FORM OF INDEMNIFICATION AGREEMENT
Exhibit 10.5
FORM OF INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is made and entered into as of the
____ day of __________, 20__, by and between Independence Realty Trust, Inc.
(the “Company”), and __________ (the “Indemnitee”).
WHEREAS, at the request of the Company, the Indemnitee currently serves as a director of the
Company and may, therefore, be subjected to claims, suits or proceedings arising as a result of his
or her service;
WHEREAS, as an inducement to the Indemnitee to continue to serve as such director, the Company
has agreed to indemnify and to advance expenses and costs incurred by the Indemnitee in connection
with any such claims, suits or proceedings; and
WHEREAS, the parties to this Agreement desire to set forth their agreement regarding
indemnification and advance of expenses.
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the
Company and the Indemnitee do hereby covenant and agree as follows:
Section 1. Definitions. For purposes of this Agreement:
(a) “Applicable Legal Rate” means a fixed rate of interest equal to the applicable
federal rate for mid-term debt instruments as of the day that it is determined that the Indemnitee
must repay any advanced expenses.
(b) “Change in Control” means a change in control of the Company occurring after the
Effective Date of a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or
form) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), whether or not the Company is then subject to such reporting requirement; provided,
however, that, without limitation, such a Change in Control shall be deemed to have occurred if,
after the Effective Date (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 15% or more of the combined
voting power of all of the Company’s then-outstanding securities entitled to vote generally in the
election of directors without the prior approval of at least two-thirds of the members of the Board
of Directors in office immediately prior to such person’s attaining such percentage interest;
(ii) the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or
other reorganization not approved by at least two-thirds of the members of the Board of Directors
then in office, as a consequence of which members of the Board of Directors in office immediately
prior to such transaction or event constitute less than a majority of the Board of Directors
thereafter; or (iii) at any time, a majority of the members of the Board of Directors are not
individuals (A) who were directors as of the Effective Date or (B) whose election by the Board of
Directors or nomination for election by the Company’s stockholders was approved by the affirmative
vote of at least two-thirds of the directors then in office who were directors as of the Effective
Date or whose election for nomination for election was previously so approved.
(c) “Corporate Status” means the status of a person as a present or former director,
officer, employee or agent of the Company or as a director, trustee, officer, partner, manager,
managing
member, fiduciary, employee or agent of any other foreign or domestic corporation,
partnership, limited liability company, joint venture, trust, employee benefit plan or other
enterprise that such person is or was serving in such capacity at the request of the Company. As a
clarification and without limiting the circumstances in which the Indemnitee may be serving at the
request of the Company, service by the Indemnitee shall be deemed to be at the request of the
Company if the Indemnitee serves or served as a director, trustee, officer, partner, manager,
managing member, fiduciary, employee or agent of any corporation, partnership, limited liability
company, joint venture, trust, employee benefit plan or other enterprise (i) of which a majority of
the voting power or equity interest is owned directly or indirectly by the Company or (ii) the
management of which is controlled directly or indirectly by the Company.
(d) “Disinterested Director” means a director of the Company who is not and was not a
party to the Proceeding in respect of which indemnification and/or advance of Expenses is sought by
the Indemnitee.
(e) “Effective Date” means the date set forth in the first paragraph of this
Agreement.
(f) “Expenses” means any and all reasonable and out-of-pocket attorneys’ fees and
costs, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees,
federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or
deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties and any other
disbursements or expenses incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, being or preparing to be a witness in or otherwise
participating in a Proceeding. Expenses shall also include Expenses incurred in connection with
any appeal resulting from any Proceeding including, without limitation, the premium for, security
for and other costs relating to any cost bond, supersedeas bond or other appeal bond or its
equivalent.
(g) “Independent Counsel” means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and neither is, nor in the past five years has been,
retained to represent: (i) the Company or the Indemnitee in any matter material to either such
party (other than with respect to matters concerning the Indemnitee under this Agreement or of
other indemnitees under similar indemnification agreements), or (ii) any other party to or
participant or witness in the Proceeding giving rise to a claim for indemnification or advance of
Expenses hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not
include any person who, under the applicable standards of professional conduct then prevailing,
would have a conflict of interest in representing either the Company or the Indemnitee in an action
to determine the Indemnitee’s rights under this Agreement.
(h) “Proceeding” means any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other
proceeding, whether brought by or in the right of the Company or otherwise and whether of a civil
(including intentional or unintentional tort claims), criminal, administrative or investigative
(formal or informal) nature, including any appeal therefrom, except one pending or completed on or
before the Effective Date, unless otherwise specifically agreed in writing by the Company and the
Indemnitee. If the Indemnitee reasonably believes that a given situation may lead to or culminate
in the institution of a Proceeding, such situation shall also be considered a Proceeding.
Section 2. Services by the Indemnitee. The Indemnitee will serve as a director of the
Company. However, this Agreement shall not impose any independent obligation on the Indemnitee or
the Company to continue the Indemnitee’s service to the Company. This Agreement shall not be
deemed an employment contract between the Company (or any other entity) and the Indemnitee.
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Section 3. General. Subject to the limitations in Section 5 hereof, the Company shall
indemnify, and advance Expenses to, the Indemnitee (i) as provided in this Agreement and (ii) as
otherwise permitted by Maryland law in effect on the Effective Date and as amended from time to
time; provided, however, that no change in Maryland law shall have the effect of reducing the
benefits available to the Indemnitee hereunder based on Maryland law as in effect on the Effective
Date. Subject to the limitations in Section 5 hereof, the rights of the Indemnitee provided in
this Section 3 shall include, without limitation, the rights set forth in the other sections of
this Agreement, including any additional indemnification permitted by Section 2-418(g) of the
Maryland General Corporation Law (the “MGCL”).
Section 4. Standard for Indemnification. Subject to the limitations in Section 5
hereof, if, by reason of the Indemnitee’s Corporate Status, the Indemnitee is, or is threatened to
be, made a party to any Proceeding, the Company shall indemnify the Indemnitee against all
judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably
incurred by the Indemnitee or on the Indemnitee’s behalf in connection with any such Proceeding
unless it is established by clear and convincing evidence that (i) the act or omission of the
Indemnitee was material to the matter giving rise to the Proceeding and (A) was committed in bad
faith or (B) 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 his or her conduct was
unlawful.
Section 5. Certain Limits on Indemnification. Notwithstanding any other provision of
this Agreement (other than Section 6 hereof), the Indemnitee shall not be entitled to:
(a) indemnification for any loss or liability unless all of the following conditions are met:
(i) the Indemnitee has determined, in good faith, that the course of conduct that caused the loss
or liability was in the best interests of the Company; (ii) the Indemnitee was acting on behalf of
or performing services for the Company; (iii) such loss or liability was not the result of
negligence or misconduct, or, if the Indemnitee is an independent director, gross negligence or
willful misconduct; and (iv) such indemnification is recoverable only out of the Company’s net
assets and not from the Company’s stockholders;
(b) indemnification for any loss or liability arising from an alleged violation of federal or
state securities laws unless one or more of the following conditions are met: (i) there has been a
successful adjudication on the merits of each count involving alleged material securities law
violations as to the Indemnitee; (ii) such claims have been dismissed with prejudice on the merits
by a court of competent jurisdiction as to the Indemnitee; or (iii) a court of competent
jurisdiction approves a settlement of the claims against the Indemnitee and finds that
indemnification of the settlement and the related costs should be made, and the court considering
the request for indemnification has been advised of the position of the Securities and Exchange
Commission and of the published position of any state securities regulatory authority in which
securities of the Company were offered or sold as to indemnification for violations of securities
laws;
(c) indemnification hereunder if the Proceeding was one by or in the right of the Company and
the Indemnitee is adjudged to be liable to the Company;
(d) indemnification hereunder if the Indemnitee is adjudged to be liable on the basis that
personal benefit was improperly received in any Proceeding charging improper personal benefit to
the Indemnitee, whether or not involving action in the Indemnitee’s Corporate Status; or
(e) indemnification or advance of Expenses hereunder if the Proceeding was brought by the
Indemnitee, unless: (i) the Proceeding was brought to enforce indemnification under this
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Agreement, and then only to the extent in accordance with and as authorized by Section 12 of this
Agreement, or (ii) the Company’s charter or Bylaws, a resolution of the stockholders entitled to
vote generally in the election of directors or of the Board of Directors or an agreement approved
by the Board of Directors to which the Company is a party expressly provide otherwise.
Section 6. Court-Ordered Indemnification. Subject to the limitations in Section 5(a)
and (b) hereof, a court of appropriate jurisdiction, upon application of the Indemnitee and such
notice as the court shall require, may order indemnification of the Indemnitee by the Company in
the following circumstances:
(a) if such court determines that the Indemnitee is entitled to reimbursement under Section
2-418(d)(1) of the MGCL, the court shall order indemnification, in which case the Indemnitee shall
be entitled to recover the Expenses of securing such reimbursement; or
(b) if such court determines that the Indemnitee is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances, whether or not the Indemnitee (i) has
met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged
liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court
may order such indemnification as the court shall deem proper. However, indemnification with
respect to any Proceeding by or in the right of the Company or in which liability shall have been
adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to
Expenses.
Section 7. Indemnification for Expenses of an Indemnitee Who is Wholly or Partly
Successful. Subject to the limitations in Section 5 hereof, to the extent that the Indemnitee
was or is, by reason of his or her Corporate Status, made a party to (or otherwise becomes a
participant in) any Proceeding and is successful, on the merits or otherwise, in the defense of
such Proceeding, the Indemnitee shall be indemnified for all Expenses actually and reasonably
incurred by the Indemnitee or on the Indemnitee’s behalf in connection therewith. If the
Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the
Company shall indemnify the Indemnitee under this Section 7 for all Expenses actually and
reasonably incurred by the Indemnitee or on the Indemnitee’s behalf in connection with each such
claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this
Section 7, and without limitation, the termination of any claim, issue or matter in such a
Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to
such claim, issue or matter.
Section 8. Advance of Expenses for an Indemnitee. If, by reason of the Indemnitee’s
Corporate Status, the Indemnitee is, or is threatened to be, made a party to any Proceeding, the
Company shall, without requiring a preliminary determination of the Indemnitee’s ultimate
entitlement to indemnification hereunder, advance all reasonable Expenses incurred by or on behalf
of the Indemnitee in connection with (i) such Proceeding which is initiated by a third party who is
not a stockholder of the Company, or (ii) such Proceeding which is initiated by a stockholder of
the Company acting in his or her capacity as such and for which a court of competent jurisdiction
specifically approves such advancement, and which relates to acts or omissions with respect to the
performance of duties or services on behalf of the Company, within ten days after the receipt by
the Company of a statement or statements requesting such advance or advances from time to time,
whether prior to or after final disposition of such Proceeding. Such statement or statements shall
reasonably evidence the Expenses incurred by the Indemnitee and shall include or be preceded or
accompanied by a written affirmation by the Indemnitee of the Indemnitee’s good faith belief that
the standard of conduct necessary for indemnification by the Company as authorized by law and by
this Agreement has been met and a written undertaking by or on behalf of the Indemnitee, in
substantially the form attached hereto as Exhibit A or in such form as may be
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required under applicable law as in effect at the time of the execution thereof, to reimburse
the portion of any Expenses advanced to the Indemnitee, together with the Applicable Legal Rate of
interest thereon, relating to claims, issues or matters in the Proceeding as to which it shall
ultimately be established, by clear and convincing evidence, that the standard of conduct has not
been met by the Indemnitee and which have not been successfully resolved as described in Section 7
hereof. To the extent that Expenses advanced to the Indemnitee do not relate to a specific claim,
issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and
proportionate basis. The undertaking required by this Section 8 shall be an unlimited general
obligation by or on behalf of the Indemnitee and shall be accepted without reference to the
Indemnitee’s financial ability to repay such advanced Expenses and without any requirement to post
security therefor.
Section 9. Indemnification and Advance of Expenses as a Witness or Other Participant.
Subject to the limitations in Section 5, to the extent that the Indemnitee is or may be, by reason
of the Indemnitee’s Corporate Status, made a witness or otherwise asked to participate in any
Proceeding, whether instituted by the Company or any other party, and to which the Indemnitee is
not a party, the Indemnitee shall be advanced all reasonable Expenses and indemnified against all
Expenses actually and reasonably incurred by the Indemnitee or on the Indemnitee’s behalf in
connection therewith within ten days after the receipt by the Company of a statement or statements
requesting any such advance or indemnification from time to time, whether prior to or after final
disposition of such Proceeding. Such statement or statements shall reasonably evidence the
Expenses incurred by the Indemnitee.
Section 10. Procedure for Determination of Entitlement to Indemnification.
(a) To obtain indemnification under this Agreement, the Indemnitee shall submit to the Company
a written request, including therein or therewith such documentation and information as is
reasonably available to the Indemnitee and is reasonably necessary to determine whether and to what
extent the Indemnitee is entitled to indemnification. The Indemnitee may submit one or more such
requests from time to time and at such time(s) as the Indemnitee deems appropriate in the
Indemnitee’s sole discretion. The officer of the Company receiving any such request from the
Indemnitee shall, promptly upon receipt of such a request for indemnification, advise the Board of
Directors in writing that the Indemnitee has requested indemnification.
(b) Upon written request by the Indemnitee for indemnification pursuant to Section 10(a)
hereof, a determination, if required by applicable law, with respect to the Indemnitee’s
entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control shall
have occurred, by Independent Counsel, in a written opinion to the Board of Directors, a copy of
which shall be delivered to the Indemnitee, which Independent Counsel shall be selected by the
Indemnitee and approved by the Board of Directors in accordance
with
Section 2-418(e)(2)(ii) of the MGCL, which approval shall not be unreasonably withheld; or (ii) if a Change in Control shall not have occurred, (A) by the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors or, if such a quorum cannot be obtained, then by a majority vote of a duly authorized committee of the Board of Directors consisting solely of one or more Disinterested Directors, (B) if Independent Counsel has been selected by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL and approved by the Indemnitee, which approval shall not be unreasonably withheld, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to the Indemnitee or (C) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. If it is so determined that the Indemnitee is entitled to indemnification, payment to the Indemnitee shall be made within ten days after such determination. The Indemnitee shall cooperate with the person, persons or entity making such determination with respect to the Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably
Section 2-418(e)(2)(ii) of the MGCL, which approval shall not be unreasonably withheld; or (ii) if a Change in Control shall not have occurred, (A) by the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors or, if such a quorum cannot be obtained, then by a majority vote of a duly authorized committee of the Board of Directors consisting solely of one or more Disinterested Directors, (B) if Independent Counsel has been selected by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL and approved by the Indemnitee, which approval shall not be unreasonably withheld, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to the Indemnitee or (C) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. If it is so determined that the Indemnitee is entitled to indemnification, payment to the Indemnitee shall be made within ten days after such determination. The Indemnitee shall cooperate with the person, persons or entity making such determination with respect to the Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably
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available to the Indemnitee and reasonably necessary to such determination in the discretion
of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this
Section 10(b). Any Expenses incurred by the Indemnitee in so cooperating with the person, persons
or entity making such determination shall be borne by the Company (irrespective of the
determination as to the Indemnitee’s entitlement to indemnification) and the Company shall
indemnify and hold the Indemnitee harmless therefrom.
(c) The Company shall pay the reasonable fees and expenses of Independent Counsel, if one is
appointed.
Section 11. Presumptions and Effect of Certain Proceedings.
(a) In making any determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall presume that the Indemnitee is entitled
to indemnification under this Agreement if the Indemnitee has submitted a request for
indemnification in accordance with Section 10(a) hereof, and the Company shall have the burden of
proof to overcome that presumption in connection with the making of any determination contrary to
that presumption.
(b) The termination of any Proceeding or of any claim, issue or matter therein, by judgment,
order, settlement or conviction, upon a plea of nolo contendere or its equivalent,
or entry of an order of probation prior to judgment, does not create a presumption that the
Indemnitee did not meet the requisite standard of conduct described herein for indemnification.
(c) The knowledge and/or actions, or failure to act, of any other director, officer, employee
or agent of the Company or any other director, trustee, officer, partner, manager, managing member,
fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited
liability company, joint venture, trust, employee benefit plan or other enterprise shall not be
imputed to the Indemnitee for purposes of determining any other right to indemnification under this
Agreement.
Section 12. Remedies of the Indemnitee.
(a) If (i) a determination is made pursuant to Section 10(b) hereof that the Indemnitee is not
entitled to indemnification under this Agreement, (ii) an advance of Expenses is not timely made
pursuant to Sections 8 or 9 hereof, (iii) no determination of entitlement to indemnification shall
have been made pursuant to Section 10(b) hereof within 60 days after receipt by the Company of the
request for indemnification, (iv) payment of indemnification is not made pursuant to Sections 7 or
9 hereof within ten days after receipt by the Company of a written request therefor, or (v) payment
of indemnification pursuant to any other section of this Agreement or the charter or Bylaws of the
Company is not made within ten days after a determination has been made that the Indemnitee is
entitled to indemnification, the Indemnitee shall be entitled to an adjudication in an appropriate
court located in the State of Maryland, or in any other court of competent jurisdiction, of the
Indemnitee’s entitlement to such indemnification or advance of Expenses. Alternatively, the
Indemnitee, at the Indemnitee’s option, may seek an award in arbitration to be conducted by a
single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration
Association. The Indemnitee shall commence a proceeding seeking an adjudication or an award in
arbitration within 180 days following the date on which the Indemnitee first has the right to
commence such proceeding pursuant to this Section 12(a); provided, however, that the foregoing
clause shall not apply to a proceeding brought by the Indemnitee to enforce his or her rights under
Section 7 hereof. Except as set forth herein, the provisions of Maryland law (without regard to
its conflicts of laws rules) shall apply to any such arbitration. The Company shall not oppose the
Indemnitee’s right to seek any such adjudication or award in arbitration.
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(b) In any judicial proceeding or arbitration commenced pursuant to this Section 12, the
Indemnitee shall be presumed to be entitled to indemnification or advance of Expenses, as the case
may be, under this Agreement, and the Company shall have the burden of proving that the Indemnitee
is not entitled to indemnification or advance of Expenses, as the case may be. If the Indemnitee
commences a judicial proceeding or arbitration pursuant to this Section 12, the Indemnitee shall
not be required to reimburse the Company for any advances pursuant to Section 8 hereof until a
final determination is made with respect to the Indemnitee’s entitlement to indemnification (as to
which all rights of appeal have been exhausted or lapsed). The Company shall, to the fullest
extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration
commenced pursuant to this Section 12 that the procedures and presumptions of this Agreement are
not valid, binding and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all of the provisions of this Agreement.
(c) If a determination shall have been made pursuant to Section 10(b) hereof that the
Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 12, absent a misstatement by
the Indemnitee of a material fact, or an omission of a material fact necessary to make the
Indemnitee’s statement not materially misleading, in connection with the request for
indemnification.
(d) In the event that the Indemnitee is successful in seeking, pursuant to this Section 12, a
judicial adjudication of or an award in arbitration to enforce the Indemnitee’s rights under, or to
recover damages for breach of, this Agreement, the Indemnitee shall be entitled to recover from the
Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably
incurred by him or her in such judicial adjudication or arbitration. If it shall be determined in
such judicial adjudication or arbitration that the Indemnitee is entitled to receive part but not
all of the indemnification or advance of Expenses sought, the Expenses incurred by the Indemnitee
in connection with such judicial adjudication or arbitration shall be appropriately prorated.
(e) Interest shall be paid by the Company to the Indemnitee at the maximum rate allowed to be
charged for judgments under the Courts and Judicial Proceedings Article of the Annotated Code of
Maryland for amounts which the Company pays or is obligated to pay for the period (i) commencing
with either the tenth day after the date on which the Company was requested to advance Expenses in
accordance with Sections 8 or 9 hereof or the 60th day after the date on which the
Company was requested to make the determination of entitlement to indemnification under Section
10(b) hereof, as applicable, and (ii) ending on the date such payment is made to the Indemnitee by
the Company.
Section 13. Defense of the Underlying Proceeding.
(a) The Indemnitee shall notify the Company promptly in writing upon being served with any
summons, citation, subpoena, complaint, indictment, request or other document relating to any
Proceeding which may result in the right to indemnification or the advance of Expenses hereunder
and shall include with such notice a description of the nature of the Proceeding and a summary of
the facts underlying the Proceeding. The failure to give any such notice shall not disqualify the
Indemnitee from the right, or otherwise affect in any manner any right of the Indemnitee, to
indemnification or the advance of Expenses under this Agreement unless the Company’s ability to
defend in such Proceeding or to obtain proceeds under any insurance policy is materially and
adversely prejudiced thereby, and then only to the extent the Company is thereby actually so
prejudiced.
(b) Subject to the provisions of the last sentence of this Section 13(b) and of Section 13(c)
hereof, the Company shall have the right to defend the Indemnitee in any Proceeding which may give
rise to indemnification hereunder; provided, however, that the Company shall notify the
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Indemnitee of any such decision to defend within 15 calendar days following receipt of notice
of any such Proceeding under Section 13(a) hereof. The Company shall not, without the prior
written consent of the Indemnitee, which shall not be unreasonably withheld or delayed, consent to
the entry of any judgment against the Indemnitee or enter into any settlement or compromise which
(i) includes an admission of fault of the Indemnitee, (ii) does not include, as an unconditional
term thereof, the full release of the Indemnitee from all liability in respect of such Proceeding,
which release shall be in form and substance reasonably satisfactory to the Indemnitee, or
(iii) would impose any Expense, judgment, fine, penalty or limitation on the Indemnitee. This
Section 13(b) shall not apply to a Proceeding brought by the Indemnitee under Section 12 hereof.
(c) Notwithstanding the provisions of Section 13(b) hereof, if, in a Proceeding to which the
Indemnitee is a party by reason of the Indemnitee’s Corporate Status, (i) the Indemnitee reasonably
concludes, based upon an opinion of counsel approved by the Company, which approval shall not be
unreasonably withheld, that the Indemnitee may have separate defenses or counterclaims to assert
with respect to any issue which may not be consistent with other defendants in such Proceeding,
(ii) the Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company,
which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest
or potential conflict of interest exists between the Indemnitee and the Company, or (iii) if the
Company fails to assume the defense of such Proceeding in a timely manner, the Indemnitee shall be
entitled to be represented by separate legal counsel of the Indemnitee’s choice, subject to the
prior approval of the Company, which approval shall not be unreasonably withheld, at the expense of
the Company. In addition, if the Company fails to comply with any of its obligations under this
Agreement or in the event that the Company or any other person takes any action to declare this
Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from the
Indemnitee the benefits intended to be provided to the Indemnitee hereunder, the Indemnitee shall
have the right to retain counsel of the Indemnitee’s choice, subject to the prior approval of the
Company, which approval shall not be unreasonably withheld, at the expense of the Company (subject
to
Section 12(d) hereof), to represent the Indemnitee in connection with any such matter.
Section 12(d) hereof), to represent the Indemnitee in connection with any such matter.
Section 14. Non-Exclusivity; Survival of Rights; Subrogation.
(a) The rights of indemnification and advance of Expenses as provided by this Agreement shall
not be deemed exclusive of any other rights to which the Indemnitee may at any time be entitled
under applicable law, the charter or Bylaws of the Company, any agreement or a resolution of the
stockholders entitled to vote generally in the election of directors or of the Board of Directors,
or otherwise. Unless consented to in writing by the Indemnitee, no amendment, alteration or repeal
of this Agreement or of any provision hereof shall limit or restrict any right of the Indemnitee
under this Agreement in respect of any action taken or omitted by such Indemnitee in his or her
Corporate Status prior to such amendment, alteration or repeal, regardless of whether a claim with
respect to such action or inaction is raised prior or subsequent to such amendment, alteration or
repeal. No right or remedy herein conferred is intended to be exclusive of any other right or
remedy, and every other right or remedy shall be cumulative and in addition to every other right or
remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion of any right or remedy hereunder, or otherwise, shall not prohibit the concurrent
assertion or employment of any other right or remedy.
(b) In the event of any payment under this Agreement, the Company 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 take all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Company to bring suit to enforce such rights.
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Section 15. Insurance. The Company will use its reasonable best efforts to acquire
directors and officers liability insurance, on appropriate terms and conditions, covering the
Indemnitee or any claim made against the Indemnitee by reason of his or her Corporate Status and
covering the Company for any indemnification or advance of Expenses made by the Company to the
Indemnitee for any claims made against the Indemnitee by reason of his or her Corporate Status.
Without in any way limiting any other obligation under this Agreement, the Company shall indemnify
the Indemnitee for any payment by the Indemnitee arising out of the amount of any deductible or
retention and the amount of any excess of the aggregate of all judgments, penalties, fines,
settlements and Expenses incurred by the Indemnitee in connection with a Proceeding over the
coverage of any insurance referred to in the previous sentence. The purchase, establishment and
maintenance of any such insurance shall not in any way limit or affect the rights or obligations of
the Company or the Indemnitee under this Agreement except as expressly provided herein, and the
execution and delivery of this Agreement by the Company and the Indemnitee shall not in any way
limit or affect the rights or obligations of the Company under any such insurance policies. If, at
the time the Company receives notice from any source of a Proceeding to which the Indemnitee is a
party or a participant (as a witness or otherwise), the Company has director and officer liability
insurance in effect, the Company shall give prompt notice of such Proceeding to the insurers in
accordance with the procedures set forth in the respective policies.
Section 16. Coordination of Payments. The Company shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable, payable or reimbursable as
Expenses hereunder if and to the extent that the Indemnitee has otherwise actually received such
payment under any insurance policy, contract, agreement or otherwise.
Section 17. Reports to Stockholders. To the extent required by the MGCL, the Company
shall report in writing to its stockholders the payment of any amounts for indemnification of, or
advance of Expenses to, the Indemnitee under this Agreement arising out of a Proceeding by or in
the right of the Company with the notice of the meeting of stockholders of the Company next
following the date of the payment of any such indemnification or advance of Expenses or prior to
such meeting.
Section 18. Duration of Agreement; Binding Effect.
(a) This Agreement shall continue until and terminate on the later of (i) the date that the
Indemnitee shall have ceased to serve as a director, officer, employee or agent of the Company or
as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of
any other foreign or domestic corporation, real estate investment trust, partnership, limited
liability company, joint venture, trust, employee benefit plan or other enterprise that such person
is or was serving in such capacity at the request of the Company and (ii) the date that the
Indemnitee is no longer subject to any actual or possible Proceeding (including any rights of
appeal thereto and any Proceeding commenced by the Indemnitee pursuant to Section 12 hereof).
(b) The indemnification and advance of Expenses provided by, or granted pursuant to, this
Agreement shall be binding upon and be enforceable by the parties hereto and their respective
successors and assigns (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business or assets of the Company),
shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of
the Company or a director, trustee, officer, partner, manager, managing member, fiduciary, employee
or agent of any other foreign or domestic corporation, partnership, limited liability company,
joint venture, trust, employee benefit plan or other enterprise that such person is or was serving
in such capacity at the request of the Company, and shall inure to the benefit of the Indemnitee
and the Indemnitee’s spouse, assigns, heirs, devisees, executors and administrators and other legal
representatives.
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(c) The Company shall require and cause any successor (whether direct or indirect by purchase,
merger, consolidation or otherwise) to all, substantially all or a substantial part, of the
business and/or assets of the Company, by written agreement in form and substance satisfactory to
the Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform if no such succession had taken
place.
(d) The Company and the Indemnitee agree that a monetary remedy for breach of this Agreement,
at some later date, may be inadequate, impracticable and difficult of proof, and further agree that
such breach may cause the Indemnitee irreparable harm. Accordingly, the parties hereto agree that
the Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance
hereof, without any necessity of showing actual damage or irreparable harm and that by seeking
injunctive relief and/or specific performance, the Indemnitee shall not be precluded from seeking
or obtaining any other relief to which the Indemnitee may be entitled. The Indemnitee shall
further be entitled to such specific performance and injunctive relief, including temporary
restraining orders, preliminary injunctions and permanent injunctions, without the necessity of
posting bonds or other undertakings in connection therewith. The Company acknowledges that, in the
absence of a waiver, a bond or undertaking may be required of the Indemnitee by a court, and the
Company hereby waives any such requirement of such a bond or undertaking.
Section 19. Severability. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever: (i) the validity, legality
and enforceability of the remaining provisions of this Agreement (including, without limitation,
each portion of any section, paragraph or sentence of this Agreement containing any such provision
held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest
extent permitted by law; (ii) such provision or provisions shall be deemed reformed to the extent
necessary to conform to applicable law and to give the maximum effect to the intent of the parties
hereto; and (iii) to the fullest extent possible, the provisions of this Agreement (including,
without limitation, each portion of any section, paragraph or sentence of this Agreement containing
any such provision held to be invalid, illegal or unenforceable, that is not itself invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
Section 20. Identical Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original but all of which
together shall constitute one and the same Agreement. One such counterpart signed by the party
against whom enforceability is sought shall be sufficient to evidence the existence of this
Agreement.
Section 21. Headings. The headings of the paragraphs of this Agreement are inserted
for convenience only and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.
Section 22. Modification and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other
provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
Section 23. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand
and receipted for by the party to whom said notice or other communication shall have been directed,
on the day of such delivery, or (ii) mailed by certified or registered mail with postage prepaid,
on the third business day after the date on which it is so mailed:
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| (a) | If to the Indemnitee, to the address set forth on the signature page hereto. | ||
| (b) | If to the Company, to: | ||
| Independence Realty Trust, Inc. Xxxx Centre 0000 Xxxx Xx., 00xx Xxxxx Xxxxxxxxxxxx, XX 00000 Attn: Chief Financial Officer |
or to such other address as may have been furnished in writing to the Indemnitee by the Company or
to the Company by the Indemnitee, as the case may be.
Section 24. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Maryland, without regard to its conflicts of
laws rules.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| INDEPENDENCE REALTY TRUST, INC. |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| INDEMNITEE |
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| Name: | ||||
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EXHIBIT A
AFFIRMATION AND UNDERTAKING TO REPAY EXPENSES ADVANCED
To: The Board of Directors of Independence Realty Trust, Inc.
Re: Affirmation and Undertaking
Ladies and Gentlemen:
This Affirmation and Undertaking is being provided pursuant to that certain Indemnification
Agreement, dated the ___ day of ________, 20__, by and between Independence Realty Trust, Inc.
(the “Company”) and the undersigned Indemnitee (the “Indemnification Agreement”),
pursuant to which I am entitled to the advance of Expenses in connection with [Description of
Proceeding] (the “Proceeding”).
Terms used herein and not otherwise defined shall have the meanings specified in the
Indemnification Agreement.
I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged
actions or omissions by me in such capacity. I hereby affirm my good faith belief that at all
times, insofar as I was involved as a director of the Company, in any of the facts or events giving
rise to the Proceeding, I (i) did not act with bad faith or active or deliberate dishonesty,
(ii) did not receive any improper personal benefit in money, property or services and (iii) in the
case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me
was unlawful.
In consideration of the advance of Expenses by the Company for reasonable attorneys’ fees and
related Expenses incurred by me in connection with the Proceeding (the “Advanced
Expenses”), I hereby agree that if, in connection with the Proceeding, it is established that
(i) an act or omission by me was material to the matter giving rise to the Proceeding and (A) was
committed in bad faith or (B) was the result of active and deliberate dishonesty, (ii) I actually
received an improper personal benefit in money, property or services or (iii) in the case of any
criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then
I shall promptly reimburse the portion of the Advanced Expenses, together with the Applicable Legal
Rate of interest thereon, relating to the claims, issues or matters in the Proceeding as to which
the foregoing findings have been established.
IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this _____ day of
_______________, 20____.
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