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Section 145(a) of the DGCL empowers a corporation to indemnify its directors against expenses, judgments, fines, and amounts paid in settlement incurred in connection with actions other than those brought by or in the right of the corporation, subject to a determination that the indemnitee has met the requisite
These agreements promise to (1) advance legal fees, and (2) pay loss (indemnification) on behalf of an individual should he or she be named in a lawsuit in his or her capacity as a director or officer of the company.
There are 3 levels of indemnification: broad form, intermediate form, and limited form. This requires the indemnitor to pay not only for its liabilities but also for the indemnitees liability whether the indemnitee is solely (i.e. 100%) at fault or partially at fault.
Indemnification, also referred to as indemnity, is an undertaking by one party (the indemnifying party) to compensate the other party (the indemnified party) for certain costs and expenses, typically stemming from third-party claims.
Indemnification clauses are common in corporations and LLCs. Often a company will agree to indemnify its shareholders, members, officers, and directors for actions they take in such roles on behalf of the company.

People also ask

Put simply, indemnity is a contractual agreement between two parties, where one party agrees to pay for potential losses or damages claimed by a third party.
Indemnification. Indemnification is an undertaking by the company to defend the director and officer against the cost of certain claims, including legal fees, litigation awards and settlement costs.
Indemnity agreements, also known as indemnity clauses, play an integral role in contracts. Thats because they are designed to punish the nonperforming party and reassure the damaged one they will be reimbursed for losses caused by the errant entity.
Modification: As opposed to indemnification and advancement rights created by the companys organizational documents, which may be amended by the board or shareholders, indemnification agreements allow the director or officer to prevent the company from unilaterally terminating or reducing the indemnitees rights.
Indemnification is where the company reimburses the director or officer for the attorneys fees and costs, and potentially judgments, incurred in connection with claims arising out of the directors or officers service to the company.

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