INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT (the "Agreement"), dated as of ____________,
1997, by and among Resource Asset Investment Trust ("RAIT"), a Maryland real
estate investment trust, RAIT General, Inc. ("RGI"), a Maryland corporation,
RAIT Limited, Inc. ("RLI"), a Maryland corporation (RAIT, RGI and RLI are herein
sometimes collectively called "Indemnitors" or individually called an
"Indemnitor"), RAIT Partnership, L.P., a Delaware limited partnership (the
"Operating Partnership") and the undersigned individual (the "Indemnitee").
W I T N E S S E T H:
WHEREAS, the Indemnitee has agreed to serve as a trustee ("Trustee"),
director ("Director") and/or officer ("Officer") of one or more of RAIT, RGI or
RLI; and
WHEREAS, Section 2-418 of the General Corporation Law of the State of
Maryland (as applicable to Maryland real estate investment trusts pursuant to
Section 8-301(15), Title 8, of the Maryland Code) empowers real estate
investment trusts and corporations to indemnify any person who is or was serving
as a trustee, director, officer, employee or agent of the trust or corporation
or any person who, while a trustee, director, officer, employee or agent of the
trust or corporation, is or was serving at its request as a director, officer,
partner, trustee, employee or agent of another corporation, partnership, limited
liability company, association, joint venture, trust or other enterprise (which,
for purposes of this Agreement shall include, without limitation, employee
benefit plans and administrative committees thereof); and
WHEREAS, said Section 2-418 and the Bylaws of each of RAIT, RGI and RLI
specify that the indemnification set forth in said Section 2-418 and in the
Bylaws, respectively, shall not be deemed to limit the right of each of RAIT,
RGI and RLI to indemnify any person against any liability and expenses to the
fullest extent permitted by law, nor shall it be deemed exclusive of any other
rights to which those seeking indemnification may be entitled; and
WHEREAS, RGI and RLI are the general partner and initial limited
partner, respectively, of the Operating Partnership, and are wholly-owned
subsidiaries of RAIT; and
WHEREAS, RAIT has contributed all or substantially all of the proceeds
of an offering of its common shares of beneficial interest to RGI and RLI, and
RGI and RLI have contributed such proceeds to the Operating Partnership.
NOW, THEREFORE, in order to induce the Indemnitee to serve as a
Trustee, Director and/or Officer of one or more of RAIT, RGI
or RLI, and in consideration of his continued service, each of RAIT, RGI and RLI
(to the extent the Indemnitee is a Trustee, Director or Officer of it, or
serving at its request as a director, officer, partner, trustee, employee or
agent of any corporation, partnership, limited liability company, association,
joint venture, trust or other enterprise) hereby agrees to indemnify the
Indemnitee as follows:
1. Indemnity. Each Indemnitor (to the extent the Indemnitee is an Officer,
Director or Trustee of it, or serving at the request of any of them as a
director, officer, partner, trustee, employee or agent of any corporation,
partnership, limited liability company, association, joint venture, trust or
other enterprise) will indemnify, save and hold harmless the Indemnitee, his
executors, administrators or assigns, or, if the Indemnitee is deceased, his
estate, spouse, heirs, executors and administrators, for any Expenses or Fines
(as defined in Section 2 hereof) which the Indemnitee is or becomes legally
obligated to pay in connection with any Proceeding. As used herein, the term
"Proceeding" shall mean any threatened, pending or completed claim, action, suit
or proceeding, including any appeals, whether brought by or in the right of the
Indemnitor or otherwise and whether of a civil, criminal, administrative or
investigative nature, in which the Indemnitee may be or may have been involved
as a party or otherwise, (i) by reason of the fact that the Indemnitee is or was
a Trustee, Director or Officer of the Indemnitor, (ii) by reason of any actual
or alleged error or misstatement or misleading statement made or suffered by the
Indemnitee, (iii) by reason of any action taken by the Indemnitee or of any
inaction on the Indemnitee's part while acting as such Trustee, Director or
Officer, or (iv) by reason of the fact that the Indemnitee was serving at the
request of the Indemnitor as a director, officer, partner, trustee, employee or
agent of another corporation, partnership, limited liability company,
association, joint venture, trust or other enterprise; provided that in each
such case the Indemnitee acted in good faith within the course and scope of the
Indemnitee's duties and in a manner which the Indemnitee reasonably believed to
be in or not opposed to the best interests of the Indemnitor, and, in the case
of a criminal proceeding, in addition the Indemnitee had no reasonable cause to
believe that his act or omission was unlawful.
2. Expenses. As used in this Agreement, the term "Expenses" shall mean
all reasonable expenses incurred by the Indemnitee in connection with the
Proceeding which shall include, without limitation, damages, judgments, fines,
penalties, settlements, costs, attorneys' fees, disbursements and costs of
attachment or similar bonds, investigations, and any such expenses of
establishing a right to indemnification under this Agreement (the "Expenses").
"Fines" shall include, without limitation, any excise tax assessed with respect
to any employee benefit plan. Any such Expenses may be paid by the Company in
-2-
advance of the final disposition of such action, suit or proceeding.
3. Exclusions. The Indemnitor shall not be liable under this Agreement
to pay any Expenses or Fines in connection with any claim made against the
Indemnitee:
(a) to the extent that payment is actually made to the
Indemnitee under a valid, enforceable and collectible insurance policy;
(b) to the extent that the Indemnitee is indemnified and
actually paid otherwise than pursuant to this Agreement;
(c) in connection with a judicial action by or in the right of
the Indemnitor, in respect of any claim, issue or matter as to which the
Indemnitee shall have been adjudged to be liable to the Indemnitor, unless and
only to the extent that any court in which such action was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, the Indemnitee is fairly and
reasonably entitled to indemnity for such Expenses or Fines as such court shall
deem proper;
(d) if it is established by final judgment in a court of law
or other final adjudication, that (i) the act or omission of the Indemnitee was
material to the matter giving rise to the proceeding and was committed in bad
faith or was the result of active and deliberate dishonesty, (ii) the Indemnitee
actually received an improper personal benefit in money, property or services,
or (iii) in the case of any criminal proceeding, the Indemnitee had reasonable
cause to believe that the act or omission was unlawful;
(e) if it is proved by final judgment in a court of law or
other final adjudication to have been based upon or attributable to the
Indemnitee having gained any personal profit or advantage to which he was not
legally entitled;
(f) for a disgorgement of profits made from the purchase and
sale by the Indemnitee of securities pursuant to Section 16(b) of the Securities
Exchange Act of 1934 and amendments thereto or similar provisions of any state
statutory law or common law; or
(g) for any judgment, fine or penalty which the Indemnitor is
prohibited by applicable law from paying as indemnity or for any other reason.
-3-
4. Termination of the Proceeding.
(a) The termination of any Proceeding which is covered by this
Agreement by judgment, order or settlement, shall not of itself create a
presumption for the purposes of this Agreement that the Indemnitee did not act
in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Indemnitor and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
(b) The termination of any proceeding by conviction, or by a
plea of nolo contendere or its equivalent, or an entry of an order of probation
prior to judgment, creates a rebuttable presumption that the Indemnitee did not
meet the requisite standard of conduct for good faith or otherwise.
5. Enforcement. If a claim or request under this Agreement is not paid
by the Indemnitor, or on its behalf, within thirty (30) days after a written
claim or request has been received by the Indemnitor, the Indemnitee may at any
time thereafter bring suit against the Indemnitor to recover the unpaid amount
of the claim or request, and if successful in whole or in part, the Indemnitee
shall be entitled to be paid all of the Expenses of prosecuting such suit. The
burden of proving that the Indemnitee is not entitled to indemnification for any
reason shall be upon the Indemnitor.
6. Recoupment. The Indemnitor shall have the right to recoup from the
Indemnitee the amount of any item or items of Expenses theretofore paid by the
Indemnitor pursuant to this Agreement to the extent that such Expenses are not
reasonable in nature or amount; provided, however, that the Indemnitor shall
have the burden of proving such Expenses to be unreasonable.
7. Subrogation. In the event of payment under this Agreement, the
Indemnitor shall be subrogated to the extent of such payment to all of the
rights of recovery of the Indemnitee, who shall execute all papers required and
shall do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Indemnitor effectively to
bring suit to enforce such rights.
8. Indemnification of Expenses of Successful Party. Notwithstanding any
other provision of this Agreement, to the extent that the Indemnitee has been
successful on the merits or otherwise in defense of any Proceeding or in defense
of any claim, issue or matter therein, including dismissal without prejudice,
the Indemnitee shall be indemnified against any and all Expenses incurred in
connection therewith.
9. Partial Indemnification. If the Indemnitee is entitled
-4-
under any provision of this Agreement to indemnification by the Indemnitor for
some portion of Expenses or Fines, but not, however, for the total amount
thereof, the Indemnitor shall nevertheless indemnify the Indemnitee for the
portion of such Expenses or Fines to which the Indemnitee is entitled.
10. Indemnification Hereunder Not Exclusive. Nothing herein shall be
deemed to diminish or otherwise restrict the Indemnitee's right to
indemnification under any provision of the Indemnitor's Declaration of Trust,
Articles of Incorporation or Bylaws, as the case may be, and amendments thereto,
or under law.
11. Advance of Expenses. Expenses incurred by the Indemnitee in
connection with any Proceeding, except the amount of any settlement, shall be
paid by the Indemnitor in advance upon request of the Indemnitee that the
Indemnitor pay such Expenses. The Indemnitee hereby undertakes to repay to the
Indemnitor the amount of any Expenses theretofore paid by the Indemnitor to the
extent that it is ultimately determined that such Expenses were not reasonable
or that the Indemnitee is not entitled to indemnification.
12. Approval of Expenses. No Expenses for which indemnity shall be
sought under this Agreement, other than those in respect of judgments and
verdicts actually rendered, shall be incurred without the prior written consent
of the Indemnitor, which consent shall not be unreasonably withheld.
13. Coverage. The provisions of this Agreement shall apply with respect
to the Indemnitee's service in those capacities set forth in Section 1 of this
Agreement prior to the date of this Agreement and with respect to all periods of
such service after the date of this Agreement, even though the Indemnitee may
have ceased to serve in any or all of such capacities.
14. Guaranty. The Operating Partnership hereby guarantees, and agrees
to be liable for, the obligations of each Indemnitor hereunder, and each
Indemnitor hereby guarantees, and agrees to be liable for, the obligations of
each of the other Indemnitors hereunder.
15. General Provisions.
15.1 Notice of Claim. The Indemnitee, as a condition precedent
to his right to be indemnified under this Agreement, shall give written notice
to the Indemnitor as soon as practicable of any claim made against him for which
will or could be sought under this Agreement. Notice to the Indemnitor shall be
given at its principal office and shall be directed to the Chief Executive
Officer (or, if no one occupies such office, the President), unless the Chief
Executive Officer is the Indemnitee, in which case it shall be directed to the
President (or such
-5-
other person as the Indemnitor shall designate in writing to the Indemnitee).
Notice shall be deemed duly given when addressed as follows and (i) when
personally delivered, (ii) when transmitted by telecopy, electronic or digital
transmission with receipt confirmed, (iii) one day after delivery to an
overnight air courier guaranteeing next day delivery, or (iv) upon receipt if
sent by certified or registered mail. In each case notice shall be sent to:
If to the Indemnitee:
If to Indemnitor: 0000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Any party may change the address to which notice is to be sent or delivered by
written notice to the other parties.
15.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Maryland without giving
effect to principles of conflicts of law.
15.3 Assignment. This Agreement may not be assigned by any
party.
15.4 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original but all
of which taken together shall constitute one and the same instrument.
15.5 Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect.
15.6 Entire Agreement. This Agreement contains the entire
agreement and understanding between the Indemnitors and the Indemnitee with
respect to the indemnification of the Indemnitee by the Indemnitors as
contemplated hereby, and no representations, promises, agreements or
understandings, written or oral, not herein contained shall be of any force or
effect. This Agreement shall not be changed unless in writing and signed by both
the Indemnitee and the Indemnitors.
[SIGNATURES CONTAINED ON FOLLOWING PAGE]
-6-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and signed as of the day and year first above written.
RESOURCE ASSET INVESTMENT TRUST
By: _______________________________________
Name:
Title:
RAIT LIMITED, INC.
By: _______________________________________
Name:
Title:
RAIT GENERAL, INC.
By: _______________________________________
Name:
Title:
RAIT PARTNERSHIP, L.P.
By: RAIT General, Inc., General
Partner
By: _____________________________
Name:
Title:
INDEMNITEE
__________________________________________
(Name)
-7-
