Document:

Exhibit 10.5

DISTRIBUTION SERVICES AGREEMENT

Registered Commodity Pools

     This Distribution Services Agreement (the “Agreement”) is made this __ day of August 2010, by and among each Delaware statutory trust set forth on Exhibit A attached hereto (each a “Fund” and collectively, the “Funds”), each having its principal place of business at 1 Penn Plaza, 36th Floor, New York, NY 10119, Foreside Fund Services, LLC, a Delaware limited liability company (the “Distributor”), having its principal place of business at Three Canal Plaza, Suite 100, Portland, ME 04101, and Factor Capital Management, LLC, a Delaware limited liability company (the “Managing Owner”), with its principal place of business at 1 Penn Plaza, 36th Floor, New York, NY 10119.

     WHEREAS, the Managing Owner serves as the sole managing owner and commodity pool operator of each Fund;

     WHEREAS, the Managing Owner, on behalf of each Fund, has filed, or will file, with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-1 under the Securities Act of 1933, as amended (the “1933 Act”);

     WHEREAS, each Fund has engaged the Managing Owner to serve as its commodity pool operator; the Managing Owner is registered with the Commodity Futures Trading Commission (the “CFTC”) as a commodity pool operator, is a member of the National Futures Association (“NFA”), and is subject to the Commodity Exchange Act, as amended (the “CEA”), and all of the relevant rules and regulations promulgated thereunder (collectively, the “Commodities Rules”);

     WHEREAS, the Distributor is a registered broker-dealer under the Securities Exchange Act of 1934, as amended (the “1934 Act”), and a member of the Financial Industry Regulatory Authority (“FINRA”);

     WHEREAS, each Fund desires to retain the Distributor to act as the distributor of such Fund and to perform the services described herein and such additional services as may be agreed to from time to time; and

     WHEREAS, the Distributor desires to provide the services described herein to the Funds.

     NOW, THEREFORE, in consideration of the mutual promises and undertakings herein contained, the parties agree as follows:

     1. Appointment.

     The Managing Owner, on behalf of each Fund, hereby appoints the Distributor as the exclusive distributor of each Fund listed in Exhibit A hereto, as it may be amended from time to time in accordance with this Agreement, on the terms and for the period set forth in this Agreement and subject to the registration requirements of the federal securities laws and of the

laws governing the sale of securities in the various states, and the Distributor hereby accepts such appointment and agrees to act in such capacity hereunder.

     2. Definitions.

     Wherever they are used herein, the following terms have the following meanings:

          (a) “Prospectus” means the prospectus which constitutes part of the Registration Statement(s) of each Fund under the 1933 Act as such Prospectus may be amended or supplemented and filed with the SEC from time to time;

          (b) “Registration Statement” means the registration statement most recently filed from time to time by each Fund with the SEC and effective under the 1933 Act, as such registration statement(s) is amended by any amendments thereto at the time in effect;

          (c) All capitalized terms used but not defined in this Agreement shall have the meanings ascribed to such terms in the Registration Statement and the Prospectus.

     3. Duties of the Distributor

          (a) The
Distributor agrees to act as agent of each Fund and to work with each
Fund’s transfer agent (the “Transfer Agent”) in connection
with the receipt and processing of all orders for purchases and redemptions of
common units of beneficial interest of each Fund (“Shares”) in
aggregations of 100,000 Shares (“Baskets”) from DTC
Participants or participants in the Continuous Net Settlement System of the
National Securities Clearing Corporation (the “NSCC
Participants”) that have executed a Participant Agreement (the
“Authorized Participants”), as defined in paragraph 3(b)
hereof, with the Funds and the Managing Owner. The Funds acknowledge that the
Distributor shall be obligated to accept all orders for Baskets subject to the
terms and conditions of the applicable Participant Agreement and guidelines
established by the Managing Owner from time to time. Nothing herein contained
shall prevent the Distributor from entering into like distribution service
arrangements with other exchange-traded funds.

          (b) The
Distributor agrees to use commercially reasonable efforts to act as agent of
each Fund with respect to the continuous distribution of Baskets of each Fund as
set forth in each Registration Statement and in accordance with the provisions
thereof. The Distributor further agrees as follows: (i) at the request of the
Managing Owner, the Distributor shall coordinate with counsel to the Managing
Owner and negotiate participant agreements (“Participant
Agreements”) between and among Authorized Participants, the Funds and
the Managing Owner, for transactions in Baskets of the Funds, in accordance with
the Registration Statement and Prospectus; (ii) the Distributor shall generate,
transmit and maintain copies of confirmations of Basket purchase and redemption
order acceptances to the purchaser or redeemer (such confirmations will indicate
the time such orders were accepted and will be made available to the Managing
Owner promptly upon request and in no case, less frequently than daily as
provided under section 3(j)(vii)); (iii) the Distributor shall deliver copies of
the Prospectus to Authorized Participants who have purchased Baskets in
accordance with the Participant Agreements; (iv) the Distributor shall maintain
telephonic, facsimile and/or access to direct computer communications links with
the Transfer Agent; and (v) the Distributor shall maintain a

2

list of Authorized Participants for each Fund and shall make such list available to the public upon request.

          (c) The Managing Owner, on behalf of each Fund, reserves the right to suspend the right of redemption, or postpone the redemption settlement date, (1) for any period during which the NYSE Arca or any exchange on which a Fund’s assets are regularly traded is closed other than for customary weekend or holiday closings, or trading is suspended or restricted, (2) for any period during which an emergency exists as a result of which the delivery, disposal or evaluation of a Fund’s assets is not reasonably practicable, or (3) for such other period as the Managing Owner determines to be necessary for the protection of the Shareholders. The Managing Owner may suspend the Distributor’s authority to process orders for Baskets on behalf of any Fund in accordance with the Participant Agreement upon notice to the Distributor.

          (d) The
Distributor is not authorized by the Managing Owner or any Fund to give any
information or to make any representations other than those contained in the
Registration Statement or Prospectus or contained in shareholder reports or
other material that may be prepared by or on behalf of a Fund (and with the
assistance of the Distributor, as applicable) for the Distributor’s use.
The Distributor shall be entitled to rely on and shall not be responsible in any
way for information provided to it by the Managing Owner with respect to any
Fund and its respective service providers and shall not be liable or responsible
for the errors and omissions of such service providers, provided that the
foregoing shall not be construed to protect the Distributor against any
liability to the Managing Owner or a Fund or the Funds’ shareholders to
which the Distributor would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of its reckless disregard of its obligations and duties under this
Agreement.

          (e) The Distributor shall ensure that all direct requests by Authorized Participants for Prospectuses, product descriptions and periodic fund reports, as applicable, are fulfilled. The Distributor will generally make it known in the brokerage community that Prospectuses and product descriptions are available, including by (i) advising the any exchange on which each Fund’s Shares are listed on behalf of its member firms of the same, (ii) making such disclosure in all marketing and advertising materials prepared and/or filed by the Distributor with FINRA, and (iii) as may otherwise be required by the SEC. The Distributor shall not bear any costs associated with printing Prospectuses and all other such materials.

          (f) The Distributer shall communicate Fund requirements and operational events to Authorized Participants.

          (g) The Distributor agrees to make available, at the Managing Owner’s request, one or more members of its staff to attend meetings of the Board of Managers of the Managing Owner in order to provide information with regard to the ongoing distribution process and for such other purposes as may be requested by the Managing Owner.

          (h) The Distributor shall review and approve all sales and marketing materials for compliance with applicable securities laws and regulations, and file such materials with FINRA, as required under the 1933 Act, and the rules promulgated thereunder. Notwithstanding the foregoing, the Distributor shall not be responsible for the compliance of sales and marketing

3

materials with the CEA or the Commodities Rules, and the Managing Owner shall be responsible for ensuring that all sales and marketing materials have been reviewed for compliance with the CEA and the Commodities Rules and filed with the CFTC or NFA, if applicable. The parties hereto acknowledge that the Managing Owner and an affiliate of the Distributor, Foreside Compliance Services, LLC, have entered into a separate agreement with respect to the review of sales and marketing materials for compliance with the CEA or the Commodities Rules.

          (i) The Distributor shall provide training to employees of the Managing Owner with respect to the marketing material review process for which the Distributor is responsible, the SEC, CFTC, NFA and FINRA regulations, and the applicability of these regulations as they relate to sales and marketing materials. Such training shall be provided on-site if requested by the Managing Owner, provided that the Managing Owner pay all reasonable travel expenses associated therewith.

          (j) The Distributor shall provide an order processing system pursuant to which the Authorized Participants may contact the Distributor (or its affiliates) and place requests to create and redeem Baskets in accordance with the Participant Agreements, including without limitation: (i) generating and transmitting confirmations of purchase and redemption order acceptances to purchasers and redeemers of Baskets; (ii) providing acknowledgement to Authorized Participants that orders have been accepted; (iii) rejecting any orders that were not submitted in proper form or in a timely fashion; (iv) maintaining a dedicated toll-free line for Authorized Participants to place share creation and redemption orders; (v) transmitting creation and redemption records and restricted files to the Managing Owner daily; and (vi) reconciling Shares daily.

     4. Duties of Each Fund.

          (a) The
Managing Owner, on behalf of each Fund, agrees that it will take all reasonable
action necessary to monitor available Shares registered by each Fund and to
register additional Shares of a Fund pursuant to the 1933 Act as may be required
from time to time. The Managing Owner will make available to the Distributor
such number of copies of each Fund’s then currently effective Prospectus
and product description as the Distributor may reasonably request. The Managing
Owner will furnish to the Distributor copies of annual audited reports of each
Fund made by independent public accountants regularly retained by the Funds and
such other publicly available information that the Distributor may reasonably
request for use in connection with the distribution of Baskets. The Managing
Owner shall keep the Distributor informed of the jurisdictions in which it has
filed notice filings for Shares for sale on behalf of each Fund under the
securities laws thereof and shall promptly notify the Distributor of any change
in this information. The Distributor shall not be liable for damages resulting
from the sale of Shares in authorized jurisdictions where the Distributor had no
information from the Managing Owner that such sale or sales were unauthorized at
the time of such sale or sales.

     5. Fees and Expenses.

          (a) The Distributor shall be entitled to receive compensation from each Fund related to its services hereunder or for additional services as may be agreed to between the

4

Managing Owner, on behalf of each Fund, and the Distributor, in accordance with the Fee Schedule attached hereto as Exhibit B;

          (b) Each Fund shall bear the cost and expenses of: (i) the registration of Shares for sale under the Securities Act; and (ii) the registration or qualification of the Shares for sale under the securities laws and/or the costs related to the filing of DDOCs pursuant to the Commodities Rules, as applicable;

          (c) The Distributor shall pay (i) all expenses relating to Distributor’s broker-dealer qualification and registration under the 1934 Act; and (ii) the expenses incurred by the Distributor in connection with routine FINRA filing fees;

          (d) Notwithstanding anything in this Agreement to the contrary, the Distributor and its affiliates may receive compensation or reimbursement from the applicable Funds with respect to any services not included under this Agreement, as may be agreed upon by the parties from time to time; and

          (e) The
payments to the Distributor under this Agreement and under any other agreement
between the Distributor or any of its affiliates and the Funds or the Managing
Owner with respect to the Funds, will not, in the aggregate, exceed 5.0% of the
aggregate dollar amount of the offering (in a dollar amount equal to the amount
disclosed on Schedule C of the aggregate amount registered on the
Registration Statement on Form S-1 or Form S-3, as applicable, in respect of
each Fund). Schedule C will be amended from time-to-time in the
event that additional amounts of Shares are registered. Each Fund will advise
the Distributor if the payments described hereunder must be limited, when
combined with selling commissions charged by other FINRA members and other
payments that would constitute underwriting compensation as defined in FINRA
Rule 2310, in order to comply with the 10% limitation on total
underwriters’ compensation pursuant to FINRA Rule 2310.

          (f) The
Managing Owner shall provide to the Distributor on an on-going basis information
sufficient to enable Distributor to ensure compliance with FINRA Rule 2310,
including calculations of underwriting compensation and total offering and
operating expenses.

     6. Indemnification.

          (a) Subject
to the limitations set forth in Section 14 and in the immediately following
paragraph below, each Fund agrees to indemnify and hold harmless the
Distributor, its affiliates and each of their respective directors, officers and
employees and agents and any person who controls the Distributor within the
meaning of Section 15 of the 1933 Act (any of the Distributor, its officers,
employees, agents and directors or such control persons, for purposes of this
paragraph, a “Distributor Indemnitee”) against any loss,
liability, claim, damages or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, claim, damages or
expense and reasonable counsel fees incurred in connection therewith) arising
out of or based upon (i) the Distributor providing services to a Fund pursuant
to this Agreement; (ii) any claim that the Registration Statement, Prospectus,
product description, shareholder reports, sales literature and advertisements
specifically approved by each Fund and the Managing Owner or other information
filed or made public by any Fund (as from time to time amended)

5

included an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein (and in the case of the Prospectus and
product description, in light of the circumstances under which they were made)
not misleading under the 1933 Act, or any other statute or the common law; (iii)
the breach by a Fund of any obligation, representation or warranty contained in
this Agreement; or (iv) a Fund’s failure to comply in any material respect
with applicable securities or commodities laws.

     Each Fund does not
agree to indemnify the Distributor or hold it harmless to the extent that the
statement or omission was made in reliance upon, and in conformity with,
information furnished to the Funds by or on behalf of the Distributor. Each Fund
will also not indemnify any Distributor Indemnitee with respect to any untrue
statement or omission made in the Registration Statement, Prospectus or product
description that is subsequently corrected in such document (or an amendment
thereof or supplement thereto) if a copy of the Prospectus (or such amendment or
supplement) was not sent or given to the person asserting any such loss,
liability, claim, damage or expense at or before the written confirmation to
such person in any case where such delivery is required by the 1933 Act and the
applicable Fund had notified the Distributor of the amendment or supplement
prior to the sending of the confirmation. In no case (i) is the indemnity of the
Funds in favor of any Distributor Indemnitee to be deemed to protect the
Distributor Indemnitee against any liability to the Funds or their respective
shareholders to which the Distributor Indemnitee would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its obligations under
this Agreement, or (ii) are the Funds to be liable under the indemnity agreement
contained in this Section with respect to any claim made against any Distributor
Indemnitee unless the Distributor Indemnitee shall have pursuant to Section 9
notified the applicable Fund in writing of the claim at its principal offices in
New York, New York within a reasonable time after the summons or other first
written notification giving information of the nature of the claim shall have
been served upon Distributor Indemnitee (or after Distributor Indemnitee shall
have received notice of service on any designated agent).

     Failure to notify
the Funds of any claim shall not relieve the applicable Fund from any liability
that it may have to any Distributor Indemnitee against whom such action is
brought unless failure or delay to so notify the applicable Fund prejudices such
Fund’s ability to defend against such claim. The Funds shall be entitled to
participate at their own expense in the defense, or, if they so elect, to assume
the defense of any suit brought to enforce any claims, but if the Funds elect to
assume the defense, the defense shall be conducted by counsel chosen by the
Funds and satisfactory to Distributor Indemnitee, defendant or defendants in the
suit. In the event the Funds elect to assume the defense of any suit and retain
counsel, Distributor Indemnitee, defendant or defendants in the suit, shall bear
the fees and expenses of any additional counsel retained by them. If the Funds
do not elect to assume the defense of any suit, they will reimburse the
Distributor Indemnitee, defendant or defendants in the suit, for the reasonable
fees and expenses of any counsel retained by them. The Funds agree to notify the
Distributor promptly of the commencement of any litigation or proceedings
against them or any of their officers or the Managing Owner in connection with
the issuance or sale of any of the Baskets or the Shares.

          (b) The
Distributor agrees to indemnify and hold harmless the Funds, the Managing Owner
and each of their managers and officers and any person who controls the
Funds

6

within the meaning of Section 15 of the 1933 Act
(for purposes of this Section, the Funds, the Managing Owner and each of their
managers and officers and their controlling persons are collectively referred to
as the “Trust Affiliates”) against any loss, liability, claim,
damages or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, claim, damages or expense and reasonable counsel
fees incurred in connection therewith) arising out of or based upon (i) the
allegation of any wrongful act of the Distributor or any of its directors,
officers, employees or affiliates in connection with its activities as
Distributor pursuant to this Agreement; (ii) the breach of any obligation,
representation or warranty contained in this Agreement by the Distributor; (iii)
the Distributor’s failure to comply in any material respect with applicable
securities laws, including applicable FINRA regulations; or (iv) any allegation
that the Registration Statement, Prospectus, product description, shareholder
reports, any information or materials relating to the Funds (as described in
section 3(g)) or other information filed or made public by the Funds (as from
time to time amended) included an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to
make the statements not misleading, insofar as such statement or omission was
made in reliance upon, and in conformity with information furnished to the Funds
by or on behalf of the Distributor.

     In no case (i) is
the indemnity of the Distributor in favor of any Trust Affiliate to be deemed to
protect any Trust Affiliate against any liability to the Funds or its security
holders to which such Trust Affiliate would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and duties
under this Agreement, or (ii) is the Distributor to be liable under its
indemnity agreement contained in this Section with respect to any claim made
against any Trust Affiliate unless the Trust Affiliate shall have notified the
Distributor in writing of the claim within a reasonable time after the summons
or other first written notification giving information of the nature of the
claim shall have been served upon the Trust Affiliate (or after the Trust
Affiliate shall have received notice of service on any designated agent).

     Failure to notify
the Distributor of any claim shall not relieve the Distributor from any
liability that it may have to the Trust Affiliate against whom such action is
brought on account of its indemnity agreement contained in this Section unless
failure or delay to so notify the Distributor prejudices the Distributor’s
ability to defend against such claim. The Distributor shall be entitled to
participate at its own expense in the defense or, if it so elects, to assume the
defense of any suit brought to enforce the claim, but if the Distributor elects
to assume the defense, the defense shall be conducted by counsel chosen by it
and satisfactory to the Funds, the Managing Owner and the Trust Affiliates, and
to any controlling person or persons, defendant or defendants in the suit. In
the event that Distributor elects to assume the defense of any suit and retain
counsel, the Funds or controlling person or persons, defendant or defendants in
the suit, shall bear the fees and expenses of any additional counsel retained by
them. If the Distributor does not elect to assume the defense of any suit, it
will reimburse the Funds, the Managing Owner, their officers and managers or
controlling person or persons, defendant or defendants in the suit, for the
reasonable fees and expenses of any counsel retained by them. The Distributor
agrees to notify the Managing Owner and the Funds promptly of the commencement
of any litigation or proceedings against it or any of its officers or directors
in connection with the issuance or sale of any of the Creation Units or the
Shares.

7

          (c) No indemnified party shall settle any claim against it for which it intends to seek indemnification from the indemnifying party, under the terms of section 6(a) or 6(b) above, without prior written notice to and consent from the indemnifying party, which consent shall not be unreasonably withheld. No indemnified or indemnifying party shall settle any claim unless the settlement contains a full release of liability with respect to the other party in respect of such action. This section 6 shall survive the termination of this Agreement.

     7. Representations.

          (a) The
Distributor represents and warrants that (i) it is duly organized as a Delaware
limited liability company and is and at all times will remain duly authorized
and licensed under applicable law to carry out its services as contemplated
herein; (ii) the execution, delivery and performance of this Agreement are
within its power and have been duly authorized by all necessary action; (iii)
its entering into this Agreement or providing the services contemplated hereby
does not conflict with or constitute a default or require a consent under or
breach of any provision of any agreement or document to which the Distributor is
a party or by which it is bound; (iv) it is registered as a broker-dealer under
the 1934 Act and is a member of FINRA, (v) it is in material compliance with all
laws, rules and regulations applicable to it, including but not limited to the
rules and regulations promulgated by FINRA; and (vi) shall as promptly as
possible notify the Managing Owner should the representations and warranties
under this Section 7(a) are no longer be true during the term of this
Agreement;

          (b) The
Distributor acknowledges that it is a financial institution subject to the USA
Patriot Act of 2001 and the Bank Secrecy Act (collectively, the “AML
Acts”), which require, among other things, that financial institutions
adopt compliance programs to guard against money laundering. The Distributor
represents and warrants that it is in compliance with and will continue to
comply with the AML Acts and applicable regulations in all relevant respects.
The Distributor agrees that it will take such further steps, and cooperate with
the other as may be reasonably necessary, to facilitate compliance with the AML
Acts, including but not limited to the provision of copies of its written
procedures, policies and controls related thereto (“AML
Operations”). Notwithstanding the foregoing, it is expressly understood
and agreed that neither the Managing Owner nor any of its directors, officers,
employees or agents, on its own behalf or on behalf of the Funds, shall have
access to any of Distributor’s AML Operations, books or records pertaining
to other clients or services of Distributor.

          (c) The Distributor and the Managing Owner, on behalf of each Fund, each individually represent and warrant that it has in place and will maintain physical, electronic and procedural safeguards reasonably designed to protect the security, confidentiality and integrity of, and to prevent unauthorized access to or use of, records and information relating to consumers and customers of the Funds. The Managing Owner, on behalf of the Funds, further represents to the Distributor that it has adopted a statement of its privacy policies and practices as required by Securities and Exchange Commission Regulation S-P and agrees to provide to the Distributor a copy of that statement annually.

          (d) Each Fund, individually represents and warrants that (i) it is duly organized as a Delaware statutory trust and is and at all times will remain duly authorized to carry out its obligations as contemplated herein; (ii) the execution, delivery and performance of

8

this Agreement are within its power and have been
duly authorized by all necessary action; (iii) its entering into this Agreement
does not conflict with or constitute a default or require a consent under or
breach of any provision of any agreement or document to which such Fund is a
party or by which it is bound; (iv) the Managing Owner is duly registered with
the NFA as a Commodity Pool Operator and the Managing Owner will ensure
compliance by each Fund with the CEA and all of the relevant Commodities Rules;
(v) it possesses, licenses or has other rights to use all patents, patent
applications, trademarks and service marks, trademark and service mark
registrations, trade names, copyrights, licenses, inventions, trade secrets,
technology, know-how and other intellectual property (collectively,
“Intellectual Property”) necessary for or used in the conduct
of the Fund’s business and for the offer, issuance, distribution and sale
of the Shares in accordance with the terms of the Prospectus and this Agreement,
and such Intellectual Property does not and will not breach or infringe the
terms of any Intellectual Property owned, held or licensed by any third party;
(vi) the Registration Statements and each Fund’s Prospectus have been
prepared, and all sales literature and advertisements (“Sales Literature
and Advertisements”) approved by the Managing Owner with respect to the
Funds or other materials prepared by or on behalf of the Funds shall be
prepared, in all material respects, in conformity with the CEA, the Commodities
Rules, the 1933 Act and the rules and regulations of the SEC (the “SEC
Rules and Regulations”); (vii) the Registration Statement and each
Fund’s Prospectus contain, and all Sales Literature and Advertisements
shall contain, all statements required to be stated therein in accordance with
the CEA, the Commodities Rules, the 1933 Act, the SEC Rules and Regulations, and
FINRA Rules and Regulations; and (viii) all statements of fact contained
therein, or to be contained in all Sales Literature and Advertisements, are or
will be true and correct in all material respects at the time indicated or the
effective date, as the case may be, and none of the Registration Statement, any
Fund’s Prospectus, nor any Sales Literature and Advertisements shall
include any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the case of each Fund’s Prospectus in light of the circumstances in which
made, not misleading. Each Fund shall, from time to time, file such amendment or
amendments to the Registration Statement and each Fund’s Prospectus as, in
the light of future developments, shall, in the opinion of counsel to the
Managing Owner, be necessary in order to have the Registration Statement and
each Fund’s Prospectus at all times contain all material facts required to
be stated therein or necessary to make the statements therein, in the case of
each Fund’s Prospectus in light of the circumstances in which made, not
misleading. Each Fund shall not file any amendment to the Registration Statement
or each Fund’s Prospectus without giving the Distributor reasonable notice
thereof in advance and the Managing Owner shall promptly notify the Distributor
of any stop order suspending the effectiveness of the Registration Statement;
provided that nothing in this Agreement shall in any way limit the Funds’
right to file at any time such amendments to the Registration Statement or any
Fund’s Prospectus as the Managing Owner may deem advisable. Notwithstanding
the foregoing, the Funds shall not be deemed to make any representation or
warranty as to any information or statement provided by the Distributor for
inclusion in the Registration Statement or any Fund’s Prospectus.

     8. Duration, Termination and Amendment.

          (a) This
Agreement shall be effective on the date set forth above, and unless terminated
as provided herein, shall continue for two years from its effective date, and
thereafter from year to year, provided such continuance is approved annually by
the Managing Owner.

9

This Agreement may be terminated at any time, without the payment of any penalty, as to each individual Fund by the Managing Owner or by the Distributor, on at least sixty (60) days’ prior written notice. This Agreement shall automatically terminate without the payment of any penalty in the event of its assignment.

          (b) No provision of this Agreement may be changed, waived, discharged or terminated except by an instrument in writing signed by the party against which an enforcement of the change, waiver, discharge or termination is sought.

     9. Notice.

     Any notice or other communication authorized or required by this Agreement to be given to either party shall be in writing and deemed to have been given when delivered in person or by confirmed facsimile, or posted by certified mail, return receipt requested, to the following address (or such other address as a party may specify by written notice to the other):

  If to the Distributor:

Foreside Fund Services, LLC

ATTN: Legal/Compliance

Three Canal Plaza, Suite 100

Portland, ME 04101

Telephone: (207) 553-7110

Facsimile: (207) 553-7151

If to the Managing Owner:

Factor Capital Management, LLC

1 Penn Plaza

36th Floor

New York, NY 10119

Telephone: (212) 786-7482

Facsimile: (917) 522-9729

If to a Fund:

[Name of applicable Fund]

c/o Factor Capital Management, LLC

1 Penn Plaza

36th Floor

New York, NY 10119

Telephone: (212) 786-7482

Facsimile: (917) 522-9729

     10. Choice of Law.

     This Agreement shall be governed by, and construed in accordance with, the laws of the state of New York, without giving effect to the choice of laws provisions thereof.

10

     11. Counterparts.

     This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

     12. Severability.

     If any provisions of this Agreement shall be held or made invalid, in whole or in part, then the other provisions of this Agreement shall remain in force. Invalid provisions shall, in accordance with this Agreement’s intent and purpose, be amended, to the extent legally possible, in order to effectuate the intended results of such invalid provisions.

     13. Confidentiality.

     During the term of
this Agreement, the Distributor and the Managing Owner, on its own behalf and on
behalf of each Fund, may have access to confidential information relating to
such matters as either party’s business, trade secrets, systems,
procedures, manuals, products, contracts, personnel, and clients. As used in
this Agreement, “Confidential Information” means information
belonging to one of the parties that is of value to such party and the
disclosure of which could result in a competitive or other disadvantage to such
party. Confidential Information includes, without limitation, financial
information, proposal and presentations, reports, forecasts, inventions,
improvements and other intellectual property; trade secrets; know-how; designs,
processes or formulae; software; market or sales information or plans; customer
lists; and business plans, prospects and opportunities (such as possible
acquisitions or dispositions of businesses or facilities). Confidential
Information includes information developed by either party in the course of
engaging in the activities provided for in this Agreement, unless: (i) the
information is or becomes publicly known through lawful means; (ii) the
information is disclosed to the other party without a confidential restriction
by a third party who rightfully possesses the information and did not obtain it,
either directly or indirectly, from one of the parties, as the case may be, or
any of their respective principals, employees, affiliated persons, or affiliated
entities. The parties understand and agree that all Confidential Information
shall be kept confidential by the other both during and after the term of this
Agreement. Each party shall maintain commercially reasonable information
security policies and procedures for protecting Confidential Information. The
parties further agree that they will not, without the prior written approval by
the other party, disclose such Confidential Information, or use such
Confidential Information in any way, either during the term of this Agreement or
at any time thereafter, except as required in the course of this Agreement and
as provided by the other party or as required by law. Upon termination of this
Agreement for any reason, or as otherwise requested by the Managing Owner, all
Confidential Information held by or on behalf of Managing Owner or any Fund
shall be promptly returned to the Managing Owner, or an authorized officer of
the Distributor will certify to the Managing Owner in writing that all such
Confidential Information has been destroyed. This section 13 shall survive the
termination of this Agreement. Notwithstanding the foregoing, a party may
disclose the other’s Confidential Information if (i) required by law,
regulation or legal process or if requested by the SEC, the CFTC, FINRA or other
governmental regulatory agency with jurisdiction over the parties hereto or (ii)
requested to do so by the other party; provided that in the event of (i), the
disclosing party shall give the other party reasonable prior notice of such
disclosure to the extent reasonably

11

practicable and shall reasonably cooperate with the other party (at such other party’s expense) in any efforts to prevent such disclosure.

     14. Limitation of Liability.

     This Agreement is
executed by or on behalf of each Fund and the obligations hereunder are not
binding upon any of the trustees, officers or shareholders of a Fund
individually but are binding only upon each Fund to which such obligations
pertain and the assets and property of such Fund. Separate and distinct records
are maintained for each Fund and the assets associated with any such Fund are
held and accounted for separately from the other assets of any other Fund. The
debts, liabilities, obligations, and expenses incurred, contracted for, or
otherwise existing with respect to a particular Fund shall be enforceable
against the assets of that Fund only, and not against the assets of any other
Fund, and none of the debts, liabilities, obligations, and expenses incurred,
contracted for, or otherwise existing with respect to any other Fund shall be
enforceable against the assets of that Fund. Each Fund’s Amended and
Restated Trust Declaration, as may be amended form time to time, is on file with
the Managing Owner.

     15. Use of Names; Publicity.

     The Funds shall not use the Distributor’s name, or any trade or service mark owned by or licensed to the Distributor, in any offering material, shareholder report, advertisement or other material relating to the Funds, other than for the purpose of merely identifying and describing the functions of the Distributor hereunder, in a manner not approved by the Distributor in writing prior to such use, such approval not to be unreasonably withheld. The Distributor hereby consents to all uses of its name required by FINRA, the SEC, the CFTC, any state securities commission, or any federal or state regulatory authority.

     The Distributor or its affiliates shall not use the name of any Fund or the name of the Managing Owner, or any trade or service mark owned by or licensed to the Managing Owner or any Fund in any offering material, shareholder report, advertisement or other material relating to the Distributor, other than for the purpose of merely identifying and describing the functions of the Funds hereunder, in a manner not approved by the Managing Owner in writing prior to such use, provided that in no case shall such approval be unreasonably withheld. The Managing Owner and each Fund hereby consent to all uses of its name required by FINRA, the SEC, the CFTC or any state securities commission, or any federal or state regulatory authority.

     The Distributor will not issue any press releases or make any public announcements regarding the existence of this Agreement without the express prior written consent of the Managing Owner. None of the Managing Owner, the Funds or the Distributor will disclose any of the economic terms of this Agreement, except as may be required by law.

12

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their officers designated below as of the date first set forth above.

				
	   	 	FACTOR CAPITAL MANAGEMENT, LLC, as 

           Managing Owner of each of the Funds set 

           forth on Exhibit A
	 	 	 	 
	 	By:	
      

      

    
	 	 	Name:	 
	 	 	Title:	 
	 	 	 
	 	 	FACTOR CAPITAL MANAGEMENT, LLC
	 	 	 	 
	 	By:	

      

    
	 	 	Name:	 
	 	 	Title:	 
	 	 	 
	 	 	FORESIDE FUND SERVICES, LLC
	 	 	 	 
	 	By:	

      

    
	 	 	Name:	Richard J. Berthy
	 	 	Title:	Vice President

13

EXHIBIT A

FactorShares S&P US Equity Premium

FactorShares S&P US Anti-Equity Premium

FactorShares S&P US Equity Anti-USD

FactorShares S&P Crude Oil Premium

FactorShares S&P Gold Premium

Ex. A-1

EXHIBIT B

Fee Schedule

	Services	Set-Up Fee	Base Fee	Per Fund Fee	BP Fee
	Distribution 

      Support 

      Services
      	$5,000*	$40,000**	$2,500**	0.50 basis points 

      on total average 

      assets in each 

      Fund**
    

	*      	
One-time fee

	**      	
Per Annum, calculated and payable 1/12 on a monthly basis

All fees payable pursuant to this Agreement and this Exhibit A are subject to an annual Consumer Price Index increase, commencing on the one-year anniversary of the Effective Date. Notwithstanding the foregoing, any increase in fees shall be capped at 3.0% in any given year.

Out-Of-Pocket and Related Expenses

The Adviser shall also reimburse Distributor for reasonable out-of-pocket and ancillary expenses incurred in the provision of services pursuant to this Agreement, including but not limited to the following: communications; postage and delivery services; record storage and retention; reproduction; reasonable travel expenses incurred in connection with the provision of the services pursuant to the Distribution Agreement; and any other expenses incurred in connection with the provision of the services pursuant to this Agreement.

2

EXHIBIT C

Pursuant to Section 5(e)

The payments to the Distributor under Section 5 and under any other agreement between the Distributor or any of its affiliates and the Funds or the Managing Owner with respect to the Funds, will not, in the aggregate, exceed 5.0% of the aggregate dollar amount of the offering (an amount equal to $5,000,000 of the $100,000,000 Shares registered on the Registration Statement on Form S-1 (333-164754) in respect of FactorShares S&P US Equity Premium).

The payments to the Distributor under Section 5 and under any other agreement between the Distributor or any of its affiliates and the Funds or the Managing Owner with respect to the Funds, will not, in the aggregate, exceed 5.0% of the aggregate dollar amount of the offering (an amount equal to $5,000,000 of the $100,000,000 Shares registered on the Registration Statement on Form S-1 (333-164758) in respect of FactorShares S&P US Anti-Equity Premium).

The payments to the Distributor under Section 5 and under any other agreement between the Distributor or any of its affiliates and the Funds or the Managing Owner with respect to the Funds, will not, in the aggregate, exceed 5.0% of the aggregate dollar amount of the offering (an amount equal to $5,000,000 of the $100,000,000 Shares registered on the Registration Statement on Form S-1 (333-164757) in respect of FactorShares S&P US Equity Anti-USD).

The payments to the Distributor under Section 5 and under any other agreement between the Distributor or any of its affiliates and the Funds or the Managing Owner with respect to the Funds, will not, in the aggregate, exceed 5.0% of the aggregate dollar amount of the offering (an amount equal to $5,000,000 of the $100,000,000 Shares registered on the Registration Statement on Form S-1 (333-164756) in respect of FactorShares S&P Crude Oil Premium).

The payments to the Distributor under Section 5 and under any other agreement between the Distributor or any of its affiliates and the Funds or the Managing Owner with respect to the Funds, will not, in the aggregate, exceed 5.0% of the aggregate dollar amount of the offering (an amount equal to $5,000,000 of the $100,000,000 Shares registered on the Registration Statement on Form S-1 (333-164755) in respect of FactorShares S&P Gold Premium).

3ex10_1.htm

 

Exhibit 10.1

 

 

  

  

  

 

Exhibit 10.1

 

INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement (this “Agreement”) dated the [•] day of [•], 20[•], by and between MDU Resources Group, Inc., a Delaware corporation (the “Company”), and [•], an individual (the “Indemnitee”).

 

Recitals

 

WHEREAS, it is essential to the Company to retain and attract as directors and officers the most capable persons available; and

 

WHEREAS, the Indemnitee is a director and/or officer of the Company and may be a director and/or officer of one or more Affiliates (as defined below) thereof; and

 

[WHEREAS, the Company and the Indemnitee are parties to an Indemnification Agreement dated [•] (the “Prior Agreement”), and the Company and the Indemnitee have agreed that this Agreement shall supersede and replace the Prior Agreement; and] [Insert this clause if the Indemnitee has prior indemnification agreement with the Company only]

 

[WHEREAS, the Company and/or its Affiliates and the Indemnitee are parties to various Indemnification Agreements as shown on the attached schedule (collectively, the “Prior Agreement”), and the Company and the Indemnitee have agreed that this Agreement shall supersede and replace the Prior Agreement; and] [Insert this clause if the Indemnitee has prior indemnification agreements with the Company and its Affiliates and attach schedule]

 

WHEREAS, the Company is authorized by Section 145 of the Delaware General Corporation Law (the “DGCL”) to indemnify its officers, directors, employees and agents by agreement and to indemnify persons who serve, at the request of the Company, as the directors, officers, employees or agents of other corporations or enterprises, and DGCL Section 145 expressly provides that the indemnification provided, or granted pursuant to, that section is not exclusive; and

 

WHEREAS, Section 7.07 of the Company’s Bylaws (the “Bylaws”) (i) provides for indemnification of, and advancement of expenses by the Company to, its directors and officers to the fullest extent permitted under applicable law, (ii) expressly provides that the indemnification provisions set forth therein are not exclusive and (iii) contemplates that contracts may be entered into between the Company and its directors and officers with respect to indemnification; and

 

WHEREAS, Article SEVENTEENTH of the Company's Restated Certificate of Incorporation, as amended (the “Certificate”), provides that no director of the Company shall be liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Company or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL or (iv) for any transaction from which the director derived an improper personal benefit; and

 

WHEREAS, in recognition of the Indemnitee’s desire for (i) substantial protection against personal liability, (ii) specific contractual assurance that indemnification will be available to the Indemnitee, regardless of any amendment or revocation of the Bylaws, any change in the composition of the Company’s Board of Directors (the “Board”) or any Change in Control (as

 

 

  

  

  

 

defined below) and (iii) an inducement to provide services to the Company or any of its Affiliates as a director and/or officer, the Company wishes to provide in this Agreement for the indemnification of, and the advancement of expenses to, the Indemnitee to the fullest extent permitted under applicable law and as set forth in this Agreement, and, to the extent directors’ and officers’ liability insurance is maintained by the Company, for the continued coverage of the Indemnitee under such insurance policies.

 

NOW, THEREFORE, in consideration of the premises and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Indemnitee hereby agree as follows:

 

ARTICLE 1

 

CERTAIN DEFINITIONS

 

Capitalized terms used in this Agreement have the meanings set forth below:

 

“Affiliate” means any Enterprise directly or indirectly controlling or controlled by or under direct or indirect common control with the Company.  For purposes of this definition, “control” when used with respect to any Enterprise means the power to direct the management and policies of such Enterprise, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Board” has the meaning ascribed to that term in the Recitals.

 

“Bylaws” has the meaning ascribed to that term in the Recitals.

 

“Certificate” has the meaning ascribed to that term in the Recitals.

 

“Change in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:

 

(a)                 the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this definition or

 

 

  

2

  

 

(b)                 individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or the actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board or

 

(c)                 consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination or

 

(d)                 approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

 

For the avoidance of doubt, unless otherwise determined by the Board, the sale of a subsidiary, operating entity or business unit of the Company shall not constitute a Change in Control for purposes of this Agreement.

 

“Corporate Status” means the status of a person who is or was a director or officer or employee or agent of the Company or a director, officer, employee, partner, member, manager, trustee, fiduciary or agent of an Enterprise at which such person is or was serving at the request

 

 

  

3

  

 

of the Company.  The Indemnitee will be deemed, for purposes of this Agreement, to be serving or to have served “at the request of the Company” as a director, officer, employee, partner, member, manager, trustee, fiduciary or agent of an Enterprise if the Indemnitee is or was serving as a director, officer, employee, partner, member, manager, trustee, fiduciary or agent of such Enterprise and (a) such Enterprise is or at the time of such service was an Affiliate, (b) such Enterprise is or at the time of such service was an employee benefit plan or related trust sponsored or maintained by the Company or an Affiliate or (c) the Company or an Affiliate directly or indirectly caused the Indemnitee to be nominated, elected, appointed, designated, employed, engaged or selected to serve in such capacity.  References to “serving at the request of the Company” include any service as a director, officer, employee, partner, member, manager, trustee, fiduciary or agent of the Company which imposes duties on, or involves services by, such director, officer, employee, partner, member, manager, trustee, fiduciary or agent with respect to any employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner the person reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan will be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to under applicable law or in this Agreement.

 

“DGCL” has the meaning ascribed to that term in the Recitals.

 

“Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by the Indemnitee.

 

“D&O Insurance Policies” has the meaning ascribed to that term in Section 6.1.

 

“Enterprise” means an entity other than the Company that is a corporation, partnership, limited liability company, joint stock company, association, joint venture, business trust, employee benefit plan, trust, incorporated association or any other legal entity or enterprise of whatever nature.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Expense Advance” has the meaning ascribed to that term in Section 3.1.

 

“Expenses” shall be broadly construed and shall include all attorneys’ fees, disbursements and retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, food and lodging expenses, duplicating costs, printing and binding costs, telephone charges, postage, fax transmission charges, secretarial services, delivery service fees and all other disbursements or expenses actually and reasonably incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding, or in connection with seeking indemnification under this Agreement.  Expenses also include Expenses actually and reasonably incurred in connection with any appeal resulting from any Proceeding, including the premium, security for, and other costs relating to any appeal bond or its equivalent.  Expenses will also include any federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payment, whether in respect of an Expense or a Loss, under this

 

 

  

4

  

 

Agreement.  Expenses, however, shall not include amounts paid in settlement by the Indemnitee or the amount of judgments or fines against the Indemnitee.

 

“Final Disposition” means the final, binding and non-appealable full or partial conclusion of a Proceeding by, including, but not limited to, (i) final judicial decision by a court of competent jurisdiction from which there is no further right to appeal, (ii) settlement or (iii) other determination.  In addition, and without limiting the foregoing, a Final Disposition shall also occur when the party commencing the Proceeding has abandoned the claims asserted or otherwise fails to prosecute the matter or otherwise does not pursue the Proceeding for a period of twelve (12) months.

 

“Independent Counsel” means an attorney or firm of attorneys that is experienced in matters of corporation law and is not currently, and has not been in the past three years, retained to represent: (a) the Company or the Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement and/or the indemnification provisions of the Certificate or Bylaws, or of other indemnitees under similar indemnification agreements) or (b) any other party to the Proceeding giving rise to a claim for indemnification hereunder.  Notwithstanding the foregoing, the term “Independent Counsel” does not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or the Indemnitee in an action to determine the Indemnitee’s rights under this Agreement.

 

“Losses” means losses of any type whatsoever, and shall include any liability, judgments, damages, amounts paid in settlement, fines, including excise taxes and penalties assessed with respect to employee benefit plans, penalties (whether civil, criminal or otherwise) and all interest, assessments and other charges paid or payable in connection with or in respect of any of the foregoing incurred by the Indemnitee, or on the Indemnitee’s behalf, in connection with a Proceeding.

 

[“Prior Agreement” has the meaning ascribed to that term in the Recitals.] [Insert this definition if the Indemnitee has prior indemnification agreement.]

 

“Proceeding” shall be broadly construed and shall include any threatened, pending or completed action, suit, claim, defamation claim, counterclaim, cross-claim, demand, arbitration, alternative dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether formal or informal, including any and all affirmative defenses and appeals, whether brought by or in the right of, or conducted by, the Company or otherwise, whether civil, criminal, administrative or investigative, and in each case whether or not commenced prior to the date of this Agreement, in which the Indemnitee was, is or will be involved as a party or otherwise, such as to provide testimony, by reason of or relating to the Indemnitee’s Corporate Status and by reason of or relating to either (i) any action or alleged action taken by the Indemnitee, or failure or alleged failure to act, or any action or alleged action, or failure or alleged failure to act, on the Indemnitee’s part, while acting in the Indemnitee’s Corporate Status or (ii) the fact of the Indemnitee’s Corporate Status, whether or not serving in such capacity at the time any Loss or Expense is incurred for which indemnification or advancement of Expenses can be provided under this Agreement, except one initiated by the Indemnitee to enforce the Indemnitee’s rights under this Agreement pursuant to

 

 

  

5

  

 

Article 7.  For purposes of this definition, the term “threatened” will be deemed to include the Indemnitee’s good faith belief that a claim or other assertion may lead to institution of a Proceeding.

 

“Sarbanes-Oxley Act” has the meaning ascribed to that term in Section 2.4(b).

 

“Spouse” means the person with whom the Indemnitee has entered into a lawful marriage, civil union or domestic partnership agreement.

 

“To the fullest extent permitted by applicable law” means to the fullest extent permitted by Section 145 of the DGCL or any provision that replaces or succeeds Section 145 of the DGCL with respect to such matters.  The parties hereto intend that this Agreement shall provide for indemnification in excess of that expressly permitted by statute, but not to the extent prohibited by law.

 

“Voting Stock” means securities entitled to vote generally in the election of directors.

 

ARTICLE 2

 

INDEMNIFICATION

 

2.1.                        Company Indemnification.  Except as otherwise provided in Section 2.4, the Company will hold harmless and indemnify the Indemnitee to the fullest extent permitted by applicable law, as the same exists or may hereafter be amended, interpreted or replaced.  In furtherance of the foregoing indemnification, and without limiting the generality thereof:

 

(a)      If, by reason of the Indemnitee’s Corporate Status, the Indemnitee was, is or becomes a party to, or was, is or is threatened to be made a party to, or was or is otherwise involved in, any Proceeding other than Proceedings by or in the right of the Company, the Indemnitee shall be indemnified against any and all Expenses and Losses incurred by the Indemnitee, or on the Indemnitee’s behalf, in connection with such Proceeding or any claim, issue or matter therein, if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminal Proceeding, had no reasonable cause to believe that the Indemnitee’s conduct was unlawful.

 

(b)      If, by reason of the Indemnitee’s Corporate Status, the Indemnitee was, is or becomes a party to, or was, is or is threatened to be made a party to, or was or is otherwise involved in, any Proceeding by or in the right of the Company, the Indemnitee shall be indemnified against all Expenses incurred by the Indemnitee, or on the Indemnitee’s behalf, in connection with such Proceeding if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company; provided, however, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which the Indemnitee shall have been adjudged to be liable to the Company unless and to the extent that the Court of Chancery of the State of Delaware or the court in which such Proceeding was brought shall determine that such indemnification may be made.

 

 

  

6

  

 

(c)      Notwithstanding any other provision of this Agreement, other than Section 2.4, to the extent that the Indemnitee has been successful on the merits or otherwise in defense of any Proceeding or any part thereof, the Company will indemnify the Indemnitee against all Expenses incurred by the Indemnitee, or on the Indemnitee’s behalf, in connection therewith to the fullest extent permitted by applicable law.  If the Indemnitee is not wholly successful in such Proceeding, but is successful on the merits or otherwise as to one or more, but fewer than all claims, issues or matters in such Proceeding, the Company will indemnify and hold harmless the Indemnitee against all Expenses incurred by the Indemnitee, or on the Indemnitee’s behalf, in connection with each successfully resolved claim, issue or matter on which the Indemnitee was successful.  For purposes of this Section 2.1(c), the termination of any Proceeding, or any claim, issue or matter in such Proceeding by dismissal with or without prejudice will be deemed to be a successful result as to such Proceeding, claim, issue or matter.

 

2.2.                      Additional Indemnity.  In addition to, and without regard to any limitations on, the indemnification provided for in Section 2.1, the Company will indemnify and hold harmless the Indemnitee against all Expenses and Losses incurred by the Indemnitee or on the Indemnitee’s behalf if, by reason of the Indemnitee’s Corporate Status, the Indemnitee was, is or becomes a party to, or was, is or is threatened to be made a party to or was otherwise involved in any Proceeding, including a Proceeding by or in the right of the Company.  The only limitation that shall exist upon the Company’s obligations pursuant to this Agreement shall be that the Company shall not be obligated to make any payment to the Indemnitee (i) that is finally determined under the procedures, and subject to the presumptions, set forth in Articles 5 and 7 hereof to be unlawful or (ii) in connection with any of the matters for which indemnity is excluded pursuant to Section 2.4 hereof.

 

2.3.                      Indemnification for Expenses of a Witness.  Notwithstanding any other provision of this Agreement, to the extent that the Indemnitee is, by reason of the Indemnitee’s Corporate Status, a witness, or is made to or asked to respond to discovery requests, in any Proceeding to which the Indemnitee is not a party, including, without limitation, any internal investigation by or on behalf of the Company, the Company will indemnify the Indemnitee against all Expenses incurred by the Indemnitee or on the Indemnitee’s behalf in connection therewith.

 

2.4.                      Exclusions.  Notwithstanding any other provision of this Agreement, the Company will not be obligated under this Agreement to provide indemnification in connection with the following:

 

(a)      any Proceeding or part of any Proceeding initiated or brought voluntarily by the Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board has authorized or consented to the initiation of the Proceeding or such part of any Proceeding or (ii) the Proceeding was commenced following a Change in Control; provided, however, that nothing in this Section 2.4(a) shall limit the right of the Indemnitee to be indemnified under Section 7.4; or

 

(b)      any Proceeding with respect to which final judgment is rendered against Indemnitee for (i) conduct determined to be knowingly fraudulent or deliberately dishonest or to constitute willful misconduct, (ii) payment or an accounting of profits

 

 

  

7

  

 

made from the purchase and sale, or sale and purchase, by the Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act or similar provisions of state statutory law or common law or (iii) any reimbursement of, or payment to, the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) or any formal policy of the Company adopted by the Board, or from the purchase or sale by the Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act.

 

2.5.                      Scope.  For the avoidance of doubt, any indemnification under this Agreement shall apply with respect to any Proceeding that relates to matters that occurred in connection with the Indemnitee’s Corporate Status, whether or not the facts underlying any claim made in such Proceeding occurred prior to, on or after the date of this Agreement.

 

2.6.                      Partial Indemnification.  If the Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses and/or Losses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify the Indemnitee for the portion thereof to which the Indemnitee is entitled.

 

2.7.                      Spousal Indemnification.  The Company shall indemnify the Indemnitee’s Spouse at any time the Indemnitee is covered under the indemnification provided in this Agreement (even if the Indemnitee did not remain married to her or him during the entire period of coverage) against any pending or threatened Proceeding for the same period, to the same extent and subject to the same standards, limitations, obligations and conditions under which the Indemnitee is provided indemnification under this Agreement, if the Indemnitee’s Spouse (or former Spouse) becomes involved in a pending or threatened Proceeding solely by reason of her or his status as the Indemnitee’s Spouse, including, without limitation, any pending or threatened Proceeding that seeks damages recoverable from marital community property, jointly-owned property or property purported to have been transferred from the Indemnitee to his/her Spouse (or former Spouse).  The Indemnitee’s Spouse (or former Spouse) also shall be entitled to advancement of Expenses to the same extent and subject to the same standards, limitations, obligations and conditions under which the Indemnitee is entitled to advancement of Expenses under this Agreement.  Any request by the Indemnitee’s Spouse (or former Spouse) for the advancement of Expenses shall include or be preceded or accompanied by an undertaking by or on behalf of the Indemnitee’s Spouse to repay any Expenses advanced if it shall ultimately be determined that the Indemnitee’s Spouse (or former Spouse) is not entitled to be indemnified against such Expenses.  The Indemnitee’s Spouse (or former Spouse) is intended to be a third-party beneficiary under this Agreement.

 

ARTICLE 3

 

ADVANCEMENT OF EXPENSES

 

3.1.                      Expense Advances; Repayment.  Except as set forth in Section 3.2, the Company will, if requested by the Indemnitee, advance to the Indemnitee (hereinafter an “Expense Advance”) any and all Expenses incurred by the Indemnitee, or on the Indemnitee’s

 

 

  

8

  

 

behalf, in connection with any Proceeding.  The Indemnitee’s right to each Expense Advance will not be subject to the satisfaction of any standard of conduct and will be made without regard to the Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement, or under provisions of the Certificate or Bylaws or otherwise.  Each Expense Advance will be unsecured and interest free and will be made by the Company without regard to the Indemnitee’s ability to repay the Expense Advance.  The Indemnitee shall qualify for Expense Advances upon the execution and delivery to the Company of this Agreement, which shall constitute the Indemnitee’s undertaking to repay such Expense Advance if it is ultimately determined, by final decision by a court from which there is no further right to appeal, that the Indemnitee is not entitled to be indemnified for such Expenses under the Certificate, Bylaws, the DGCL, this Agreement or otherwise.  No other form of undertaking shall be required other than the execution of this Agreement.

 

3.2.                      Exclusions.  The Indemnitee will not be entitled to any Expense Advance in connection with any of the matters for which indemnity is excluded pursuant to Section 2.4.

 

3.3.                      Timing.  An Expense Advance pursuant to Section 3.1 will be made within twenty (20) business days after the receipt by the Company of a written statement or statements from the Indemnitee requesting such Expense Advance (which statement or statements will include, if requested by the Company, reasonable detail underlying the Expenses for which the Expense Advance is requested).

 

ARTICLE 4

 

CONTRIBUTION

 

4.1.                      Contribution in the Event of Joint Liability.  If the indemnification provided in Sections 2.1 and 2.2 hereof is not available (but not if prohibited by applicable law or this Agreement), in respect of any Proceeding in which the Company is jointly liable with the Indemnitee (or would be if joined in such Proceeding), the Company shall contribute to the amount of Expenses and/or Losses incurred by Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company, other than the Indemnitee, who are jointly liable with the Indemnitee, or would be if joined in such Proceeding, on the one hand, and the Indemnitee, on the other hand, from the transaction(s) or event(s) from which such Proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to applicable law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company, other than the Indemnitee, who are jointly liable with the Indemnitee (or would be if joined in such Proceeding) on the one hand, and the Indemnitee, on the other hand, in connection with the transaction(s) or event(s) that resulted in such Expenses and/or Losses, as well as any other equitable considerations which applicable law may require to be considered.  The relative fault of the Company and all officers, directors and employees of the Company, other than the Indemnitee, who are jointly liable with the Indemnitee (or would be if joined in such Proceeding) on the one hand, and the Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.

 

 

  

9

  

 

4.2.                      Indemnification for Contribution Claims by Others.  The Company, if not prohibited by applicable law or this Agreement, will fully indemnify and hold the Indemnitee harmless from any claims of contribution which may be brought by other officers, directors or employees of the Company who may be jointly liable with the Indemnitee for any Loss or Expense arising from a Proceeding.

 

ARTICLE 5

 

PROCEDURES AND PRESUMPTIONS FOR THE

DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION

 

5.1.                      Notification of Claims; Request for Indemnification.  The Indemnitee agrees to notify the Company promptly in writing of any claim made against the Indemnitee for which indemnification will or could be sought under this Agreement; provided, however, that a delay in giving, or a failure to give, such notice will not deprive the Indemnitee of any right to be indemnified under this Agreement unless the Company did not otherwise learn of the Proceeding and such delay or failure is materially prejudicial to the Company’s ability to defend such Proceeding, and, if such delay or failure does materially prejudice the Company’s rights, it will relieve the Company from liability only to the extent of such prejudice; and, provided, further, that notice will be deemed to have been given without any action on the part of the Indemnitee in the event the Company is a party to the same Proceeding.  Any delay in giving, or a failure to give, notice to the Company will not relieve the Company from any liability for indemnification which it may have to the Indemnitee otherwise than under this Agreement.  The Indemnitee may deliver to the Company a written request to have the Company indemnify and hold harmless the Indemnitee in accordance with this Agreement.  Subject to Section 5.10, such request may be delivered from time to time and at such time or times as the Indemnitee deems appropriate in the Indemnitee’s discretion.  Following such a written request for indemnification, the Indemnitee’s entitlement to indemnification shall be determined in accordance with Section 5.2.  The General Counsel of the Company will, promptly upon receipt of such a request for indemnification, advise the Board in writing that the Indemnitee has requested indemnification.  The Company will be entitled to participate in any Proceeding at its own expense.

 

5.2.                      Determination of Right to Indemnification.  Upon written request by the Indemnitee for indemnification pursuant to Section 5.1 with respect to any Proceeding, a determination, if, but only if, required by applicable law, with respect to the Indemnitee’s entitlement thereto will be made upon the Final Disposition of such Proceeding: (a) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to the Indemnitee or (b) if a Change in Control shall not have occurred, by any of the following methods, which shall be at the election of the Board or the Disinterested Directors, as the case may be, (i) by a majority vote of all Disinterested Directors, even though less than a quorum of the Board, (ii) by a committee of Disinterested Directors designated by a majority vote of all Disinterested Directors, even though less than a quorum of the Board, (iii) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to the Indemnitee, or (iv) if so directed by the Board, by the stockholders of the Company.  The Company will promptly advise the Indemnitee in writing with respect to any determination that 

 

 

  

10

  

 

the Indemnitee is or is not entitled to indemnification, including a description of any reason or basis for which indemnification has been denied.

 

5.3.                      Selection of Independent Counsel.  If the determination of entitlement to indemnification pursuant to Section 5.2 will be made by Independent Counsel, the Independent Counsel will be selected as provided in this Section 5.3.  The Independent Counsel shall be selected by the Board, and the Company will give written notice to the Indemnitee advising the Indemnitee of the identity of the Independent Counsel so selected.  The Indemnitee may, within 10 days after such written notice of selection is given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in this Agreement, and the objection shall set forth with particularity the factual basis of such assertion.  Absent a proper and timely objection, the person so selected will act as Independent Counsel.  If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit.  If, within 30 days after submission by the Indemnitee of a written request for indemnification pursuant to Section 5.1, no Independent Counsel has been selected, or the selection of the Independent Counsel remains the subject of a properly made objection thereto, either the Company or the Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction for the appointment as Independent Counsel of a person selected or designated by the court or for resolution of any objection which has been made by the Indemnitee to the Company’s selection of Independent Counsel and the person so appointed or the person with respect to whom all objections are so resolved will act as Independent Counsel under Section 5.2.  The Company will pay any and all fees and expenses incurred by such Independent Counsel in connection with acting pursuant to Section 5.2, and the Company will pay all fees and expenses incident to the procedures of this Section 5.3, regardless of the manner in which such Independent Counsel was selected or appointed.

 

5.4.                      Burden of Proof.  In making a determination with respect to entitlement to indemnification hereunder, the person, persons or entity making such determination shall presume that the Indemnitee is entitled to indemnification under this Agreement.  If this Agreement or applicable law should require a determination of the Indemnitee’s good faith or whether the Indemnitee acted in a manner which the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, the person, persons or entity making such determination shall presume that the Indemnitee has at all times acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company.  The Indemnitee will be deemed to have acted in good faith if the Indemnitee’s action with respect to the Company or the particular Enterprise is based on the records or books of account of such entity, including financial statements, or on information supplied to the Indemnitee by the officers of such entity in the course of their duties, or on the advice of legal counsel for such entity or on information or records given or reports made to such entity by an independent certified public accountant or by an appraiser or other expert selected by such entity; provided, however, that this sentence will not be deemed to limit in any way the other circumstances in which the Indemnitee may be deemed to have met such standard of conduct.  In addition, the knowledge or actions, or failure to act, of any other director, officer, agent or employee of the Company or such Enterprise 

 

 

  

11

  

 

shall not be imputed to the Indemnitee for purposes of determining the right to indemnification under this Agreement.

 

5.5.                      No Presumption in the Absence of a Determination or As Result of an Adverse Determination.  Neither the failure of any person, persons or entity chosen to make a determination as to whether the Indemnitee has met any particular standard of conduct or had any particular belief, nor an actual determination by such person, persons or entity that the Indemnitee has not met such standard of conduct or did not have such belief, prior to or after the commencement of any action, suit or proceeding by the Indemnitee to secure a judicial determination that the Indemnitee should be indemnified under this Agreement or under applicable law, will be a defense to the Indemnitee’s claim or create a presumption that the Indemnitee has not met any particular standard of conduct or did not have any particular belief.  In addition, the termination of any Proceeding by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere or its equivalent, will not, of itself, create a presumption that the Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by this Agreement or applicable law.

 

5.6.                      Presumption Regarding Success. In the event that any Proceeding to which the Indemnitee is a party is resolved in any manner other than by final adverse judgment (as to which all rights of appeal therefrom have been exhausted or lapsed) against the Indemnitee (including settlement of such Proceeding with or without payment of money or other consideration), it will be presumed that the Indemnitee has been successful on the merits or otherwise in such Proceeding.

 

5.7.                      Timing of Determination.  The Company will use its reasonable best efforts to cause any determination required to be made pursuant to Section 5.2 to be made as promptly as practicable after the later of the date (i) the Indemnitee has submitted a written request for indemnification pursuant to Section 5.1 and (ii) of the Final Disposition of the Proceeding.  If the person, persons or entity chosen to make a determination does not make such determination within 30 days after the latest of the date (a) the Company receives the Indemnitee’s request for indemnification pursuant to Section 5.1, (b) the Company receives notice of the Final Disposition of the Proceeding and (c) on which an Independent Counsel is selected pursuant to Section 5.3, if applicable (and all objections to such person, if any, have been resolved), the requisite determination of entitlement to indemnification will be deemed to have been made and the Indemnitee will be entitled to such indemnification, absent (i) the Indemnitee’s failure to fulfill the Indemnitee’s obligations pursuant to Section 5.9, (ii) a misstatement by the Indemnitee of a material fact, or an omission of a material fact necessary to make the Indemnitee’s statement not materially misleading, in connection with the request for indemnification and (iii) a prohibition of such indemnification under applicable law, in the reasonable opinion of the Company based on consultation with outside legal counsel; provided, however, that such 30-day period may be extended for a reasonable time, not to exceed an additional 30 days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining of or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 5.7 shall not apply if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 5.2 and if (A) within 15

 

 

  

12

  

 

days after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within 75 days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within 15 days after such receipt for the purpose of making such determination, such meeting is held for such purpose within 60 days after having been so called and such determination is made thereat; provided, however, that such 75-, 15- and 60-day periods may be extended if required to comply with applicable law, rules and regulations.

 

5.8.                      Timing of Payments.  All payments of Expenses, other than Expense Advances, which are governed by Section 3.3, and other amounts by the Company to the Indemnitee pursuant to this Agreement will be made as soon as practicable after a written request or demand therefor by the Indemnitee is presented to the Company, but in no event later than (i) thirty (30) days after such demand is presented or (ii) as soon as reasonably practicable following such later date as a determination of entitlement to indemnification is made in accordance with Section 5.7, if applicable.

 

5.9.                      Cooperation.  The Indemnitee will cooperate in all reasonable respects with the person, persons or entity making a determination with respect to the Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity, upon reasonable advance request, any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to the Indemnitee and reasonably necessary to such determination.  Any Expenses incurred by the Indemnitee, or on the Indemnitee’s behalf, in so cooperating with the person, persons or entity making such determination will be borne by the Company (irrespective of the determination as to the Indemnitee’s entitlement to indemnification) and the Company will indemnify the Indemnitee therefor and will hold the Indemnitee harmless therefrom.

 

5.10.            Time for Submission of Request.  The Indemnitee shall submit any request for indemnification pursuant to this Article 5 within a reasonable time, not to exceed three years, after any judgment, order, settlement, dismissal, arbitration award, conviction, acceptance of a plea of nolo contendere or its equivalent or other Final Disposition of the Proceeding, with the latest date of the occurrence of any such event to be considered the commencement of the three-year period.

 

5.11.           Security.  To the extent requested by the Indemnitee and approved by the Board, the Company may at any time, and from time to time, provide security to the Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral.  Any such security, once provided to the Indemnitee, may not be revoked or released without prior written consent of the Indemnitee.

 

ARTICLE 6

 

LIABILITY INSURANCE

 

6.1.                      Company Insurance.  The Company currently has in force policies of directors’ and officers’ liability insurance (the “D&O Insurance Policies”).  The Company agrees to furnish to Indemnitee copies of such D&O Insurance Policies (including any directors’ and officer’ liability insurance policies that replace D&O Insurance Policies) upon Indemnitee’s request.

 

 

  

13

  

 

Subject to Section 6.3, for the duration of the Indemnitee’s service as a director and/or officer of the Company, and thereafter for a period of time equal to the greater of 6 years and the period during which the Indemnitee remains subject to any pending or possible Proceeding, the Company shall cause to be maintained in effect for the benefit of the Indemnitee policies of directors’ and officers’ liability insurance with terms of coverage substantially similar to those provided under the D&O Insurance Policies and in no event less favorable than the terms of coverage provided for the benefit of any other director or officer of the Company or any of its Affiliates.

 

6.2.                      Notice to Insurers.  If, at the time of receipt by the Company of a notice from any source of a Proceeding as to which the Indemnitee is a party or participant, the Company will give prompt written notice of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies, and the Company will provide the Indemnitee with a copy of such notice and copies of all subsequent correspondence between the Company and such insurers related thereto.  The Company will thereafter take all necessary or desirable actions to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

 

6.3.                      Insurance Not Required.  Notwithstanding Section 6.1, the Company will have no obligation to obtain or maintain the insurance contemplated by Section 6.1 if the Board determines in good faith that such insurance is not reasonably available, if the premium costs for such insurance are disproportionately high compared to the amount of coverage provided or if the coverage provided by such insurance is limited by exclusions so as to provide an insufficient benefit.  The Company will promptly notify the Indemnitee in writing of any such determination not to provide insurance coverage.  Notwithstanding the foregoing, in the event of a Change in Control, the Company shall maintain in force any and all insurance policies then maintained by the Company in providing insurance—directors’ and officers’ liability, fiduciary, employment practices or otherwise—in respect of the Indemnitee, for a period of six years thereafter.

 

ARTICLE 7

 

REMEDIES OF INDEMNITEE

 

7.1.                      Action by the Indemnitee.  In the event that (a) a determination is made pursuant to Article 5 that the Indemnitee is not entitled to indemnification under this Agreement, (b) an Expense Advance is not timely made pursuant to Section 3.3, (c) no determination of entitlement to indemnification is made within the applicable time periods specified in Section 5.7, (d) payment of indemnified amounts is not made within the applicable time periods specified in Section 5.8, (e) contribution has not been timely made pursuant to Article 4, (f) D&O Insurance Policies are not maintained in accordance Article 6, or (g) it should appear to the Indemnitee that the Company has failed to comply with (a) any other provision of this Agreement, (b) any other agreement for indemnification of Indemnitee to which the Company is a party, (c) the indemnification or advancement of expenses provisions in the Bylaws or (d) the liability limitation provision in Article SEVENTEENTH of the Certificate (if the Indemnitee is or was a director of the Company), the Indemnitee will be entitled to an adjudication in the Delaware Chancery Court of the Indemnitee’s entitlement to such indemnification, expense advance, contribution, D&O Insurance Policies coverage or liability limitation.

 

 

  

14

  

 

7.2.                      De Novo Review if Prior Adverse Determination.  In the event that a determination is made pursuant to Article 5 that the Indemnitee is not entitled to indemnification, any judicial proceeding commenced pursuant to this Article 7 will be conducted in all respects as a de novo trial on the merits, and the Indemnitee will not be prejudiced by reason of that adverse determination.  In any judicial proceeding commenced pursuant to this Article 7, the Indemnitee will be presumed to be entitled to indemnification under this Agreement, the Company will have the burden of proving the Indemnitee is not entitled to indemnification, and the Company may not refer to or introduce evidence of any determination pursuant to Article 5 adverse to the Indemnitee for any purpose.  If the Indemnitee commences a judicial proceeding pursuant to this Article 7, the Indemnitee will not be required to reimburse the Company for any Expense Advance made pursuant to Article 3 until a final determination is made with respect to the Indemnitee’s entitlement to indemnification (as to which all rights of appeal have been exhausted or lapsed).

 

7.3.                      Company Bound by Favorable Determination by Reviewing Party.  If a determination is made that the Indemnitee is entitled to indemnification pursuant to Article 5, the Company will be bound by such determination in any judicial proceeding commenced pursuant to this Article 7, absent (a) a misstatement by the Indemnitee of a material fact or an omission of a material fact necessary to make the Indemnitee’s statements in connection with the request for indemnification not materially misleading or (b) a prohibition of such indemnification under applicable law.

 

7.4.                      Company Bears Expenses if the Indemnitee Seeks Adjudication.  In the event that the Indemnitee, pursuant to this Article 7, seeks a judicial adjudication of the Indemnitee’s rights under, or to recover damages for breach of, (i) this Agreement, (ii) any other agreement for indemnification to which the Company is a party, (iii) the indemnification or advancement of expenses provisions in the Bylaws, (iv) the liability limitation provision in Article SEVENTEENTH of the Certificate, if the Indemnitee is or was a director of the Company, or (v) any director and officer liability insurance policies maintained by the Company, and the Indemnitee is, at least to some extent, successful in such action, the Company will, to the fullest extent permitted by applicable law, indemnify and hold harmless the Indemnitee against any and all Expenses incurred by the Indemnitee, or on the Indemnitee’s behalf, in connection with such judicial adjudication.  In addition, if requested by the Indemnitee, the Company will, within twenty (20) business days after receipt by the Company of the written request therefor, pay as an Expense Advance such Expenses, to the fullest extent permitted by applicable law.

 

7.5.                      Company Bound by Provisions of this Agreement.  The Company will be precluded from asserting in any judicial proceeding commenced pursuant to this Article 7 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and will stipulate in any such judicial proceeding that the Company is bound by all the provisions of this Agreement.

 

 

  

15

  

 

ARTICLE 8

 

NON-EXCLUSIVITY, SUBROGATION; NO DUPLICATIVE PAYMENTS

 

8.1.                      Non-Exclusivity.  The rights of indemnification and to receive Expense Advances as provided by this Agreement will not be deemed exclusive of, and shall be in addition to, any other rights to which the Indemnitee may at any time be entitled under applicable law, the Certificate, the Bylaws, any agreement or covenant in an agreement, a vote of stockholders, a resolution of the directors or otherwise.  To the extent that a change in the DGCL, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the Certificate, Bylaws and this Agreement, it is the intent of the parties hereto that the Indemnitee enjoy by this Agreement the greater benefits so afforded by such change.  The assertion or employment of any right or remedy hereunder, or otherwise, will not prevent the concurrent assertion or employment of any other right or remedy.  [Notwithstanding this Section 8.1, the parties agree that this Agreement shall supersede and replace the Prior Agreement.] [Insert this clause if the Indemnitee has a prior indemnification agreement.]

 

8.2.                      Subrogation.  In the event of any payment by the Company under this Agreement, the Company will be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee with respect thereto and the Indemnitee will execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights, with all of the Indemnitee’s reasonable Expenses related thereto to be borne by the Company.

 

8.3.                      No Duplicative Payments.  The Company will not be liable under this Agreement to make any payment of amounts otherwise indemnifiable, or any Expense for which advancement is provided, hereunder if and to the extent that the Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.  The Company’s obligation to indemnify or advance Expenses hereunder to the Indemnitee in respect of Proceedings relating to the Indemnitee’s service at the request of the Company as a director, officer, employee, partner, member, manager, trustee, fiduciary or agent of any other Enterprise will be reduced by any amount the Indemnitee has actually received as indemnification or advancement of Expenses from such other Enterprise.

 

ARTICLE 9

 

DEFENSE OF PROCEEDINGS 

 

9.1.                      Company Assuming the Defense.  Subject to Section 9.3 below, in the event the Company is obligated to pay in advance the Expenses relating to any Proceeding pursuant to Article 3, the Company will be entitled, by written notice to the Indemnitee, to assume the defense of such Proceeding, with counsel approved by the Indemnitee, which approval will not be unreasonably withheld.  The Company will identify the counsel it proposes to employ in connection with such defense as part of the written notice sent to the Indemnitee notifying the Indemnitee of the Company’s election to assume such defense, and the Indemnitee will be required, within ten days following the Indemnitee’s receipt of such notice, to inform the Company of its approval of such counsel or, if it has objections, the reasons therefor.  If such

 

 

  

16

  

 

objections cannot be resolved by the parties, the Company will identify alternative counsel, which counsel will also be subject to approval by the Indemnitee in accordance with the procedure described in the prior sentence.

 

9.2.                      Right of the Indemnitee to Employ Counsel.  Following approval of counsel by the Indemnitee pursuant to Section 9.1 and retention of such counsel by the Company, the Company will not be liable to the Indemnitee under this Agreement for any fees and expenses of counsel subsequently incurred by the Indemnitee, or on the Indemnitee’s behalf, with respect to the same Proceeding; provided, however, that if counsel to the Indemnitee shall have reasonably concluded that there exists a potential, but not actual, conflict of interest between the Company (or any other person or persons included in a joint defense) and the Indemnitee in the conduct of the defense or representation by such counsel retained by the Company, the Company’s indemnification and expense advancement obligations to the Indemnitee under this Agreement shall include Expenses incurred by the Indemnitee, or on the Indemnitee’s behalf, for separate counsel retained by the Indemnitee to monitor the litigation; provided, further, that if such counsel retained by the Indemnitee reasonably concludes that there is an actual conflict between the Company (or any other person or persons included in a joint defense) and the Indemnitee in the conduct of such defense or representation by such counsel retained by the Company, such counsel may assume the Indemnitee’s defense in such proceeding.  The existence of an actual or potential conflict, and whether any such conflict may be waived, shall be determined pursuant to the rules of attorney professional conduct and applicable law.

 

9.3.                      Company Not Entitled to Assume Defense.  Notwithstanding Section 9.1, the Company will not be entitled to assume the defense of any Proceeding brought by or in the right of the Company or any Proceeding as to which counsel retained by the Indemnitee has reasonably concluded that there exists such a conflict as described in the second proviso to the first sentence of Section 9.2.

 

ARTICLE 10

 

SETTLEMENT 

 

10.1.           When Company’s Prior Consent is Required.  Notwithstanding anything in this Agreement to the contrary, the Company will have no obligation to indemnify the Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding effected without the Company’s prior written consent, such consent not to be unreasonably withheld; provided, however, that if a Change in Control has occurred, the Company shall indemnify the Indemnitee for amounts paid in settlement if the Independent Counsel has approved the settlement.

 

10.2.           No Adverse Settlement.  The Company will not seek, nor will it agree to, consent to, support or agree not to contest any settlement or other resolution of any Proceeding that has the actual or purported effect of extinguishing, limiting or impairing the Indemnitee’s rights hereunder, including, without limitation, the entry of any bar order or other order, decree or stipulation, pursuant to the Private Securities Litigation Reform Act, or any similar federal, state or foreign statute, regulation, rule or law.

 

 

  

17

  

 

ARTICLE 11

 

MISCELLANEOUS

 

11.1.           Assignment; Binding Effect; Third Party Beneficiaries.  No party may assign either this Agreement or any of its rights, interests or obligations hereunder without the prior written approval of the other party and any such assignment by a party without prior written approval of the other party will be deemed invalid and not binding on such other party; provided, however, that the Company may assign all, but not less than all, of its rights, obligations and interests hereunder to any direct or indirect successor to all, substantially all or a substantial part of the business and/or assets of the Company by purchase, merger, consolidation or otherwise.  All of the terms, agreements, covenants, representations, warranties and conditions of this Agreement are binding upon, and inure to the benefit of and are enforceable by, the parties and their respective successors, permitted assigns, Spouses, heirs, executors and personal and legal representatives.  Except as expressly provided in the previous sentence and in Section 2.7, there are no third party beneficiaries having rights under or with respect to this Agreement.  The Company shall exercise its best efforts to require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance reasonably satisfactory to the Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.  The indemnification provided under this Agreement shall continue as to the Indemnitee for any action taken or not taken while serving in an indemnified capacity pertaining to any indemnifiable event hereunder even though the Indemnitee may have ceased to serve in such capacity at the time of any Proceeding.

 

11.2.           Notices.  All notices, requests and other communications provided for or permitted to be given under this Agreement must be in writing and be given by personal delivery, by certified or registered United States mail postage prepaid, return receipt requested, by a nationally recognized overnight delivery service for next day delivery, or by facsimile transmission, as follows or to such other address as either party may give in a notice given in accordance with the provisions hereof:

 

If to Company:

 

MDU Resources Group, Inc.

1200 West Century Avenue

 

Mailing Address:

P.O. Box 5650

Bismarck, ND 58506-5650

Attention: General Counsel

Telephone: (701) 530-1006

Facsimile : (701) 530-1731

 

 

  

18

  

 

If to the Indemnitee:

 

[·]

Facsimile: [·]

 

All notices, requests or other communications will be effective and deemed given only as follows: (a) if given by personal delivery, upon such personal delivery, (b) if sent by certified or registered mail, on the fifth business day after being deposited in the United States mail, (c) if sent for next day delivery by overnight delivery service, on the date of delivery as confirmed by written confirmation of delivery or (d) if sent by facsimile, upon the transmitter’s confirmation of receipt of such facsimile transmission, except that if such confirmation is received after 5:00 p.m. in the recipient’s time zone on a business day, or is received on a day that is not a business day, then such notice, request or communication will not be deemed effective or given until the next succeeding business day.  Notices, requests and other communications sent in any other manner, including by electronic mail, will not be effective.

 

11.3.             Specific Performance; Remedies.  Each party hereby acknowledges and agrees that the other party would be damaged irreparably if any provision of this Agreement was not performed in accordance with its specific terms or was otherwise breached, that a remedy at law would be an inadequate remedy for any such breach, and that, in event of such breach, the party so harmed, in addition to any other relief available to it at law or in equity, shall be entitled to temporary and/or permanent injunctive relief and/or specific performance.  Each party hereby agrees to waive any requirement for the securing or posting of any bond or the proof of damages in connection with the petition for any injunctive relief or other equitable remedy

 

11.4.             Headings.  The article and section headings contained in this Agreement are inserted for convenience only and will not affect in any way the meaning or interpretation of this Agreement.

 

11.5.             Governing Law and Consent to Jurisdiction.  This Agreement shall be governed by and construed and interpreted in accordance with the internal laws of the State of Delaware without regard to any choice of law or conflict of law, choice of forum or other provision, rule or principle (whether of the State of Delaware or any other jurisdiction) that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.  The parties hereby irrevocably (a) submit themselves to the exclusive jurisdiction of the Delaware Chancery Court with respect to any action, suit or proceeding arising out of or in connection with this Agreement and (b) waive the right and hereby agree not to assert by way of motion, as a defense or otherwise in any action, suit or other legal proceeding brought in such court, any claim that they are not subject to the jurisdiction of such court, that such action, suit or proceeding is brought in an inconvenient forum or that the venue of such action, suit or proceeding is improper.  Each party also irrevocably and unconditionally consents to the service of any process, pleadings, notices or other papers in a manner permitted by the notice provisions of Section 11.2.

 

11.6.             Certificate.  The Company will also maintain in full force and effect a provision in the Certificate eliminating liability of a director for breach of fiduciary duty to the fullest extent

 

 

  

19

  

 

permitted by Section 102(b)(7) of the DGCL, as the same exists or may hereafter be amended, or any successor thereto.

 

11.7.             Period of Limitations.  No legal action arising out of or in connection with this Agreement shall be brought and no cause of action arising out of or in connection with this Agreement shall be asserted by or on behalf of the Company or any of its Affiliates against the Indemnitee, the Indemnitee’s respective successors, permitted assigns, heirs, executors and personal and legal representatives after the expiration of two years from the date of accrual of such cause of action, or such longer period as may be required by federal or state law under the circumstances.  Any claim or cause of action of the Company or its Affiliate shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action, the shorter period shall govern.

 

11.8.             Service to the Company.  Nothing in this Agreement shall be construed as giving the Indemnitee any right to be retained in the employ of, or, with respect to service as a director, to continue providing services to, the Company or any Affiliate.

 

11.9.             Amendment.  This Agreement may not be amended or modified except by a writing signed by all of the parties.

 

11.10.             Extensions; Waivers.  Any party may, for itself only, (a) extend the time for the performance of any of the obligations of any other party under this Agreement, (b) waive any inaccuracies in the representations and warranties of any other party contained herein or in any document delivered pursuant hereto and (c) waive compliance with any of the agreements or conditions for the benefit of such party contained herein.  Any such extension or waiver will be valid only if set forth in a writing signed by the party to be bound thereby.  No waiver by any party of any default, misrepresentation or breach of warranty or covenant hereunder, whether intentional or not, may be deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising because of any prior or subsequent such occurrence.  Neither the failure nor any delay on the part of any party to exercise any right or remedy under this Agreement will operate as a waiver thereof, nor will any single or partial exercise of any right or remedy preclude any other or further exercise of the same or of any other right or remedy.

 

11.11.             Severability.  The provisions of this Agreement will be deemed severable and the invalidity or unenforceability of any provision will not affect the validity or enforceability of the other provisions hereof; provided that if any provision of this Agreement, as applied to any party or to any circumstance, is judicially determined not to be enforceable in accordance with its terms, the parties agree that the court judicially making such determination may delete specific words or phrases or otherwise modify the provision in a manner consistent with its objectives such that it is enforceable, and in its modified form, such provision will then be enforceable and will be enforced.

 

11.12.             Counterparts.  This Agreement may be executed in two or more counterparts, which may be delivered via facsimile, each of which shall be binding as of the date first written above, and, when delivered, all of which shall constitute one and the same instrument.  This

 

 

  

20

  

 

Agreement and any documents delivered pursuant hereto, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine or as an attachment to an electronic mail message in “pdf” or similar format, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.  At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re-execute original forms thereof and deliver them to all other parties.  No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine or electronic mail attachment in “pdf” or similar format to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or as an attachment to an electronic mail message as a defense to the formation of a contract and each such party forever waives any such defense.  A facsimile signature or electronically scanned copy of a signature shall constitute and shall be deemed to be sufficient evidence of a party’s execution of this Agreement, without necessity of further proof.  Each such copy shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart.

 

11.13.             Construction.  The words “include,” “includes” and “including” will be deemed to be followed by “without limitation.” Pronouns in masculine, feminine and neuter genders will be construed to include any other gender, and words in the singular form will be construed to include the plural and vice versa, unless the context otherwise requires.  The words “this Agreement,” “herein,” “hereof,” “hereby,” “hereunder” and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited.  The parties intend that each representation, warranty and covenant contained herein will have independent significance.  If any party has breached any representation, warranty or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter, regardless of the relative levels of specificity, which the party has not breached will not detract from or mitigate the fact that the party is in breach of the first representation, warranty or covenant.  There shall be no presumption that any ambiguities in this Agreement shall be resolved against any particular party.  Any controversy over construction of this Agreement shall be decided without regard to events of authorship or negotiation.

 

 

  

21

  

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

 

 

	
 

	
By: 

	 	 
	 	Name: 	 	 
	 	Title:	 	 
	 	 	 	 

 

 

	 	 	MDU RESOURCES GROUP, INC.	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	Name: 	 	 
	 	Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00177-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00177-of-00352.parquet"}]]