Indemnification by the Administrator The Administrator shall indemnify each Series and hold it harmless from and against any and all losses, damages and expenses, including reasonable attorneys' fees and expenses, incurred by such Series which result from: (i) the Administrator's failure to comply with the terms of this Agreement with respect to such Series; or (ii) the Administrator's lack of good faith in performing its obligations hereunder with respect to such Series; or (iii) the Administrator's negligence or misconduct or that of its employees, agents or contractors in connection herewith with respect to such Series. A Series shall not be entitled to such indemnification in respect of actions or omissions constituting negligence or misconduct on the part of that Series or its employees, agents or contractors other than the Administrator unless such negligence or misconduct results from or is accompanied by negligence or misconduct on the part of the Administrator, any affiliated person of the Administrator, or any affiliated person of an affiliated person of the Administrator. Before confessing any claim against it which may be subject to indemnification hereunder, a Series shall give the Administrator reasonable opportunity to defend against such claim in its own name or in the name of the Trust on behalf of such Series.
Provision of Services by the Administrator The Administrator shall directly, or indirectly through one or more Affiliates (as defined below) or third parties as described in Section 1(b), engage and maintain personnel for the purpose of providing the following services (collectively, the “Services”) to the Issuer and Masterworks Cayman:
(i) Artwork-Level Services, including:
(A) custodial and storage services for the Artwork;
(B) maintaining asset-level insurance requirements for the Artwork;
(C) managing transport for the Artwork in the ordinary course of business, including the display and exhibition thereof;
(D) research services;
(E) appraisal and valuation services; and
(F) other services deemed necessary or appropriate by the Administrator at its discretion to maintain the Artwork;
(ii) Entity-Level Services for the Issuer and Masterworks Cayman, including:
(A) oversight and management of banking activities;
(B) management of preparation and filing of SEC and other corporate filings;
(C) financial, accounting and bookkeeping services, including retention of an auditor for the Issuer;
(D) record-keeping, shareholder registrar, investor relations and regulatory compliance;
(E) providing listing services, subject to the applicable law;
(F) tax reporting services;
(G) bill payment;
(H) selecting and negotiating insurance coverage for the Issuer and Masterworks Cayman, including operational errors and omissions coverage and directors’ and officers’ coverage;
(I) maintain the Issuer’s stock ledger and coordinating activities of the Issuer’s transfer agent, escrow agent and related parties;
(J) software services; and
(K) services related to Templum ATS trading.
(iii) Non-Routine Services, including:
(A) legal and professional transactional services;
(B) negotiation of terms of potential sale of the Artwork or the Issuer and the execution thereof;
(C) obtaining appraisals and statements of condition in connection with a sale transaction relating to the Artwork;
(D) other transaction-related services, cost, payments and expenditures relating to the Artwork or the Issuer;
(E) administrative services in connection with liquidation or winding up of the Issuer and Masterworks Cayman;
(F) managing litigation, judicial proceedings or arbitration, including the defense and or settlement of any claims (regardless of whether or not the Issuer is named as a defendant or party in any such claim);
(G) Conservation, restoration (as deemed necessary by the Administrator), reframing and other expenditures that increase the value of the Artwork; and
(H) other non-routine or extraordinary services.
Indemnities by the Servicer (a) Without limiting any other rights that any such Person may have hereunder or under Applicable Law, the Servicer hereby agrees to indemnify each Indemnified Party, forthwith on demand, from and against any and all Indemnified Amounts (calculated without duplication of Indemnified Amounts paid by the Borrower pursuant to Section 9.1 above) awarded against or incurred by any such Indemnified Party by reason of any acts, omissions or alleged acts or omissions of the Servicer, including, but not limited to (i) any representation or warranty made by the Servicer under or in connection with any Transaction Documents to which it is a party, any Monthly Report, Servicer’s Certificate or any other information or report delivered by or on behalf of the Servicer pursuant hereto, which shall have been false, incorrect or misleading in any material respect when made or deemed made, (ii) the failure by the Servicer to comply with any Applicable Law, (iii) the failure of the Servicer to comply with its duties or obligations in accordance with the Agreement or (iv) any litigation, proceedings or investigation against the Servicer, excluding, however, (a) Indemnified Amounts to the extent resulting from gross negligence or willful misconduct on the part of such Indemnified Party, and (b) under any Federal, state or local income or franchise taxes or any other Tax imposed on or measured by income (or any interest or penalties with respect thereto or arising from a failure to comply therewith) required to be paid by such Indemnified Party in connection herewith to any taxing authority. The provisions of this indemnity shall run directly to and be enforceable by an injured party subject to the limitations hereof. If the Servicer has made any indemnity payment pursuant to this Section 9.2 and such payment fully indemnified the recipient thereof and the recipient thereafter collects any payments from others in respect of such Indemnified Amounts, the recipient shall repay to the Servicer an amount equal to the amount it has collected from others in respect of such indemnified amounts.
(b) If for any reason the indemnification provided above in this Section 9.2 is unavailable to the Indemnified Party or is insufficient to hold an Indemnified Party harmless, then Servicer shall contribute to the amount paid or payable to such Indemnified Party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by such Indemnified Party on the one hand and Servicer on the other hand but also the relative fault of such Indemnified Party as well as any other relevant equitable considerations.
(c) The obligations of the Servicer under this Section 9.2 shall survive the resignation or removal of the Administrative Agent or any Managing Agents and the termination of this Agreement.
(d) The parties hereto agree that the provisions of this Section 9.2 shall not be interpreted to provide recourse to the Servicer against loss by reason of the bankruptcy or insolvency (or other credit condition) of, or default by, the related Obligor, on any Transferred Loan.
(e) The Servicer shall not be permitted to liquidate any of the Collateral to pay any indemnification payable by the Servicer pursuant to this Section 9.2.
Liability of the Administrator No provision of this Agreement shall be deemed to protect the Administrator against any liability to the Fund or its shareholders to which it might otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or the reckless disregard of its obligations under this Agreement.
Activities of the Administrator The services of the Administrator to the Company are not to be deemed to be exclusive, and the Administrator and each affiliate is free to render services to others. It is understood that directors, officers, employees and stockholders of the Company are or may become interested in the Administrator and its affiliates, as directors, officers, members, managers, employees, partners, stockholders or otherwise, and that the Administrator and directors, officers, members, managers, employees, partners and stockholders of the Administrator and its affiliates are or may become similarly interested in the Company as stockholders or otherwise.
Compensation of the Administrator For the services to be rendered by the Administrator as provided in Section 2 of this Agreement, the Portfolio shall pay to the Administrator, at the end of each month, a fee equal to one-twelfth of 0.15 percent of the net assets of the Portfolio. If this Agreement is terminated prior to the end of any month, the fee for such month shall be prorated.
Limitation of Liability of the Administrator The duties of the Administrator shall be confined to those expressly set forth herein, and no implied duties are assumed by or may be asserted against the Administrator hereunder. The Administrator shall not be liable for any error of judgment or mistake of law or for any loss arising out of any act or omission in carrying out its duties hereunder, except a loss resulting from willful misfeasance, bad faith or negligence in the performance of its duties, or by reason of reckless disregard of its obligations and duties hereunder, except as may otherwise be provided under provisions of applicable law which cannot be waived or modified hereby. Any person, even though also an employee, or agent of the Administrator, who may be or become an officer, Trustee, employee or agent of the Trust or the Funds shall be deemed, when rendering services to the Trust or the Funds, or acting on any business of that party, to be rendering such services to or acting solely for that party and not as a partner, employee, or agent or one under the control or direction of the Administrator even though paid by it. So long as the Administrator acts in good faith and with due diligence and without negligence, the Trust assumes full responsibility and shall indemnify the Administrator, its employees, agents, directors, officers and nominees and hold them harmless from and against any and all actions, suits and claims, whether groundless or otherwise, and from and against any and all losses, damages, costs, charges, reasonable counsel fees and disbursements, payments, expenses and liabilities (including reasonable investigation expenses) arising directly or indirectly out of the Administrator’s actions taken or non-actions with respect to the performance of services hereunder. The indemnity and defense provisions set forth herein shall indefinitely survive the termination of this Agreement. The rights hereunder shall include the right to reasonable advances of defense expenses in the event of any pending or threatened litigation with respect to which indemnification hereunder may ultimately be merited. In order that the indemnification provision contained herein shall apply, however, it is understood that if in any case the Trust may be asked to indemnify or hold the Administrator harmless, the Trust shall be fully and promptly advised of all pertinent facts concerning the situation in question, and it is further understood that the Administrator will use all reasonable care to identify and notify the Trust promptly concerning any situation which presents or appears likely to present the probability of such a claim for indemnification against the Trust, but failure to do so in good faith shall not affect the rights hereunder. The Trust shall be entitled to participate at its own expense or, if it so elects, to assume the defense of any suit brought to enforce any claims subject to this indemnity provision. If the Trust elects to assume the defense of any such claim, the defense shall be conducted by counsel chosen by the Trust and satisfactory to the Administrator, whose approval shall not be unreasonably withheld. In the event that the Trust elects to assume the defense of any suit and retain counsel, the Administrator shall bear the fees and expenses of any additional counsel retained by it. If the Trust does not elect to assume the defense of a suit, it will reimburse the Administrator for the reasonable fees and expenses of any counsel retained by the Administrator. The Administrator may apply to the Trust at any time for instructions and may consult counsel for the Trust or its own counsel and with accountants and other experts with respect to any matter arising in connection with the Administrator’s duties, and the Administrator shall not be liable or accountable for any action taken or omitted by it in good faith in accordance with such instruction or with the opinion of such counsel, accountants or other experts. The Administrator shall be protected in acting upon any document which it reasonably believes to be genuine and to have been signed or presented by the proper person or persons. The Administrator will not be held to have notice of any change of authority of any officers, employees or agents of the Trust until receipt of written notice thereof from the Trust.
Indemnities of Servicer The Servicer shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Servicer under this Agreement:
(a) The Servicer shall indemnify, defend and hold harmless the Seller, the Issuer, the Owner Trustee, the Indenture Trustee, the Paying Agent, the Note Registrar, the Securities Intermediary, the Noteholders and the Certificateholder and any of the officers, directors, employees and agents of the each such party from and against any and all costs, expenses, losses, damages, claims and liabilities (including, but not limited to, reasonable legal fees, costs and expenses, and including any such reasonable fees, costs and expenses incurred in connection with any enforcement (including any action, claim, or suit brought by such indemnified parties) of any indemnification or other obligation of the Servicer), arising out of or resulting from the use, ownership or operation by the Servicer or any Affiliate thereof of a Financed Vehicle.
(b) [Reserved].
(c) The Servicer shall indemnify, defend and hold harmless the Seller, the Issuer, the Owner Trustee, the Indenture Trustee, the Securities Intermediary, the Certificateholder and the Noteholders and any of the officers, directors, employees and agents of the Seller, the Issuer, the Owner Trustee, the Indenture Trustee, the Securities Intermediary, the Certificateholder and the Noteholders from and against any and all costs, expenses, losses, claims, damages and liabilities (including, but not limited to, reasonable legal fees, costs and expenses, and including any such reasonable fees, costs and expenses incurred in connection with any enforcement (including any action, claim, or suit brought by such indemnified parties) of any indemnification or other obligation of the Servicer), to the extent that such cost, expense, loss, claim, damage or liability arose out of, or is imposed upon any such Person through, the negligence, willful misfeasance or bad faith of the Servicer in the performance of its duties under this Agreement or by reason of reckless disregard of its obligations and duties under this Agreement, including those that may be incurred by any such indemnified party as a result of any act or omission by the Servicer in connection with its maintenance and custody of the Receivables Files.
(d) Promptly after receipt by a party indemnified under this Section 7.02 or Section 4.08 (a “Servicer Indemnified Party”) of notice of the commencement of any action, such Servicer Indemnified Party will, if a claim in respect thereof is to be made against the party providing indemnification under this Section 7.02 or 4.08 (a “Servicer Indemnifying Party”), notify such Servicer Indemnifying Party of the commencement thereof. In case any such action is brought against any Servicer Indemnified Party under this Section 7.02 or 4.08 and it notifies the Servicer Indemnifying Party of the commencement thereof, the Servicer Indemnifying Party will assume the defense thereof, with counsel reasonably satisfactory to such Servicer Indemnified Party (who may, unless there is, as evidenced by an opinion of counsel to the Servicer Indemnified Party stating that there is an unwaivable conflict of interest, be counsel to the Servicer Indemnifying Party), and the Servicer Indemnifying Party will not be liable to such Servicer Indemnified Party under this Section for any legal or other expenses subsequently incurred by such Servicer Indemnified Party in connection with the defense thereof, other than reasonable costs of investigation. The obligations set forth in this Section 7.02 and Section 4.08 shall survive the termination of this Agreement or the resignation or removal of the Servicer, the Owner Trustee, the Indenture Trustee and shall include reasonable fees and expenses of counsel and expenses of litigation. If the Servicer shall have made any indemnity payments pursuant to this Section and the Person to or on behalf of whom such payments are made thereafter collects any of such amounts from others, such Person shall promptly repay such amounts to the Servicer, without interest. For purposes of this Section, in the event of the termination of the rights and obligations of TMCC (or any successor thereto pursuant to Section 7.03) as Servicer pursuant to Section 8.01, or a resignation by such Servicer pursuant to this Agreement, such Servicer shall be deemed to be the Servicer pending appointment of a successor Servicer (other than the Indenture Trustee) pursuant to Section 8.02.
Retention of the Administrator The Trust hereby retains the Administrator to act as the administrator of the Portfolios and to furnish the Portfolios with the management and administrative services as set forth in Article 2 below. The Administrator hereby accepts such employment to perform the duties set forth below. The Administrator shall, for all purposes herein, be deemed to be an independent contractor and, unless otherwise expressly provided or authorized, shall have no authority to act for or represent the Trust in any way and shall not be deemed an agent of the Trust.
Indemnities by the Seller Without limiting any other rights that the Administrator, any Purchaser Agent, any Purchaser, any Liquidity Provider, any other Program Support Provider, the Program Administrator or any of their respective Affiliates, agents, employees, officers, and directors (each, an “Indemnified Party”) may have hereunder or under applicable Law, the Seller hereby agrees to indemnify each Indemnified Party and hold each Indemnified Party harmless from and against any and all claims, damages, expenses, costs, losses and liabilities, including Attorney Costs (all of the foregoing being collectively referred to as “Indemnified Amounts”) arising out of or resulting from this Agreement, the use of proceeds of Purchases or Reinvestments, or any interest therein, or the purchase of the Purchased Interest or in respect of any Pool Receivable, Related Security or Contract, or in respect of any other Transaction Document except (a) to the extent resulting from fraud, gross negligence or willful misconduct on the part of such Indemnified Party; (b) for which indemnification would constitute recourse (except as otherwise specifically provided in this Agreement to be paid by the Seller hereunder) for uncollectible Receivables; and (c) in respect of Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim. Without limiting the foregoing, but subject to the exclusions set forth in the preceding sentence, the Seller shall pay within five (5) Business Days after written demand (which demand shall be accompanied by documentation of the Indemnified Amounts, in reasonable detail) to each Indemnified Party any and all amounts necessary to indemnify such Indemnified Party from and against any and all Indemnified Amounts relating to or resulting from any of the following:
(i) the failure of any Receivable included in the calculation of the Net Receivables Pool Balance as an Eligible Receivables to be an Eligible Receivable as of the date of such calculation, the failure of any information contained in any Information Package to be true and correct, or the failure of any other information required to be provided to any Purchaser, Purchaser Agent or the Administrator with respect to the Receivables or this Agreement to be true and correct;
(ii) the failure of any representation or warranty made or deemed made by the Seller (or any of its officers, employees or agents) under or in connection with this Agreement, any other Transaction Document to have been true and correct as of the date made or deemed made;
(iii) the failure by the Seller to comply with any applicable law, rule or regulation with respect to any Pool Receivable or the related Contract, or the failure of any Pool Receivable or the related Contract to conform to any such applicable law, rule or regulation;
(iv) the failure to vest in the Administrator, for the benefit of each Purchaser Group, First Priority Interest in the Pool Assets to the extent required under this Agreement;
(v) any commingling of funds to which the Administrator, any Purchaser Agent or any Purchaser is entitled hereunder with any other funds;
(vi) any dispute, claim, offset or defense (other than discharge in bankruptcy of the Obligor) of the Obligor to the payment of any Receivable in, or purporting to be in, the Receivables Pool (including a defense based on such Receivable or the related Contract not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale of the goods or services related to such Receivable or the furnishing or failure to furnish such goods or services or relating to collection activities with respect to such Receivable or any Contract related thereto (if such collection activities were performed by the Seller or any of its Affiliates or by any agent or independent contractor retained by the Seller or any of its Affiliates);
(vii) any failure of the Seller to perform its duties or obligations in accordance with the provisions hereof, any other Transaction Document or under the Contracts;
(viii) any products liability, environmental or other claim by an Obligor or other third party arising out of the goods or services which are the subject of any Pool Receivable or the related Contract;
(ix) the use of proceeds of Purchases or Reinvestments;
(x) the failure of the Seller to pay when due any Taxes, energy surcharges or other governmental charges payable by the Seller in connection with any of the Pool Receivables or this Agreement;
(xi) any investigation, litigation or proceeding related to this Agreement, any of the other Transaction Documents or the ownership of the Pool Receivables or any Pool Assets;
(xii) any failure of a Lock-Box Bank to comply with the terms of the applicable Lock-Box Agreement;
(xiii) any action taken by the Seller, the Servicer or any Originator (or any of their respective Affiliates) in the enforcement or collection of any Pool Receivable;
(xiv) in the case of a Retail Receivable, the failure or delay in providing any Obligor with an invoice or other evidence of indebtedness; or
(xv) the failure of the sale and pledge of any Pool Receivable under the Transaction Documents to comply with the notice requirements of FACA or any analogous State or local Laws.
