{"component": "clause", "props": {"groups": [{"size": 4, "snippet": "23 Section 5.7 Payment of Indemnification...................................... 23 Section 5.8 Contribution.................................................... 23 Section 5.9 Mandatory Indemnification of Members and Managers............... 23 Section 5.10 Contract Rights; Amendment or Repeal............................ 24 Section 5.11 Scope of Article................................................ 24 Section 5.12 Reliance on Provisions.......................................... 24 ARTICLE VI CAPITAL ACCOUNTS", "samples": [{"hash": "64euoKK8xPf", "uri": "/contracts/64euoKK8xPf#advancing-expenses", "label": "Operating Agreement (Cotelligent Inc)", "score": 18.0, "published": true}], "snippet_links": [{"key": "section-57", "type": "clause", "offset": [3, 14]}, {"key": "payment-of-indemnification", "type": "clause", "offset": [15, 41]}, {"key": "section-58", "type": "clause", "offset": [83, 94]}, {"key": "section-59", "type": "clause", "offset": [163, 174]}, {"key": "mandatory-indemnification-of-members-and-managers", "type": "clause", "offset": [175, 224]}, {"key": "contract-rights", "type": "clause", "offset": [256, 271]}, {"key": "amendment-or-repeal", "type": "clause", "offset": [273, 292]}, {"key": "scope-of-article", "type": "clause", "offset": [337, 353]}, {"key": "reliance-on-provisions", "type": "clause", "offset": [418, 440]}, {"key": "article-vi", "type": "definition", "offset": [486, 496]}, {"key": "capital-accounts", "type": "definition", "offset": [497, 513]}], "hash": "d6424b68198e1352e6f6b07f7945190b", "id": 8}, {"size": 49, "snippet": "The Company shall pay the expenses (including attorneys\u2019 fees and disbursements) incurred in good faith by an indemnified representative in advance of the final disposition of a proceeding described in Section 13(a) or the initiation of or participation in a proceeding which has been authorized by the Member pursuant to Section 13(b) upon receipt of an undertaking by or on behalf of the indemnified representative to repay the amount if it is ultimately determined pursuant to Section 13(f) that such person is not entitled to be indemnified by the Company pursuant to this Section 13. 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partnership, joint venture, trust or other enterprise) shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized by relevant provisions of the General Corporation Law of the State of Delaware; provided, however, the corporation shall not be required to advance such expenses to a director (i) who commences any action, suit or proceeding as a plaintiff unless such advance is specifically approved by a majority of the Board of Directors, or (ii) who is a party to an action, suit or proceeding brought by the corporation and approved by a majority of the Board of Directors which alleges willful misappropriation of corporate assets by such director, disclosure of confidential information in violation of such director\u2019s fiduciary 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"How can the clause be drafted to minimize risk of unrecoverable advances if misconduct is later found?", "What are the most common negotiation points regarding security or repayment obligations?", "How do courts in relevant jurisdictions interpret and enforce advancement provisions?", "How does this clause compare to industry standards and statutory requirements for expense advancement?"], "drafting_tip": "Specify conditions for advancement, require repayment if indemnification is unwarranted, and define eligible expenses to ensure clarity, prevent abuse, and facilitate enforceability.", "explanation": "The Advancing Expenses clause requires a company to pay or reimburse legal fees and other costs incurred by directors, officers, or employees in defending against claims or lawsuits before the final resolution of the case. Typically, this advancement is subject to conditions, such as the individual agreeing to repay the expenses if it is later determined they were not entitled to indemnification. This clause ensures that individuals are not financially burdened while defending themselves in legal proceedings related to their corporate roles, thereby encouraging qualified individuals to serve in these positions without fear of personal financial risk."}, "json": true, "cursor": ""}}