FORM OF
INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT between Prime Retail, Inc., a Maryland
corporation (the "Company"), and ______________ , an officer and/or director
of the Company (the "Indemnitee"), dated as of _________________ , 199__.
WHEREAS, the Indemnitee has agreed to serve as an officer and/or
director of the Company; and
WHEREAS, the Amended and Restated Articles of Incorporation (as
amended, the "Articles of Incorporation") and the Amended and Restated Bylaws of
the Company (the "Bylaws") provide for certain indemnification of the officers
and directors of the Company.
NOW, THEREFORE, in consideration of the Indemnitee's agreement to
serve as an officer or director of the Company and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company has agreed to the covenants set forth herein for the purpose of further
securing to the Indemnitee the indemnification provided by the Articles of
Incorporation and the Bylaws:
Section 1. In the event that the Indemnitee was or is made a party or
is threatened to be made a party to or is involved in any action, suit, or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that the Indemnitee or a
person of whom the Indemnitee is the legal representative is or was a director,
officer or employee of the Company or a nominee for any such office or is or was
serving at the request of the Company as a director, officer, employee or agent
of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such actual or threatened proceeding is alleged action in an
official capacity as a director, officer, employee or agent or a nominee for any
such office or in any other capacity while serving as a director, officer,
employee or agent, the Indemnitee shall be indemnified and held harmless by the
Company to the fullest extent authorized by the General Corporation Law of
Maryland (the "GCL") as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
Company to provide broader indemnification rights than said law permitted the
Company to provide prior to such amendment), against all expense, liability and
loss (including, without limitation, attorneys' fees, judgments, fines, ERISA
excise taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by the Indemnitee in connection therewith and
such indemnification shall continue as to the Indemnitee if the Indemnitee
ceases to be a director, officer, employee, agent or a nominee for any such
office and shall inure to the benefit of the Indemnitee's heirs, executors and
administrators; PROVIDED, HOWEVER, that except as provided in Section 2 of this
Indemnification Agreement with respect to proceedings seeking to enforce rights
to indemnification, the Company shall indemnify the Indemnitee in connection
with a proceeding (or part hereof) initiated by the Indemnitee only if such
proceeding (or part thereof) was authorized by the Board of Directors of the
Company.
Section 2. If a claim under Section 1 of this Indemnification
Agreement is not paid in full by the Company within thirty days after a written
claim has been received by the Company, the Indemnitee may at any time
thereafter bring suit against the Company to recover the unpaid amount of the
claim and, if successful in whole or in part, the Indemnitee shall be entitled
to be paid also the expense of prosecuting such claim. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in defending any actual or threatened proceeding in advance of its
final disposition where the required undertaking, if any is required, has been
tendered to the Company) that the Indemnitee has not met the standards of
conduct which make it permissible under the GCL for the Company to indemnify the
Indemnitee for the amount claimed, but the burden of proving such defense shall
be on the Company. Neither the failure of the Company (including its Board of
Directors, independent legal counsel or stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the Indemnitee is proper in the circumstances because the Indemnitee has met the
applicable standard of conduct set forth in the GCL, nor an actual determination
by the Company (including its Board of Directors, independent legal counsel or
stockholders) that the Indemnitee has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
Indemnitee has not met the applicable standard of conduct.
Section 3. Following any "change in control" of the Company of the
type required to be reported under Item 1 of Form 8-K promulgated under the
Securities Exchange Act of 1934, as amended, any determination as to entitlement
to indemnification shall be made by independent legal counsel selected by the
Indemnitee, which such independent legal counsel shall be retained by the Board
of Directors on behalf of the Company.
Section 4. The right to indemnification and the payment of expenses
incurred in defending any actual or threatened proceeding in advance of its
final disposition conferred in this Indemnification Agreement shall not be
exclusive of any other right which the Indemnitee may have or hereafter acquire
under any statute, provision of the Articles of Incorporation, Bylaws,
agreement, vote of stockholders or disinterested directors or otherwise.
Section 5. In the event that the Company maintains insurance to
protect itself and any director or officer of the Company against any expense,
liability or loss, such insurance shall cover the Indemnitee to at least the
same extent as any other director or officer of the Company.
Section 6. The right to indemnification conferred by this
Indemnification Agreement shall include the right to be paid by the Company the
expenses incurred in defending any actual or threatened proceeding in advance of
its final disposition; PROVIDED, HOWEVER, that if the GCL requires, the payment
of such expenses incurred by the Indemnitee in the Indemnitee's capacity as a
director or officer (and not in any other capacity in which service was or is
rendered by the Indemnitee while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of any actual or threatened proceeding, shall be made only upon
delivery to the Company of an undertaking by or on behalf of the Indemnitee, to
repay all amounts so advanced if it shall ultimately be determined that the
Indemnitee is not entitled to be indemnified under this Indemnification
Agreement or otherwise.
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Section 7. This Indemnification Agreement may not be changed,
modified or amended except in writing signed by the parties hereto.
IN WITNESS WHEREOF, the Company and the Indemnitee have executed this
Indemnification Agreement in duplicate on the day and year first above written.
PRIME RETAIL, INC.
By: ____________________________________________
______________________________________________
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