Document:

Exhibit

Exhibit 10.1
FORM OF 
EXCHANGE AGREEMENT
[__]  (the “Undersigned”), for itself and on behalf of the beneficial owners listed on Exhibit A hereto (“Accounts”) for whom the Undersigned holds contractual and investment authority (each Account, as well as the Undersigned if it is exchanging Existing Notes (as defined below) hereunder, a “Holder”), enters into this Exchange Agreement (the “Agreement”) with Apollo Commercial Real Estate Finance, Inc., a Maryland corporation (the “Company”), on August 2, 2018 pursuant to which the Holders will exchange (the “Exchange”) the Company’s 5.50% Convertible Senior Notes due 2019 (the “Existing Notes”) for the Exchange Consideration (as defined below). The Existing Notes to be exchanged by the Holder in the Exchange are referred to herein as the “Exchanged Notes”.
On and subject to the terms and conditions set forth in this Agreement, the parties hereto agree as follows:
Article I.    Exchange of the Existing Notes for the Exchange Consideration
At the Closing (as defined below), the Undersigned agrees to cause the Holders to exchange and deliver to the Company the Exchanged Notes set forth on Exhibit A hereto, and in exchange therefor the Company agrees to pay or deliver, as applicable, to the Holders, in the aggregate, the sum of: 
		
	(a)
	[___] shares of common stock, par value $0.01 per share, of the Company (the “Common Stock”) in the amounts set forth for each individual Holder on Exhibit A hereto (the “Exchange Shares”); plus 

		
	(b)
	an amount in cash equal to $[___] plus accrued and unpaid interest to, but excluding, the Closing Date (as defined below), together with cash in lieu of any fractional share of Common Stock, in the amounts set forth for each individual Holder on Exhibit A hereto (the “Total Cash Amount” and, together with the Exchange Shares, the “Exchange Consideration”). 

The closing of the Exchange (the “Closing”) shall take place at the offices of Clifford Chance US LLP at 10:00 A.M. (New York City time) on August 7, 2018, or at such other time and place as the Company and the Undersigned may mutually agree in writing (the “Closing Date”), subject to the exceptions set forth below. At the Closing, (a) the Holder shall deliver or cause to be delivered to the Company all right, title and interest in and to its Exchanged Notes (and no other consideration) free and clear of any mortgage, lien, pledge, charge, security interest, encumbrance, title retention agreement, option, equity or other adverse claim thereto (collectively, “Liens”), together with any documents of conveyance or transfer required by the Company or Wells Fargo Bank, National Association, as trustee of the Existing Notes (the “Trustee”) to transfer to and confirm all right, title and interest in and to the Exchanged Notes free and clear of any Liens, and (b) the Company shall deliver to each Holder (or, if there are no Accounts, to the Undersigned as the sole Holder) the Exchange Consideration. Delivery of such Exchanged Notes as provided above will be made by each Holder by posting, at or before 10:00 A.M. (New York City time) on the Closing Date, a withdrawal request for such Exchanged Notes through the Deposit or Withdrawal at Custodian (“DWAC”) settlement system of the Depository Trust Company (“DTC”) (it being understood that posting such request on any date before the Closing Date will result in such request expiring unaccepted at the close of business on such date, and such Holder will need to repost such withdrawal request on the Closing Date). The Company will deliver such Exchange Shares, identified by an unrestricted CUSIP number, to the DTC participant identified in Exhibit A hereto, on behalf of each Holder, through the facilities of DTC free and clear of all Liens.

Article II.    Covenants, Representations and Warranties of the Holders
Each Holder (and, where specified below, the Undersigned) covenants (solely as to itself), as follows, and makes the following representations and warranties (solely as to itself), each of which is and shall be true and correct on the date hereof and at the Closing, to the Company and J.P. Morgan Securities LLC (the “Agent”), and all such covenants, representations and warranties shall survive the Closing.
Section 2.1    Power and Authorization. The Holder is duly organized, validly existing and in good standing under the laws of its state of formation, and has the power, authority and capacity to execute and deliver this Agreement, to perform its obligations hereunder, and to consummate the Exchange contemplated hereby. If the Undersigned is executing this Agreement on behalf of Accounts, (a) the Undersigned has all requisite discretionary and contractual authority to enter into this Agreement on behalf of, and bind, each Account, and (b) Exhibit A hereto is a true, correct and complete list of (i) the name and state of residence of each Account, (ii) the principal amount of such Account’s Exchanged Notes, (iii) the Total Cash Amount to be made to such Account in respect of its Exchanged Notes, and (iv) the Exchange Shares to be delivered to such Account.
Section 2.2    Valid and Enforceable Agreement; No Violations. This Agreement has been duly executed and delivered by the Undersigned and constitutes a legal, valid and binding obligation of the Undersigned and the Holder, enforceable against the Undersigned and the Holder in accordance with its terms, except that such enforcement may be subject to (a) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally, and (b) general principles of equity, whether such enforceability is considered in a proceeding at law or in equity (the “Enforceability Exceptions”). This Agreement and consummation of the Exchange will not violate, conflict with or result in a breach of or default under (i) the Undersigned’s or the Holder’s organizational documents, (ii) any note, bond, mortgage, deed, indenture, lien, instrument, contract, agreement, lease or license, whether written or oral, express or implied, to which the Undersigned or the Holder is a party or by which the Undersigned or the Holder or any of their respective assets are bound, or (iii) any laws, regulations or governmental or judicial decrees, injunctions or orders or investment guidelines or restrictions applicable to the Undersigned or the Holder, except for such violations, conflicts or breaches under clauses (ii) and (iii) above that would not, individually or in the aggregate, have a material adverse effect on the financial position, results of operations or prospects of the Undersigned or Holder or on their performance of the obligations under this Agreement or on the consummation of the transactions contemplated hereby.
Section 2.3    Title to the Exchanged Notes. The Holder or the Undersigned, as applicable, has been the beneficial owner of the Exchanged Notes continuously since July 15, 2018, is currently the sole beneficial owner of the Exchanged Notes, and at the Closing will be the sole legal and beneficial owner of the Exchanged Notes set forth opposite its name on Exhibit A  hereto. The Holder or the Undersigned, as applicable, has good, valid and marketable title to its Exchanged Notes, free and clear of any Liens. The Holder or the Undersigned, as applicable, has not, in whole or in part (a) assigned, transferred, hypothecated, pledged, exchanged or otherwise disposed of any of its Exchanged Notes or its rights in its Exchanged Notes, or (b) given any person or entity any transfer order, power of attorney or other authority of any nature whatsoever with respect to its Exchanged Notes. Upon delivery of such Exchanged Notes to the Company pursuant to the Exchange, such Exchanged Notes shall be free and clear of all Liens created by the Holder. The Exchanged Notes exchanged hereby are not subject to any adverse claims, rights or proxies. 
Section 2.4    Institutional Accredited Investor and Qualified Institutional Buyer. The Holder is (i) an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”), and (ii) a “qualified institutional buyer” within the meaning of Rule 144A promulgated under the Securities Act. The Holder agrees to furnish any 

additional information requested by the Company or any of its affiliates to assure compliance with applicable U.S. federal and state securities laws in connection with the Exchange.
Section 2.5    Residence. The Holder is a resident of the state set forth in Exhibit A hereto and is not acquiring the Exchange Shares as a nominee or agent or otherwise for any other person. 
Section 2.6    Compliance with Laws. The Undersigned will comply with all applicable laws and regulations in effect in any jurisdiction in which the Undersigned, pursuant to the Exchange, purchases, acquires or sells Exchange Shares and will obtain any consent, approval or permission required for such purchases, acquisitions or sales under the laws and regulations of any jurisdiction to which the Undersigned is subject or in which the Undersigned makes such purchases, acquisitions or sales, and the Company shall have no responsibility therefor. The Undersigned shall use commercially reasonable efforts to procure each Holder’s compliance with this Section 2.6. 
Section 2.7    No Affiliate Status; Etc. The Holder is not, will not be as of the Closing Date, and has not been and will not be during the consecutive three month periods preceding the date hereof or the Closing Date, a director, officer or “affiliate” within the meaning of Rule 144 promulgated under the Securities Act (an “Affiliate”) of the Company. A period of at least one year (calculated in the manner provided in Rule 144(d) under the Securities Act) has elapsed since the Exchanged Notes of the Holder were acquired from the Company or from a person known by the Holder or the Undersigned to be an Affiliate of the Company. The Holder and its Affiliates collectively beneficially own and will beneficially own as of the Closing Date (without giving effect to the Exchange contemplated hereby) (i) less than 5% of the outstanding Common Stock and (ii) less than 5% of the aggregate number of votes that may be cast by holders of those outstanding securities of the Company that entitle the holders thereof to vote generally on all matters submitted to the Company’s stockholders for a vote.
Section 2.8    Adequate Information; No Reliance. Each of the Undersigned and the Holder acknowledges and agrees that (a) it has been furnished with all materials it considers relevant to making an investment decision to enter into the Exchange and has had the opportunity to review (and has carefully reviewed) (i) the Company’s filings and submissions with the Securities and Exchange Commission (the “SEC”), including, without limitation, all information filed or furnished pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act” and such filings, collectively, the “Public Filings”), and (ii) this Agreement (including the exhibits thereto) (collectively, the “Materials”), (b) it has had a full opportunity to ask questions of the Company concerning the Company, its business, operations, financial performance, financial condition and prospects, and the terms and conditions of the Exchange, and to obtain from the Company any information that it considers necessary in making an informed investment decision and to verify the accuracy of the information set forth in the Public Filings and the other Materials, (c) it has had the opportunity to consult with its accounting, tax, financial and legal advisors to be able to evaluate the risks involved in the Exchange and to make an informed investment decision with respect to such Exchange, (d) it is not relying, and has not relied, upon any statement, advice (whether accounting, tax, financial, legal or other), representation or warranty made by the Company or any of its affiliates or representatives or any other entity or person (including the Agent), (e) no statement or written material contrary to the Public Filings or the Materials has been made or given to it by or on behalf of the Company, (f ) it is able to fend for itself in the Exchange, (g) it is not relying on any information or statements provided by the Agent in connection with the Exchange and (h) the Company has not (i) given any guarantee or representation as to the potential success, return, effect or benefit (either legal, regulatory, tax, financial, accounting or otherwise) of an investment in the Exchange Shares or (ii) made any representation to it regarding the legality of an investment in the Exchange Shares under applicable investment guidelines, laws or regulations.
Section 2.9    Access to Filings; Understanding of Risk. Each of the Undersigned and the Holder is familiar with the business and financial condition and operations of the Company and has conducted its own investigation of the Company and the Exchange Shares. The Holder understands and accepts that the Exchange Shares 

to be acquired in the Exchange involve risks, including those described in the Company’s filings with the SEC. Each of the Undersigned and the Holder has such knowledge, skill and experience in business, financial and investment matters that it is capable of evaluating the merits and risks of the Exchange and an investment in the Exchange Shares and has considered the suitability of the Exchange Shares as an investment in light of its own circumstances and financial condition, and the Holder is able to bear the risks associated with an investment in the Exchange Shares. The Holder’s participation in the Exchange was not conditioned by the Company on the Holder’s exchange of a minimum principal amount of Exchanged Notes for the Exchange Consideration and each of the Undersigned and the Holder acknowledges that (a) the terms of the Exchange have been mutually negotiated between the Undersigned (on behalf of each Holder) and the Company and (b) the Undersigned was given a meaningful opportunity to negotiate the terms of the Exchange on behalf of each Holder. 
Section 2.10    Information. Each of the Undersigned and the Holder acknowledges that no person has been authorized to give any information or to make any representation or warranty concerning the Company or the Exchange other than the information set forth herein in connection with its examination of the Company and the terms of the Exchange and the Exchanged Shares, and the Company does not, and the Agent does not, take any responsibility for, and neither the Company nor the Agent can provide any assurance as to the reliability of, any other information that others may provide to the Undersigned or the Holder.
Section 2.11    No Federal or State Review. Each of the Undersigned and the Holder understands that no federal or state agency has passed upon the merits or risks of an investment in the Exchange Shares or made any finding or determination concerning the fairness or advisability of this investment. 
Section 2.12    No Distribution. The Holder is acquiring the Exchange Shares solely for the Holder’s own beneficial account, for investment purposes, and not with a view to, or for resale in connection with, any distribution of the Exchange Shares. The Holder understands that the Exchange Shares have not been registered under the Securities Act or any state securities laws by reason of specific exemptions under the provisions thereof which depend in part upon the investment intent of the Holder and the accuracy of the other representations made by the Holder in this Agreement. The Holder understands that the Company is relying upon the representations and agreements contained in this Agreement (and any supplemental information) for the purpose of determining whether the Holder’s participation in the Exchange meets the requirements for such exemptions. 
Section 2.13    No Solicitation. Each of the Undersigned and the Holder acknowledges that it did not become aware of the Exchange through any form of general solicitation or advertising within the meaning of Rule 502 under the Securities Act or otherwise through a “public offering” under Section 4(a)(2) of the Securities Act.
Section 2.14    Sanctions, AML. The operations of the Undersigned and the Holder have been conducted at all times in material compliance with all applicable rules and regulations administered or conducted by the U.S. Department of Treasury Office of Foreign Assets Control (“OFAC”), the applicable rules and regulations of the Foreign Corrupt Practices Act (“FCPA”) and all applicable financial recordkeeping and reporting requirements, including those of the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “USA PATRIOT Act”), and the applicable anti-money laundering statutes of jurisdictions where the Undersigned and each Holder conduct business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental agency. 
Section 2.15    No Trading. Each of the Undersigned and the Holder acknowledges and agrees that it has not transacted, and will not transact, in any securities of the Company, including, but not limited to, any hedging transactions, from the time the Holder was first contacted by the Company, the Agent or any of their advisors 

or representatives with respect to the transactions contemplated by this Agreement until after the confidential information (as described in the confirmatory wall-crossing email received by the Holder from the Company, the Agent or of their advisors) is made public or the applicable date specified in such email has passed, except for any such hedging transactions that were performed by personnel otherwise authorized to do so and not aware of the transactions contemplated by this Agreement on the basis of information barriers reasonably implemented, taking into consideration the nature of the Holder’s business, to ensure that such trading is not on the basis of material nonpublic information in compliance with applicable securities laws.
Section 2.16    Stop Transfer Instructions. The Holder acknowledges that the Company may issue appropriate stop-transfer instructions to the transfer agent for the Common Stock (the “Transfer Agent”), if any, and may make appropriate notations to the same effect in its books and records to ensure compliance with the provisions of this Article II.
Section 2.17    Role of Agent. Each of the Undersigned and the Holder acknowledges that (a) it understands that the Company intends to pay the Agent a fee in respect of the Exchange; (b) there is no investment banker, broker, finder or other intermediary which has been retained by, will be retained by or is authorized to act on behalf of the Holder who might be entitled to any fee or commission from the Company or the Holder upon consummation of the transactions contemplated by this Agreement; (c) it understands that the Company, the Agent and others will rely upon the truth and accuracy of the foregoing representations, warranties and covenants and agrees that if any of the representations and warranties deemed to have been made by it by its participation in the transactions contemplated by this Agreement and acquisition of the Exchange Shares are no longer accurate, the Holder shall promptly notify the Company and the Agent; (d) the Agent has not provided any legal, accounting or tax advice in connection with the Exchange or any advice in relation to selling restrictions and other securities laws matters in any jurisdiction in connection with the Exchange; and (e) the Agent has not acted as a financial advisor or fiduciary to the Holder and that the Agent and its respective directors, officers, employees, representatives and controlling persons have no responsibility for making, and have not made, any independent investigation of the information contained herein or in the Company’s SEC filings and make no representation or warranty to the Holder, express or implied, with respect to the Company, the Exchanged Notes or the Exchange Shares or the accuracy, completeness or adequacy of the information provided to the Holder or any other publicly available information, nor shall any of the foregoing persons be liable for any loss or damages of any kind resulting from the use of the information contained therein or otherwise supplied to the Holder.
Section 2.18    Non-Reliance Letter. The Undersigned, on behalf of each Account, will, simultaneously with the execution and delivery of this Agreement, execute and deliver to the Agent, a non-reliance letter in the form attached as Exhibit B hereto.
Section 2.19    Further Action. Each of the Undersigned and the Holder agrees that it will, upon request, execute and deliver any additional documents deemed by the Company, Trustee or Transfer Agent to be necessary or desirable to complete the Exchange.
Section 2.20    Withholding. The Company and its agents shall be entitled to deduct and withhold from any consideration payable pursuant to this Agreement such amounts as may be required to be deducted or withheld under applicable law, and shall be provided with an IRS Form W–9 or an appropriate type of IRS Form W–8, as applicable, in order to establish whether such Holder is entitled to an exemption from (or reduction in the rate of) withholding. To the extent any such amounts are withheld and remitted to the appropriate taxing authority, such amounts shall be treated for all purposes as having been paid to the Holder to whom such amounts otherwise would have been paid.

Article III.    Covenants, Representations and Warranties of the Company
The Company covenants as follows, and makes the following representations and warranties, each of which is and shall be true and correct on the date hereof and at the Closing, to the Holders, and all such covenants, representations and warranties shall survive the Closing.
Section 3.1    Power and Authorization. The Company is duly incorporated, validly existing and in good standing under the laws of its state of incorporation, and has the power, authority and capacity to execute and deliver this Agreement, to perform its obligations hereunder, and to consummate the Exchange contemplated hereby.
Section 3.2    Valid and Enforceable Agreements; No Violations. This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except that such enforcement may be subject to the Enforceability Exceptions. This Agreement and consummation of the Exchange will not violate, conflict with or result in a breach of or default under (i) the charter, by-laws or similar organizational documents of the Company, (ii) any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, or (iii) any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except for such violations, conflicts or breaches under clauses (ii) and (iii) above that would not, individually or in the aggregate, have a material adverse effect on the financial position, results of operations or prospects of the Company and its subsidiaries taken as a whole or on its performance of its obligations under this Agreement or on the consummation of the transactions contemplated hereby. The execution of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby do not require the consent, approval, authorization, order, registration or qualification of, or filing (assuming the truth and accuracy of the representations and warranties in Article II and excluding any filing required under the requirements of the Exchange Act) with, any governmental authority, non-governmental regulatory authorities (including the New York Stock Exchange), other than the filing with the New York Stock Exchange of any applications in connection with Section 3.5 below. 
Section 3.3    No Default. Neither the Company nor any of its subsidiaries is (i) in violation of its charter or by-laws or similar organizational documents; (ii) in default, and, to the knowledge of the Company (having made due and reasonable enquiry), no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject; or (iii) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority (including, without limitation, the rules and regulations of the New York Stock Exchange), in each case, applicable to the Company, except, in the case of clauses (ii) and (iii) above, for any such conflict, breach or violation that would not, individually or in the aggregate, have a material adverse effect on the financial position or results of operations or prospects of the Company and its subsidiaries taken as a whole. 
Section 3.4    Validity of Underlying Common Stock. The Exchange Shares (a) have been duly authorized and, upon delivery, will be fully paid and non-assessable, (b) will be issued without any legends that restrict the transfer of such Exchange Shares under the U.S. federal securities laws and (c) will not be subject to any preemptive, participation, rights of first refusal or other similar rights. Upon delivery of such Exchange Shares to the Holder pursuant to the Exchange, such Exchange Shares shall be free and clear of all Liens created by the Company.

Section 3.5    Listing Approval. At the Closing, the Exchange Shares shall have been approved for listing on the New York Stock Exchange, subject to official notice of issuance.
Section 3.6    Exchange. The terms of the Exchange (a) have been mutually negotiated between the Undersigned (on behalf of each Holder) and the Company and (b) the Undersigned was given a meaningful opportunity to negotiate the terms of the Exchange on behalf of each Holder.
Section 3.7    Securities Act Matters. The Exchange is exempt from the registration and prospectus-delivery requirements of the Securities Act and, assuming the accuracy of the Holder’s representations and warranties in Article II above, including with respect to the Holder’s holding period and affiliate status, the Exchange Shares to be delivered to the Holder’s account pursuant to this Agreement will not be subject to restrictions on transfer under the Securities Act (and will not have any restrictive legends on such Exchange Shares).
Section 3.8    Disclosure. The Company is not aware of any material non-public information regarding the Company, other than the fact and proposed terms of the Exchange and all reports and other documents filed by the Company with the SEC pursuant to the Exchange Act when considered as a whole (with the more recent such reports and documents deemed to amend and supersede inconsistent statements contained in any earlier such reports and documents), do not contain any untrue statement of a material fact or any omission of a material fact necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading, other than the fact and proposed terms of the Exchange. At or prior to 9:00 A.M. (New York City time) on the Business Day immediately following the date hereof, the Company will issue a publicly available press release and/or file with the SEC a Current Report on Form 8-K disclosing all material terms of the transactions contemplated hereby as well as any other material non-public information disclosed by the Company or its representatives to the Undersigned, the Holder or their respective representatives (to the extent not previously publicly disclosed). Subsequent to the disclosure referred to in the prior sentence, neither the Company nor any of its representatives have disclosed any material non-public information to the Undersigned, the Holder or their respective representatives.
Section 3.9    Investment Company. The Company is not and, after giving effect to the transactions contemplated by this Agreement, will not be required to register as an “investment company” or an entity “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the SEC thereunder.
Section 3.10    Further Action. The Company will, upon request, execute and deliver any additional documents deemed by the Trustee or the Transfer Agent to be reasonably necessary to complete the transactions contemplated by this Agreement.  
Article IV.    Miscellaneous
Section 4.1    Entire Agreement. This Agreement and any documents and agreements executed in connection with the Exchange embody the entire agreement and understanding of the parties hereto with respect to the subject matter hereof and supersede all prior and contemporaneous oral or written agreements, representations, warranties, contracts, correspondence, conversations, memoranda and understandings between or among the parties or any of their agents, representatives or affiliates relative to such subject matter, including, without limitation, any term sheets, emails or draft documents.
Section 4.2    Construction. References in the singular shall include the plural, and vice versa, unless the context otherwise requires. References in the masculine shall include the feminine and neuter, and vice versa, unless the context otherwise requires. Headings in this Agreement are for convenience of reference only and shall not 

limit or otherwise affect the meanings of the provisions hereof. Neither party, nor its respective counsel, shall be deemed the drafter of this Agreement for purposes of construing the provisions of this Agreement, and all language in all parts of this Agreement shall be construed in accordance with its fair meaning, and not strictly for or against either party.
Section 4.3    Expenses.  All costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense
Section 4.4    Reliance by Agent. The Agent, acting as exchange advisor to the Company, may rely on each representation and warranty of the Company, the Undersigned and the Holder made herein or pursuant to the terms hereof with the same force and effect as if such representation or warranty were made directly to the Agent. The Agent shall be a third-party beneficiary of this Agreement to the extent provided in this Section 4.4.
Section 4.5    Notices. All notices and other communications to the Company provided for herein shall be in writing and shall be deemed to have been duly given if delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid to the following addresses, or in the case of the undersigned, the address provided on the signature page below (or such other address as either party shall have specified by notice in writing to the other):
If to the Company:     Apollo Commercial Real Estate Finance, Inc. 
            c/o Apollo Global Management, LLC 
            9 West 57th Street, 43rd Floor 
            New York, New York 10019
Section 4.6    Waiver, Amendment. Neither this Agreement nor any provisions hereof shall be modified, changed, discharged or terminated except by an instrument in writing, signed by the party against whom any waiver, change, discharge or termination is sought. 
Section 4.7    Assignability. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by either the Company or the Undersigned without the prior written consent of the other party.
Section 4.8    Governing Law. This Agreement shall in all respects be construed in accordance with and governed by the substantive laws of the State of New York, without reference to its choice of law rules.
Section 4.9    Waiver of Jury Trial. THE UNDERSIGNED IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
Section 4.10    Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Any counterpart or other signature hereon delivered by facsimile shall be deemed for all purposes as constituting good and valid execution and delivery of this Agreement by such party.
Section 4.11    Release. The Undersigned and each Holder, and each of their respective partners, members, affiliates, directors, officers, employees, controlling persons, agents, representatives, successors and assigns (collectively, the “Releasing Parties”) shall be deemed to have released and forever discharged to the fullest extent permitted by law, the Company, the trustee of the Exchanged Notes and their respective affiliates, and each of their respective directors, officers, employees, agents and controlling persons (collectively, the “Released Parties”) of and 

from any and all claims which the Releasing Parties, or any of them, now have, ever had, or hereafter shall or may have, against the Released Parties, or any of them, for, upon or by reason of any matter, cause or thing whatsoever arising out of or related to the Exchanged Notes. The Releasing Parties expressly acknowledge that they have had the opportunity to be advised by independent legal counsel and hereby waive and relinquish, and do so understanding and acknowledging the significance and consequence of such specific waiver, all rights and benefits in respect of the Exchanged Notes. 
Section 4.12    Confidentiality. Until the earlier of (x) 9:00 A.M. (New York City time) on the Business Day immediately following the date hereof or (y) the Company making the press release or Form 8-K filing contemplated in Section 3.8 or other public announcement about the Exchange, the Undersigned and each Holder will maintain the confidentiality of the Exchange and the terms of the Exchange.
Section 4.13    Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.
Section 4.14    Termination. The Company may terminate this Agreement if there has occurred any breach by the Undersigned or a Holder of any covenant, representation or warranty set forth in Article II. The Undersigned or a Holder may terminate this Agreement if (1) there has occurred any breach by the Company of any covenant, representation or warranty set forth in Article III or (2) the Closing has not occurred by August 10, 2018.
[Signature Page Follows]

IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed as of the date first above written.
	
	
	The Company

	Apollo Commercial Real Estate Finance, Inc.

	 
By:                    

Name:                 

Title:                    

	
	
	The Undersigned

	[___], in its capacities described in the first paragraph hereof

	 
By:                

Name:                

Title:                 

	

Address for Notices:

______________________________
 
______________________________ 
 
______________________________

EXHIBIT A
EXCHANGING BENEFICIAL OWNERS

	
								
	Name of Beneficial Owner and State of Residence
	Aggregate Principal Amount of Exchanged Notes
	Exchange Shares
	Cash Payment for Fractional Shares
	Total Cash Amount
	DTC Participant Number of DTC Participant through Which the Exchanged Notes Will Be Delivered

	DTC Participant Number of DTC Participant to Which the Exchange Shares Will Be Credited

	Payment Instructions for Total Cash Amount

	[Name]

[State of Residence]
	$[__]
	[__]
	$[__]
	$[__]
	[__]
	[__]
	[__]

EXHIBIT B

NON-RELIANCE LETTER
 
J.P. Morgan Securities LLC 
383 Madison Avenue 
New York 
NY 10178
 
Re:  Exchange for 5.50% Convertible Senior Notes due 2019 (the “Exchanged Notes”) issued by Apollo Commercial Real Estate Finance, Inc. (the “Company”) for cash and shares of common stock, par value $0.001 per share, of the Company (the “Exchange Shares”, and such exchange transaction, the “Exchange”)

Ladies and Gentlemen:

We, the undersigned, refer to the Exchange Agreement entered into between us and the Company, dated on or about the date hereof, in relation to the Exchange (the “Exchange Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Exchange Agreement. 

In connection with the Exchange, on behalf of ourselves and each Account, we represent, warrant, agree and acknowledge as follows:

		
	1.
	The undersigned has all requisite discretionary and contractual authority to enter into this letter agreement on behalf of, and bind, each Account. 

		
	2.
	No disclosure or offering document has been prepared in connection with the Exchange by J.P. Morgan Securities LLC or any of its affiliates (“J.P. Morgan”).

		
	3.
	(a) Each Holder has conducted its own investigation of the Company, the Exchanged Notes and the Exchange Shares and has not relied on any statements or other information provided by J.P. Morgan concerning the Company or the Exchange Shares or the Exchange, (b) each Holder has had access to, and an adequate opportunity to review, financial and other information as it deems necessary to make its decision to subscribe to the Exchange, (c) each Holder has been offered the opportunity to ask questions of the Company and received answers thereto, as it deemed necessary in connection with its decision to subscribe to the Exchange, and (d) each Holder has made its own assessment and has satisfied itself concerning the relevant tax and other economic considerations relevant to its investment in the Exchange Shares.

		
	4.
	J.P. Morgan and its directors, officers, employees, representatives and controlling persons have made no independent investigation with respect to the Company, the Exchanged Notes or the Exchange Shares, or the accuracy, completeness or adequacy of any information supplied to each Holder by the Company.

		
	5.
	In connection with the Exchange, J.P. Morgan has not acted as financial advisor or fiduciary to the undersigned or any Holder. 

		
	6.
	Each Holder is both (i) an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”), and (ii) a “qualified institutional buyer” within the meaning of Rule 144A promulgated under the Securities Act. Each Holder is aware that the issuance and delivery to it of the Exchange Shares are being made in reliance on a private placement exemption from registration under the Securities Act and is acquiring the Exchange Shares for its own account or for an account over which the Holder exercises sole discretion for another qualified institutional buyer or accredited investor.

		
	7.
	Each Holder has the expertise and commercial sophistication to enable it to evaluate the transactions contemplated in connection with the Exchange for itself or with such advisors as it deems necessary in its sole discretion; has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its prospective investment in the Exchange Shares; and has the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment.

		
	8.
	The Exchange Shares have not been registered under the Securities Act or any other applicable securities laws, and are being offered for exchange in transactions not requiring registration under the Securities Act.

 
Very truly yours,

	
			
	[NAME OF INVESTOR]
	 

	 
	 
	 

	By:
	 
	 

	Name:
	 
	 

	Title:
	 
	 

 
Date: ___________________, 2018Exhibit 10-1

		

			Exhibit 10.1

		

		

			 

		

		
			RLI CORP. DIRECTOR AND OFFICER
		

		
			INDEMNIFICATION AGREEMENT
		

		
			 
		

		
			THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is entered into as of the 15th day of August, 2018, by and between RLI Corp., a Delaware corporation (the “Company”) and _________________(“Indemnitee”).
		

		
			 
		

		
			RECITALS
		

		
			 
		

		
			A.The Company is aware that competent and experienced persons are increasingly reluctant to serve or continue serving as directors or officers of companies unless they are protected by comprehensive liability insurance and adequate indemnification due to the increased exposure to litigation costs and risks resulting from service to such companies that often bear no relationship to the compensation of such directors or officers.
		

		
			 
		

		
			B.The statutes and judicial decisions regarding the duties of directors and officers are often insufficient to provide directors and officers with adequate, reliable knowledge of the legal risks to which they are exposed or the manner in which they are expected to execute their fiduciary duties and responsibilities.
		

		
			 
		

		
			C.The Company and the Indemnitee recognize that plaintiffs often seek damages in such large amounts, and the costs of litigation may be so great (whether or not the claims are meritorious), that the defense and/or settlement of such litigation can create an extraordinary burden on the personal resources of directors and officers.
		

		
			 
		

		
			D.The board of directors of the Company has concluded that, to attract and retain competent and experienced persons to serve as directors and officers of the Company, it is not only reasonable and prudent but necessary to promote the best interests of the Company and its stockholders for the Company to contractually indemnify its directors and certain of its officers in the manner set forth herein, and to assume for itself liability for expenses and damages in connection with claims against such directors and officers in connection with their service to the Company as provided herein.
		

		
			 
		

		
			E. Section 145 of the General Corporation Law of Delaware (the “DGCL”) permits the Company to indemnify and advance defense costs to its officers and directors and to indemnify and advance expenses to persons who serve at the request of the Company as directors, officers, employees, or agents of other corporations or enterprises.
		

		
			 
		

		
			F.The Company desires and has requested the Indemnitee to serve or continue to serve as a director and/or officer of the Company and/or its affiliates and the Indemnitee is willing to serve, or to continue to serve, as a director and/or officer of the Company and/or its affiliates if the Indemnitee is furnished the indemnity provided for herein by the Company.
		

		
			 
		

		
			 
		

		
			NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements set forth below, the parties hereto, intending to be legally bound, hereby agree as follows:
		

		
			 
		

			
	
			
				 1.
			Definitions.  For purposes of this Agreement, the following terms shall have the corresponding meanings set forth below.

		
			“Change in Control” means each of the following:
		

		
			 
		

		
			(i) The date any Person becomes the “Beneficial Owner,” as such term is defined in Rule 13d-3 promulgated under the Exchange Act, of 30% or more of the combined voting power of the Company’s outstanding shares, other than beneficial ownership by (A) the Company or any subsidiary of the Company, (B) any employee benefit plan of the Company or any subsidiary of the Company or (C) any entity of the Company for or pursuant to the terms of any such plan.  Notwithstanding the foregoing, a Change in Control shall not occur as the result of an acquisition of outstanding shares of the Company by the Company which, 

		 

 

by reducing the number of shares outstanding, increases the proportionate number of shares beneficially owned by a Person to 30% or more of the shares of the Company then outstanding; provided, however, that if a Person becomes the Beneficial Owner of 30% or more of the shares of the Company then outstanding by reason of share purchases by the Company and shall, after such share purchases by the Company, become the Beneficial Owner of any additional shares of the Company, then a Change in Control shall be deemed to have occurred; or
		

		
			 
		

		
			(ii)  The date the Company consummates a merger or consolidation with another entity, or engages in a reorganization with or a statutory share exchange or an exchange offer for the Company’s outstanding voting stock of any class with another entity or acquires another entity by means of a statutory share exchange or an exchange offer, or engages in a similar transaction; provided that no Change in Control shall have occurred by reason of this paragraph unless either:
		

		
			 
		

		
			(A)    the stockholders of the Company immediately prior to the consummation of the transaction would not, immediately after such consummation, as a result of their beneficial ownership of voting stock of the Company immediately prior to such consummation (I) be the Beneficial Owners, directly or indirectly, of securities of the resulting or acquiring entity entitled to elect a majority of the members of the board of directors or other governing body of the resulting or acquiring entity; and (II) be the Beneficial Owners of the resulting or acquiring entity in substantially the same proportion as their beneficial ownership of the voting stock of the Company immediately prior to such transaction; or
		

		
			 
		

		
			(B) those persons who were directors of the Company immediately prior to the consummation of the proposed transaction would not, immediately after such consummation, constitute a majority of the directors of the resulting entity.
		

		
			 
		

		
			(iii) The date of the sale or disposition, in one or a series of related transactions, of all or substantially all of the assets of the Company to any Person (as defined in paragraph (i) above) other than an affiliate of the Company (meaning any corporation that is part of a controlled group within the meaning of the Internal Revenue Code of 1986, as amended, Section 414(b) or (c)); or
		

		
			 
		

		
			(iv) The date the number of duly elected and qualified directors of the Company who were not either elected by the Company’s Board or nominated by the Board or its nominating/governance committee for election by the shareholders shall constitute a majority of the total number of directors of the Company as fixed by its By-Laws.
		

		
			 
		

		
			 The Reviewing Party shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change in Control of the Company has occurred pursuant to the above definition, and the date of the occurrence of such Change in Control and any incidental matters relating thereto.
		

		
			 
		

		
			“Claim” means a claim or action asserted by a Person in a Proceeding or any other written demand for relief in connection with or arising from an Indemnification Event.
		

		
			 
		

		
			“Covered Entity” means (i) the Company, (ii) any subsidiary of the Company or (iii) any other Person for which Indemnitee is or was or may be deemed to be serving, at the request of the Company or any subsidiary of the Company, as a director, officer, employee, controlling person, agent or fiduciary.
		

		
			 
		

		
			“Disinterested Director” means, with respect to any determination contemplated by this Agreement, any Person who, as of the time of such determination, is a member of the Company’s board of directors but is not a party to any Proceeding then pending with respect to any Indemnification Event.
		

		
			 
		

		
			

		 

		

			2

		

 

		

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

		
			 
		

		
			“Expenses” means any and all direct and indirect fees and costs, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating, printing and binding costs, telephone charges, postage and delivery service fees and all other disbursements or expenses of any type or nature whatsoever reasonably incurred by Indemnitee (including, subject to the limitations set forth in Section 3(c) below, reasonable attorneys’ fees) in connection with or arising from an Indemnification Event, including, without limitation: (i) the investigation or defense of a Claim; (ii) being, or preparing to be, a witness or otherwise participating, or preparing to participate, in any Proceeding; (iii) furnishing, or preparing to furnish, documents in response to a subpoena or otherwise in connection with any Proceeding; (iv) any appeal of any judgment, outcome or determination in any Proceeding (including, without limitation, any premium, security for and other costs relating to any cost bond, supersedeas bond or any other appeal bond or its equivalent); (v) establishing or enforcing any right to indemnification under this Agreement (including, without limitation, pursuant to Section 2(c) below), the DGCL or otherwise, regardless of whether Indemnitee is ultimately successful in such action, unless as a part of such action, a court of competent jurisdiction over such action determines that each of the material assertions made by Indemnitee as a basis for such action was not made in good faith or was frivolous; (vi) Indemnitee’s defense of any Proceeding instituted by or in the name of the Company under this Agreement to enforce or interpret any of the terms of this Agreement (including, without limitation, costs and expenses incurred with respect to Indemnitee’s counterclaims and cross-claims made in such action); and (vii) any Federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, including all interest, assessments and other charges paid or payable with respect to such payments.  For purposes of clarification, Expenses shall not include Losses.
		

		
			 
		

		
			An “Indemnification Event” shall be deemed to have occurred if Indemnitee was or is or becomes, or is threatened to be made, a party to or witness or other participant in, or was or is or becomes obligated to furnish or furnishes documents in response to a subpoena or otherwise in connection with, any Proceeding by reason of the fact that Indemnitee is or was or may be deemed a director, officer, employee, controlling person, agent or fiduciary of any Covered Entity, or by reason of any action or inaction on the part of Indemnitee while serving in any such capacity.
		

		
			 
		

		
			“Independent Legal Counsel” means an attorney or firm of attorneys designated by the Disinterested Directors (or, if there are no Disinterested Directors, the Company’s board of directors) that is experienced in matters of corporate law and neither presently is, nor in the thirty-six (36) months prior to such designation 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.  
		

		
			 
		

		
			“Losses” means any and all losses, claims, damages, liabilities, judgments, fines, penalties, settlement payments, awards and amounts of any type whatsoever incurred by Indemnitee in connection with or arising from an Indemnification Event.  For purposes of clarification, Losses shall not include Expenses.
		

		
			 
		

		
			“Organizational Documents” means any and all organizational documents, charters or similar agreements or governing documents, including, without limitation, (i) with respect to a corporation, its certificate of incorporation and bylaws, (ii) with respect to a limited liability company, its operating agreement, and (iii) with respect to a limited partnership, its partnership agreement.
		

		
			 
		

		
			“Proceeding” means any threatened, pending or completed claim, action, suit, proceeding, arbitration or alternative dispute resolution mechanism, investigation, inquiry, administrative hearing or appeal [or any other actual, threatened or completed proceeding], whether brought in the right of a Covered Entity or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal, administrative, internal or investigative nature.
		

		
			 
		

		
			“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or other entity or government or agency or political subdivision thereof.
		

		
			 
		

		
			

		 

		

			3

		

 

		

		
			“Reviewing Party” means, with respect to any determination contemplated by this Agreement, any one of the following:  (i) a majority of the Disinterested Directors, even if such Persons would not constitute a quorum of the Company’s board of directors; (ii) a committee consisting solely of Disinterested Directors, even if such Persons would not constitute a quorum of the Company’s board of directors, so long as such committee was designated by a majority of the Disinterested Directors; (iii) Independent Legal Counsel (in which case, any determination shall be evidenced by the rendering of a written opinion); or (iv) in the absence of any Disinterested Directors, the Company’s stockholders; provided, that, in the event that  a  Change  in  Control  has  occurred,  the Reviewing Party shall be Independent Legal Counsel (selected by Indemnitee) in a written opinion to the board of directors of the Company, a copy of which shall be delivered to the Indemnitee.
		

		
			 
		

		
			“SEC” means the Securities and Exchange Commission. 
		

		
			 
		

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

		
			 
		

			
	
			
				 2.
			Indemnification.

			
	
			
				 (a)
			Indemnification of Losses and Expenses.  If an Indemnification Event has occurred, then, subject to Section 9 below, the Company shall indemnify and hold harmless Indemnitee, to the fullest extent permitted by the DGCL, as such law may be amended from time to time (but in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than were permitted prior thereto), against any and all Losses and Expenses; provided that the Company’s commitment set forth in this Section 2(a) to indemnify the Indemnitee shall be subject to the limitations and procedural requirements set forth in this Agreement.

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

			
	
			
				 (c)
			Advancement of Expenses.  The Company shall advance Expenses to or on behalf of Indemnitee to the fullest extent permitted by the DGCL, as such law may be amended from time to time (but in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than were permitted prior thereto),  as soon as practicable, but in any event not later than 30 days after written request therefor by Indemnitee, which request shall be accompanied by vouchers, invoices or similar evidence documenting in reasonable detail the Expenses incurred or to be incurred by Indemnitee; provided, however, that Indemnitee need not submit to the Company any information that counsel for Indemnitee reasonably deems is privileged and exempt from compulsory disclosure in any Proceeding.  Execution and delivery of this Agreement by the Indemnitee constitutes an undertaking to repay such amounts advanced only if, and to the extent that, it shall ultimately be determined that Indemnitee is not entitled to be indemnified by the Company as authorized by this Agreement.  No other form of undertaking shall be required other than the execution of this Agreement.

			
	
			
				 (d)
			Contribution.  To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for Losses or Expenses, in connection with any Proceeding relating to an Indemnification Event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (1) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving rise to such Proceeding; and (2) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

			
	
			
				 3.
			Indemnification Procedures.  

			
	
			
				 (a)
			Notice of Indemnification Event.  Indemnitee shall give the Company notice as soon as practicable of any Indemnification Event of which Indemnitee becomes aware and of any request for indemnification hereunder, provided that any failure to so notify the Company shall not relieve the Company of any of its obligations 

		 

		

			4

		

 

	under this Agreement, except if, and then only to the extent that, such failure increases the liability of the Company under this Agreement.

			
	
			
				 (b)
			Notice to Insurers.  The Company shall give prompt written notice of any Indemnification Event which may be covered by the Company’s liability insurance to the insurers in accordance with the procedures set forth in each of the applicable policies of insurance.  The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such Indemnification Event in accordance with the terms of such policies; provided that nothing in this Section 3(b) shall affect the Company’s obligations under this Agreement or the Company’s obligations to comply with the provisions of this Agreement in a timely manner as provided. 

			
	
			
				 (c)
			Selection of Counsel.  If the Company shall be obligated hereunder to pay or advance Expenses or indemnify Indemnitee with respect to any Losses, the Company shall be entitled to assume the defense of any related Claims, with counsel selected by the Company.  After the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the defense of such Claims; provided that:  (i) Indemnitee shall have the right to employ counsel in connection with any such Claim at Indemnitee’s expense; and (ii) if (A) the employment of counsel by Indemnitee has been previously authorized by the Company, (B) counsel for Indemnitee shall have provided the Company with written advice that there is a conflict of interest between the Company and Indemnitee in the conduct of any such defense, or (C) the Company shall not continue to retain such counsel to defend such Claim, then the fees and expenses of Indemnitee’s counsel shall be at the expense of the Company.

			
	
			
				 4.
			Determination of Right to Indemnification.

			
	
			
				 (a)
			Successful Proceeding.  To the extent Indemnitee has been successful, on the merits or otherwise, in defense of any Proceeding referred to in Section 2(a), the Company shall indemnify Indemnitee against Losses and Expenses incurred by him in connection therewith.  If Indemnitee is not wholly successful in such Proceeding, but is successful, on the merits or otherwise, as to one or more but less than all Claims in such Proceeding, the Company shall indemnify Indemnitee against all Losses and Expenses actually or reasonably incurred by Indemnitee in connection with each successfully resolved Claim. 

			
	
			
				 (b)
			Other Proceedings.  In the event that Section 4(a) is inapplicable, the Company shall nevertheless indemnify Indemnitee as provided in Section 2(a) or 2(b), as applicable,  or provide a contribution payment to the Indemnitee as provided in Section 2(d),  to the extent determined by the Reviewing Party.

			
	
			
				 (c)
			Reviewing Party Determination.  A Reviewing Party chosen by the Company’s board of directors shall determine whether Indemnitee is entitled to indemnification, subject to the following:

			
	
			
				 (i)
			A Reviewing Party so chosen shall act in the utmost good faith to assure Indemnitee a complete opportunity to present to such Reviewing Party Indemnitee’s case that Indemnitee has met the applicable standard of conduct.

			
	
			
				 (ii)
			Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of a Covered Entity, including, without limitation, its financial statements, or on information supplied to Indemnitee by the officers or employees of a Covered Entity in the course of their duties, or on the advice of legal counsel for a Covered Entity or on information or records given, or reports made, to a Covered Entity by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by a Covered Entity.  In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of a Covered Entity shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.  Whether or not the foregoing provisions of this Section 4(c)(ii) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company.  Any Person seeking to overcome 

		 

		

			5

		

 

	this presumption shall have the burden of proof and the burden of persuasion, by [clear and convincing] evidence.

			
	
			
				 (iii)
			If a Reviewing Party chosen pursuant to this Section 4(c) shall not have made a determination whether Indemnitee is entitled to indemnification within thirty (30) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (A) 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, or (B) a prohibition of such indemnification under applicable law; provided, however, that such 30 day period may be extended for a reasonable time, not to exceed an additional fifteen (15) days, if the Reviewing Party in good faith requires such additional time for obtaining or evaluating documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 4(c)(iii) shall not apply if (I) the determination of entitlement to indemnification is to be made by the stockholders of the Company, (II) a special meeting of stockholders is called by the board of directors of the Company for such purpose within thirty (30) days after the stockholders are chosen as the Reviewing Party, (III) such meeting is held for such purpose within sixty (60) days after having been so called, and (IV) such determination is made thereat.

			
	
			
				 (iv)
			The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Company shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

			
	
			
				 (d)
			Appeal to Court.  Notwithstanding a determination by a Reviewing Party chosen pursuant to Section 4(c) that Indemnitee is not entitled to indemnification with respect to a specific Claim or Proceeding (an “Adverse Determination”), Indemnitee shall have the right to apply to the court in which that Claim or Proceeding is or was pending or any other court of competent jurisdiction for the purpose of enforcing Indemnitee's right to indemnification pursuant to this Agreement, provided that Indemnitee shall commence any such Proceeding seeking to enforce Indemnitee’s right to indemnification within one (1) year following the date upon which Indemnitee is notified in writing by the Company of the Adverse Determination.  In the event of any dispute between the parties concerning their respective rights and obligations hereunder, the Company shall have the burden of proving that the Company is not obligated to make the payment or advance claimed by Indemnitee.

			
	
			
				 (e)
			Presumption of Success.  The Company acknowledges that a settlement or other disposition short of final judgment shall be deemed a successful resolution for purposes of Section 4(a) if it permits a party to avoid expense, delay, distraction, disruption or uncertainty.  In the event that any Proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such Proceeding with or without payment of money or other consideration), it shall be presumed that Indemnitee has been successful on the merits or otherwise in such Proceeding.  Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion, by [clear and convincing] evidence.

			
	
			
				 (f)
			Settlement of Claims.  The Company shall not be liable to indemnify Indemnitee under this Agreement or otherwise for any amounts paid in settlement of any Proceeding effected without the Company’s written consent.  The Company shall not settle any Proceeding in any manner that would impose any penalty or limitation on Indemnitee without Indemnitee’s written consent.  Neither the Company nor the Indemnitee will unreasonably withhold their consent to any proposed settlement.  The Company shall not be liable to indemnify the Indemnitee under this Agreement with regard to any judicial award if the Company was not given a reasonable and timely opportunity, at its expense, to participate in the defense of such action; the Company’s liability hereunder shall not be excused if participation in the Proceeding by the Company was barred by this Agreement.

			
	
			
				 5.
			Additional Indemnification Rights; Non-exclusivity.

			
	
			
				 (a)
			Scope.  The Company hereby agrees to indemnify Indemnitee to the fullest extent permitted by law, even if such indemnification is not specifically authorized by the other provisions of this Agreement or any other agreement, the Organizational Documents of any Covered Entity or by applicable law.  In the event of 

		 

		

			6

		

 

	any change after the date of this Agreement in any applicable law, statute or rule that expands the right of a Delaware corporation to indemnify a member of its board of directors or an officer, employee, controlling person, agent or fiduciary, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits afforded by such change.  In the event of any change in any applicable law, statute or rule that narrows the right of a Delaware corporation to indemnify a member of its board of directors or an officer, employee, controlling person, agent or fiduciary, such change, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement, shall have no effect on this Agreement or the parties rights and obligations hereunder except as set forth in Section 9(a) hereof.

			
	
			
				 (b)
			Non-exclusivity.  The rights to indemnification, contribution and advancement of Expenses provided in this Agreement shall not be deemed exclusive of, but shall be in addition to, any other rights to which Indemnitee may at any time be entitled under the Organizational Documents of any Covered Entity, any other agreement, any vote of stockholders or Disinterested Directors, the laws of the State of Delaware or otherwise.  Furthermore, no right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion of any right or remedy hereunder or otherwise shall not prevent the concurrent assertion of any other right or remedy.  The rights to indemnification, contribution and advancement of Expenses provided in this Agreement shall continue as to Indemnitee for any action Indemnitee took or did not take while serving in an indemnified capacity even though Indemnitee may have ceased to serve in such capacity.

			
	
			
				 6.
			No Duplication of Payments.  The Company shall not be liable under this Agreement to make any payment of any amount otherwise indemnifiable hereunder, or for which advancement is provided hereunder, if and to the extent Indemnitee has otherwise actually received such payment, whether pursuant to any insurance policy, the Organizational Documents of any Covered Entity or otherwise.  

			
	
			
				 7.
			Mutual Acknowledgment.  Both the Company and Indemnitee acknowledge that, in certain instances, Federal law or public policy may override applicable state law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise.  For example, the Company and Indemnitee acknowledge that the SEC has taken the position that indemnification is not permissible for liabilities arising under certain Federal securities laws, and Federal legislation prohibits indemnification for certain violations of the Employee Retirement Income Security Act of 1979, as amended.  Indemnitee understands and acknowledges that the Company has undertaken, or may be required in the future to undertake, with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy to indemnify Indemnitee, and any right to indemnification hereunder shall be subject to, and conditioned upon, any such required court determination.

			
	
			
				 8.
			Liability Insurance.  The Company shall maintain liability insurance applicable to directors and officers of the Company and shall cause Indemnitee to be named as an insured in such a manner as to provide Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Company’s officers and directors (other than in the case of an independent director liability insurance policy if Indemnitee is not an independent or outside director).  The Company shall advise Indemnitee as to the general terms of, and the amounts of coverage provide by, any liability insurance policy described in this Section 8 and shall promptly notify Indemnitee if, at any time, any such insurance policy is terminated or expired without renewal or if the amount of coverage under any such insurance policy will be decreased.

			
	
			
				 9.
			Exceptions.  Any other provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement to indemnify Indemnitee:

			
	
			
				 (a)
			against any Losses or Expenses, or advance Expenses to Indemnitee, with respect to Claims initiated or brought voluntarily by Indemnitee, and not by way of defense (including, without limitation, affirmative defenses and counter-claims), except (i) Claims to establish or enforce a right to indemnification, contribution or advancement with respect to an Indemnification Event, whether under this Agreement, any other agreement or insurance policy, the Company’s Organizational Documents of any 

		 

		

			7

		

 

	Covered Entity, the laws of the State of Delaware or otherwise, or (ii) if the Company’s board of directors has approved specifically the initiation or bringing of such Claim; 

			
	
			
				 (b)
			against any Losses or Expenses, or advance Expenses to Indemnitee, with respect to Claims arising (i) with respect to an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act or (ii) pursuant to Section 304 or 306 of the Sarbanes-Oxley Act of 2002, as amended, or any rule or regulation promulgated pursuant thereto; or 

			
	
			
				 (c)
			if, and to the extent, that a court of competent jurisdiction renders a final, unappealable decision that such indemnification is not lawful.

			
	
			
				 10.
			Miscellaneous.

			
	
			
				 (a)
			Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall constitute an original.

			
	
			
				 (b)
			Binding Effect; Successors and Assigns.    This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and assigns (including with respect to the Company, any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company) and with respect to Indemnitee, his or her spouse, heirs, and personal and legal representatives.  The Company shall require and cause any successor or assign (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, 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 or assignment had taken place.  This Agreement shall continue in effect with respect to Claims relating to Indemnification Events regardless of whether Indemnitee continues to serve as a director, officer, employee, controlling person, agent or fiduciary of any Covered Entity.

			
	
			
				 (c)
			Notice.  All notices and other communications required or permitted hereunder shall be in writing, shall be effective when given, and shall in any event be deemed to be given (a) five (5) days after deposit with the U.S. Postal Service or other applicable postal service, if delivered by first class mail, postage prepaid, (b) upon delivery, if delivered by hand, (c) one (1) business day after the business day of deposit with Federal Express or similar, nationally recognized overnight courier, freight prepaid, or (d) one (1) business day after the business day of delivery by confirmed facsimile transmission, if deliverable by facsimile transmission, with copy by other means permitted hereunder, and addressed, if to Indemnitee, to the Indemnitee’s address or facsimile number (as applicable) as set forth beneath the Indemnitee’s signature to this Agreement, or, if to the Company, at the address or facsimile number (as applicable) of its principal corporate offices (attention:  Secretary), or at such other address or facsimile number (as applicable) as such party may designate to the other parties hereto.

			
	
			
				 (d)
			Enforceability.  This Agreement is a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.

			
	
			
				 (e)
			Consent to Jurisdiction.  The Company and Indemnitee each hereby irrevocably consent to the jurisdiction and venue of the courts of the State of Delaware for all purposes in connection with any Proceeding which arises out of or relates to this Agreement and agree that any Proceeding instituted under this Agreement shall be commenced, prosecuted and continued only in the courts of the State of Delaware.

			
	
			
				 (f)
			Severability.  The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law.  Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of this Agreement containing any provision held to be invalid, 

		 

		

			8

		

 

	void or otherwise unenforceable that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the extent manifested by the provision held invalid, illegal or unenforceable.

			
	
			
				 (g)
			Choice of Law.  This Agreement shall be governed by and its provisions shall be construed and enforced in accordance with, the laws of the State of Delaware, without regard to the conflict of laws principles thereof.

			
	
			
				 (h)
			Subrogation.  In the event of 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 documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights.

			
	
			
				 (i)
			Amendment and Termination.  No amendment, modification, termination or cancellation of this Agreement shall be effective unless it is in a writing signed by the parties to be bound thereby.  Notice of same shall be provided to all 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.

			
	
			
				 (j)
			No Construction as Employment Agreement.  This Agreement is not an employment agreement between the Company and the Indemnitee and nothing contained in this Agreement shall be construed as giving Indemnitee any right to be retained or continue in the employ or service of any Covered Entity.

			
	
			
				 (k)
			Supersedes Previous Agreements.  This Agreement supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.  All such prior agreements and understandings are hereby terminated and deemed of no further force or effect. 

		
			 
		

		
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			9

		

 

      In Witness Whereof, the parties hereto have executed this Agreement on and as of the day and year first above written.
		

		
			 
		

		
			 
		

			
					
						 

				
	
					
						COMPANY:

				
	
					
						RLI Corp.

				
	
					
						a Delaware corporation

				
	
					
						 

				
	
					
						 

				
	
					
						By:

				
	
					
						 

				
	
					
						Name:

				
	
					
						 

				
	
					
						Title:

				
	
					
						 

				
	
					
						 

				
	
					
						INDEMNITEE:

				
	
					
						 

				
	
					
						 

				

		
			 
		

		
			 
		

		 

		

			10

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