EXHIBIT 10.6
FORM OF INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made and entered into as of
this _________ day of _______________, 2003, and is by and between Inland
Western Retail Real Estate Trust, Inc., a Maryland corporation (the "Company"),
as indemnitor, and an officer and/or director of the Company who shall execute
this Agreement as of or subsequent to the date hereof whether by separate
instrument, counterpart or otherwise, as indemnitee (collectively the
"Indemnified Parties" and each an "Indemnified Party"). Terms capitalized herein
and not otherwise defined shall have the meaning ascribed to them in the
Company's Articles of Incorporation, as amended and restated (the "Articles").
R E C I T A L S
A. The Company was formed in March 2003, and intends to operate as a
real estate investment trust (a "REIT") for federal and state income
tax purposes.
B. The Articles and the Company's Bylaws (the "Bylaws") authorize and
direct the Company to indemnify the Indemnified Parties, subject to
certain limitations and conditions.
C. The Indemnified Parties have requested that the Company enter into
separate agreements with them to provide indemnification as set
forth in the Articles and Bylaws, and the Company is willing to
enter into such agreements.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
hereinafter contained, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. RECITALS. The Recitals set forth above are herein incorporated into
this Agreement as if fully restated herein.
2. COMPANY INDEMNIFICATION OF THE INDEMNIFIED PARTIES:
(a) Subject to paragraphs (b), (c) and (d) below, the Company
shall, to the fullest extent permitted by Maryland statutory or decisional law,
as amended or interpreted and, without limiting the generality of the foregoing,
in accordance with Section 2-418 of the Maryland General Corporation Law,
indemnify and pay, advance or reimburse reasonable expenses to each of the
Indemnified Parties.
(b) As long as the Company qualifies as a REIT, it shall not
indemnify nor pay, advance or reimburse expenses to an Indemnified Party unless:
(i) the Indemnified Party has determined, in good faith, that the course of
conduct which caused the loss or liability was in the best interest of the
Company; (ii) the Indemnified Party was acting on behalf of or performing
services on the part of the Company; (iii) such liability or loss was not the
result of negligence or misconduct on the part of the Indemnified Party except
that in the event the Indemnified Party is or was an Independent Director, such
liability or loss shall not have been the result of gross negligence or willful
misconduct; and (iv) such indemnification or agreement
to be held harmless is recoverable only out of the Net Assets of the Company and
not from the Stockholders.
(c) As long as the Company qualifies as a REIT and
notwithstanding anything to the contrary in paragraph (b) above, the Company
shall not indemnify an Indemnified Party for losses, liabilities or expenses
arising from or out of an alleged violation of federal or state securities laws
by such party 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
securities law violations as to the particular Indemnified Party; (ii) such
claims have been dismissed with prejudice on the merits by a court of competent
jurisdiction as to the particular Indemnified Party; or (iii) a court of
competent jurisdiction approves a settlement of the claims and finds that
indemnification of the settlement and related costs should be made and the court
considering the request has been advised of the position of the United States
Securities and Exchange Commission and the published opinions of any state
securities regulatory authority in which securities of the Company were offered
or sold as to indemnification for violations of securities laws.
(d) The Company may advance amounts to an Indemnified Party for
legal and other expenses and costs incurred as a result of any legal action for
which indemnification is being sought only in accordance with Section 2-418 of
the Maryland General Corporation Law, and, as long as the Company qualifies as a
REIT, only if all of the following conditions are satisfied: (i) the legal
action relates to acts or omissions with respect to the performance of duties or
services by the Indemnified Party for or on behalf of the company; (ii) the
legal action is initiated by a third party who is not a Stockholder or the legal
action is initiated by a Stockholder acting in his or her capacity as such and a
court of competent jurisdiction specifically approves such advancement; and
(iii) the Indemnified Party receiving such advances undertakes in writing to
repay the advanced funds to the Company, together with the applicable legal rate
of interest thereon, in cases in which such party is found not to be entitled to
indemnification.
(e) The Company shall have the power to purchase and maintain
insurance or provide similar protection on behalf of an Indemnified Party
against any liability asserted which was incurred in any such capacity with the
Company or arising out of such status; provided, however, that the Company shall
not incur the costs of any liability insurance which insures any person against
liability for which he, she or it could not be indemnified under the Articles.
Nothing contained herein shall constitute a waiver by any Indemnified Party of
any right which he, she or it may have against any party under federal or state
securities laws.
3. AMENDMENT. This Agreement may be modified only by a writing signed
by all of the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
INDEMNITOR:
INLAND WESTERN RETAIL REAL ESTATE
TRUST, INC.
By:
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a duly authorized officer thereof
INDEMNIFIED PARTY:
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Name:
