Indemnification
Agreement
This Indemnification Agreement (this “
Agreement ”) is executed on March ___, 2007, with an
effective date of January 1, 2007 (the “ Effective
Date ”), by and between Rio Vista GP LLC, a Delaware
limited liability company (the “ Company ”), and
, an individual residing in the State of
( “Indemnitee“ ).
Indemnitee is
an officer or manager of the Company or an affiliate of the
Company.
The Company and Indemnitee recognize the
difficulty in obtaining directors’ and officers’
liability insurance, the increases in the cost of such insurance,
and the general limitations in the coverage of such
insurance.
The Company and Indemnitee further recognize the
substantial increase in corporate litigation in general, subjecting
officers and managers to expensive litigation risks at the same
time as the availability and coverage of liability insurance has
been severely limited.
Indemnitee does not regard the current
protection available as adequate under the present circumstances,
and Indemnitee may not be willing to serve or continue to serve as
a manager or officer of the Company without additional
protection.
The Company desires to attract and retain the
services of highly qualified individuals, such as Indemnitee, to
serve as officers and managers of the Company and to indemnify its
officers and managers so as to provide them with the maximum
protection permitted by law.
NOW, THEREFORE, in consideration of the foregoing recitals and
the mutual promises set forth in this Agreement, the parties to
this Agreement agree as follows:
Section 1.
Indemnification.
1.1 Third Party Proceedings .
The Company shall indemnify
Indemnitee if he is or was 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 (other than an action by or in the right of the
Company) by reason of the fact that Indemnitee is or was a manager
or officer of the Company, by reason of any action or inaction on
the part of Indemnitee while a manager or officer of the Company or
by reason of the fact that Indemnitee is or was serving at the
request of the Company as a director, manager, officer, employee,
or agent of another corporation, limited liability company,
partnership, joint venture, trust, or other enterprise, against
expenses (including attorneys’ fees), judgments, fines, and
amounts paid in settlement (if such settlement is approved in
advance by the Company, which approval shall not be unreasonably
withheld) actually and reasonably incurred by Indemnitee in
connection with such action, suit, or proceeding, if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed
to be in or not opposed to the best interests of the Company, and,
with respect to any criminal action or proceeding, had no
reasonable cause to believe Indemnitee’s conduct was
unlawful. The termination of any action, suit, or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that Indemnitee did not act in good faith and in a
manner that Indemnitee 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 that
Indemnitee’s conduct was unlawful.
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1.2 Proceedings By or in the Right of the
Company . The Company
shall indemnify Indemnitee if Indemnitee was or is a party or is
threatened to be made a party to any threatened, pending, or
completed action or suit by or in the right of the Company or any
subsidiary of the Company to procure a judgment in its favor by
reason of the fact that Indemnitee is or was a manager or officer
of the Company, or any subsidiary of the Company, by reason of any
action or inaction on the part of Indemnitee while an officer or
manager or by reason of the fact that Indemnitee is or was serving
at the request of the Company as a director, manager, officer,
employee, or agent of another corporation, limited liability
company, partnership, joint venture, trust, or other enterprise,
against expenses (including attorneys’ fees) and, to the
fullest extent permitted by law, amounts paid in settlement, in
each case to the extent actually and reasonably incurred by
Indemnitee in connection with the defense or settlement of such
action or suit, if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, except that no indemnification shall be
made pursuant to this Section 1.2 in respect of any
claim, issue, or matter as to which Indemnitee shall have been
adjudged to be liable to the Company, by the Court of Chancery of
the State of Delaware or other court in which such action or suit
was brought, unless and only to the extent that such court
determines upon application that, despite the adjudication of
liability but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnity for such
expenses that such court shall deem proper.
1.3 Mandatory Payment of Expenses
. To the extent that
Indemnitee has been successful on the merits or otherwise in
defense of any action, suit, or proceeding referred to in
Sections 1.1 and 1.2 or the defense of any claim,
issue, or matter in Section 1.1 or 1.2 , Indemnitee
shall be indemnified against expenses (including attorneys’
fees) actually and reasonably incurred by Indemnitee in connection
with such defense.
1.4 Limited Liability Company
Agreement . This
Agreement is intended to implement the provisions of
Article 12 (Indemnification) of the Company’s limited
liability company agreement in effect as of the date hereof.
Pursuant to such Article 12, if the liability, loss, damage or
claim arises out of any action or inaction of the Indemnitee,
indemnification under this Agreement shall be available only if
(a) either (i) the Indemnitee, at the time of such action
or inaction, determined in good faith that its, his or her course
of conduct was in, or not opposed to, the best interests of the
Company, or (ii) in the case of inaction by the Indemnitee,
the Indemnitee did not intend its, his or her inaction to be
harmful or opposed to the best interests of the Company, and
(b) the action or inaction did not constitute fraud, gross
negligence or willful misconduct by the Indemnitee or a breach of
the Company’s limited liability company agreement; and
provided, further, that indemnification shall be recoverable only
from the assets of the Company and not from any assets of the
Company’s members. THE FOREGOING INDEMNITY IS INTENDED TO
INDEMNIFY THE INDEMNITEE FOR HIS OWN ACTS OF NEGLIGENCE AND SHALL
APPLY IRRESPECTIVE OF ANY CLAIM OF CONCURRENT OR CONTRIBUTORY
NEGLIGENCE ON THE PART OF THE INDEMNITEE.
1.5 Determination That Indemnification Is
Proper . Any
indemnification under this Agreement shall (unless otherwise
ordered by a court) be made by the Company unless a determination
is made that indemnification of such person is not proper in the
circumstances because he or she has not met the applicable
standards of conduct set forth in Section 1.1 or 1.2 ,
as applicable, and Section 1.4 above. Any such
determination shall be made (i) by a majority vote of the
managers who are not parties to the action, suit or proceeding in
question (“disinterested managers”), even if less than
a quorum, (ii) by a majority vote of a committee of
disinterested managers designated by majority vote of disinterested
managers, even if less than a quorum, (iii) by a majority vote
of a quorum of the members of the Company, which quorum shall
consist of members who are not at that time parties to the action,
suit or proceeding in question, (iv) by independent legal
counsel, or (v) by the Court of Chancery of the State of
Delaware or other court of competent jurisdiction. Upon submission
to the Company of a written request for indemnification, Indemnitee
shall be entitled to a rebuttable presumption that he has met the
applicable standard of conduct for indemnification set forth in
this Section 1 . The Company shall have
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the burden of
proof to overcome that presumption in connection with the making of
any determination contrary to that presumption. If the Company
contests the right of Indemnitee to indemnification, the Company
shall furnish to Indemnitee a statement of reasons underlying the
Company’s position within sixty (60) days following
receipt of a written request for indemnification. If the Company
fails to respond to a written request for indemnification within
such 60-day period, Indemnitee may thereafter submit to the Company
a second written request for indemnification. If the Company fails
to respond to such second request within an additional period of
thirty (30) days, the Company shall thereafter be deemed to
have waived its right to contest the right of Indemnitee to
indemnification under this Agreement. Nothing contained in this
Agreement shall limit the ability of the Court of Chancery of the
State of Delaware or other court of competent jurisdiction to
determine that Indemnitee has or has not met the applicable
standard of conduct for indemnification.
1.6 Amendments to the Delaware Limited
Liability Company Act or Limited Liability Company
Agreement . This
Agreement is intended to provide indemnity to Indemnitee to the
fullest extent allowed under Delaware law and the Company’s
limited liability company agreement. Accordingly, to the extent
permitted by law, if the Limited Liability Company Act of the State
of Delaware or the Company’s limited liability company
agreement permits greater indemnity than the indemnity set forth
herein, or if any amendment is made to the Limited Liability
Company Act of the State of Delaware or the Company’s limited
liability company agreement expanding the indemnity permissible
under law or such agreement, the indemnity obligations of the
Company contained herein shall automatically be expanded, without
the necessity of action on the part of any party, to the extent
necessary to provide to Indemnitee the fullest indemnity
permissible under law or such agreement.
Section 2. Expenses: Indemnification
Procedure.
2.1 Advancement of Expenses .
The Company shall advance all
expenses incurred by Indemnitee, and, to the fullest extent
permitted by law, amounts paid in settlement
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