Document:

Exhibit 10.86

 

CONFIDENTIAL

EXECUTION VERSION

 

REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of June 14, 2013, is entered into by and between Clean Energy Fuels Corp., a Delaware corporation (the “Company”), Green Energy Investment Holdings LLC (“Green”), and T. Boone Pickens (“TBP” and, together with Green, “Holders”).

 

RECITALS

 

WHEREAS, the Holders have acquired Convertible Promissory Notes initially issued by the Company on July 11, 2011 for the aggregate principal amount of $50 million and bearing a cash interest rate of 7.5% (the “First Tranche Note”), and Convertible Promissory Notes initially issued by the Company on July 10, 2012 for the principal amount of $50 million and bearing a cash interest rate of 7.5% (the “Second Tranche Note,” and together with the First Tranche Note, the “Convertible Notes”) from Chesapeake NG Ventures Corporation, an Oklahoma corporation (the “Seller”), pursuant to a Note Purchase Agreement among the Company, the Seller, Chesapeake Energy Corporation, an Oklahoma corporation, and the several Holders dated as of June 14, 2013 (the “Purchase Agreement”);

 

WHEREAS, pursuant to the Purchase Agreement, the Company cancelled the Convertible Notes in the name of the Seller and reissued notes of like tenor and of equivalent aggregate face value to and in the names of the Holders (the “Replacement Notes”);

 

WHEREAS, pursuant to the Purchase Agreement, the Holders have acquired all of Seller’s rights, title and interest to and under the Registration Rights Agreement by and between the Company and the Seller dated as of June 11, 2011 (the “Original Registration Rights Agreement”) pursuant to which the Company previously filed with the Securities and Exchange Commission a Registration Statement under the 1933 Act on Form S-3 (Registration No. 333-187085, initially filed on March 6, 2013 and amended May 3, 2013) (as amended, the “Existing Registration Statement”) registering for resale by the Seller the shares of the Company’s Common Stock for which the Convertible Notes could be converted or exchanged;

 

WHEREAS, by virtue of the Holders’ acquisition of all of the Seller’s rights, title and interest to and under the Original Registration Rights Agreement, the shares of the Company’s Common Stock for which the Replacement Notes can be converted or exchanged (the “Registered Shares”) are required to be registered for resale by the Holders;

 

WHEREAS, the Company and Green have entered into a Loan Agreement, dated as of June 14, 2013 (the “Green Loan Agreement”), in connection with the outstanding Convertible Notes acquired by Green and Green’s funding an additional $35,000,000 to the Company (the “Green Loan”); and the Company and TBP have entered into a Loan Agreement dated as of June 14, 2013 (the “TBP Loan Agreement” and, collectively with the Green Loan Agreement, the “Loan Agreements”), in connection with the outstanding Convertible Notes acquired by TBP and TBP’s funding an additional $15,000,000 to the Company (the “TBP Loan” and, collectively with the Green Loan, the “Loans”);

 

 

WHEREAS, under certain conditions all or part of each Convertible Note to be issued concurrently with the funding of the Green Loan and TBP Loan, respectively, is convertible or exchangeable for shares of the Company’s Common Stock (the “Additional Shares”);

 

WHEREAS, the Company has agreed to provide certain rights to Holders with respect to the Additional Shares and Registered Shares as set forth in this Agreement; and

 

WHEREAS, this Agreement is being executed and delivered concurrently with the execution of the Loan Agreements.

 

NOW, THEREFORE, the parties hereby agree as follows:

 

1.                                      REGISTRATION RIGHTS

 

(a)                                 Definitions.

 

Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Loan Agreements.  As used in this Agreement, the following terms shall have the following meanings:

 

“1933 Act” means the Securities Act of 1933, as amended.

 

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

 

“Business Day” means any day other than Saturday, Sunday or any other day on which commercial banks in the City of New York are authorized or required by law to remain closed.

 

“Common Stock” means the shares of common stock of the Company, par value $0.0001.

 

“Effective Date” means the date the Registration Statement has been declared effective by the SEC.

 

“Effectiveness Deadline” means the date that is (i) thirty (30) days after each respective Filing Deadline if the Registration Statement is not subject to review by the SEC, or (ii) ninety (90) days after each respective Filing Deadline if the Registration Statement is subject to review by the SEC.

 

“Filing Deadline” means the 180th calendar day following the issuance of Registrable Securities received in exchange for some portion of the Loans.

 

“Majority Holders” shall mean the holders of a majority of the aggregate amount of the Registrable Securities on an as-converted basis.

 

“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.

 

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“register”, “registered” and “registration” refer to a registration effected by preparing and filing one or more Registration Statements (as defined below) in compliance with the 1933 Act and the declaration or ordering of effectiveness of such Registration Statement(s) by the SEC.

 

“Registrable Securities” means the Additional Shares and Registered Shares, together with any shares of capital stock issued or issuable with respect to the Additional Shares and Registered Shares as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, issued to or held by Holders.

 

“Registration Statement” means a registration statement or registration statements of the Company filed under the 1933 Act covering the Registrable Securities.

 

“Rule 144” means Rule 144 promulgated under the 1933 Act or any successor rule or other similar rule or regulation of the SEC that may at any time permit Holders to sell securities of the Company to the public without registration.

 

“SEC” means the United States Securities and Exchange Commission.

 

(b)                                 Mandatory Registration.

 

(i)                                     The Company shall prepare, and no later than the applicable Filing Deadline, file with the SEC, a Registration Statement on Form S-3 covering the resale of all unregistered Registrable Securities then issued or issuable with respect to the amounts advanced under the Convertible Notes and Loans as of the date such Registration Statement is initially filed with the SEC.  If Form S-3 is unavailable for such a registration, the Company shall use such other form as is available for such a registration.

 

(ii)                                  The Company shall use its commercially reasonable efforts to have such Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the applicable Effectiveness Deadline, and shall use its commercially reasonable efforts to keep such Registration Statement continuously effective under the 1933 Act until all Registrable Securities covered by such Registration Statement (A) have been sold, thereunder or pursuant to Rule 144, or (B) may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144, as determined by counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company’s transfer agent and the Majority Holders (the “Effectiveness Period”).

 

(iii)                               On or before the 45th calendar day following the first date on which Green has made its advance of $35,000,000 under the Green Loan Agreement to the Company, and TBP has made its advance of $15,000,000 under the TBP Loan Agreement to the Company, the Company shall, if permitted, prepare and file with the SEC a supplement or a post-effective amendment to the Existing Registration Statement, or a new Registration Statement, covering the resale of all unregistered Additional Shares then issued or issuable with respect to the amounts advanced under the Loan Agreements as of the date the supplement or post-effective amendment is filed with the SEC.  For the avoidance of doubt, failure by the Company to comply with the foregoing obligation shall constitute a Maintenance Failure.

 

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(iv)                              Promptly after the date hereof, the Company shall prepare and file with the SEC a supplement to the Existing Registration Statement reflecting the sale of the Convertible Notes to the Holders.

 

(c)                                  Piggyback Registration.

 

(i)                                     If (but without any obligation to do so) following the expiration of the Effectiveness Period the Company proposes to register (including for this purpose a registration effected by the Company for stockholders other than Holders) any of its capital stock or other securities under the 1933 Act in connection with a fully underwritten firm commitment public offering of such securities (other than a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities), the Company shall, at such time, give each Holder written notice of such registration in accordance with Section 2(f).  Upon the written request of a Holder given within five (5) Business Days after delivery of such notice by the Company, the Company shall, subject to the provisions of Section 1(c)(iii), use all commercially reasonable efforts to cause to be registered under the Act all of the Registrable Securities that such Holder requests to be registered.

 

(ii)                                  The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 1(c) prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration.  The expenses of such withdrawn registration shall be borne by the Company in accordance with Section 1(j) hereof.

 

(iii)                               The Company shall not be required under this Section 1(c) to include any of a Holder’s securities in such underwriting unless such Holder accepts the terms of the underwriting as reasonably agreed upon between the Company and the underwriters selected by the Company (or by other Persons entitled to select the underwriters) and enters into an underwriting agreement in customary form with such underwriters, and then only in such quantity as the underwriters determine in their sole discretion will not jeopardize the success of the offering by the Company.  If the total amount of securities, including Registrable Securities, requested to be included in such offering exceeds the amount of securities that the underwriters determine in their sole discretion is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of Registrable Securities that the underwriters determine in their sole discretion will not jeopardize the success of the offering.  Any reduction in the number of Registrable Securities will be made pro rata with the other securities to be registered on behalf of third parties in such offering.

 

(d)                                 Effect of Failure to File and Obtain and Maintain Effectiveness of Registration Statement.  If (i) a Registration Statement covering all of the Registrable Securities required to be covered thereby and required to be filed by the Company pursuant to Section 1(b) of this Agreement is (A) not filed with the SEC on or before the Filing Deadline (a “Filing Failure”) or (B) not declared effective by the SEC on or before the Effectiveness Deadline (an “Effectiveness Failure”); or (ii) for more than thirty days in any one calendar year during the applicable Effectiveness Period, Registrable Securities that have previously been covered by an effective Registration Statement are no longer covered by an effective Registration Statement (a

 

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“Maintenance Failure”, and a Filing Failure, Effectiveness Failure and Maintenance Failure each being referred to herein as a “Failure”) then, in lieu of the damages to any Holder by reason of such delay in or reduction of its ability to sell such Registrable Securities (which payments shall be the exclusive remedies available under this Agreement or under applicable law), the Company shall pay to each Holder an amount in cash equal to 0.75% of the aggregate original loan represented by the Registrable Securities included in such Registration Statement or, in the case of a Filing Failure, the Registrable Securities required by this Agreement to be included in such Registration Statement, (i) within five (5) Trading Days of a Failure and (ii) on every monthly anniversary of such Failure (in each case, on a pro rata basis for periods less than 30 days) until such Failure is cured or the end of the Effectiveness Period, whichever is earlier.  The payments to which each Holder shall be entitled pursuant to this Section 1(d) are referred to herein as “Registration Delay Payments.” If the Company fails to make Registration Delay Payments within five (5) Business Days after the date payable, such Registration Delay Payments shall bear interest at the rate of 18% per annum until paid in full.  Notwithstanding anything to the contrary herein or in the Loan Agreement, in no event shall the Company be liable for aggregate Registration Delay Payments of more than four percent (4%) per annum of the aggregate original loan represented by the Registrable Securities included in a Registration Statement that is the subject of a Failure or, in any 30-day period, for Registration Delay Payments in excess of 0.75% of the aggregate original loan represented by the Registrable Securities included in a Registration Statement that is the subject of a Failure.

 

(e)                                  Request for Registration and/or Underwriting.

 

(i)                                     At any time during an Effectiveness Period, the Company shall, at the request of the Majority Holders, participate in an underwritten offering of Registrable Securities by Holders under a Registration Statement effected pursuant to Section 1(b) hereof, and shall file any supplements and amendments to such Registration Statement as may be required by applicable law or rules of the SEC.  At any time after an Effectiveness Period, if the Company shall receive a written request from the Majority Holders that the Company effect a registration on Form S-3 with respect to an underwritten offering of Registrable Securities, the Company shall use commercially reasonable efforts to file a Registration Statement covering the Registrable Securities as soon as reasonably practicable after receipt of the request.  For purposes of this Agreement, a “Demand” shall refer to a Majority Holders request, pursuant to this Section 1(e), for the Company to (1) participate in an underwritten offering of Registrable Securities or (2) effect a registration on Form S-3 with respect to an underwritten offering of Registrable Securities.  In any underwritten offering under this Section 1(e), the investment banker or bankers and manager or managers that will administer the offering will be selected by, and the underwriting arrangements with respect thereto (including the size of the offering) will be approved by the Majority Holders; provided, however, that such investment bankers and managers and underwriting arrangements must be reasonably satisfactory to the Company.  The Company shall not be required to participate in any underwritten offering contemplated hereby unless (A) each Holder agrees to sell its Registrable Securities to be included in the underwritten offering in accordance with any approved underwriting arrangements and (B) each Holder completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other documents required under the terms of such approved underwriting arrangements.  Each Holder shall be responsible for any underwriting discounts and commissions and fees and expenses of its own counsel.  The Company shall pay

 

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all expenses customarily borne by issuers in an underwritten offering, including, but not limited to, filing fees, the fees and disbursements of its counsel and independent public accountants and any printing expenses incurred in connection with such underwritten offering.

 

(ii)                                  The Company shall not be required to participate in or effect any Demand pursuant to this Section 1(e):

 

(1)                                 after the Company has participated in or effected two (2) Demands (Holders shall be deemed to have forfeited their right to a Demand if (i) the Majority Holders withdraw their request that the Company effect a registration on Form S-3 with respect to an underwritten offering of Registrable Securities and does not, within thirty (30) days of any such withdrawal, pay all of the Company’s expenses in connection with such registration or (ii) an underwritten offering that is the subject of a Demand is terminated subsequent to the marketing thereof);

 

(2)                                 if the Company has participated in or effected a Demand within the preceding twelve (12) months;

 

(3)                                 during the period starting with the date sixty (60) days prior to the Company’s good faith estimate of the date of the filing of, and ending on a date one hundred eighty (180) days following the effective date of, a Company-initiated registration subject to Section 1(c), provided that the Company is actively employing in good faith all reasonable efforts to cause such registration statement to become effective; or

 

(4)                                 if the Company shall furnish to each Holder a certificate signed by the Company’s Chief Executive Officer or Chairman of the Board stating that in the good faith judgment of the Board of Directors of the Company (the “Board”), it would be seriously detrimental to the Company and its stockholders for the Company to participate in or effect a Demand at such time, in which event the Company shall have the right to defer such Demand for a period of not more than one hundred twenty (120) days after receipt of the request of the Majority Holders.

 

(f)                                   Related Obligations.  Whenever required under this Section 1 to effect the registration of any Registrable Securities, except as otherwise expressly provided herein, the Company shall:

 

(i)                                     prepare and file with the SEC a Registration Statement with respect to such Registrable Securities and use all commercially reasonable efforts to cause such Registration Statement to become and remain effective;

 

(ii)                                  prepare and file with the SEC such amendments and supplements to such Registration Statement and the prospectus used in connection with such Registration Statement as may be necessary to comply with the provisions of the 1933 Act with respect to the disposition of all securities covered by such Registration Statement;

 

(iii)                               furnish to each Holder such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the 1933 Act, and

 

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such other documents as it may reasonably request in order to facilitate the disposition of Registrable Securities owned by it;

 

(iv)                              if required by applicable law, use all commercially reasonable efforts to register and qualify the securities covered by such Registration Statement under such other securities or “blue sky” laws of such jurisdictions as shall be reasonably requested by each Holder, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions;

 

(v)                                 with a view to making available to Holders the benefits of Rule 144:

 

(1)                                 make and keep public information available, as those terms are understood and defined in Rule 144;

 

(2)                                 file with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act so long as the Company remains subject to such requirements and the filing of such reports and other documents is required for the applicable provisions of Rule 144; and

 

(3)                                 furnish or otherwise make available, as applicable, to each Holder so long as such Holder owns Registrable Securities, promptly upon request, (i) a written statement by the Company, if true, that it has complied with the reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company and (iii) such other information as may be reasonably requested to permit Holders to sell such securities without registration pursuant to Rule 144;

 

(vi)                              in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering; and

 

(vii)                           notify the holder of Registrable Securities covered by such Registration Statement at any time when a prospectus relating thereto is required to be delivered under the 1933 Act of the happening of any event as a result of which the prospectus included in such Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing.

 

Notwithstanding the provisions of this Section 1, the Company shall be entitled to postpone or suspend the filing, effectiveness or use of, or trading under, any Registration Statement during any period when (i) the SEC or the national securities exchange upon which shares of Common Stock are then listed requests that the Company amend or supplement the Registration Statement or the prospectus included therein or requests additional information relating thereto, (ii) the SEC or the national securities exchange upon which shares of Common Stock are then listed issues a stop order or similar order suspending the effectiveness or restricting the use of the Registration Statement or initiates proceedings to issue a stop order or

 

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similar order, (iii) the Board of Directors of the Company in good faith determines that the Registration Statement, the prospectus included therein, any amendment or supplement thereto or any document incorporated or deemed to be incorporated therein contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading, in light of the circumstances then existing; provided, however, that the Company uses commercially reasonable efforts to prepare and file with the SEC such amendments and supplements to the such Registration Statement or amendment as shall be reasonably necessary to cure such untrue statement or omission, or (iv) the Company’s management or the Board in good faith determines that the failure to so postpone or suspend would require disclosure of material nonpublic information that, if disclosed at such time, would be materially harmful to the interests of the Company and its stockholders; provided, further, that such postponement or suspension (A) shall not exceed a period of forty-five (45) days and (B) shall be exercised by the Company not more than twice in any twelve (12) month period (for a maximum of ninety (90) days within any such twelve (12) month period) (each, an “Allowable Grace Period”).

 

(g)                                  Information from Holders.  It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 1 with respect to the Registrable Securities of each Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be reasonably required to effect the registration of such Registrable Securities.

 

(h)                                 Indemnification.  If any Registrable Securities are included in a Registration Statement under this Agreement:

 

(i)                                     To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend each Holder, the directors, officers, members, partners, employees, agents, representatives of, and each Person, if any, who controls such Holder within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Person”), against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid in settlement or expenses, joint or several, (collectively, “Claims”) incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto (“Indemnified Damages”), to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon:  (A) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the securities or other “blue sky” laws of any jurisdiction in which Registrable Securities are offered, or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (B) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any

 

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material fact necessary to make the statements made therein, in the light of the circumstances under which the statements therein were made, not misleading, or (C) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement (the matters in the foregoing clauses (A) through (C) being, collectively, “Violations”).  Subject to Section 1(h)(iii), the Company shall reimburse the Indemnified Persons, promptly as such expenses are incurred and are due and payable, for any legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim.  Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 1(h)(i):  (A) shall not apply to a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by such Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto, and (B) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed.  Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person.

 

(ii)                                  In connection with any Registration Statement in which Holders are participating, Holders severally agree to indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 1(h)(i), the Company, each of its directors, officers, employees and agents and each Person, if any, who controls the Company within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Party”), against any Claim or Indemnified Damages to which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon any Violation, in each case to the extent, and only to the extent, that such Violation occurs in reliance upon and in conformity with written information furnished to the Company by Holders expressly for use in connection with such Registration Statement; and, subject to Section 1(h)(iii), Holders will severally reimburse any legal or other expenses reasonably incurred by an Indemnified Party in connection with investigating or defending any such Claim; provided, however, that the indemnity agreement contained in this Section 1(h)(ii) and the agreement with respect to contribution contained in Section 1(i) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of such Holders, which consent shall not be unreasonably withheld or delayed; provided, further, however, that a Holder shall be liable under this Section 1(h)(ii) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to such Holder as a result of the sale of Registrable Securities pursuant to such Registration Statement.  Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party.

 

(iii)                               Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 1(h) of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 1(h), deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the

 

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indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the fees and expenses of not more than one counsel for such Indemnified Person or Indemnified Party to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding.  In the case of an Indemnified Person, legal counsel referred to in the immediately preceding sentence shall be selected by the Majority Holders.  The Indemnified Party or Indemnified Person shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person which relates to such action or Claim.  The indemnifying party shall keep the Indemnified Party or Indemnified Person reasonably apprised at all times as to the status of the defense or any settlement negotiations with respect thereto.  No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent; provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent.  No indemnifying party shall, without the prior written consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all liability in respect to such Claim or litigation, and such settlement shall not include any admission as to fault on the part of the Indemnified Party.  Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made.  The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 1(h), except to the extent that the indemnifying party is prejudiced in its ability to defend such action.

 

(iv)                              The indemnification required by this Section 1(h) shall be made by periodic payments of the amount thereof during the course of the investigation or defense, promptly following when bills are received or Indemnified Damages are incurred, and in each case submitted to the indemnifying party for payment subject to and in accordance with this Section 1(h).

 

The indemnity agreements contained herein shall be in addition to (A) any cause of action or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or others, and (B) any liabilities the indemnifying party may be subject to pursuant to the law.

 

(i)                                     Contribution.  To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 1(h) to the fullest extent permitted by law; provided, however, that:  (i) no Person involved in the sale of Registrable Securities who is guilty of fraudulent misrepresentation (within the meaning of

 

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Section 11(f) of the 1933 Act) in connection with such sale shall be entitled to contribution from any Person involved in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation; and (ii) contribution by any Holder that sells Registrable Securities shall be limited in amount to the excess of the net amount of proceeds received by such Holder from the sale of such Registrable Securities pursuant to such Registration Statement over the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.

 

(j)                                    Expenses of Registration.  All expenses (other than (i) underwriting discounts and commissions relating to the Registrable Securities that are being sold by Holders and (ii) fees of any counsel for Holders) that are incurred in connection with registrations, filings or qualifications pursuant to Sections 1(b) and 1(c), including (without limitation) all registration, filing and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the Company, shall be borne by the Company.

 

2.                                      MISCELLANEOUS.

 

(a)                                 Governing Law; Jurisdiction; Jury Trial.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Delaware.  Each party hereby irrevocably submits to the exclusive jurisdiction of the Delaware Court of Chancery, or, if no such state court has proper jurisdiction, the United States District Court for the District of Delaware, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

(b)                                 Counterparts.  This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other parties; provided that a facsimile signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile signature.

 

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(c)                                  Headings.  The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.

 

(d)                                 Severability.  If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

 

(e)                                  Entire Agreement; Amendments.  This Agreement, the Loan Agreement and the other Loan Documents supersede all other prior oral or written agreements between or among Holders, the Company, their affiliates and Persons acting on their behalf with respect to the matters discussed herein, and this Agreement, the Loan Agreement, the other Loan Documents and the instruments referenced herein and therein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor Holders makes any representation, warranty, covenant or undertaking with respect to such matters.  No provision of this Agreement may be amended other than by an instrument in writing signed by the Company and the Majority Holders.  No provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought.

 

(f)                                   Notices.  Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered:  (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one Business Day after deposit with an overnight courier service, in each case properly addressed to the party to receive the same.  The addresses and facsimile numbers for such communications shall be:

 

if to the Company:

 

Clean Energy Fuels Corp.
 3020 Old Ranch Parkway, Suite 400 
 Seal Beach, California 90740 
 Telephone:  (562) 493-2804 
 Facsimile:  (562) 493-4956 
 Attention:  J. Nathan Jensen, Vice President and General Counsel

 

with a copy (for informational purposes only) to:

 

Morrison & Foerster LLP
 12531 High Bluff Drive, Suite 100 
 San Diego, California 92130 
 Telephone:  (858) 720-5100 
 Facsimile:  (858) 720-5125 
 Attention:  Steven G. Rowles, Esq.

 

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if to Green:

 

Green Energy Investment Holdings LLC
 c/o Leonard Green and Partners, L.P.
 11111 Santa Monica Boulevard, Suite 2000
 Los Angeles, California  90025
 Tel:  (310) 954-0444
 Fax:  (310) 954-0404
 Attn:  Usama N. Cortas

 

with a copy (for informational purposes only) to:

 

Gibson, Dunn & Crutcher LLP
 333 South Grand Avenue; Suite 4400
 Los Angeles, California  90071
 Tel:  (213) 229-7986
 Fax:  (213) 229-6986
 Attn:  Jennifer Bellah Maguire

 

if to TBP:

 

T. Boone Pickens
 c/o Drew A. Campbell
 8117 Preston Road, Suite 260
 Dallas, Texas  75225
 Tel:  (214) 265-4165
 Fax:  (214) 750-9773

 

with a copy (for informational purposes only) to:

 

Baker Botts L.L.P.
 One Shell Plaza
 910 Louisiana Street
 Houston, Texas  77002-4995
 Tel:  (713) 229-1475
 Fax:  (713) 229-7775
 Attn:  Stephen Massad

 

or to such other address and/or facsimile number and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change.  Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively.

 

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(g)                                  Successors and Assigns.  Neither party may assign this Agreement or any rights or obligations hereunder without the prior written consent of the other party.  This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.

 

(h)                                 No Third Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns (and, with respect to Sections 2(h) and (i), each other Person entitled to indemnification or contribution pursuant thereto), and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

(i)                                     Further Assurances.  Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

[Signature Page Follows]

 

14

 

IN WITNESS WHEREOF, the Company and Holders have executed this Registration Rights Agreement to be duly executed as of the date first above written.

 

 

	
 
    	
COMPANY:
    
	
 
    	
 
    	
 
    
	
 
    	
CLEAN   ENERGY FUELS CORP.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Richard R. Wheeler
    
	
 
    	
 
    	
Richard   R. Wheeler
    
	
 
    	
 
    	
Chief   Financial Officer
    
				

 

[Signature Page to Registration Rights Agreement]

 

 

	
 
    	
HOLDERS:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
GREEN   ENERGY INVESTMENT HOLDINGS LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Leonard   Green & Partners, L.P.
    
	
 
    	
 
    	
a   Delaware limited partnership
    
	
 
    	
 
    	
its   manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
LGP   Management, Inc.
    
	
 
    	
 
    	
 
    	
a   Delaware corporation
    
	
 
    	
 
    	
 
    	
its   general partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
/s/   John G. Danhakl
    
	
 
    	
 
    	
 
    	
 
    	
John   G. Danhakl
    
	
 
    	
 
    	
 
    	
 
    	
Executive   Vice President and
    
	
 
    	
 
    	
 
    	
 
    	
Managing   Partner
    
						

 

[Signature Page to Registration Rights Agreement]

 

 

	
 
    	
/s/   Boone Pickens
    
	
 
    	
T.   Boone Pickens
    

 

[Signature Page to Registration Rights Agreement]Exhibit 10.1

 

FORM OF

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into this day of                   , 20    , among PHH Corporation, a Maryland corporation (the “Company”), and (“Indemnitee”).

 

WHEREAS, the Company desires to attract and retain the services of highly qualified individuals, such as Indemnitee, to serve as officers and directors of the Company;

 

WHEREAS, highly qualified individuals have become more reluctant to serve corporations as directors or officers unless they are provided adequate protection through insurance and indemnification against the risks of claims and actions against them arising out of their service to and activities on behalf of such corporations;

 

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that the increased difficulty in attracting and retaining such individuals is detrimental to the best interests of the Company’s stockholders and the Company should act to assure such individuals that there will be increased certainty of such protection in the future;

 

WHEREAS, it is reasonable, prudent and necessary for the Company to contractually obligate itself to indemnify, and to advance expenses on behalf of, such individuals to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;

 

WHEREAS, at the request of the Company, Indemnitee [has agreed to serve] [currently serves] as [a member of the Company’s Board of Directors] [and] [an officer of the Company] and may, therefore, be subjected to claims, suits or proceedings arising as a result of [his][her] service;

 

WHEREAS, as an inducement to Indemnitee [to serve] [continue to serve] as such [director] [and] [officer], the Company has agreed to enter into this Agreement to indemnify and advance expenses and costs incurred by Indemnitee in connection with any claims, suits or proceedings arising as a result of [his][her] service, to the maximum extent permitted by law;

 

WHEREAS, Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company in the capacity of [director] [and] [officer] on the condition that Indemnitee be indemnified on the terms set forth in this Agreement; and

 

WHEREAS, this Agreement is a supplement to and in furtherance of the provisions of the Company’s Charter and Bylaws regarding indemnification and advancement of expenses and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of the Indemnitee thereunder.

 

 

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

Section 1. Definitions.  For purposes of this Agreement:

 

(a)                     “Change in Control” shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred:

 

(i)                  any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company) representing 40% or more of the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (1) of paragraph (iii) below; or

 

(ii)               the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the date hereof, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended; or

 

(iii)            there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than (1) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any subsidiary of the Company, at least 70% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, and in proportion to their voting power immediately prior to such merger or consolidation, or (2) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of the Company’s then outstanding securities; or

 

2

 

(iv)           the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 70% of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale. Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.

 

(b)                     “Corporate Status” means the status of a person who is or was a director, officer, employee or agent of the Company or one or more of its subsidiaries.

 

(c)                      “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 Indemnitee.

 

(d)                     “Effective Date” means the date set forth in the first paragraph of this Agreement.

 

(e)                      “Expenses” shall include any and all: (i) reasonable and out-of-pocket attorneys’ fees and costs, retainers, court costs, transcript costs, fees of experts and consultants, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, and delivery service fees, (ii) federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, (iii) ERISA excise taxes and penalties, and (iv) any other disbursements or expenses 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. Expenses shall also include Expenses incurred in connection with any appeal resulting from any Proceeding including, without limitation, the premium, security for and other costs relating to any cost bond, supersedeas bond or other appeal bond or its equivalent.

 

(f)                       “Independent Counsel” means a law firm, or a member of a law firm that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party, or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall 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 Indemnitee in an action to determine Indemnitee’s rights under this Agreement. If a Change in Control has not occurred, Independent Counsel shall be selected by the Board, with the approval of Indemnitee, which approval will not be unreasonably withheld. If a Change in Control

 

3

 

has occurred, Independent Counsel shall be selected by Indemnitee, with the approval of the Board, which approval will not be unreasonably withheld.

 

(g)                      “Person” as used herein shall be broadly interpreted to include, without limitation, any corporation, company, group, partnership or individual.

 

(h)                     “Proceeding” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative (including on appeal), except one (i) initiated by an Indemnitee pursuant to Section 11 of this Agreement to enforce his rights under this Agreement or (ii) pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee. If Indemnitee reasonably believes that a given situation may lead to or culminate in the institution of a Proceeding, such situation shall also be considered a Proceeding.

 

Section 2. Services by Indemnitee.  Indemnitee currently serves as a director, officer or employee of the Company or of one or more of its subsidiaries. However, this Agreement shall not impose any obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company or any of its subsidiaries beyond any period otherwise required by law or by other agreements or commitments of the parties, if any.

 

Section 3. Indemnification - General. The Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise to the fullest extent permitted by Maryland law in effect on the date hereof (including applicable case law) and as amended from time to time; provided, however, that no change in Maryland law (including applicable case law) shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the date hereof. The rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law (“MGCL”).

 

Section 4. Proceedings Other Than Proceedings by or in the Right of the Company.

 

(a)                     Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of Indemnitee’s Corporate Status, he or she was or is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed Proceeding, other than a Proceeding by or in the right of the Company. Pursuant to this Section 4, Indemnitee shall be indemnified against all judgments, arbitral awards, damages, penalties, fines and amounts paid in settlement, and all Expenses actually and reasonably incurred by Indemnitee or on his or her behalf in connection with a Proceeding by reason of Indemnitee’s Corporate Status unless it is established by a final, non-appealable adjudication in the Proceeding that (i) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty, or (ii) Indemnitee actually received an improper personal benefit

 

4

 

in money, property or services in connection with the matter giving rise to the Proceeding, or (iii) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his act or omission was unlawful.

 

(b)                     Indemnitee shall be deemed to have acted in good faith if, in performing his or her duties, Indemnitee relied on any information, opinion, report or statement, including any financial statement or other financial data prepared or presented by:

 

(i)                 an officer or employee of the Company whom Indemnitee reasonably believes to be reliable and competent in the matters presented;

 

(ii)              a lawyer, certified public accountant, investment banker, engineer, consultant, investment or financial advisor or other person, as to a matter which Indemnitee reasonably believes to be within the person’s professional or expert competence; or

 

(iii)           a committee of the Board on which Indemnitee does not serve, as to a matter within its designated authority, if Indemnitee reasonably believes the committee to merit confidence.

 

(c)                      A rebuttable presumption that Indemnitee has not acted in good faith shall be created if it is established by a final, non-appealable adjudication in the Proceeding that he or she had any material knowledge concerning the matter in question which would cause the reliance set forth in paragraph (b) above to be unreasonably warranted.

 

Section 5. Proceedings by or in the Right of the Company.

 

(a)                     Indemnitee shall be entitled to the rights of indemnification provided in this Section 5 if, by reason of Indemnitee’s Corporate Status, he or she is, or is threatened to be, made a party to or a witness in any threatened, pending or completed Proceeding brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 5, Indemnitee shall be indemnified against all judgments, arbitral awards, damages, penalties, fines and amounts paid in settlement, and all Expenses actually and reasonably incurred by Indemnitee or on his or her behalf in connection with such Proceeding unless it is established by a final, non-appealable adjudication in the Proceeding that (i) the act or omission of Indemnitee was material to the matter giving rise to such a Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty, or (ii) Indemnitee actually received an improper personal benefit in money, property or services in connection with the matter giving rise to the Proceeding.

 

(b)                     Indemnitee shall be deemed to have acted in good faith if, in performing his or her duties, Indemnitee relied on any information, opinion, report or statement, including any financial statement or other financial data prepared or presented by:

 

5

 

(i)                  an officer or employee of the Company whom Indemnitee reasonably believes to be reliable and competent in the matters presented;

 

(ii)               a lawyer, certified public accountant, investment banker, engineer, consultant, investment or financial advisor or other person, as to a matter which Indemnitee reasonably believes to be within the person’s professional or expert competence; or

 

(iii)            committee of the Board on which Indemnitee does not serve, as to a matter within its designated authority, if Indemnitee reasonably believes the committee to merit confidence.

 

(c)                      A rebuttable presumption that Indemnitee has not acted in good faith shall be created if it is established by a final, non-appealable adjudication in the Proceeding that he or she had any material knowledge concerning the matter in question which would cause the reliance set forth in paragraph (b) above to be unreasonably warranted.

 

Section 6. Court-Ordered Indemnification. Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application of a director or officer (including the Indemnitee) and such notice as the court shall require, may order the Company to indemnify the Indemnitee in the following circumstances:

 

(a)                     if it determines a director or officer is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case the director or officer shall be entitled to recover the expenses of securing such reimbursement; or

 

(b)                     if it determines that the director or officer is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not the director or officer (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses.

 

Section 7. Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, and without limiting any such provision, to the extent that Indemnitee is, by reason of his Corporate Status, made a party to and is successful on the merits or otherwise in the defense of any Proceeding, he shall be indemnified for all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding such that he would not be entitled to indemnification as to some or all matters under Section 4 or Section 5, as applicable, but is successful on the merits or otherwise as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify

 

6

 

Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter. Notwithstanding anything to the contrary contained herein, regardless of the outcome of any Proceeding, Indemnitee’s defense of any claim, issue or matter in any such Proceeding shall be deemed successful for purposes of this Section 7 so long as none of the matters set forth in the last sentence of Section 4(a) or Section 5(a) above, as applicable, shall have been conclusively established by a final, non-appealable adjudication with respect to such claim, issue or matter.

 

Section 8. Advance of Expenses. The Company shall advance all reasonable Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding to which Indemnitee is, or is threatened to be, made a party or a witness (including Expenses incurred pursuant to Section 12(c) below), within ten days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by or on behalf of Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee’s good faith belief that the standard of conduct as set forth in the last sentence of Section 4(a) or 5(a) above, as applicable, has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee relating to claims, issues or matters in the Proceeding as to which it shall be established in a final, non-appealable adjudication in the Proceeding that the standard of conduct as set forth in the last sentence of Section 4(a) or 5(a) above, as applicable, has not been met and which has not been successfully resolved as described in Section 7. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee’s financial ability to repay such advanced Expenses and without any requirement to post security therefor. Advances shall be unsecured and interest free. Such advances are deemed to be an obligation of the Company to Indemnitee hereunder, and shall in no event be deemed a personal loan.

 

Section 9. Procedure for Determination of Entitlement to Indemnification.

 

(a)                     To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.

 

(b)                     Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 9(a) hereof, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control shall have

 

7

 

occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change of Control shall not have occurred, (A) by the Board (or a duly authorized committee thereof) by a majority vote of a quorum consisting of Disinterested Directors (as herein defined), or (B) if a quorum of the Board consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee, or (C) if so directed by a majority of the members of the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall reasonably cooperate with the person, persons or entity making such determination with respect to 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 Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including reasonable attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby agrees to indemnify and hold Indemnitee harmless therefrom.

 

Section 10. Presumptions and Effect of Certain Proceedings.

 

(a)                     In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.

 

(b)                     The termination of any Proceeding by judgment, order, settlement, conviction, a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.

 

Section 11. Remedies of Indemnitee.

 

(a)                     If (i) a determination is made pursuant to Section 9 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 9(b) of this Agreement within 60 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 7 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten days after a determination has been made

 

8

 

that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Maryland, or in any other court of competent jurisdiction, of his entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the commercial Arbitration Rules of the American Arbitration Association in effect as of the Effective Date hereof.

 

(b)       In any judicial proceeding or arbitration commenced pursuant to this Section 11 the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be.

 

(c)       If a determination shall have been made pursuant to Section 9(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 11, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification.

 

(d)       In the event that Indemnitee, pursuant to this Section 11, seeks a judicial adjudication of or an award in arbitration to seek an interpretation of, enforce his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him in connection with such judicial adjudication or arbitration.

 

Section 12. Defense of the Underlying Proceeding.

 

(a)       Indemnitee shall notify the Company promptly upon being served with or receiving any summons, citation, subpoena, complaint, indictment, information, notice, request or other document relating to any Proceeding which may reasonably result in the right to indemnification or the advance of Expenses hereunder; provided, however, that the failure to give any such notice, or the lateness or inaccuracy of such notice, shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company’s ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.

 

(b)       Subject to the provisions of the last sentence of this Section 12(b) and of Section 12(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 12(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admission of fault of

 

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Indemnitee or (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee. This Section 12(b) shall not apply to a Proceeding brought by Indemnitee under Section 11 above or Section 18 below.

 

(c)       Notwithstanding the provisions of Section 12(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s Corporate Status, (i) Indemnitee reasonably concludes that he or she may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee’s choice, subject to the prior approval of such counsel by the Company, which shall not be unreasonably withheld or delayed, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s choice, subject to the prior approval of such counsel by the Company, which shall not be unreasonably withheld or delayed, at the expense of the Company (subject to Section 11(d)), to represent Indemnitee in connection with any such matter.

 

Section 13. Non-Exclusivity; Survival of Rights; Insurance; Subrogation.

 

(a)       The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter or Bylaws of the Company or any subsidiary, as applicable, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal.

 

(b)       In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to assist the Company in securing such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

 

(c)       The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

 

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Section 14. Insurance.  The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee for service as a director or officer of the Company or any of its subsidiaries and covering the Company for any indemnification or advance of expenses made by the Company to Indemnitee for any claims made against Indemnitee for service as a director or officer of the Company or any of its subsidiaries. Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and reasonable expenses incurred by Indemnitee in connection with a Proceeding covered in whole or in part by the insurance referred to in the first sentence of this Section 14.

 

Section 15. Indemnification for Expenses of a Witness.  Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party, he shall be advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.

 

Section 16. Duration of Agreement; Binding Effect.

 

(a)       This Agreement shall continue until and terminate ten years after the date that Indemnitee shall have ceased to serve as a director, trustee, officer, employee, or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee served at the request of the Company; provided, that the rights of Indemnitee hereunder shall continue until the later of final termination (i) of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advance of Expenses hereunder, (ii) of any proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement relating thereto, or (iii) of any Proceeding arising out of, based on, or relating to Indemnitee’s acts or omissions occurring prior to his cessation as a director, trustee, officer, employee, or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee served at the request of the Company.

 

(b)       The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the request of the Company, and shall inure to the benefit of Indemnitee and his or her spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.

 

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(c)       The Company shall 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 satisfactory to 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.

 

Section 17. Severability.  If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

 

Section 18. Exception to Right of Indemnification or Advance of Expenses.  Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to indemnification or advance of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee, unless (a) the Proceeding is brought to enforce indemnification or advancement of Expenses under this Agreement or otherwise or (b) the Company’s Bylaws, Charter, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board or an agreement approved by the Board to which the Company is a party expressly provide otherwise.

 

Section 19. Identical Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.

 

Section 20. Headings.  The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

 

Section 21. Modification and Waiver; Entire Agreement.  No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. This Agreement constitutes the full and entire understanding and agreement among the parties with regard to the subject matter hereof, and supersedes all prior agreements.

 

Section 22. Notices.  All notices and other communications under this Agreement shall be in writing and shall be deemed given (i) when delivered personally by hand (with written confirmation of receipt),

 

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(ii) when sent by facsimile or e-mail (with written confirmation of transmission) or (iii) three business days following the day sent by overnight courier (with written confirmation of receipt), in each case at the following addresses, facsimile numbers and e-mail addresses (or to such other address or facsimile number or e-mail address as a party may have specified by notice given to the other party pursuant to this provision):

 

(a)           If to Indemnitee, to: The address set forth on the signature page hereto.

 

(b)           If to the Company to:

 

	
 
    	
PHH   Corporation
    
	
 
    	
3000   Leadenhall Road
    
	
 
    	
Mt.   Laurel, New Jersey 08054
    
	
 
    	
Attn:   William F. Brown
    
	
 
    	
Senior   Vice President, General Counsel and Secretary
    
	
 
    	
Bill.Brown@phh.com
    

 

Section 23. Notice to the Company’s Stockholders.  Any indemnification of, or advancement of Expenses, to Indemnitee arising out of a Proceeding by or in the right of the Company, shall be reported in writing to the stockholders of the Company with the notice of the next stockholders’ meeting or prior to the meeting.

 

Section 24. Governing Law.  The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without regard to its conflicts of laws rules.

 

Section 25. Miscellaneous.  Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.

 

	
ATTEST:
    	
PHH   CORPORATION
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
WITNESS:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
INDEMNITEE
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Address:
    

 

 

EXHIBIT A

 

FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED

 

The Board of Directors of PHH Corporation

 

Re: Undertaking to Repay Expenses Advanced

 

Ladies and Gentlemen:

 

This undertaking is being provided pursuant to that certain Indemnification Agreement dated the day of       , 201    , by and between PHH Corporation, a Maryland corporation, (the “Company”), and the undersigned Indemnitee (the “Indemnification Agreement”), pursuant to which I am entitled to advance of expenses in connection with [Description of Proceeding] (the “Proceeding”).

 

Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.

 

It is my good faith belief that I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm that at all times, insofar as I was involved as [a director] [an officer] of the Company or one of its subsidiaries, in any of the facts or events giving rise to the Proceeding, it is my good faith belief that I (1) acted in good faith and honestly, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.

 

In consideration of the advance of expenses by the Company for reasonable attorney’s fees and related expenses incurred by me in connection with the Proceeding (the “Advanced Expenses”), I hereby agree that if, in connection with the Proceeding, it is established by a final, non-appealable adjudication in the Proceeding that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established by a final, non-appealable adjudication in the Proceeding and which have not been successfully resolved as described in Section 7 of the Indemnification Agreement.

 

IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this       day of    , 201       .

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