Article VI - Indemnification

Written by Anthony Drago. Posted in Bylaws

Section 6.1 Indemnification of Directors and Officers.

In accordance with Section 6.6 of these bylaws, the Corporation may indemnify, to the fullest extent now or hereafter permitted by NY N-PCL 722 et seq, each Director and/or officer (including each former Director or officer) (for the purposes of this Article VI, references to “officer” includes all officers and assistant officers whether elected or appointed) of the Corporation who was or is threatened to be made a party to or a witness in any threatened, pending or completed action or proceeding, whether civil, criminal, administrative or investigative, other than one by or in the right of the Corporation to procure a judgment in its favor, by reason of the fact that the Director or officer is or was an authorized representative of the Corporation, or is or was serving at the request of the Corporation as a representative of another domestic or foreign corporation for profit or not-for-profit, partnership, joint venture, trust or other enterprise, against all expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the Director or officer in connection with such action, suit or proceeding if such Director or officer acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interest of the Corporation and, with respect to any criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any action or proceeding by judgment, order, settlement or conviction or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that the person did not act in good faith and in a manner that he reasonably believed to be in, or not opposed to, the best interests of the Corporation and, with respect to any criminal proceeding, had reasonable cause to believe that his conduct was unlawful. Notwithstanding anything to the contrary contained herein, the Corporation shall not be obligated to provide indemnification for any acts committed by such officers or Directors which constitute bad faith, gross negligence, or willful misconduct.

Section 6.2 Expenses to Directors and Officers.

If the Corporation determines the Director or officer is entitled to indemnification pursuant to Section 6.6, the Corporation shall pay expenses (including attorneys’ fees) incurred by a Director or officer of the Corporation referred to in Section 6.1 in defending or appearing as a witness in any civil or criminal action, suit or proceeding described in Section 6.1, only upon receipt of an undertaking by or on behalf of such Director or officer to repay all amounts advanced if it shall ultimately be determined that the Director or officer is not entitled to be indemnified by the Corporation as provided in Section 6.3.

Section 6.3 Scope of Indemnification.

Notwithstanding anything to the contrary, indemnification under this Article shall not be made by the Corporation in any case where a court determines that the alleged act or failure to act giving rise to the claim for indemnification is expressly prohibited by the Act , any successor statute as in effect at the time of such alleged action, failure to take action or any acts committed by such officers or Directors which constitute bad faith, gross negligence, or willful misconduct.

Section 6.4 Miscellaneous.

Each Director and officer of the Corporation shall be deemed to act in such capacity in reliance upon such rights of indemnification and advancement of expenses as are provided in this Article. The rights of indemnification and advancement of expenses provided by this Article shall not be deemed exclusive of any other rights to which any person seeking indemnification or advancement of expenses may be entitled under any agreement, vote of Members, disinterested Directors, statute or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office or position, and shall continue as to a person who has ceased to be an authorized representative of the Corporation and shall inure to the benefit of the heirs, executors and administrators of such person. Any repeal or modification of this Article by the Board of Directors of the Corporation shall not adversely affect any right or protection existing at the time of such appeal or modification to which any person may be entitled under this Article.

Section 6.5 Definition of Authorized Representative.

For the purposes of this Article, the term, “authorized representative” shall mean a Director, officer or employee of the Corporation or of any corporation controlled by the Corporation, or a Director, custodian, administrator, committeeperson or fiduciary of any employee benefit plan established and maintained by the Corporation or by any corporation controlled by the Corporation, or person serving another corporation, partnership, joint venture, trust or other enterprise in any of the foregoing capacities at the request of the Corporation. The term “authorized representative” shall not include money managers or investment advisors (or any employees thereof) hired by the Corporation, and shall not include agents of the Corporation unless indemnification thereof is expressly approved by the Board of Directors.

Section 6.6 Procedure for Effecting Indemnification.

Unless ordered by a court, any indemnification under this Article VI or the Act shall be made only following a determination that the indemnification is proper in the circumstances because the person seeking indemnification has met the applicable standard of conduct. Such determination shall be made:

(a) by the Board of Directors by a majority vote of a quorum consisting of Directors who were not party to the action or proceeding; or

(b) if such a quorum is not obtainable or if obtainable and a majority vote of a quorum of disinterested Directors so directs, by independent legal counsel in a written opinion.