Indemnification Provisions (Version 1.0)
These indemnification provisions are a part of and are incorporated into those certain letter agreements (each, a “Letter Agreement”) that reference such provisions by and among the Company and Advisor. Each Letter Agreement and the provisions set forth herein are referred to as the “Agreement.” Capitalized terms used herein without definition shall have the meanings ascribed to them in each such Letter Agreement.
As a material part of the consideration for the agreement of Advisor to furnish its services under this Agreement, the Company agrees (a) to indemnify and hold harmless Advisor and its affiliates, and their respective past, present and future directors, officers, partners, members, employees, agents, representatives, advisors, subcontractors and controlling persons (collectively, the “Indemnified Parties”), to the fullest extent lawful, from and against any and all losses, claims, damages or liabilities (or actions in respect thereof), joint or several, arising out of or related to Advisor’s engagement under, or any matter referred to in, this Agreement, and (b) to reimburse each Indemnified Party for all reasonable and reasonably documented expenses (including, without limitation, the fees and expenses of counsel) as they are incurred in connection with investigating, preparing, pursuing, defending, settling, compromising or otherwise becoming involved in any action, suit, dispute, inquiry, investigation or proceeding, pending or threatened, brought by or against any person or entity (including, without limitation, any shareholder or derivative action or any claim to enforce this Agreement), arising out of or related to such engagement or matter. However, the Company shall not be liable under the foregoing indemnification provision to the extent of any loss, claim, damage or liability which is finally judicially determined by a court of competent jurisdiction to have resulted from the willful misconduct or gross negligence of such Indemnified Party, and in such case, the Company shall be entitled to recover from the applicable Indemnified Party any expenses advanced by the Company to such Indemnified Party pursuant to the reimbursement obligation set forth in this paragraph to the extent attributable to such loss, claim, damage or liability, subject to such Indemnified Party’s rights of contribution.
If for any reason the foregoing indemnification or reimbursement is unavailable to any Indemnified Party or insufficient fully to indemnify any Indemnified Party or to hold it harmless, then the Company shall contribute to the amount paid or payable by such Indemnified Party as a result of the losses, claims, damages, liabilities or expenses referred to in subsections (a) or (b) of such indemnification or reimbursement provisions in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and Advisor, on the other hand, in connection with the matters contemplated by this Agreement. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law, then the Company shall contribute to such amount paid or payable by such Indemnified Party in such proportion as is appropriate to reflect not only such relative benefits, but also the relative fault of the Company (and its affiliates, and their respective directors, employees, agents and other advisors), on the one hand, and such Indemnified Party, on the other hand, in connection therewith, as well as any other relevant equitable considerations. Notwithstanding the two immediately preceding sentences, to the extent the exception to indemnification contemplated by the last sentence in the preceding paragraph applies with respect to such Indemnified Party, the Company shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the Company (and its affiliates, and their respective directors, employees, agents and other advisors), on the one hand, and such Indemnified Party, on the other hand, in connection with the matters contemplated by this Agreement, as well as any other relevant equitable considerations.
Notwithstanding the foregoing, in no event shall the Indemnified Parties be required to contribute an aggregate amount in excess of the amount of fees actually received by Advisor from the Company pursuant to this Agreement. Relative benefits received by the Company, on the one hand, and Advisor, on the other hand, shall be deemed to be in the same proportion as (i) the total value paid or received or contemplated to be paid or received by the Company, and its security holders, creditors, and other affiliates, as the case may be, pursuant to the transaction(s) (whether or not consummated) contemplated by the engagement hereunder, bears to (ii) the fees received by Advisor under this Agreement. The Company shall not settle, compromise or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened action, suit, dispute, inquiry, investigation or proceeding arising out of or related to Advisor’s engagement under, or any matter referred to in, this Agreement (whether or not an Indemnified Party is an actual or potential party thereto), or participate in or otherwise facilitate any such settlement, compromise, consent or termination by or on behalf of any person or entity, unless such settlement, compromise, consent or termination contains a release of the Indemnified Parties reasonably satisfactory in form and substance to Advisor. The Company further agrees that neither Advisor nor any other Indemnified Party shall have any liability (whether direct or indirect and regardless of the legal theory advanced) to the Company or any person or entity asserting claims on behalf of or in right of the Company arising out of or related to Advisor’s engagement under, or any matter referred to in, this Agreement, except for losses, claims, damages or liabilities incurred by the Company which are finally judicially determined by a court of competent jurisdiction to have resulted primarily from the willful misconduct or gross negligence of such Indemnified Party. The Company shall cause any new company that may be formed by the Company, for any purpose, to agree to all of the obligations in this Agreement to Advisor in accordance with the foregoing provisions.
Prior to entering into any agreement or arrangement with respect to, or effecting, any (y) merger, statutory exchange or other business combination or proposed sale, exchange, dividend or other distribution or liquidation of all or a significant portion of its assets, or (z) significant recapitalization or reclassification of its outstanding securities that does not directly or indirectly provide for the assumption of the obligations of the Company set forth in this Agreement, the Company shall notify Advisor in writing thereof (if not previously so notified) and, if requested by Advisor, shall arrange in connection therewith alternative means of providing for the obligations of the Company set forth in this Agreement, including the assumption of such obligations by another party, insurance, surety bonds, the creation of an escrow, or other credit support arrangements, in each case in an amount and upon terms and conditions satisfactory to Advisor. If Advisor receives actual notice of the commencement of any action or proceeding to which the Company is not a party in respect of which indemnity shall be sought from the Company hereunder, Advisor shall notify the Company of such action or proceeding, provided that failure to notify the Company shall not relieve the Company from any liability hereunder (A) if the Company had actual notice of such action or proceeding, or (B) unless and only to the extent of any material prejudice to the Company’s rights and defenses resulting therefrom, and shall not in any event relieve the Company from any obligation or liability that the Company may have to any Indemnified Party otherwise than on account of the indemnity obligation hereunder. If an Indemnified Party has sought indemnification hereunder in connection with an action or proceeding brought by a third party that is also brought against the Company, the Company may, in actions or proceedings other than those brought by or on behalf of the Company, upon written notice to such Indemnified Party, assume the defense thereof, by retaining counsel reasonably satisfactory to such Indemnified Party and paying the reasonable fees and expenses of such counsel. Any Indemnified Party shall have the right to employ separate counsel in any such action or proceeding and to participate in the defense thereof, but the fees and expenses of such counsel incurred after receipt of such notice from the Company shall be at the expense of such Indemnified Party (but not other out-of-pocket defense or investigation expenses incurred by or on behalf of such Indemnified Party, which expenses shall be reimbursed by the Company) unless (I) the Company has agreed to pay the reasonable fees and expenses of such counsel, or (II) the Company shall have failed to timely assume the defense of such action or proceeding or retain counsel reasonably satisfactory to such Indemnified Party, or (III) as reasonably determined by such Indemnified Party (upon advice of counsel), (aa) there may be legal defenses available to such Indemnified Party or another Indemnified Party that are different from or in addition to those available to the Company, or (bb) the representation of the Company and such Indemnified Party by the same counsel would be inappropriate due to an actual or potential conflict of interest (in the case of any of the foregoing clauses (I), (II) or (III), if such Indemnified Party notifies the Company in writing that it elects to retain separate counsel, (yy) the Company shall not have the right to assume the defense of such action or proceeding on behalf of such Indemnified Party, and (zz) such Indemnified Party may employ separate counsel to represent or defend it in any such action or proceeding and the Company shall pay the reasonable fees and expenses of such counsel (in addition to local counsel), provided, however, that the Company shall not be required to pay the reasonable fees and expenses of more than one separate law firm for all Indemnified Parties in any jurisdiction (in addition to local counsel) in any single action or proceeding except to the extent that separate counsel (upon advice of counsel) is reasonably necessary in order to effectively defend against such action or proceeding). The indemnity, reimbursement, and other obligations and agreements of the Company set forth herein (i) shall apply to any services provided by Advisor in connection with this engagement prior to the Effective Date and to any modifications of this Agreement, (ii) shall be in addition to any obligation or liability which the Company may otherwise have to any Indemnified Party, and (iii) shall survive the completion of the services described in, and any expiration or termination of the relationship established by, this Agreement. The Company agrees that Advisor would be irreparably injured by any breach of any such obligations or agreements, that money damages alone would not be an adequate remedy for any such breach and that, in the event of any such breach, Advisor shall be entitled, in addition to any other remedies, to injunctive relief and specific performance.