INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made and
entered into as of the ____ day of ________ 1997, by and between
Entertainment Properties Trust, a Maryland real estate investment trust (the
"Company") and ______ ("Indemnitee").
WHEREAS, Indemnitee has agreed to serve, at the request of the
Company as [a/an] [trustee/officer] of the Company on the condition that he
be indemnified as set forth herein.
NOW, therefore, in consideration of Indemnitee's agreement to serve
the Company as set forth above, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties do hereby agree as follows:
1. GENERAL. If Indemnitee is made a party or threatened to be
made a party to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "Proceeding"), by reason of the fact that
Indemnitee is or was a trustee, director, officer, agent, fiduciary or
employee of the Company or any subsidiary or division of the Company or is or
was serving at the request of the Company or any subsidiary or division of
the Company as a director, officer, shareholder, partner, agent, fiduciary,
trustee or manager of another real estate investment trust, corporation,
partnership, joint venture, trust, employee benefit plan or any other
enterprise, whether or not the basis of such Proceeding is alleged action in
an official capacity as a director, officer, shareholder, partner, agent,
fiduciary, trustee or manager while serving as a director, officer,
shareholder, partner, agent, fiduciary, trustee or manager, the Company shall
indemnify and hold harmless Indemnitee to the fullest extent
1
authorized by the Maryland General Corporation Law (the "MGCL") (including
the "non-exclusivity" provision of Section 2-418(g) of the MGCL) 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 "Expenses" (as defined in Section 2) actually
incurred or suffered by Indemnitee in connection therewith. Such
indemnification shall continue as to Indemnitee even if Indemnitee has ceased
to be a director, officer, shareholder, partner, agent, fiduciary, trustee
or manager, or is no longer employed by the Company and shall inure to the
benefit of the Indemnitee's heirs, executors and administrators; PROVIDED,
HOWEVER, that indemnification hereunder shall not extend to cover any
Expenses (i) arising out of Indemnitee's activities prior to the date hereof,
(ii) the payment of which is judicially determined to be unlawful,
(iii) relating to claims under Section 16(b) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or (iv) relating to judicially
determined criminal violations; and, PROVIDED, FURTHER, that except as
provided in Section 3 of this Agreement with respect to proceedings seeking
to enforce rights to indemnification, the Company shall indemnify the
Indemnitee in connection with a proceeding (or part thereof) initiated by the
Indemnitee only if such proceeding (or part thereof) was authorized by the
Board of Trustees of the Company.
2. EXPENSES. As used in this Agreement, the term "Expenses" shall
include, without limitation, damages, losses, judgments, liabilities, fines,
penalties, excise taxes, settlements, and costs, attorneys' fees,
accountants' fees, and disbursements and costs of attachment or similar
bonds, investigations and any expenses of establishing a right to
indemnification under this Agreement.
2
3. ENFORCEMENT. If a claim or request under this Agreement is not
paid by the Company or on its behalf, within thirty (30) days after a written
claim or request has been received by the Company and, if applicable, the
affirmation in Section 5 hereof has been received by the Company, Indemnitee
may at any time thereafter bring suit against the Company to recover the
unpaid amount of the claim or request and, if successful in whole or in part,
Indemnitee shall be entitled to be paid also the expenses of prosecuting such
suit. 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
affirmation and undertaking, if any is required, have been tendered to the
Company) that the Indemnitee has not met the standards of conduct for the
Company to indemnify the Indemnitee under the MGCL 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 Trustees, independent legal
counsel or shareholders) 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 MGCL, nor an actual determination by the Company
(including its Board of Trustees, independent legal counsel or shareholders)
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.
4. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of any Expenses, but not however, for the total amount thereof, the
Company shall nevertheless indemnify Indemnitee for the portion of such
Expenses to which Indemnitee is entitled.
3
5. ADVANCES OF EXPENSES. Expenses incurred by Indemnitee in
connection with any Proceeding shall be paid by the Company in advance upon
request of Indemnitee that the Company pay such Expenses, but, only upon
receipt by the Company of (i) a written affirmation of his good faith
belief that the standard of conduct necessary for indemnification by the
Company has been met and (ii) a written undertaking by or on behalf of the
Indemnitee to reimburse the Company for Expenses if and to the extent that it
is ultimately determined that the standard of conduct has not been met and
(iii) satisfactory evidence of the amount of such expenses.
6. NOTICE OF CLAIM. Indemnitee shall notify the Company in
writing of any claim against him for which indemnification will or could be
sought under this Agreement at the address set forth on the signature page of
this Agreement (or such other address as provided by notice given as
aforesaid). In addition, Indemnitee shall give the Company such information
and cooperation as it may reasonably require and as shall be within
Indemnitee's power and at such times and places as are convenient for
Indemnitee.
7. DEFENSE OF CLAIM. With respect to any Proceeding as to which
Indemnitee notifies the Company of the commencement thereof:
(a) the Company will be entitled to participate at its own
expense; and
(b) except as otherwise provided below, to the extent that it
may wish, the Company will be entitled to assume the defense thereof,
with counsel reasonably satisfactory to Indemnitee, which in the
Company's sole discretion may be regular counsel to the Company and
may be counsel to other officers and trustees of the Company or any
subsidiary. Indemnitee also shall have the right to employ his own
counsel in such action, suit or proceeding if he reasonably concludes
that failure to do so would involve a conflict of interest between the
Company and Indemnitee, and under such circumstances the fees and
expenses of such counsel shall be at the expense of the Company; and
4
(c) the Company shall not be liable to indemnify Indemnitee
under this Agreement for any amounts paid in settlement of any action
or claim effected without the Company's written consent. The Company
shall not settle any action or claim in any manner which would impose
any penalty or limitation on Indemnitee without Indemnitee's written
consent. Neither the Company nor Indemnitee will unreasonably
withhold or delay their consent to any proposed settlement.
8. NON-EXCLUSIVITY. The right to indemnification and the payment
of expenses incurred in defending a Proceeding in advance of its final
disposition conferred in this Agreement shall not be exclusive of any other
right which Indemnitee may have or thereunder may acquire under any statute,
the declaration of trust or certificate of incorporation, partnership
agreement, or bylaws of the Company or any subsidiary or any agreement or
vote of shareholders or disinterested directors or trustees or otherwise.
9. CHANGE IN CONTROL. 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 Exchange Act, any determination as to entitlement to
indemnification shall be made by independent legal counsel selected in
accordance with the GCL.
5
10. INSURANCE. If the Company obtains insurance to protect itself
and any trustee 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 trustee or officer of the Company.
11. BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the parties hereto and their
respective successors, assigns (including any direct or indirect successor by
merger or consolidation), heirs, executors and administrators.
12. GOVERNING LAW. This Agreement shall be deemed to be made in,
and in all respect shall be interpreted, construed, and governed by and in
accordance with, the laws of the State of Maryland.
13. AMENDMENT. No amendments or additions to this Agreement shall
be binding unless made in writing and signed by all of the parties.
14. WAIVER OF BREACH. The failure or delay of either party at any
time to require performance by the other party of any provision of this
Agreement, even if known, shall not affect the right of such party to require
performance of that provision or to exercise any right, power, or remedy
hereunder, and any waiver by any party of any breach of any provision of this
Agreement shall not be construed as a waiver of any continuing or succeeding
breach of such provision, a waiver of the provision itself, or a waiver of
any right, power, or remedy under this Agreement. No notice to or demand on
any party in any case shall, of itself, entitle such party to other or
further notice or demand in similar or other circumstances.
6
15. SEVERABILITY. The Company and Indemnitee agree that the
agreements and provisions contained in this Agreement are severable and
divisible, that each such agreement and provision does not depend upon any
other provision or agreement for its enforceability, and that each such
agreement and provision set forth herein constitutes an enforceable
obligation between the Company and Indemnitee. Consequently, the parties
hereto agree that neither the invalidity nor the unenforceability of any
provision of this Agreement shall affect the other provisions hereof, and
this Agreement shall remain in full force and effect and be construed in all
respects as if such invalid or unenforceable provision were omitted.
16. NO PRESUMPTION. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the Indemnitee did not act in good faith and in a manner that he reasonably
believed to be in or not opposed to the best interests of the Company, and with
respect to any criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful.
7
IN WITNESS WHEREOF, the parties hereto have entered into this
Agreement as of the date first written above.
ENTERTAINMENT PROPERTIES TRUST
By:_________________________
By:_________________________
