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EXHIBIT 10.14
INDEMNITY AGREEMENT
AGREEMENT dated as of ________, by and between American Residential
Investment Trust, Inc., a Maryland corporation (the "Corporation"), and
_____________ (the "Indemnitee").
RECITALS
WHEREAS, the Charter and Bylaws of the Corporation provide for
indemnification by the Corporation of its directors and officers as provided
therein, and the Indemnitee has been serving and continues to serve as a
director and/or officer of the Corporation in part in reliance on such
provision;
WHEREAS, to provide Indemnitee with additional contractual assurance of
protection against personal liability in connection with certain proceedings
described below, the Corporation desires to enter into this Agreement;
WHEREAS, the Maryland General Corporation Law (the "Maryland Statute")
expressly recognizes that the indemnification provisions of the Maryland Statute
are not exclusive of any other rights to which a person seeking indemnification
may be entitled under the Charter or Bylaws of the Corporation, a resolution of
stockholders or directors, an agreement or otherwise, and this Agreement is
being entered into pursuant to and in furtherance of the Charter and Bylaws of
the Corporation, as permitted by the Maryland Statute and as authorized by the
Charter and the Board of Directors of the Corporation; and
WHEREAS, in order to induce the Indemnitee to serve or continue to serve
as a director and/or officer of the Corporation and in consideration of the
Indemnitee's so serving, the Corporation desires to indemnify the Indemnitee and
to make arrangements pursuant to which the Indemnitee may be advanced or
reimbursed expenses incurred by Indemnitee in certain proceedings described
below, according to the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the foregoing recitals and of
Indemnitee's serving or continuing to serve the Corporation as a director and/or
officer, the parties agree as follows:
1. Indemnification.
(a) In accordance with the provisions of subsection (b) of this
Section 1, the Corporation shall hold harmless and indemnify the Indemnitee
against any and all expenses, liabilities and losses (including, without
limitation, investigation expenses and expert witnesses' and attorneys' fees and
expenses, judgments, penalties, fines, ERISA excise taxes and amounts
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paid or to be paid in settlement) actually incurred by the Indemnitee (net of
any related insurance proceeds or other amounts received by Indemnitee or paid
by or on behalf of the Corporation on the Indemnitee's behalf), in connection
with any action, suit, arbitration or proceeding (or any inquiry or
investigation, whether brought by or in the right of the Corporation or
otherwise, that Indemnitee in good faith believes might lead to the institution
of any such action, suit, arbitration or proceeding), whether civil, criminal,
administrative or investigative, or any appeal therefrom, in which the
Indemnitee is a party, is threatened to be made a party, is a witness or is
participating (a "Proceeding") based upon, arising from, relating to, or by
reason of the fact that Indemnitee is, was, shall be, or shall have been a
director and/or officer of the Corporation or is or was serving, shall serve, or
shall have served at the request of the Corporation as a director, officer,
partner, trustee, employee, or agent ("Affiliate Indemnitee") of another foreign
or domestic corporation or non-profit corporation, cooperative, partnership,
joint venture, trust, or other incorporated or unincorporated enterprise (each,
a "Company Affiliate").
(b) In providing the foregoing indemnification, the Corporation
shall, with respect to a Proceeding, hold harmless and indemnify the Indemnitee
to the fullest extent required by the Maryland Statute and to the fullest extent
permitted by the Express Permitted Indemnification Provisions (as hereinafter
defined) of the Maryland Statute. For purposes of this Agreement, the Express
Permitted Indemnification Provisions of the Maryland Statute shall mean
indemnification as permitted by Section 2-418(b) of the Maryland Statute or by
any amendment thereof or other statutory provisions expressly permitting such
indemnification which is adopted after the date hereof (but, in the case of any
such amendment, only to the extent that such amendment permits the Corporation
to provide broader indemnification rights than said law required or permitted
the Corporation to provide prior to such amendment).
(c) Without limiting the generality of the foregoing, the Indemnitee
shall be entitled to the rights of indemnification provided in this Section 1
for any expenses actually incurred in any Proceeding initiated by or in the
right of the Company unless the Indemnitee shall have been adjudged to be liable
to the Company.
(d) If Indemnitee is entitled under this Agreement to indemnification
by the Corporation for some or a portion of the Indemnified Amounts but not,
however, for all of the total amount thereof, the Corporation shall nevertheless
indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
2. Other Indemnification Arrangements. The Maryland Statute and the
Charter and Bylaws of the Corporation permit the Corporation to purchase and
maintain insurance or furnish similar protection or make other arrangements,
including, but not limited to, providing a trust fund, letter of credit, or
surety bond ("Indemnification Arrangements") on behalf of the Indemnitee against
any liability asserted against him or her or incurred by or on behalf of him or
her in such capacity as a director or officer of the Corporation or an
Affiliated Indemnitee, or arising out of his or her status as such, whether or
not the Corporation would have the power to indemnify him or her against such
liability under the provisions of this Agreement or under the Maryland Statute,
as it may then be in effect. The purchase, establishment, and maintenance of
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any such Indemnification Arrangement shall not in any way limit or affect the
rights and obligations of the Corporation or of the Indemnitee under this
Agreement except as expressly provided herein, and the execution and delivery of
this Agreement by the Corporation and the Indemnitee shall not in any way limit
or affect the rights and obligations of the Corporation or the other party or
parties thereto under any such Indemnification Arrangement. All amounts payable
by the Corporation pursuant to this Section 2 and Section 1 hereof are herein
referred to as "Indemnified Amounts."
3. Advance Payment of Indemnified Amounts.
(a) The Indemnitee hereby is granted the right to receive in advance
of a final, nonappealable judgment or other final adjudication of a Proceeding
(a "Final Determination") the amount of any and all expenses, including, without
limitation, investigation expenses, expert witness' and attorney's fees and
other expenses expended or incurred by the Indemnitee in connection with any
Proceeding or otherwise expended or incurred by the Indemnitee (such amounts so
expended or incurred being referred to as "Advanced Amounts").
(b) In making any written request for Advanced Amounts, the
Indemnitee shall submit to the Corporation a schedule setting forth in
reasonable detail the dollar amount expended or incurred and expected to be
expended. Each such listing shall be supported by the xxxx, agreement, or other
documentation relating thereto, each of which shall be appended to the schedule
as an exhibit. In addition, before the Indemnitee may receive Advanced Amounts
from the Corporation, the Indemnitee shall provide to the Corporation (i) a
written affirmation of the Indemnitee's good faith belief that the applicable
standard of conduct required for indemnification by the Corporation has been
satisfied by the Indemnitee, and (ii) a written undertaking by or on behalf of
the Indemnitee to repay the Advanced Amount if it shall ultimately be determined
that the Indemnitee has not satisfied any applicable standard of conduct. The
written undertaking required from the Indemnitee shall be an unlimited general
obligation of the Indemnitee but need not be secured. The Corporation shall pay
to the Indemnitee all Advanced Amounts within twenty (20) days after receipt by
the Corporation of all information and documentation required to be provided by
the Indemnitee pursuant to this paragraph.
4. Procedure for Payment of Indemnified Amounts.
(a) To obtain indemnification under this Agreement, the Indemnitee
shall submit to the Corporation a written request for payment of the appropriate
Indemnified Amounts, including with such requests such documentation and
information as is reasonably available to the Indemnitee and reasonably
necessary to determine whether and to what extent the Indemnitee is entitled to
indemnification. The Secretary of the Corporation shall, promptly upon receipt
of such a request for indemnification, advise the Board of Directors in writing
that the Indemnitee has requested indemnification.
(b) The Corporation shall pay the Indemnitee the appropriate
Indemnified Amounts unless it is established that the Indemnitee has not met any
applicable standard of conduct of the
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Express Permitted Indemnification Provisions. For purposes of determining
whether the Indemnitee is entitled to Indemnified Amounts, in order to deny
indemnification to the Indemnitee the Corporation has the burden of proof in
establishing that the Indemnitee did not meet the applicable standard of
conduct. In this regard, a termination of any Proceeding by judgment, order or
settlement does not create a presumption that the Indemnitee did not meet the
requisite standard of conduct; provided, however, that the termination of any
criminal proceeding by conviction, or a pleading 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 applicable standard
of conduct.
(c) Any determination that the director has not met the applicable
standard of conduct required to qualify for indemnification shall be made (i)
either by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties of such action, suit or proceeding; or (ii) by
independent legal counsel (who may be the outside counsel regularly employed by
the Corporation); provided that the manner in which (and, if applicable, the
counsel by which) the right to indemnification is to be determined shall be
approved in advance in writing by both the highest ranking executive officer of
the Corporation who is not party to such action (sometimes hereinafter referred
to as "Senior Officer") and by the Indemnitee. In the event that such parties
are unable to agree on the manner in which any such determination is to be made,
such determination shall be made by independent legal counsel retained by the
Corporation especially for such purpose, provided that such counsel be approved
in advance in writing by both the said Senior Officer and Indemnitee and
provided further, that such counsel shall not be outside counsel regularly
employed by the Corporation. The fees and expenses of counsel in connection with
making said determination contemplated hereunder shall be paid by the
Corporation, and, if requested by such counsel, the Corporation shall give such
counsel an appropriate written agreement with respect to the payment of their
fees and expenses and such other matters as may be reasonably requested by
counsel.
(d) The Corporation will use its best efforts to conclude as soon as
practicable any required determination pursuant to subparagraph (c) above and
promptly will advise the Indemnitee in writing with respect to any determination
that the Indemnitee is or is not entitled to indemnification, including a
description of any reason or basis for which indemnification has been denied.
Payment of any applicable Indemnified Amounts will be made to the Indemnitee
within ten (10) days after any determination of the Indemnitee's entitlement to
indemnification.
(e) Notwithstanding the foregoing, Indemnitee may, at any time after
sixty (60) days after a claim for Indemnified Amounts has been filed with the
Corporation (or upon receipt of written notice that a claim for Indemnified
Amounts has been rejected, if earlier) and before three (3) years after a claim
for Indemnified Amounts has been filed, petition a court of competent
jurisdiction to determine whether the Indemnitee is entitled to indemnification
under the provisions of this Agreement, and such court shall thereupon have the
exclusive authority to make such determination unless and until such court
dismisses or otherwise terminates such action without having made such
determination. The court shall, as petitioned, make an independent determination
of whether the Indemnitee is entitled to indemnification as provided under this
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Agreement, irrespective of any prior determination made by the Board of
Directors or independent counsel. If the court shall determine that the
Indemnitee is entitled to indemnification as to any claim, issue or matter
involved in the Proceeding with respect to which there has been no prior
determination pursuant to this Agreement or with respect to which there has been
a prior determination that the Indemnitee was not entitled to indemnification
hereunder, the Corporation shall pay all expenses (including attorneys' fees)
actually incurred by the Indemnitee in connection with such judicial
determination.
5. Agreement Not Exclusive; Subrogation Rights, etc.
(a) This Agreement shall not be deemed exclusive of and shall not
diminish any other rights the Indemnitee may have to be indemnified or insured
or otherwise protected against any liability, loss, or expense by the
Corporation, any subsidiary of the Corporation, or any other person or entity
under any charter, bylaws, law, agreement, policy of insurance or similar
protection, vote of stockholders or directors, disinterested or not, or
otherwise, whether or not now in effect, both as to actions in the Indemnitee's
official capacity, and as to actions in another capacity while holding such
office. The Corporation's obligations to make payments of Indemnified Amounts
hereunder shall be satisfied to the extent that payments with respect to the
same Proceeding (or part thereof) have been made to or for the benefit of the
Indemnitee by reason of the indemnification of the Indemnitee pursuant to any
other arrangement made by the Corporation for the benefit of the Indemnitee.
(b) In the event the Indemnitee shall receive payment from any
insurance carrier or from the plaintiff in any Proceeding against such
Indemnitee in respect of Indemnified Amounts after payments on account of all or
part of such Indemnified Amounts have been made by the Corporation pursuant
hereto, such Indemnitee shall promptly reimburse to the Corporation the amount,
if any, by which the sum of such payment by such insurance carrier or such
plaintiff and payments by the Corporation or pursuant to arrangements made by
the Corporation to Indemnitee exceeds such Indemnified Amounts; provided,
however, that such portions, if any, of such insurance proceeds that are
required to be reimbursed to the insurance carrier under the terms of its
insurance policy, such as deductible or co-insurance payments, shall not be
deemed to be payments to the Indemnitee hereunder. In addition, upon payment of
Indemnified Amounts hereunder, the Corporation shall be subrogated to the rights
of Indemnitee receiving such payments (to the extent thereof) against any
insurance carrier (to the extent permitted under such insurance policies) or
plaintiff in respect of such Indemnified Amounts and the Indemnitee shall
execute and deliver any and all instruments and documents and perform any and
all other acts or deeds which the Corporation deems necessary or advisable to
secure such rights. Such right of subrogation shall be terminated upon receipt
by the Corporation of the amount to be reimbursed by the Indemnitee pursuant to
the first sentence of this paragraph.
6. Insurance Coverage. In the event that the Corporation directors
and officers liability maintains insurance to protect itself and any director or
officer of the Corporation 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 Corporation.
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7. Establishment of Trust. In the event of a potential business
combination or change in control (as contemplated by Article Eleventh (11) of
the Charter of the Corporation) (collectively, a "Change in Control"), the
Corporation shall, upon written request by Indemnitee, create a trust (the
"Trust") for the benefit of the Indemnitee and from time to time upon written
request of Indemnitee shall fund the Trust in an amount sufficient to satisfy
any and all Indemnified Amounts (including, Advanced Amounts) which are actually
paid or which Indemnitee reasonably determines from time to time may be payable
by the Corporation under this Agreement. The amount or amounts to be deposited
in the Trust pursuant to the foregoing funding obligation shall be determined by
the independedt legal counsel appointed under Section 4 hereof. The terms of the
Trust shall provide that upon a Change in Control: (i) the Trust shall not be
revoked or the principal thereof invaded without the written consent of the
Indemnitee; (ii) the trustee of the Trust shall advance, within twenty (20) days
of a request by the Indemnitee, any and all Advanced Amounts to the Indemnitee
(and the Indemnitee hereby agrees to reimburse the Trust under the circumstances
under which the Indemnitee would be required to reimburse the Corporation under
Section 3(b)(ii) hereof); (iii) the Corporation shall continue to fund the Trust
from time to time in accordance with the funding obligations set forth above;
(iv) the trustee of the Trust shall promptly pay to the Indemnitee all
Indemnified Amounts for which the Indemnitee shall be entitled to
indemnification pursuant to this Agreement; and (v) all unexpended funds in the
Trust shall revert to the Corporation upon a final determination by a court of
competent jurisdiction in a final decision from which there is no further right
of appeal that the Indemnitee has been fully Indemnified under the terms of this
Agreement. The Trustee of the Trust shall be chosen by the Indemnitee.
8. Continuation of Indemnity. All agreements and obligations of the
Corporation contained herein shall continue during the period Indemnitee is a
director or officer, as the case may be, of the Corporation (or is serving at
the request of the Corporation as an Affiliate Indemnitee) and shall continue
thereafter so long as Indemnitee shall be subject to any possible Proceeding by
reason of the fact that Indemnitee was a director or officer of the Corporation
or was serving in any other capacity referred to herein.
9. Successors; Binding Agreement. This Agreement shall be binding on
and shall inure to the benefit of and be enforceable by the Corporation's
successors and assigns and by the Indemnitee's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees, and legatees. The Corporation shall require any successor or assignee
(whether direct or indirect, by purchase, merger, consolidation, or otherwise)
to all or substantially all of the business and/or assets of the Corporation, by
written agreement in form and substance reasonably satisfactory to the
Corporation and to the Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Corporation would
be required to perform if no such succession or assignment had taken place.
10. Enforcement. The Corporation has entered into this Agreement and
assumed the obligations imposed on the Corporation hereby in order to induce the
Indemnitee to act as a director or officer, as the case may be, of the
Corporation, and acknowledges that the Indemnitee
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is relying upon this Agreement in continuing in such capacity. In the event the
Indemnitee is required to bring any action to enforce rights or to collect
moneys due under this Agreement and is successful in such action, the
Corporation shall reimburse Indemnitee for all of the Indemnitee's fees and
expenses in bringing and pursuing such action. The Indemnitee shall be entitled
to the advancement of Indemnified Amounts to the full extent contemplated by
Section 3 hereof in connection with such proceeding.
11. Separability. Each of the provisions of this Agreement is a
separate and distinct agreement independent of the others, so that if any
provision hereof shall be held to be invalid or unenforceable for any reason,
such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof, which other provisions shall
remain in full force and effect.
12. Miscellaneous. No provision of this Agreement may be modified,
waived, or discharged unless such modification, waiver, or discharge is agreed
to in writing signed by Indemnitee and either the Chairman of the Board or the
President of the Corporation or another officer of the Corporation specifically
designated by the Board of Directors. No waiver by either party at any time of
any breach by the other party of, or of compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same time or
at any prior or subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not set forth expressly in this Agreement.
The validity, interpretation, construction, and performance of this Agreement
shall be governed by the laws of the State of Maryland, without giving effect to
the principles of conflicts of laws thereof. The Indemnitee may bring an action
seeking resolution of disputes or controversies arising under or in any way
related to this Agreement in the state or federal court jurisdiction in which
Indemnitee resides or in which his or her place of business is located, and in
any related appellate courts, and the Corporation consents to the jurisdiction
of such courts and to such venue.
13. Notices. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, as follows:
If to Indemnitee:
Attention:
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If to Corporation:
Attention: Secretary
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
15. Effectiveness. This Agreement shall be effective as of the date
it is executed.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the day and year first above written.
ATTEST: [Name of Corporation]
_______________________________ By:_________________________________*
WITNESS: INDEMNITEE
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[Name of Indemnitee]
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