RESPECT TO OR IN
CONNECTION WITH OR ARISING OUT OF (I) THE EXECUTION AND DELIVERY OF THIS
AGREEMENT, ANY OTHER OPERATIVE DOCUMENT OR ANY AGREEMENT OR INSTRUMENT
CONTEMPLATED HEREBY OR THEREBY, INCLUDING WITHOUT LIMITATION, THE LOAN
DOCUMENTS, THE PERFORMANCE BY THE PARTIES HERETO OR THERETO OF THEIR RESPECTIVE
OBLIGATIONS HEREUNDER OR THEREUNDER OR THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY, (II) THE MAKING OR ADMINISTRATION OF THE LOAN COMMITMENTS,
THE LOANS OR ANY OF THEM, INCLUDING ANY VIOLATION OF FEDERAL OR STATE USURY OR
OTHER LAWS, PROVIDED THAT WITH RESPECT TO CLAUSES (I) AND (II), SPONSOR SHALL
HAVE NO OBLIGATION TO INDEMNIFY THE SERVICER AND ALL PARTICIPANTS FOR MORE THAN
ONE (1) COUNSEL'S REASONABLE FEES AND EXPENSES, (III) THE ENFORCEMENT,
PERFORMANCE AND ADMINISTRATION OF THIS AGREEMENT OR THE LOAN DOCUMENTS OR ANY
POWERS GRANTED TO THE SERVICER HEREUNDER OR UNDER ANY LOAN DOCUMENTS, (IV) ANY
MISREPRESENTATION OF THE SPONSOR HEREUNDER, (V) ANY MATTER ARISING PURSUANT TO
ANY ENVIRONMENTAL LAWS AS A RESULT OF THE COLLATERAL OR (VI) ANY ACTUAL OR
PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF
THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY, WHETHER OR
NOT THE INDEMNIFIED PARTY IS A NAMED PARTY THERETO, EXCEPT TO THE EXTENT THAT
SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY
A COURT OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE
RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNIFIED
PARTY OR ARISE SOLELY FROM THE NONPAYMENT OF ANY LOAN INDEBTEDNESS
NOTWITHSTANDING THE PERFORMANCE BY SPONSOR OF ALL OF ITS OBLIGATIONS UNDER THE
OPERATIVE DOCUMENTS RELATING TO SUCH LOAN INDEBTEDNESS.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, AND SEPARATE AND APART FROM
ANY OBLIGATION OF SPONSOR PURSUANT TO ARTICLE 10, SPONSOR AGREES TO INDEMNIFY
AND HOLD HARMLESS EACH INDEMNIFIED PARTY FROM AND AGAINST, AND ON DEMAND WILL
PAY OR REIMBURSE ANY INDEMNIFIED PARTY FOR, ANY AND ALL (I) LIABILITIES ARISING
FROM A BREACH OF ANY REPRESENTATION OR WARRANTY MADE BY SPONSOR HEREUNDER
(WHETHER OR NOT SPONSOR'S OBLIGATIONS UNDER ARTICLE 10 HAVE BEEN SATISFIED),
(II) ANY BREACH BY SPONSOR OF ITS AGREEMENTS WITH THE BORROWERS, (III) ANY
OVERADVANCE TO ANY BORROWER CAUSED BY THE TRANSFER OF ACH TRANSFER INSTRUCTIONS
FROM THE AARON'S PROPRIETARY SYSTEM TO THE SERVICER BY SPONSOR RESULTING IN
AGGREGATE ADVANCES TO SUCH BORROWER IN EXCESS OF THE LOAN COMMITMENT TO SUCH
BORROWER, AND (IV) ANY BREACH BY SPONSOR OF THE TERMS OF ITS MICROACH SERVICE
AGREEMENT WITH THE SERVICER OR ANY FAILURE BY SPONSOR TO MAINTAIN SUCH AGREEMENT
IN FULL FORCE AND EFFECT.
THIS INDEMNITY SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.
NOTICE OF PROCEEDINGS; RIGHT TO DEFEND
ANY PERSON WITH AN INDEMNIFICATION CLAIM (OR POTENTIAL CLAIM) PURSUANT TO
SECTION 11.1 ("POTENTIAL INDEMNITEE") AGREES TO NOTIFY SPONSOR (THE "POTENTIAL
INDEMNITOR") IN WRITING WITHIN A REASONABLE TIME AFTER RECEIPT BY IT OF WRITTEN
NOTICE OF THE COMMENCEMENT OF ANY ADMINISTRATIVE, LEGAL OR OTHER PROCEEDING,
SUIT OR ACTION BY A PERSON (OTHER THAN INDEMNITEE OR AN AFFILIATE THEREOF),