly liable with Indemnitee (or
would be if joined in such action, suit or proceeding), on the one hand, and
Indemnitee, on the other hand, in connection with the events that resulted in
such expenses, judgments, fines or settlement amounts, as well as any other
equitable considerations which the Law may require to be considered.  The relative fault of the Company and all
officers, directors or employees of the Company, other than Indemnitee, who are
jointly liable with Indemnitee (or would be if joined in such action, suit or
proceeding), on the one hand, and Indemnitee, on the other hand, shall be
determined by reference to, among other things, the degree to which their
actions were motivated by intent to gain personal profit or advantage, the
degree to which their liability is primary or secondary and the degree to which
their conduct is active or passive.

 

(c)                                  The Company hereby agrees to fully
indemnify and hold Indemnitee harmless from any claims of contribution which
may be brought by officers, directors or employees of the Company, other than
Indemnitee, who may be jointly liable with Indemnitee.

 

(d)                                 To the fullest extent permissible under
applicable law, if the indemnification provided for in this Agreement is
unavailable to Indemnitee for any reason whatsoever, the 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 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).

 

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)                                 for an accounting of profits made from
the purchase and sale (or sale and purchase) by Indemnitee of securities of the
Company within the meaning of Section 16(b) of the Exchange Act or similar
provisions of state statutory law or common law;

 

(c)                                  except as otherwise provided in Sections
14(e) and (f) hereof, prior to a Change in Control, 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 (i)
the Board authorized the Proceeding (or any part of any Proceeding) prior to
its initiation or (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable law;

 

(d)                                 for any Expenses, judgments, liabilities,
fines, penalties and amounts paid in settlement resulting from Indemnitee’s
conduct which is finally adjudged to have been willful misconduct, knowingly
fraudulent or deliberately dishonest; or

 

6

 

(e)                                  if a court of competent jurisdiction
shall finally determine that any indemnification hereunder is unlawful.

 

10.                                 Advances of Expenses; Defense of Claim

 

(a)                                  Notwithstanding any provision of this
Agreement to the contrary, and to the fullest extent permitted by applicable
law, the Company shall advance all Expenses incurred by or on behalf of
Indemnitee (or reasonably expected by Indemnitee to be incurred by Indemnitee
within three months) in connection with any Proceeding by reason of Indemnitee’s
Corporate Status 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. 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 reasonable Expenses incurred pursuing a Proceeding to
enforce this right of advancement, including Expenses incurred preparing and
forwarding statements to the Company to support the advances claimed.
Indemnitee shall qualify for advances, to the fullest extent permitted by
applicable law, solely upon the execution and delivery to the Company of an undertaking
providing that Indemnitee undertakes to repay the advance to the extent that it
is ultimately determined that Indemnitee is not entitled to be indemnified by
the Company under the provisions of this Agreement, the Charter, the Bylaws of
the Company, applicable law or otherwise. This Section 10(a) shall not apply to
any claim made by Indemnitee for which indemnity is excluded pursuant to Section
9.

 

(b)                                 The Company shall be entitled to
participate in any Proceeding at its own expense.

 

(c)                                  The Company shall not settle any action,
claim or Proceeding (in whole or in part) which would impose any Expense,
judgment, fine, penalty or limitation on Indemnitee without Indemnitee’s prior
written consent.

 

11.                                 Procedure for Notification and
Application for Indemnification

 

(a)                                  Indemnitee agrees to notify promptly the
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
covered hereunder. The failure of Indemnitee to so notify the Company shall not
relieve the Company of any obligation which it may have to Indemnitee under
this Agreement, or otherwise.

 

(b)                                 Indemnitee may deliver to the Company a
written application to indemnify and hold harmless Indemnitee in accordance
with this Agreement. Such application(s) may be delivered from time to time and
at such time(s) as Indemnitee deems appropriate in his sole discretion.
Following such a written application for indemnification by Indemnitee,
Indemnitee’s entitlement to indemnification shall be determined according to Section
12(a) of this Agreement.

 

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 the Board: (i) by a majority vote of the Disinterested Directors,
even though less than a quorum of the Board or (ii) by Independent Counsel in a
written opinion to the Board, a copy of which shall be delivered to Indemnitee.
The Company promptly shall 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 costs or Expenses (including attorneys’ fees and
disbursements) incurred by 

 

7

 

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.

 

(b)                                 In the event the determination of
entitlement to indemnification is to be made by Independent Counsel pursuant to
Section 12(a) hereof, the Independent Counsel shall be selected as provided in
this Section 12(b). The Independent Counsel shall be selected by the Board of
Directors, and the Company shall give written notice to Indemnitee advising him
of the identity of the Independent Counsel so selected and certifying that the
Independent Counsel so selected meets the requirements of “Independent Counsel”
as defined in Section 1 of this Agreement. Indemnitee may, within ten (10) days
after such written notice of selection shall have been received, deliver to the
Company a written objection to such selection; provided, however, that such
objection may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of “Independent Counsel” as defined in Section
1 of this Agreement, and the objection shall set forth with particularity the
factual basis of such assertion. Absent a proper and timely objection, the
person so selected shall act as Independent Counsel. If such written objection
is so made and substantiated, the Independent Counsel so selected may not serve
as Independent Counsel unless and until such objection is withdrawn or a court
of competent jurisdiction has determined that such objection is without merit.
If, within twenty (20) days after submission by Indemnitee of a written request
for indemnification pursuant to Section 11(b) hereof, no Independent Counsel
shall have been selected and not objected to, either the Company or Indemnitee
may petition the Delaware Court for resolution of any objection which shall
have been made by Indemnitee to the Company’s selection of Independent Counsel
and/or for the appointment as Independent Counsel of a person selected by the
Delaware Court, and the person with respect to whom all objections are so
resolved or the person so appointed shall act as Independent Counsel under Section
12(a) hereof. 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).
The Company shall pay any and all reasonable fees and expenses of Independent
Counsel incurred by such Independent Counsel in connection with acting pursuant
to Section 12(a) hereof, regardless of the manner in which such Independent
Counsel was selected or appointed.

 

13.                                 Presumptions and Effect of Certain
Proceedings

 

(a)                                  In making a determination with respect to
entitlement to indemnification hereunder, the person, persons or entity making
such determination shall presume that Indemnitee is entitled to indemnification
under this Agreement if Indemnitee has submitted a request for indemnification
in accordance with Section 11(b) of this Agreement, and the Company shall 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.

 

(b)                                 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 thirty (30) days after receipt by the Company of the request therefor,
the requisite determination of entitlement to indemnification shall be deemed
to have been made and Indemnitee shall be entitled to such indemnification,
absent (i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee’s statement not materially
misleading, in connection with the request for indemnification, or (ii) a final
judicial determination that any or all such indemnification is expressly
prohibited under applicable law; provided, however, that such 30-day period may
be extended for a reasonable time, not to exceed an additional fifteen (15)
days, if the person, persons or entity making the determination with respect to
entitlement to indemnification in good faith requires such additional time for
the obtaining or evaluating of documentation and/or information relating
thereto.

 

8

 

(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) of itself adversely affect the right of
Indemnitee to indemnification or create a presumption that Indemnitee did not
act in good faith and in a manner which 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)           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(d) shall
not be deemed to be exclusive or to limit in any way the other circumstances in
which Indemnitee may be deemed or found to have met the applicable standard of
conduct set forth in this Agreement.

 

(e)           The knowledge and/or actions, or failure to act, of
any other director, officer, trustee, partner, managing 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(a) of
this Agreement within thirty (30) days after receipt by the Company of the
request for indemnification, (iv) payment of indemnification is not made
pursuant to Section 5, 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) a contribution payment is not made in a
timely manner pursuant to Section 8 of this Agreement, or (vi) payment
of indemnification pursuant to Section 3 or 4 of this Agreement is not
made within ten (10) days after a determination has been made that
Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an
adjudication by the Delaware Court to such indemnification, contribution or
advancement of Expenses. Alternatively, Indemnitee, at his 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.
Except as set forth herein, the provisions of Delaware law (without regard to
its conflict of laws rules) shall apply to any such arbitration. The Company
shall not oppose Indemnitee’s right to seek any such adjudication or award in
arbitration.

 

(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 proceeding or arbitration 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, and the Company may not refer
to or introduce into evidence any determination pursuant to Section 12(a) of
this Agreement adverse to Indemnitee for any purpose. If Indemnitee commences a
judicial proceeding or arbitration 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 (i) a misstatement by
Indemnitee of a material fact, or an omission of a material fact necessary to
make Indemnitee’s statement not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such indemnification
under applicable law.

 

9

 

(d)           The Company shall be precluded from asserting in any
judicial proceeding or arbitration 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.

 

(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 or arbitration 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 Charter, or the Company’s Bylaws 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)            Interest shall be paid by the Company to Indemnitee at
the legal rate under Delaware law for amounts which the Company indemnifies or
is obliged to indemnify for the period commencing with the date on which
Indemnitee requests indemnification, contribution, reimbursement or advancement
of any Expenses and ending with the date on which such payment is made to
Indemnitee by the Company.

 

15.           Establishment of Trust.  In the event
of a Potential Change in Control, the Company shall, upon written request by
Indemnitee, create a “Trust” for the benefit of Indemnitee and from time to
time upon written request of Indemnitee shall fund such Trust in an amount
sufficient to satisfy any and all Expenses reasonably anticipated at the time
of each such request to be incurred in connection with investigating, preparing
for, participating in or defending any Proceedings, and any and all judgments,
fines, penalties and amounts paid in settlement (including all interest,
assessments and other charges paid or payable in connection with or in respect
of such judgments, fines penalties and amounts paid in settlement) in
connection with any and all Proceedings from time to time actually paid or
claimed, reasonably anticipated or proposed to be paid. The trustee of the
Trust (the “Trustee”) shall be a bank or trust company or other
individual or entity chosen by Indemnitee and reasonably acceptable to the
Company. Nothing in this Section 15 shall relieve the Company of any of
its obligations under this Agreement. The amount or amounts to be deposited in
the Trust pursuant to the foregoing funding obligation shall be determined by
mutual agreement of Indemnitee and the Company or, if the Company and
Indemnitee are unable to reach such an agreement, by Independent Counsel
selected in accordance with Section 12(b) of this Agreement. The
terms of the Trust shall provide that, except upon the consent of both
Indemnitee and the Company, upon a Change in Control: (a) the Trust shall
not be revoked or the principal thereof invaded, without the written consent of
Indemnitee; (b) the Trustee shall advance, to the fullest extent permitted
by applicable law, within two (2) business days of a request by Indemnitee
and upon the execution and delivery to the Company of an undertaking providing
that Indemnitee undertakes to repay the advance to the extent that it is
ultimately determined that Indemnitee is not entitled to be indemnified by the
Company, any and all Expenses to Indemnitee; (c) the Trust shall continue
to be funded by the Company in accordance with the funding obligations set
forth above; (d) the Trustee shall promptly pay to Indemnitee all amounts
for which Indemnitee shall be entitled to indemnification pursuant to this Agreement
or otherwise; and (e) all unexpended funds in such Trust shall revert to
the Company upon mutual agreement by Indemnitee and the Company or, if
Indemnitee and the Company are unable to reach such an agreement, by
Independent Counsel selected in accordance with Section 12(b) of this
Agreement, that Indemnitee has been fully indemnified under the terms of this
Agreement. The Trust shall be governed by Delaware law (without regard to its
conflicts of laws rules) and the Trustee shall consent to the exclusive
jurisdiction of the Delaware Court in accordance with Section 23 of this
Agreement.

 

16.           Security. 
Notwithstanding anything herein to the contrary, to the extent requested
by Indemnitee and approved by the Board, the Company may at any time and from
time to time provide security to Indemnitee for the Company’s obligations
hereunder through an irrevocable bank line of credit, funded trust or other
collateral. Any such security, once provided to Indemnitee, may not be revoked
or released without the prior written consent of Indemnitee.

 

10

 

17.           Non-Exclusivity; Survival of Rights; Insurance;
Subrogation

 

(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 Charter, the Company’s Bylaws, any agreement, a vote
of stockholders or a resolution of directors, or otherwise. No amendment, alteration
or repeal of this Agreement or of any provision hereof shall limit or restrict
any right of Indemnitee under this Agreement in respect of any action taken or
omitted by such Indemnitee in his 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 Charter, the Company’s
Bylaws 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)           The DGCL, the Charter and the Company’s Bylaws permit
the Company to purchase and maintain insurance or furnish similar protection or
make other arrangements including, but not limited to, providing a trust fund,
letter of credit, or surety bond (“Indemnification Arrangements”) on
behalf of Indemnitee against any liability asserted against him or incurred by
or on behalf of him or in such capacity as a director, officer, employee or
agent of the Company, or arising out of his status as such, whether or not the
Company would have the power to indemnify him against such liability under the
provisions of this Agreement or under the DGCL, as it may then be in effect.
The purchase, establishment, and maintenance of any such Indemnification
Arrangement shall not in any way limit or affect the rights and obligations of
the Company or of Indemnitee under this Agreement except as expressly provided
herein, and the execution and delivery of this Agreement by the Company and
Indemnitee shall not in any way limit or affect the rights and obligations of
the Company or the other party or parties thereto under any such
Indemnification Arrangement.

 

(c)           To the extent that the Company maintains an insurance
policy or policies providing liability insurance for directors, officers,
trustees, partners, managing members, fiduciaries, employees, or agents of the
Company or of any other Enterprise which such person serves at the request of
the Company, 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, trustee, partner, managing member,
fiduciary, employee or agent under such policy or policies. If, at the time the
Company receives notice from any source of a Proceeding as to which Indemnitee
is a party or a participant (as a witness or otherwise), the Company has
director and officer liability insurance in effect, the Company shall give
prompt notice 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 Indemnitee, all amounts payable as a result of such Proceeding in accordance
with the terms of such policies.

 

(d)           In the event of any payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all papers required and take all
action necessary to secure such rights, including execution of such documents
as are necessary to enable the Company to bring suit to enforce such rights.

 

(e)           The Company’s obligation to indemnify or advance
Expenses hereunder to Indemnitee who is or was serving at the request of the
Company as a director, officer, trustee, partner, managing member, fiduciary,
employee or agent of any other Enterprise shall be reduced by any amount
Indemnitee has actually received as indemnification or advancement of expenses
from such Enterprise.

 

18.           Duration of Agreement.  All
agreements and obligations of the Company contained herein shall continue
during the period Indemnitee serves as a director or officer of the Company or
as a director, officer, trustee, partner, managing 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 so long as Indemnitee shall be subject to
any possible Proceeding (including any rights of appeal thereto and any
Proceeding commenced by Indemnitee pursuant to Section 14 of this
Agreement) by reason of his 

 

11

 

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.

 

19.           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.

 

20.           Enforcement and Binding Effect

 

(a)           The Company expressly confirms and agrees that it has
entered into this Agreement and assumed the obligations imposed on it hereby in
order to induce Indemnitee 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.

 

(b)           Without limiting any of the rights of Indemnitee under
the Charter or Bylaws of the Company 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. If the DGCL or any other applicable law
is amended after the date hereof to permit the Company to indemnify Indemnitee
for Expenses or liabilities, or to indemnify Indemnitee with respect to any
action or Proceeding, not contemplated by this Agreement, then this Agreement
(without any further action by either party hereto) shall automatically be
deemed to be amended to require that the Company indemnify Indemnitee to the
fullest extent permitted by the DGCL.

 

(c)           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 spouse,
assigns, heirs, devisees, executors and administrators and other legal
representatives.

 

(d)           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.

 

(e)           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 the court, and the Company hereby waives any such
requirement of such a bond or undertaking.

 

12

 

21.           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.

 

22.           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:

 

Farmer Bros. Co.

20333 South Normandie Avenue 

Torrance, CA 90502

Attention:
Corporate Secretary

 

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

 

23.           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 Delaware,
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: (a) agree
that any action or proceeding arising out of or in connection with this
Agreement shall be brought only in the Delaware Court and not in any other
state or federal court in the United States of America or any court in any
other country; (b) consent to submit to the exclusive jurisdiction of the
Delaware Court for purposes of any action or proceeding arising out of or in
connection with this Agreement; (c) appoint irrevocably, to the extent
such party is not a resident of the State of Delaware, RL&F Service Corp.,
One Rodney Square, 10th Floor, 10th and King Streets, P.O. Box 551,
Wilmington, Delaware 19899 as its agent in the State of Delaware as such party’s
agent for acceptance of legal process in connection with any such action or
proceeding against such party with the same legal force and validity as if
served upon such party personally within the State of Delaware; (d) waive
any objection to the laying of venue of any such action or proceeding in the
Delaware Court; and (e) waive, and agree not to plead or to make, any
claim that any such action or proceeding brought in the Delaware Court has been
brought in an improper or inconvenient forum, or is subject (in whole or in
part) to a jury trial.

 

24.           Counterparts.        This Agreement may be executed in one or
more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute one and the same Agreement.
Only one such counterpart signed by the party against whom enforceability is
sought needs to be produced to evidence the existence of this Agreement.

 

25.           Miscellaneous.  Use of the
masculine pronoun shall be deemed to include usage of the feminine pronoun
where appropriate. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction thereof.

 

[SIGNATURE PAGE
FOLLOWS]

 

13

 

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

 

	
  FARMER BROS. CO.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  INDEMNITEE

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  
	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
				

 

14

 

SCHEDULE
OF INDEMNITEES

 

John M. Anglin

Guenter W. Berger

Kenneth R. Carson

Lewis A. Coffman

Hortensia R. Gomez

Michael J. King

Roger M. Laverty III

Martin A. Lynch

Thomas A. Maloof

James J. McGarry

John H. Merrell

Heidi L. Modaro

John Samore, Jr.

John E. Simmons

Carol Farmer Waite

 

15

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