The Illinois Indemnification Agreement is a legal document that outlines the method for determining whether the standards for indemnification of a corporation and its directors have been met. This agreement serves to protect directors from personal liability in the event of legal proceedings related to their corporate duties. The agreement is governed by the Illinois Business Corporation Act. The key elements of the Illinois Indemnification Agreement include the definition of the standards for indemnification, the process for evaluating whether these standards have been met, and the responsibilities of the corporation and its directors in these situations. One of the main types of the Illinois Indemnification Agreement is the "Permissive Indemnification Agreement." This agreement allows the corporation to indemnify its directors for all expenses and liabilities incurred in connection with their directorship. However, it requires a determination that the director acted in good faith and believed that their actions were in the best interest of the corporation. Another type of agreement is the "Mandatory Indemnification Agreement." This agreement mandates the corporation to indemnify a director who has been successful in defending against legal proceedings based on their corporate actions. It ensures that directors are protected from personal financial burdens resulting from their service to the corporation. The Illinois Indemnification Agreement specifies the method for determining whether the standards for indemnification have been met, which typically involves a review by an independent legal counsel. This evaluation assesses whether the director acted in good faith, with reasonable belief, and in a manner that aligns with their fiduciary duties. If these criteria are met, the corporation is obligated to indemnify the director for their legal expenses, judgments, fines, and other costs incurred. The keywords relevant to this description are: Illinois Indemnification Agreement, corporation, directors, indemnification standards, method of determination, Permissive Indemnification Agreement, Mandatory Indemnification Agreement, legal proceedings, corporation's responsibilities, directors' responsibilities, protection, expenses, liabilities, and fiduciary duties.
Illinois Indemnification Agreement between corporation and its directors regarding method for determining whether standards for indemnification have been met
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How to fill out Indemnification Agreement Between Corporation And Its Directors Regarding Method For Determining Whether Standards For Indemnification Have Been Met?
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An indemnification provision allocates the risk and expense in the event of a breach, default, or misconduct by one of the parties.
Giving directors an exemption from any liability to the company and an indemnity against liability to third parties; taking out and paying for insurance against any liability incurred by the directors.
Indemnifications, or ?hold harmless? provisions, shift risks or potential costs from one party to another. One party to the contract promises to defend and pay costs and expenses of the other if specific circumstances arise (often a claim or dispute with a third party to the contract).
Indemnification is, generally speaking, a reimbursement by a company of its Ds&Os for expenses or losses they have incurred in connection with litigation or other proceedings relating to their service to the company.
These provisions generally require the portfolio company to expressly acknowledge that the director has rights of indemnification, advancement, and insurance from the sponsor; to agree that it is the indemnitor of first resort and that it is obligated to advance all expenses and indemnify for all judgments, penalties, ...
Indemnity is the obligation of a person to make good any loss or damage another has incurred or may incur by acting on the first person's behalf, or for the first person's benefit.
There are three main types of express indemnity clauses: broad form, intermediate form, and limited form. Broad form express indemnity clauses require the indemnitor to hold the indemnitee harmless for all liability, even if the indemnitee is solely at fault.
A company may, however, lend money to a director to fund the director's defence costs. Frequently, an indemnity will include a provision under which the company agrees to lend the director the amounts necessary to fund the director's defence costs.