Indemnification clause

Clause Library
 | 

On December 18, 2012, the Company filed suit in the United States District Court for the Southern District Court of New York against a former credit provider. The suit sought damages arising out of the credit provider’s termination of the Company’s credit line in 2009. The defendant counterclaimed for recovery of legal fees of $2 million under an indemnification clause contained in one of the loan documents. The matter proceeded to trial in May 2015, and the Court thereafter issued decisions dismissing the Company’s claims and the defendant’s counterclaim. On January 15, 2016 the complaint, the amended complaint and the defendant’s counterclaim were dismissed. On February 12, 2016, the Company filed a Notice of Appeal to the United States Court of Appeals for the Second Circuit from the judgment dismissing the complaint and amended complaint. On February 18, 2016, the defendant filed a Notice of Cross-Appeal of the dismissal of its counterclaim. Sparta can make no representations about the potential outcome of the appeal or cross-appeal, but believes that the decision of the lower court dismissing the defendant’s counterclaim was properly decided in holding that the indemnification clause did not apply to defendant’s claim.

The Company has entered into substantively identical indemnification agreements, or agreements containing an indemnification clause, with its current directors and officers (the “Indemnitees”), which generally provide that, to the fullest extent permitted by Colorado law, the Company shall indemnify such Indemnitee if the Indemnitee was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that the Indemnitee is or was or has agreed to serve at the Company’s request as a director, officer, employee or agent of the Company, or while serving as a director or officer of the Company, is or was serving or has agreed to serve at the Company’s request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity or by reason of the imposition upon such officer or director of any federal and/or state income tax obligation (inclusive of any interest and penalties, if applicable), that is imposed on such officer or director with respect to income, “phantom income,” rescinded or unconsummated transactions, or any other allegedly taxable event for which no benefit was received by such officer or director. The indemnification obligation includes, without limitation, claims for monetary damages against an Indemnitee in respect of an alleged breach of fiduciary duties and generally covers expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by an Indemnitee or on an Indemnitee’s behalf in connection with such action, suit or proceeding and any appeal therefrom, but shall only be provided if the Indemnitee acted in good faith; and, in the case of conduct in an official capacity with the corporation, if such conduct was in the Company’s best interests, and, in all other cases, if such conduct was at least not opposed to the Company’s best interests; and, with respect to any criminal action, suit or proceeding, if the Indemnitee had no reasonable cause to believe the Indemnitee’s conduct was unlawful.

The Subscription Agreement and/or Cryptocurrency Subscription Agreement you must sign to invest in this Offering contains an indemnification clause. The clause provides that you agree to indemnify and hold harmless the Company and all of its affiliates, attorneys, accountants, employees, officers, directors, broker-dealers, placement agents, shareholders and other agents from any liability, claims, costs, damages, losses or expenses incurred or sustained by them as a result of your representations and warranties being made when you sign the Subscription Agreement or otherwise being untrue or inaccurate, or because of a breach of the Subscription Agreement by you. By signing the Subscription Agreement, you also grant to the Company the right to setoff against any amounts payable by the Company to the you, for whatever reason, of any and all damages, costs and expenses (including, but not limited to, reasonable attorney’s fees) which are incurred by the Company or any of its affiliates as a result of matters for which the Company is indemnified pursuant to the Subscription Agreement.

The Subscription Agreement and/or Cryptocurrency Subscription Agreement you must sign to invest in this Offering contains an indemnification clause. The clause provides that you agree to indemnify and hold harmless the Company and all of its affiliates, attorneys, accountants, employees, officers, directors, broker-dealers, placement agents, shareholders and other agents from any liability, claims, costs, damages, losses or expenses incurred or sustained by them as a result of your representations and warranties being made when you sign the Subscription Agreement and/or Cryptocurrency Subscription Agreement or otherwise being untrue or inaccurate, or because of a breach of the Subscription Agreement and/or Cryptocurrency Subscription Agreement by you. By signing the Subscription Agreement and/or Cryptocurrency Subscription Agreement, you also grant to the Company the right to setoff against any amounts payable by the Company to the you, for whatever reason, of any and all damages, costs and expenses (including, but not limited to, reasonable attorney’s fees) which are incurred by the Company or any of its affiliates as a result of matters for which the Company is indemnified pursuant to the Subscription Agreement and/or Cryptocurrency Subscription Agreement. If the Company were to enforce this clause against an investor, in all likelihood the matter would be litigated in the State of Delaware, or applying Delaware law. If the matter were litigated in a court of law, a judge or jury would determine the validity of the Company’s claim, and the amount of damages you would owe the Company, if any.

4.4. Standard Contractual Clauses. By signing this DPA, Blockstack and Vendor conclude the standard contractual clauses annexed to EU Commission Decision 2010/87/EU of 5 February 2010 on standard contractual clauses for the transfer of personal data to processors established in third countries under Directive 95/46/EC of the European Parliament and of the Council (OJ L 39, 12.2.2010, p. 5-18), which are hereby incorporated into this DPA and completed as follows: the “data exporter” is Blockstack; the “data importer” is Vendor; the governing law in Clause 9 and Clause 11.3 is the law of the European member state in which Blockstack is established; Appendix 1 and 2 are Appendix 1 and 2 to this DPA, respectively; and the optional indemnification clause is struck.

8.We note that you have included an indemnification clause in Section 3.10 of the subscription agreement, which requires an investor to indemnify, defend and hold harmless the company and various representatives and management. Please revise your offering circular to highlight the indemnification provision in more detail and explain how it applies to investors. For example, clarify under what circumstances and for what amount an investor should expect to indemnify the company and its representatives.

Also, the Company included in the employment agreement of certain officers an indemnification clause that provides that the Company will indemnify such officer, to the maximum extent permitted under applicable law, against all liabilities sustained by such officer in connection with any proceeding to which such officer may be made a party by reason of any act or omission by such officer as an officer of the Company; provided, however, that such officer shall be liable for any losses incurred by reason of his gross negligence, willful misconduct, or breach of the duty of loyalty.

5.1 Any Option to be granted in the framework of a track with a trustee and/or shares of the Company to be allotted following the exercise of Options under a trustee shall be held by a trustee to be appointed by the Board (hereinafter: the “Trustee”) in accordance with the terms set forth in the Ordinance, in accordance with the Trust Agreement, a copy of which is attached hereto and constitutes an integral part of this Plan, and in accordance with the provisions of the Company, to be given from time to time. Each Grantee hereby consents to the terms of the trust agreement, which includes an indemnification clause and waiver of the Grantee.

1. We note your response to comment 3 and reissue the comment. Please add a section to the securities being offered section specifically discussing the investment management agreement. Such disclosure should set forth the material terms of the investment management agreement, including the provisions that limit stockholder rights. For example only, we note provision 8.2.2 requires each purchaser to reimburse the manager for expenses in connection with defending a claim covered under the indemnification clause. Also clarify whether the investment management agreement would allow the manager to vote the securities following conversion into common stock. Clarify all fees or other forms of compensation, direct or indirect, related to this investment management agreement.

The Registrant included in the Employment Agreement of some of its officers (who also serve as Directors) an indemnification clause which provides, among other things, that the Registrant will indemnify such officers to the fullest extent permitted by law from and against all losses that the officer may reasonably suffer, sustain or incur, including in a civil, criminal or administrative proceeding, by reason of such individual being or having been a director or officer, provided that the Registrant shall not indemnify such individual if, among other things, he or she did not act honestly and in good faith with a view to the Registrant’s best interests.

Licensee and its Sublicensee(s) shall, at all times during the term of this Agreement and thereafter, indemnify, defend and hold UFRF, the Florida Board of Governors, the University of Florida Board of Trustees, the University of Florida, and each of their directors, officers, employees, and agents, and the inventors of the Licensed Patents, regardless of whether such inventors are employed by the University of Florida at the time of the claim, harmless against all claims and expenses, including legal expenses and reasonable attorneys fees, arising from a third party claim (including legal expenses and attorneys fees resulting from UFRF’s enforcing this indemnification clause against Licensee with respect to any such third party claim) (collectively, “Liabilities”) arising out of (a) the death of or injury to any person or persons or (b) any damage to property or (c) any other claim, proceeding, demand, expense and liability of any kind whatsoever (other than patent infringement claims) resulting from the production, manufacture, sale, use, lease, consumption, marketing, or advertisement of Licensed Products or Licensed Process(es) or (d) arising from any material breach by Licensee or its Affiliates of any obligation of Licensee

In January 2010, GS Clean Tech Corp. filed a lawsuit against Big River Resources West Burlington, LLC in the U.S. District Court for infringement rights on its patent covering corn oil extraction technology. On July 1, 2009, Big River Resources Galva, LLC entered into a Corn Oil Tricanter Purchase and Installation Agreement with ICM, Inc. This agreement includes an indemnification clause that holds Big River Resources West Burlington, LLC and Big River Resources Galva, LLC harmless from all claims, liabilities, and costs including attorney fees arising out of the infringement of adversely owned patents. However, if GS Clean Tech Corp. were to prevail in this lawsuit and ICM, Inc. was not able to pay the claims, the company would be liable for any amounts not paid by ICM, Inc. under the indemnification clause. Due to this indemnification clause, the company does not expect to incur any costs related to the litigation and no liability has been recorded as of December 31, 2013.

fees, arising from or related to the performance of PSTC’s duties under this Agreement, specifically including any dispute, litigation, arbitration, or regulatory investigation or action in which the Agent is named as a respondent, defendant, third-party defendant or third-party respondent, or any proceeding or matter where the agent is required to respond to a subpoena, summons, or any other order or inquiry, whether through testimony, in writing, or by the production of documents or information, unless there has been a final and non-appealable adjudication by a court of competent jurisdiction that such claim, loss, damage, or cost was directly caused by the willful misconduct or gross negligence of PSTC, without any contributory negligence by the Company. All payments by the Company to PSTC pursuant to this indemnification clause shall be made as soon as practicable after written demand for indemnification by PSTC therefore is presented to the Company, but in no event later than thirty (30) business days after such written demand is sent by PSTC to the Company. The Company’s obligation to make such payments shall not be affected by the pendency of any proceeding regarding the amount or validity of PSTC’s demand for indemnification, or by any proceeding alleging willful misconduct or gross negligence by PSTC, unless and until there has been a final and non-appealable adjudication that PSTC is guilty of willful misconduct. Anything herein to the contrary notwithstanding, PSTC shall in no event be liable for any damage resulting from any action taken, omitted or suffered by it in connection with the Company, unless resulting from its gross negligence or willful misconduct. In no event shall PSTC be liable for any consequential or incidental damages of the Company. Company assumes full responsibility and agrees to indemnify and hold harmless PSTC from and against all liabilities, losses, damages, costs, charges, counsel fees and other expenses of every kind, nature and character, which PSTC may incur as a result of acting as Company’s Transfer Agent, or as a result of actions of any predecessor Transfer Agent. PSTC may request Company to post collateral which is sufficient in the opinion of PSTC or its counsel to secure this indemnity section. PSTC shall not be under any obligation to prosecute or to defend any action or suit in relation to the Transfer Agent relationship between PSTC and the Company which, in the opinion of PSTC or its counsel may involve an expense or liability on behalf or against PSTC, unless the Company shall, when such occasion arises, furnish PSTC with satisfactory security for expense or liability. Additionally, Company grants PSTC the following rights and remedies:

All payments by the Company to the Agent pursuant to this indemnification clause shall be made as soon as practicable after written demand by the Agent therefore is presented to the Company, but in no event later than thirty (30) business days after such written demand is sent by the Agent to the Company. The Company’s obligation to make such payments shall not be affected by the pendency of any proceeding regarding the amount or validity of the Agent’s demand for indemnification, or by any proceeding alleging willful misconduct or gross negligence by the Agent, unless and until there has been a final and non-appealable adjudication that the Agent is guilty of willful misconduct or gross negligence.

The Registrant has entered into an indemnification agreement with each of its directors and officers, in order to provide consistent indemnification arrangements for all directors and officers. The indemnification agreement provides that each director or officer who was or is made a party or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was one of the Registrant’s directors or officers, shall be indemnified by the Registrant to the fullest extent authorized by the DGCL against all expense, liability and loss (including attorneys’ fees, judgments, fines or penalties and amounts paid in settlement) reasonably incurred in connection with such legal proceedings. A director or officer will not receive indemnification under the agreement if (a) the liability relates to an accounting under Section 16(b) of the Exchange Act, or similar provisions of federal, state or local law; (b) the director’s or officer’s conduct is found to be fraudulent, deliberately dishonest or constitutes willful misconduct; (c) the director’s or officer’s conduct involves a breach of the duty of loyalty to the Registrant or its stockholders, or involves a transaction from which the director or officer derived an improper personal benefit; (d) the director or officer is found to have received payment under a valid and collectible insurance policy, indemnification clause, by-law or agreement; (e) indemnification of the director or officer is not lawful; or (f) the indemnification is in connection with any proceeding initiated by the director or officer, with certain exceptions.

Documate Newsletter

Sign up for our newsletter to get product updates, exclusive client interviews, and more.

Start a free trial, or
chat with our team today:

By clicking “Accept”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. View our Privacy Policy for more information.