INDEMNIFICATION
AGREEMENT
This
INDEMNIFICATION AGREEMENT is made and executed effective as
of this
day of
, 2009, by and between LODGIAN, INC., a Delaware corporation (the
“Company”), and
, an individual resident of the State of
(the “Indemnitee”).
WHEREAS, the
Company is aware that, in order to induce highly competent persons
to serve the Company as directors or officers or in other
capacities, the Company must provide such persons with adequate
protection through indemnification against risks of claims and
actions against them arising out of their service to and activities
on behalf of the Company;
WHEREAS, the Board
of Directors of the Company has determined that it is in the best
interests of the Company’s stockholders that the Company act
to assure such persons that there will be increased certainty of
such protection in the future;
WHEREAS, it is
reasonable, prudent and necessary for the Company contractually to
obligate itself to indemnify such persons to the fullest extent
permitted by applicable law so that they will continue to serve the
Company free from undue concern that they will not be so
indemnified; and
WHEREAS, the
Indemnitee is willing to serve, continue to serve, and take on
additional service for or on behalf of the Company on the condition
that he/she be so indemnified.
NOW, THEREFORE, in
consideration of the premises and the mutual promises and covenants
contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
Company and Indemnitee do hereby agree as follows:
1.
Service by the Indemnitee . The Indemnitee agrees to serve
and/or continue to serve as a director or officer of the Company
faithfully and will discharge his/her duties and responsibilities
to the best of his/her ability so long as the Indemnitee is duly
elected or qualified in accordance with the provisions of the
Second Amended and Restated Certificate of Incorporation (as may be
amended from time to time, the “Certificate”), and
Amended and Restated Bylaws (as may be amended from time to time,
the “Bylaws”) of the Company, the General Corporation
Law of the State of Delaware, as amended (the “DGCL”)
and any other applicable law in effect on the date of this
Agreement and from time to time, or until his/her earlier death,
resignation or removal. The Indemnitee may at any time and for any
reason resign from such position (subject to any other contractual
obligation or other obligation imposed by operation of law), in
which event the Company shall have no obligation under this
Agreement to continue the employment or directorship of the
Indemnitee. Nothing in this Agreement shall confer upon the
Indemnitee the right to continue in the employ of the Company or as
a director of the Company or affect the right of the Company to
terminate the Indemnitee’s employment at any time in the sole
discretion of the Company, with or without cause, subject to any
contract rights of the Indemnitee created or existing otherwise
than under this Agreement.
2.
Indemnification . The Company shall indemnify the Indemnitee
against all Expenses (as defined below), judgments, fines and
amounts paid in settlement actually and reasonably incurred by the
Indemnitee as provided in this Agreement to the fullest extent
permitted by the Certificate, Bylaws and DGCL or other applicable
law in effect on the date of this Agreement and to any greater
extent that applicable law may in the future from time to time
permit.
3.
Indemnification for Expenses When Serving on Behalf of the
Company . To the extent that the Indemnitee has served on
behalf of or at the request of the Company as a witness or other
participant in any class action or proceeding, the Indemnitee shall
be indemnified against all Expenses actually and reasonably
incurred by the Indemnitee in connection therewith, without any
determination pursuant to Section 5.
4.
Partial Indemnification . If the Indemnitee is entitled
under any provision of this Agreement to indemnification by the
Company for some or a portion of the Expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by the
Indemnitee in connection with the investigation, defense, appeal or
settlement of a suit, action, investigation or proceeding covered
by Section 2, but is not entitled to indemnification for the
total amount thereof, the Company shall nevertheless indemnify the
Indemnitee for the portion of such Expenses, judgments, penalties,
fines and amounts paid in settlement actually and reasonably
incurred by the Indemnitee to which the Indemnitee is
entitled.
5.
Procedure for Determination of Entitlement to
Indemnification .
(a) The
Secretary of the Company shall, promptly upon receipt of a claim
for indemnification from the Indemnitee, advise the Board of
Directors in writing that Indemnitee has requested indemnification.
Any Expenses incurred by the Indemnitee in connection with the
Indemnitee’s request for indemnification hereunder shall be
borne by the Company. The Company hereby indemnifies and agrees to
hold the Indemnitee harmless for any Expenses incurred by
Indemnitee under the immediately preceding sentence irrespective of
the outcome of the determination of the Indemnitee’s
entitlement to indemnification.
(b) Upon
written request by the Indemnitee for indemnification in connection
with the investigation, defense, appeal or settlement of a suit,
action, investigation or proceeding covered by Section 2, the
entitlement of the Indemnitee to indemnification pursuant to the
terms of this Agreement shall be determined by the following person
or persons, who shall be empowered to make such determination:
(i) if a Change in Control (as hereinafter defined) shall have
occurred, by Independent Counsel (as hereinafter defined) (unless
the Indemnitee shall request in writing that such determination be
made by the Board of Directors (or a committee thereof) in the
manner provided for in clause (ii) of this Section 5(b))
in a written opinion to the Board of Directors, a copy of which
shall be delivered to the Indemnitee; or (ii) if a Change in
Control shall not have occurred, (A)(1) by the Board of Directors
of the Company, by a majority vote of Disinterested Directors (as
hereinafter defined) even though less than a quorum, or (2) by
a committee of Disinterested Directors designated by majority vote
of Disinterested Directors, even though less than a quorum, or
(B) if there are no such Disinterested Directors or, even if
there are such Disinterested Directors, if the Board of Directors,
by the majority vote of Disinterested Directors, so directs, by
Independent Counsel in a written opinion to the Board of
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Directors, a
copy of which shall be delivered to the Indemnitee. Such
Independent Counsel shall be selected by the Board of Directors and
approved by the Indemnitee. Upon failure of the Board of Directors
to so select, or upon failure of the Indemnitee to so approve, such
Independent Counsel shall be selected by the Chancellor of the
State of Delaware or such other person as the Chancellor shall
designate to make such selection. Such determination of entitlement
to indemnification shall be made not later than 45 days after
receipt by the Company of a written request for indemnification. If
the person making such determination shall determine that the
Indemnitee is entitled to indemnification as to part (but not all)
of the application for indemnification, such person shall
reasonably prorate such part of indemnification among such claims,
issues or matters. If it is so determined that Indemnitee is
entitled to indemnification, payment to Indemnitee shall be made
within ten days after such determination.
6.
Presumptions and Effect of Certain Proceedings . (a) In
making a determination with respect to entitlement to
indemnification, the Indemnitee shall be presumed to be entitled to
indemnification hereunder and the Company shall be required to make
any showing necessary to the making of any determination contrary
to such presumption.
(b) If the
Board of Directors, or such other person or persons empowered
pursuant to Section 5 to make the determination of whether
Indemnitee is entitled to indemnification, shall have failed to
make a determination as to entitlement to indemnification within
45 days after receipt by the Company of such request, the
requisite determination of entitlement to indemnification shall be
deemed to have been made and the Indemnitee shall be absolutely
entitled to such indemnification, absent actual fraud in the
request for indemnification or a prohibition of indemnification
under applicable law. The termination of any action, suit,
investigation or proceeding covered by Section 2 hereof by
judgment, order, settlement or conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself
adversely affect the rights of the Indemnitee to indemnification,
except as may be provided herein.
7.
Advancement of Expenses . All reasonable Expenses actually
incurred by the Indemnitee in connection with any threatened or
pending action, suit or proceeding shall be paid by the Company in
advance of the final disposition of such action, suit or
proceeding, if so requested by the Indemnitee, within 20 days
after the receipt by the Company of a statement or statements from
the Indemnitee requesting such advance or advances. The Indemnitee
may submit such statements from time to time. The
Indemnitee’s entitlement to such Expenses shall include those
incurred in connection with any proceeding by the Indemnitee
seeking an adjudication or award in arbitration pursuant to this
Agreement. Such statement or statements shall reasonably evidence
the Expenses incurred by the Indemnitee in connection therewith and
shall include or be accompanied by a written affirmation by
Indemnitee of Indemnitee’s good faith belief that Indemnitee
has met the standard of conduct necessary for indemnification under
the DGCL and an undertaking, executed personally by or on behalf of
the Indemnitee, to repay any such amounts if it is ultimately
determined that the Indemnitee is not entitled to be indemnified
against such Expenses by the Company pursuant to this Agreement or
otherwise.
8.
Remedies of the Indemnitee in Cases of Determination not to
Indemnify or to Advance Expenses . In the event that a
determination is made that the Indemnitee is not entitled to
indemnification hereunder or if the payment has not been timely
made following a
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determination
of entitlement to indemnification pursuant to Sections 5 and
6, or if Expenses are not advanced pursuant to Section 7, the
Indemnitee shall be entitled to a final adjudication in an
appropriate court of the State of Delaware or any other court of
competent jurisdiction of the Indemnitee’s entitlement to
such indemnification or advance. Alternatively, the Indemnitee may,
at the Indemnitee’s option, seek an award in arbitration to
be conducted by a single arbitrator pursuant to the rules of the
American Arbitration Association, such award to be made within
60 days following the filing of the demand for arbitration.
The Company shall not unreasonably oppose the Indemnitee’s
right to seek any such adjudication or award in arbitration or any
other claim. Such judicial proceeding or arbitration shall be made
de novo , and the Indemnitee shall not be prejudiced by
reason of a prior determination (if so made) that the Indemnitee is
not entitled to indemnification. If a determination is made or
deemed to have been made pursuant to the terms of Section 5 or
Section 6 hereof that the Indemnitee is entitled to
indemnification, the Company shall be bound by such determination
and shall be precluded from asserting that such determination has
not been made or that the procedure by which such determination was
made is not valid, binding and enforceable. The Company further
agrees to stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement
and is precluded from making any assertions to the contrary. If the
court or arbitrator shall determine that the Indemnitee is entitled
to any indemnification hereunder, the Company shall pay all
reasonable Expenses actually incurred by the Indemnitee in
connection with such adjudication or award in arbitration
(including, but not limited to, any appellate
proceedings).
9.
Notification and Defense of Claim . Promptly after receipt
by the Indemnitee of notice of the commencement of any action, suit
or proceeding, the Indemnitee will, if a claim in respect thereof
is to be made against the Company under this Agreement, notify the
Company in writing of the commencement thereof; but the omission to
so notify the Company will not relieve the Company from any
liability that it may have to the Indemnitee under this Agreement
or otherwise, except to the extent that the Company may suffer
material prejudice by reason of such failure. Notwithstanding any
other provision of this Agreement, with respect to any such action,
suit or proceeding as to which the Indemnitee gives notice
to
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