INDEMNIFICATION AGREEMENT Rentech Nitrogen Partners, L.P.
Exhibit 10.42
Rentech Nitrogen Partners, L.P.
This indemnification agreement (this “Agreement”) is made and entered into effective as of
November 9, 2011 between Rentech Nitrogen Partners, L.P, a Delaware limited partnership (the
“Partnership”), and X. Xxxx Ramsbottom, Jr. (“Indemnitee”).
RECITALS:
A. Indemnitee currently serves as an officer or director of Rentech Nitrogen GP, LLC, a
Delaware limited liability company and the general partner of the Partnership (the “General
Partner”). As such, Indemnitee may be subjected to claims, suits or proceedings.
B. Indemnitee has indicated that it was and is a condition of Indemnitee’s acceptance and
continuing in such service that, among other things, the Partnership agrees to indemnify Indemnitee
against liabilities, expenses and costs incurred in connection with any such claims, suits or
proceedings, in accordance with, and to the fullest extent permitted by, the Delaware Revised
Uniform Limited Partnership Act, other applicable law and/or the Second Amended and Restated
Agreement of Limited Partnership of the Partnership (as may be amended from time to time, the
“Partnership Agreement”); and
C. Indemnitee is an “Indemnitee” as such term is defined in the Partnership Agreement.
D. Section 7.7 of the Partnership Agreement provides for indemnification of directors and
officers of the General Partner, and provides that the Partnership may enter into additional
indemnification agreements with any Indemnitee.
AGREEMENT:
Now, therefore, in consideration of Indemnitee’s acceptance and continuation of service as an
officer or director of the General Partner after the date of this Agreement, and in consideration
of the mutual covenants stated herein, the parties agree as follows:
1. Definitions. As used in this Agreement, the following terms have the following
meanings:
(a) Disinterested Director. The term “Disinterested Director” means, with respect to
any request by Indemnitee for indemnification hereunder, a director of the General Partner who at
the time of the vote is not a named defendant or respondent in the Proceeding in respect of which
indemnification is sought by Indemnitee.
(b) DRULPA. The term “DRULPA” means the Delaware Revised Uniform Limited Partnership
Act, as amended.
(c) ERISA. The term “ERISA” means the Employee Retirement Income Security Act of
1974, as amended.
(d) Proceeding. The term “Proceeding” means any threatened, pending or completed
action, suit, claim, counterclaim, cross claim, arbitration, mediation, alternative dispute
resolution mechanism, investigation, inquiry, administrative hearing or any other actual,
threatened or completed proceeding whether civil, criminal, administrative, regulatory, legislative
or investigative, and whether formal or informal, including appeals.
(e) Representative. As used in reference to Indemnitee, the term “Representative”
means Indemnitee’s serving in the capacity of an officer or director of the General Partner and,
while an officer or director of the General Partner, Indemnitee’s serving at the General Partner’s
request as a director, officer, agent, associate, employee, fiduciary, manager, member, partner,
promoter, or a trustee of, or holding a similar position with, any corporation, partnership, joint
venture, trust, other enterprise or person or employee benefit plan.
2. Agreement to Indemnify. The Partnership shall indemnify, and keep indemnified,
Indemnitee in accordance with, and to the fullest extent permitted and/or required by, the DRULPA
and other applicable law, from and against any losses, claims, damages, liabilities, whether joint
or several, judgments, penalties, fines (including but not limited to ERISA penalties and excise
taxes), interest, amounts paid in settlement and reasonable expenses (including but not limited to
expenses of investigation and preparation and fees and disbursements of Indemnitee’s counsel,
accountants or other experts) actually incurred by Indemnitee in connection with any Proceeding in
which Indemnitee was or is made a party or was or is involved (for example, as a witness) because
Indemnitee is or was a Representative, which includes any actual or alleged action or failure to
act by Indemnitee in his or her capacity as a Representative.
3. Insurance.
(a) So long as Indemnitee may be subject to any possible Proceeding by reason of the fact that
Indemnitee is or was a Representative, to the extent the General Partner or the Partnership
maintains an insurance policy or policies providing directors’ and officers’ liability insurance,
the Partnership shall ensure that Indemnitee shall be covered by such policy or policies, in
accordance with its or their terms, to the maximum extent of the coverage applicable to a
Representative.
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(b) If Indemnitee shall cease to be a Representative for any reason, the Partnership shall
procure a run-off directors’ and officers’ liability insurance policy with respect to claims
arising from facts or events that occurred before the time Indemnitee ceased to be a
Representative, which policy, without any lapse in coverage,
will provide coverage for a period of six years after the time Indemnitee ceased to be a
Representative and will provide coverage (including amount and type of coverage and size of
deductibles) that is substantially comparable to the General Partner’s or the Partnership’s
directors’ and officers’ liability insurance policy that was most protective of Indemnitee in the
12 months preceding the time Indemnitee ceased to be a Representative, provided, however, that:
(i) this obligation shall be suspended during the period immediately following the time
Indemnitee ceases to be a Representative if and only so long as the General Partner or the
Partnership has a directors’ and officers’ liability insurance policy in effect covering Indemnitee
for such claims that, if it were a run-off policy, would meet or exceed the foregoing standards;
and
(ii) no later than the end of the suspension period provided in the preceding clause (i), the
Partnership shall procure a run-off directors’ and officers’ liability insurance policy meeting the
foregoing standards and lasting the remainder of the six-year period.
4. Advances. In the event of any Proceeding in which Indemnitee is a party or is involved
and which may give rise to a right of indemnification from the Partnership pursuant to this
Agreement, following written request to the Partnership by Indemnitee, the Partnership shall pay to
Indemnitee, in accordance with and to the fullest extent permitted and/or required by the DRULPA
and other applicable law, amounts to cover reasonable expenses incurred by Indemnitee in such
Proceeding in advance of its final disposition upon receipt of (a) a written affirmation by
Indemnitee of Indemnitee’s good faith belief that Indemnitee has met any applicable standard of
conduct; (b) a written undertaking executed by or on behalf of Indemnitee to repay the advance if
it shall ultimately be determined that Indemnitee did not meet such standard of conduct; and (c)
satisfactory evidence as to the amount of such expenses (which shall include invoices received by
Indemnitee in connection with such expenses but, in the case of invoices in connection with legal
services, any references to legal work performed or to expenditures made that would cause
Indemnitee to waive any privilege accorded by applicable law shall not be so included).
5. Burden of Proof. If under applicable law, the entitlement of Indemnitee to be
indemnified or advanced expenses hereunder depends upon whether a standard of conduct has been met,
the burden of proof of establishing that Indemnitee did not act in accordance with such standard
shall rest with the Partnership. Indemnitee shall be presumed to have acted in accordance with
such standard and to be entitled to indemnification or the advancement of expenses (as the case may
be) unless, based upon a preponderance of the evidence, it shall be determined that Indemnitee has
not met such standard. Such determination and any evaluation as to the reasonableness of amounts
claimed by Indemnitee shall be made by either (a) a majority vote of the Disinterested Directors;
(b) a majority vote of a committee consisting of Disinterested Directors designated to act in the
matter by a majority vote of Disinterested Directors; (c) if there are no Disinterested Directors
or if the Disinterested Directors so choose, independent legal counsel in a written opinion; or (d)
by the unitholders of the
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Partnership. For purposes of this Agreement, unless otherwise expressly stated, the termination of
any Proceeding by judgment, order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption
that Indemnitee did not meet any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by applicable law.
6. Notice to the Partnership. Indemnitee shall notify the Partnership, by written
submission to the Secretary of the General Partner, of any matter for which Indemnitee intends to
seek indemnification hereunder as soon as reasonably practicable following the receipt by
Indemnitee of written notice thereof; provided, however, that delay in so notifying the
Partnership shall not constitute a waiver or release by Indemnitee of rights hereunder. The
written notification to the Partnership shall include a description of the nature of the Proceeding
and the facts underlying the Proceeding, in each case to the extent known by Indemnitee. If the
Partnership maintains an insurance policy providing directors’ and officers’ liability insurance
that covers Indemnitee, the Partnership, at the time that any such notice is received from
Indemnitee, shall give prompt notice thereof to the insurers in accordance with the procedures set
forth in the applicable policy.
7. Counsel for Proceeding. In the event of any Proceeding in which Indemnitee is a party
or is involved and which may give rise to a right of indemnification hereunder, the Partnership
shall have the right to retain counsel reasonably satisfactory to Indemnitee to represent
Indemnitee and any others the Partnership may designate in such Proceeding. In any such
Proceeding, Indemnitee shall have the right to retain Indemnitee’s own counsel, but the fees and
expenses of such counsel shall be at the expense of Indemnitee unless (a) the retention of such
counsel has been specifically authorized by the Partnership; (b) representation of Indemnitee and
another party by the same counsel would be inappropriate, in the reasonable judgment of Indemnitee,
due to actual or potential differing interests between them (as might be the case for
representation of both the Partnership and Indemnitee in a Proceeding by or in the right of the
Partnership); (c) the counsel retained by the Partnership and satisfactory to Indemnitee has
advised Indemnitee, in writing, that such counsel’s representation of Indemnitee would be likely to
involve such counsel in representing differing interests which could adversely affect either the
judgment or loyalty of such counsel to Indemnitee, whether it be a conflicting, inconsistent,
diverse or other interest; or (d) the Partnership shall fail to retain counsel for Indemnitee in
such Proceeding. Notwithstanding the foregoing, if an insurance carrier has supplied directors’
and officers’ liability insurance covering a Proceeding and is entitled to retain counsel for the
defense of such Proceeding, then the insurance carrier shall retain counsel to conduct the defense
of such Proceeding unless Indemnitee and the Partnership concur in writing that the insurance
carrier’s doing so is undesirable. The Partnership shall not be liable under this Agreement for
any settlement of any Proceeding effected without its written consent. The Partnership shall not
settle any Proceeding in any manner which would impose any penalty or limitation on Indemnitee
without Indemnitee’s written consent. Consent to a proposed settlement of any Proceeding shall not
be unreasonably withheld by either the Partnership or Indemnitee.
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8. Enforcement. The Partnership acknowledges that Indemnitee is relying upon this
Agreement in serving as a Representative. If a claim for indemnification or advancement of
expenses is not paid in full by the Partnership within ninety (90) days after a written claim has
been received from Indemnitee by the Partnership, Indemnitee may at any time bring suit against the
Partnership to recover the unpaid amount of the claim. If successful in whole or in part in such
suit, Indemnitee shall also be entitled to be paid all reasonable fees and expenses (including
without limitation fees of counsel) in bringing and prosecuting such claim. Whether or not
Indemnitee has met any applicable standard of conduct, the Court in such suit may order
indemnification or the advancement of expenses as the Court deems proper (subject to any express
limitation of the Partnership Agreement). Further, the Partnership shall indemnify Indemnitee from
and against any and all expenses (including reasonable attorneys’ fees) and, if requested by
Indemnitee, shall (within ten business days of such request) advance such expenses to Indemnitee,
which are incurred by Indemnitee in connection with any claim asserted against or suit brought by
Indemnitee for recovery under any directors’ and officers’ liability insurance policies maintained
by the Partnership, regardless of whether Indemnitee is unsuccessful in whole or in part in such
claim or suit.
9. Nonexclusivity. The rights of Indemnitee to receive indemnification and advancement of
expenses under this Agreement shall be in addition to, and shall not be deemed exclusive of, any
other rights Indemnitee shall have under the DRULPA or other applicable law, the certificate of
limited partnership or the Partnership Agreement of the Partnership, any other agreement, vote of
members or unitholders or a resolution of directors, or otherwise. No amendment or alteration of
the certificate of limited partnership or the Partnership Agreement of the Partnership shall
adversely affect Indemnitee’s rights hereunder. Any amendment, alteration or repeal of the DRULPA
or other applicable law that adversely affects any right of Indemnitee hereunder shall, to the
fullest extent permitted by law, be prospective only and shall not limit or eliminate any such
right with respect to any Proceeding involving any occurrence or alleged occurrence of any action
or omission to act that took place before such amendment or repeal.
10. Limitations on Indemnification. Notwithstanding any other provision herein to the
contrary, the Partnership shall not be obligated pursuant to this Agreement:
(a) To indemnify or advance expenses to Indemnitee with respect to a Proceeding (or part
thereof), however denominated, initiated by Indemnitee, including any Proceeding (or any part
thereof) initiated by Indemnitee against the Partnership or the Partnership’s directors, officers,
employees or other indemnitees, other than (i) a Proceeding brought to establish or enforce a right
to indemnification or advancement of expenses under this Agreement, (ii) a Proceeding (or part
thereof) authorized or consented to by the General Partner prior to its initiation, it being
understood and agreed that such authorization or consent shall not be unreasonably withheld in
connection with any compulsory counterclaim or counterclaim or affirmative defense brought or
raised by Indemnitee in response to a Proceeding otherwise indemnifiable under this Agreement, and
(iii) a Proceeding in which the Partnership provides indemnification, in its sole discretion,
pursuant to the powers vested in the Partnership under the Partnership Agreement or applicable law.
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(b) To indemnify Indemnitee for any expenses incurred by Indemnitee with respect to any
Proceeding initiated by Indemnitee to enforce or interpret this Agreement, unless Indemnitee is
successful in such Proceeding in establishing Indemnitee’s right, in whole or in part, to
indemnification or advancement of expenses hereunder, or unless and to the extent that the court in
such action, suit or proceeding shall determine that, despite Indemnitee’s failure to establish its
right to indemnification, Indemnitee is entitled to indemnity for such expenses; provided, however,
that nothing in this Section 10(b) is intended to limit the Partnership’s obligations with respect
to the advancement of expenses to Indemnitee in connection with any such action, suit or proceeding
instituted by Indemnitee to enforce or interpret this Agreement, as provided in Section 8 hereof.
(c) To indemnify Indemnitee on account of conduct by Indemnitee where such conduct has been
determined by a final (not interlocutory) judgment or other adjudication of a court or arbitrator
or administrative body of competent jurisdiction to have been knowingly fraudulent or constitute
willful misconduct as to which there is no further right or option of appeal or the time within
which an appeal must be filed has expired without such filing.
(d) To indemnify Indemnitee in any circumstance where such indemnification has been determined
to be prohibited by law by a final (not interlocutory) judgment or other adjudication of a court or
arbitrator or administrative body of competent jurisdiction as to which there is no further right
or option of appeal or the time within which an appeal must be filed has expired without such
filing.
11. Miscellaneous.
(a) Effectiveness. This Agreement shall be effective for and shall be applied to acts or
omissions prior to, on or after the date of this Agreement.
(b) Mutual Acknowledgments. Both the Partnership and Indemnitee acknowledge that in
certain instances, applicable law (including applicable federal law that may preempt or override
applicable state law) or public policy may prohibit the Partnership from indemnifying the
directors, officers, employees, agents or fiduciaries of the Partnership under this Agreement or
otherwise. For example, the Partnership and Indemnitee acknowledge that the U.S. Securities and
Exchange Commission has taken the position that indemnification of directors, officers and
controlling persons of the Partnership for liabilities arising under federal securities laws is
against public policy and, therefore, unenforceable. Indemnitee understands and acknowledges that
the Partnership has undertaken or may be required in the future to undertake with the Securities
and Exchange Commission to submit the question of indemnification to a court in certain
circumstances for a determination of the Partnership’s right under public policy to indemnify
Indemnitee. In addition, the Partnership and Indemnitee acknowledge that federal law prohibits
indemnifications for certain violations of ERISA.
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(c) Survival; Continuation. The rights of Indemnitee hereunder shall inure to the
benefit of Indemnitee (even after Indemnitee ceases to be a Representative), Indemnitee’s personal
representative, heirs, executors, administrators and beneficiaries; and this Agreement shall be
binding upon the Partnership, its successors and assigns. The rights of Indemnitee under this
Agreement shall continue so long as Indemnitee may be subject to any possible Proceeding because of
the fact that Indemnitee was an Indemnitee of the Partnership. If the Partnership sells, leases,
exchanges or otherwise disposes of, in a single transaction or series of related transactions, all
or substantially all of its property and assets, the Partnership shall, as a condition precedent to
such transaction, cause effective provision to be made so that the person or entity acquiring such
property and assets shall become bound by and replace the Partnership under this Agreement.
(d) Governing Law. This Agreement shall be governed by the laws of the State of
Delaware. Any Proceeding arising out of or based upon this Agreement may be instituted in the
United States District Court for the District of Delaware or the courts of the State of Delaware,
in each case located in the County of New Castle, and Indemnitee and the Partnership each
irrevocably submits to the exclusive jurisdiction (except for proceedings instituted in regard to
the enforcement of a judgment of any such court, as to which such jurisdiction is non-exclusive) of
such courts in any such Proceeding.
(e) Severability. If any provision of this Agreement shall be held to be prohibited
by or invalid under applicable law, such provision shall be deemed amended to accomplish the
objectives of the provision as originally written to the fullest extent permitted by law and all
other provisions shall remain in full force and effect.
(f) Amendment. No amendment, termination or cancellation of this Agreement shall be
effective unless in writing signed by the Partnership and Indemnitee.
(g) Other Payments. The Partnership shall not be liable under this Agreement to make
any payment in connection with any Proceeding against or involving Indemnitee to the extent
Indemnitee has otherwise actually received payment (under the Partnership Agreement, any insurance
policy or otherwise) of the amounts otherwise indemnifiable hereunder. Indemnitee shall repay to
the Partnership the amount of any payment the Partnership makes to Indemnitee under this Agreement
in connection with any Proceeding against or involving Indemnitee, to the extent Indemnitee has
otherwise actually received payment (under the Partnership Agreement, any insurance policy or
otherwise) of such amount.
(h) Subrogation. In the event of payment under this Agreement, the Partnership shall
be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who
shall execute all papers required and shall do everything that may be reasonably necessary to
secure such rights, including the execution of such documents necessary to enable the Partnership
effectively to bring suit to enforce such rights.
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(i) Headings. The headings in this Agreement are for convenience only and are not to
be considered in construing this Agreement.
(j) Counterparts. This Agreement may be executed in counterparts, both of which shall
be deemed an original, and together shall constitute one document.
The parties have executed this Agreement as of the day and year first above stated.
| RENTECH NITROGEN PARTNERS, L.P. | INDEMNITEE | |||||
By: |
/s/ RENTECH NITROGEN PARTNERS, L.P. | /s/ X. Xxxx Ramsbottom, Jr. | ||||
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Schedule to Exhibit 10.42
The following directors and executive officers of Rentech Nitrogen GP, LLC are parties to
Indemnification Agreements with Rentech Nitrogen Partners, L.P. which are substantially identical
in all material respects to the representative Indemnification Agreement to which this schedule is
attached and which is filed as an exhibit to the Company’s Annual Report on Form 10-K, except as to
the parties thereto set forth below. These other Indemnification Agreements are not being filed
with the Annual Report, pursuant to Instruction 2 to Item 601 of Regulation S-K promulgated under
the Securities Exchange Act of 1934, as amended.
| Name of Signatory | ||
| Xxx X. Xxxxx | ||
| Xxxxx X. Xxxxxx | ||
| Xxxx X. Xxxxxx | ||
| Xxxx X. Xxxxxxx | ||
| Xxxxxxx X. Xxxx, Xx. | ||
| Xxxxx Xxxxxxxxx | ||
| Xxxxxxx X. Xxxxx | ||
| Xxxxx X. Xxxxxx | ||
| Xxxxxxx X. Xxx | ||
| Xxxxxxx X. Xxxxxxxx |
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