INDEMNIFICATION AGREEMENT
EXHIBIT
10.9
This
INDEMNIFICATION
AGREEMENT
(“Agreement”)
is
entered into as of this ___ day of _______, 200_, by and between Xxxxxx Center
L.L.C., a Delaware limited liability company (the “Company”)
and
____________________ (such individual, an “Indemnitee”).
R
E C I T A L S:
A. The
Company is aware that because of the exposure to litigation costs and risks
resulting from service to corporations, partnerships and limited liability
companies, talented and experienced persons are increasingly reluctant to
serve
or continue serving as directors or officers of such entities unless they
are
protected by comprehensive liability insurance or indemnification.
B. The
statutes and judicial decisions regarding the duties of directors and officers
are often difficult to apply, ambiguous, or conflicting, and therefore fail
to
provide such directors and officers with adequate guidance regarding the
proper
course of action.
C. The
Company believes that it is fair and proper to protect the Company’s directors
and certain of its officers, and the directors and certain officers of the
Company’s subsidiaries from the risk of judgments, settlements and other
expenses which may occur as a result of their service to the Company, even
in
cases in which such persons received no personal profit or were not otherwise
culpable.
D. The
Board
of Directors of the Company (the “Board”)
has
concluded that to retain and attract talented and experienced individuals
to
serve as officers and directors of the Company and to encourage such individuals
to take the business risks necessary for the success of the Company, the
Company
should contractually indemnify its officers and directors in connection with
their services to the Company, and has further concluded that the failure
to
provide such contractual indemnification could be detrimental to the Company
and
its members.
NOW,
THEREFORE,
the
parties, intending to be legally bound, hereby agree as follows:
1. Definitions.
(a) “Agent”
means
any person who is or was a director, officer, employee or other agent of
the
Company; or is or was serving at the request of, for the convenience of,
or to
represent the interests of, the Company as a director, officer, employee
or
agent of another entity or enterprise.
(b) “Expenses”
means
all reasonable direct and indirect costs of any type or nature whatsoever
(including, without limitation, all reasonable attorneys’ fees, costs of
investigation and related disbursements) incurred by the Indemnitee in
connection with the investigation, settlement, defense or appeal of a claim
or
Proceeding covered hereby or establishing or enforcing a right to
indemnification under this Agreement.
(c) “Proceeding”
means
any threatened, pending, or completed claim, suit or action, whether civil,
criminal, administrative, investigative or otherwise.
2. Maintenance
of Liability Insurance.
(a) The
Company hereby covenants and agrees to and with Indemnitee that, so long
as
Indemnitee shall continue to serve as an Agent of the Company and thereafter
so
long as Indemnitee shall be subject to any claim or Proceeding by reason
of the
fact that the Indemnitee was an Agent of the Company or in connection with
such
Indemnitee’s acts as such an Agent, the Company, subject to Section
2(b),
shall
obtain and maintain in full force and effect general and umbrella liability
insurance (“Liability
Insurance”)
and
Directors and Officers’ Liability Insurance (“D&O
Insurance”)
in
commercially reasonable amounts from established and reputable insurers.
In all
policies of D&O Insurance that the Company may purchase, the Indemnitee
shall be named as an insured in such a manner to provide the Indemnitee the
same
rights and benefits as are accorded to the most favorable insured of the
Company’s directors, if the Indemnitee is a director.
(b) Notwithstanding
the foregoing, the Company shall have no obligation to obtain or maintain
Liability Insurance if the Company determines in good faith that the premium
costs for such insurance are disproportionate to the amount of coverage provided
after giving effect to exclusions.
3. Mandatory
Indemnification.
The
Company shall defend, indemnify and hold harmless each Indemnitee:
(a) Third
Party Actions.
If the
Indemnitee is a person who was or is a party or is threatened to be made
a party
to any Proceeding (other than an action by or in the right of the Company)
by
reason of the fact that Indemnitee is or was an Agent of the Company, or
by
reason of anything done or not done by the Indemnitee in any such capacity,
against any and all Expenses and liabilities of any type whatsoever (including,
but not limited to, judgments, fines, or penalties, and amounts paid in
settlement) incurred by him in connection with the investigation, defense,
settlement or appeal of such Proceeding, so long as the Indemnitee acted
in good
faith and in a manner he reasonably believed to be in or not opposed to the
best
interests of the Company or, with respect to any criminal action or Proceeding,
had reasonable cause to believe his conduct was not unlawful.
(b) Derivative
Actions.
If the
Indemnitee is a person who was or is a party or is threatened to be made
a party
to any Proceeding by or in the right of the Company by reason of the fact
that
he is or was an Agent of the Company, or by reason of anything done or not
done
by him in any such capacity, against any amounts paid in settlement of any
such
Proceeding and all other Expenses incurred by him in connection with the
investigation, defense, settlement or appeal of such Proceeding if he acted
in
good faith and in a manner he reasonably believed to be in or not opposed
to the
best interests of the Company; provided,
however,
that no
indemnification under this subsection shall be made, and the Indemnitee shall
repay all amounts previously advanced by the Company, in respect of any claim,
issue or matter for which such person is judged in a final, non-appealable
decision to be liable to the Company by a court of competent jurisdiction
due to
willful misconduct in the performance of his duties to the Company, unless
and
only to the extent that the court in which such Proceeding was brought shall
determine that such person is fairly and reasonably entitled to
indemnity.
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(c) Actions
Where Indemnitee is Deceased.
If the
Indemnitee is a person who was or is a party or is threatened to be made
a party
to any Proceeding by reason of the fact that he is or was an Agent of the
Company, or by reason of anything done or not done by him in any such capacity,
and prior to, during the pendency of, or after completion of, such Proceeding,
the Indemnitee shall die, then the Company shall defend, indemnify and hold
harmless the estate, heirs and legatees of the Indemnitee against any and
all
Expenses and liabilities incurred by or for such persons or entities in
connection with the investigation, defense, settlement or appeal of such
Proceeding on the same basis as provided for Indemnitee in Sections
3(a)
and
3(b)
above.
The
Expenses and liabilities covered hereby shall be net of any payments by
Liability Insurance carriers or others related to the settlement of a
Proceeding.
4. Partial
Indemnification.
If
Indemnitee is found under Section
3(b),
7
or
10
hereof
not to be entitled to indemnification for all of the Expenses relating to
a
Proceeding, the Company shall indemnify the Indemnitee for any portion of
such
Expenses not specifically precluded by the operation of such Sections
3(b),
7
or
10.
5. Mandatory
Advancement of Expenses.
Until a
determination to the contrary under Section
7
hereof
is made, and unless the provisions of Section
10
apply,
the Company shall advance all documented Expenses incurred by each Indemnitee
in
connection with the investigation, defense, settlement or appeal of any
Proceeding to which the Indemnitee is a party or is threatened to be made
a
party covered by the indemnification in Section
3
hereof.
If required by law, as a condition to such advances, each Indemnitee shall,
at
the request of the Company, undertake in a manner satisfactory to the Company
to
repay such amounts advanced if it shall ultimately be determined by a final
order of a court, that the Indemnitee is not entitled to be indemnified by
the
Company by the terms hereof or under applicable law. Subject to Section
6
hereof,
the advances to be made hereunder shall be paid by the Company to the Indemnitee
within thirty (30) days following delivery of a written request by the
Indemnitee to the Company, which request shall be accompanied by vouchers,
invoices and similar evidence documenting the amounts requested.
6. Indemnification
Procedures.
(a) Promptly
after receipt by the Indemnitee of notice of the commencement or threat of
any
Proceeding covered hereby, the Indemnitee shall notify the Company of the
commencement or threat thereof, provided that any failure to so notify shall
not
relieve the Company of its obligations hereunder, except to the extent that
such
failure or delay increases the liability of the Company hereunder.
(b) If,
at
the time of the receipt of a notice pursuant to Section
6(a)
above,
the Company has Liability Insurance in effect, the Company shall give prompt
notice of the Proceeding or claim to its insurers in accordance with the
procedures set forth in the applicable policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay all
amounts
payable as a result of such Proceeding in accordance with the terms of such
policies, and the Indemnitee shall not take any action (by waiver, settlement
or
otherwise) which would adversely affect the ability of the Company to obtain
payment from its insurers.
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(c) If
the
Company shall be obligated to pay the Expenses of Indemnitee, the Company
shall
be entitled to assume the defense of the Proceeding, with counsel approved
by
the Indemnitee, which approval shall not be unreasonably withheld, to which
the
Expenses relate and shall deliver a notice a notice of assumption to the
Indemnitee. The Company will not be liable to the Indemnitee under this
Agreement for any fees of counsel incurred after delivery of such notice
with
respect to such Proceeding or any costs of settlement not approved in advance
in
writing by the Company, provided that (i) the Indemnitee shall have the right
to
employ his own counsel in any such Proceeding at the Indemnitee’s expense, and
(ii) if (1) the employment of counsel by the Indemnitee has been previously
authorized by the Company, (2) the Indemnitee shall have provided the Company
with an opinion of counsel stating that there is a strong argument that a
conflict of interest exists between the Company and the Indemnitee in the
conduct of any such defense, or (3) the Company shall not have assumed the
defense of such Proceeding, the reasonable fees and Expenses of the Indemnitee’s
counsel shall be at the expense of the Company.
7. Determination
of Right to Indemnification.
(a) To
the
extent an Indemnitee has been successful on the merits or otherwise in defense
of any Proceeding, claim, issue or matter covered hereby, the Indemnitee
need
not repay any of the Expenses advanced in connection with the investigation,
defense or appeal of such Proceeding.
(b) If
Section
7(a)
is
inapplicable, the Company shall remain obligated to indemnify the Indemnitee,
and the Indemnitee need not repay Expenses previously advanced, unless the
Company, by contested motion before a court of competent jurisdiction, obtains
a
preliminary or permanent relief order suspending or denying the obligation
to
advance or indemnify for Expenses.
(c) Notwithstanding
a determination by a court that the Indemnitee is not entitled to
indemnification with respect to a specific Proceeding, the Indemnitee shall
have
the right to apply to the Court of Chancery of Delaware for the purpose of
enforcing the Indemnitee’s right to indemnification pursuant to this
Agreement.
(d) Notwithstanding
any other provision in this Agreement to the contrary, the Company shall
indemnify the Indemnitee against all Expenses incurred by the Indemnitee
in
connection with any Proceeding under Section
7(b)
and
7(c)
and
against all Expenses incurred by the Indemnitee in connection with any other
Proceeding between the Company and the Indemnitee involving the interpretation
or enforcement of the rights of the Indemnitee under this Agreement unless
a
court of competent jurisdiction finds that the material claims and/or defenses
of the Indemnitee in any such Proceeding were frivolous or made in bad
faith.
8. Certificate
of Formation and Operating Agreement.
The
Company agrees that the Certificate of Formation and Operating Agreement
of the
Company in effect on the date hereof shall not be amended to reduce, limit,
hinder or delay (i) the rights of the Indemnitee granted hereby, (ii) the
ability of the Company to indemnify the Indemnitee as required hereby. The
Company further agrees that it shall exercise the powers granted to it under
its
Certificate of Formation and Operating Agreement and by applicable law to
indemnify any Indemnitee to the fullest extent possible as required hereby.
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9. Witness
Expenses.
The
Company agrees to reimburse each Indemnitee for all Expenses, including
attorneys’ fees and travel costs, incurred by Indemnitee in connection with
being a witness, or if an Indemnitee is threatened to be made a witness,
with
respect to any Proceeding, by reason of his serving or having served as an
Agent
of the Company.
10. Exceptions.
Notwithstanding any other provision herein to the contrary, the Company shall
not be obligated pursuant to the terms of this Agreement:
(a) Claims
Initiated by Indemnitee.
To
indemnify or advance Expenses to the Indemnitee with respect to Proceedings
or
claims initiated or brought voluntarily by Indemnitee and not by way of defense
(other than Proceedings brought to establish or enforce a right to
indemnification under this Agreement or the provisions of the Company’s
Certificate of Formation or Operating Agreement, unless a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such Proceeding were not made in good faith or were
frivolous).
(b) Unauthorized
Settlements.
To
indemnify the Indemnitee under this Agreement for any amounts paid in settlement
of a Proceeding covered hereby without the prior written consent of the Company
to such settlement.
11. Non-exclusivity.
This
Agreement is not the exclusive arrangement between the Company and any
Indemnitee regarding the subject matter hereof and shall not diminish or
affect
any other rights which Indemnitee may have under any provision of law, the
Company’s Certificate of Formation or Operating Agreement under other
agreements, or otherwise.
12. Continuation
After Term.
Each
Indemnitee’s rights hereunder shall continue after the Indemnitee has ceased
acting as a director or Agent of the Company and the benefits hereof shall
inure
to the benefit of the heirs, executors and administrators of each
Indemnitee.
13. Interpretation
of Agreement.
This
Agreement shall be interpreted and enforced so as to provide indemnification
to
Indemnitee to the fullest extent now or hereafter permitted by law.
14. Severability.
If any
provision or provisions of this Agreement shall be held to be invalid, illegal
or unenforceable, (i) the validity, legality and enforceability of the remaining
provisions of the Agreement shall not in any way be effected or impaired
thereby, and (ii) to the fullest extent possible, the provisions of this
Agreement shall be construed or altered by the court so as to remain enforceable
and to provide Indemnitee with as many of the benefits contemplated hereby
as
are permitted under law.
15. Counterparts,
Modification and Waiver.
This
Agreement may be signed in counterparts. This Agreement constitutes a separate
agreement between the Company and each Indemnitee and may be supplemented
or
amended as to an Indemnitee only by a written instrument signed by the Company
and such Indemnitee, with such amendment binding only the Company and the
signing Indemnitee(s). All waivers must be in a written document signed by
the
party to be charged. No waiver of any of the provisions of this Agreement
shall
be implied by the conduct of the parties. A waiver of any right hereunder
shall
not constitute a waiver of any other right hereunder.
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16. Notices.
All
notices, demands, consents, requests, approvals and other communications
required or permitted hereunder shall be in writing and shall be deemed to
have
been properly given if hand delivered (effective upon receipt or when refused),
or if sent by a courier freight prepaid (effective upon receipt or when
refused), in the case of the Company, at the address listed below, and in
the
case of Indemnitee, at his address of record at the office of the Company,
or to
such other addresses as the parties may notify each other in
writing.
|
To
Company:
|
Xxxxxx Center, L.L.C. | |
| 000 X. Xxxxxxx Xxxxxx, Xxxxx 000 | ||
| Xxxxxxx, Xxxxxxxx 00000 | ||
| Attention: Xxxxxx Xxxxxxx |
17. Governing
Law; Consent to Jurisdiction.
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of Delaware, without regard to the application of the laws of the State
of
Delaware regarding conflicts of laws. The parties hereto hereby irrevocably
submit themselves to the exclusive jurisdiction of the courts of the State
of
Illinois located in Xxxx County, Illinois and to the jurisdiction of the
United
States District Court for the Northern District of Illinois for the purpose
of
bringing any action that may be brought in connection with the provisions
hereof. The parties hereto hereby individually agree that they shall not
assert
any claim that they are not subject to the jurisdiction of such courts, that
the
venue is improper, that the forum is inconvenient or any similar objection,
claim or argument. Service of process on any of the parties hereto with regard
to any such action may be made by mailing the process to such party by regular
or certified mail to the address of such party specified in Section
16.
[Remainder
of page intentionally left blank. Signature
page follows.]
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IN
WITNESS WHEREOF, the parties hereto have entered into this Indemnification
Agreement effective as of the date first above written.
| XXXXXX CENTER L.L.C. | ||
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| By: |
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| By: | ||
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| INDEMNITEE: | ||
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