New Mexico Indemnity Agreement between Corporation and Directors, Officers, Employees, and Agents In the state of New Mexico, when it comes to protecting the interests of corporations and their individuals, an Indemnity Agreement plays a vital role. This legally binding document safeguards the corporation's directors, officers, employees, and agents from potential liabilities incurred during the course of their duties. The New Mexico Indemnity Agreement is designed to provide financial coverage and indemnification to these individuals in case they face legal claims, lawsuits, or any other legal proceedings arising from their actions within the scope of their corporate roles. This agreement assures protection against expenses, judgments, fines, settlements, and even attorneys' fees incurred during such events. Under the New Mexico Indemnity Agreement, a corporation may offer several types of protection to its directors, officers, employees, and agents. Here are some variations: 1. Director Indemnity Agreement: This type of agreement specifically focuses on providing indemnification to directors of the corporation. It outlines the terms, conditions, and limitations of the indemnification, along with the scope of their responsibilities and liabilities. 2. Officer Indemnity Agreement: This agreement is specifically tailored to protect officers of the corporation. Similar to the director agreement, it defines the extent of indemnification, detailing the rights, obligations, and potential limitations. 3. Employee Indemnification Agreement: This type of agreement ensures indemnity coverage for employees of the corporation. It outlines the parameters under which employees are eligible for protection and clearly defines the responsibilities and obligations of both parties. 4. Agent Indemnity Agreement: Agents, who act on behalf of the corporation, are also included in the New Mexico Indemnity Agreement. An agent indemnification agreement defines the indemnification terms applicable to these individuals, providing them with protection while performing their duties on the corporation's behalf. Key elements commonly found in New Mexico Indemnity Agreements include: a. Indemnification scope: The agreement precisely states the actions for which indemnification is provided, ensuring clarification on what activities fall under the coverage. b. Limitations and exceptions: The agreement may include certain limitations and exceptions on the corporation's indemnity obligations, such as instances involving gross negligence or intentional misconduct. c. Advancement of expenses: It specifies whether the corporation will advance funds or reimburse expenses in a timely manner. This ensures the individuals are not burdened financially during legal proceedings. d. Insurance requirements: The agreement may include provisions requiring the corporation to maintain liability insurance coverage, further protecting the parties involved. e. Severability clause: This clause ensures that if any provision of the agreement is deemed invalid or unenforceable, the remaining provisions will still be upheld. f. Governing law and jurisdiction: The agreement establishes that it is governed by the laws of New Mexico and provides clarity on which courts have jurisdiction over any disputes that may arise. It is crucial for corporations and individuals to consult legal professionals to draft and review these agreements thoroughly. Properly executed New Mexico Indemnity Agreements grant peace of mind to the directors, officers, employees, and agents, allowing them to carry out their responsibilities without fear of undue personal liability.
New Mexico Indemnity Agreement between corporation and directors officers employees and agents of corporation
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FAQ
Indemnification refers to the right to have a company reimburse current or former directors or officers for all losses, including legal fees, incurred in connection with litigation arising from actions taken in service to the company or at the company's direction.
Section 145(c)(1) provides that to the extent a director has been successful on the merits or otherwise in defense of any action, suit, or proceeding referenced in Section 145(a) or Section 145(b), the director shall be indemnified against expenses actually and reasonably incurred by the director in connection ...
Indemnification is often very broad, often extending ?to the maximum extent permitted by law?, whereas D&O insurance polices contain numerous exclusions and conditions. In addition, D&O insurance must be renewed each year, with possible changes in terms and conditions.
Indemnification, also referred to as indemnity, is an undertaking by one party (the indemnifying party) to compensate the other party (the indemnified party) for certain costs and expenses, typically stemming from third-party claims.
The indemnity may cover liability incurred by the director to any person other than the company or an associated company. This may include both legal costs and the financial costs of an adverse judgement.
A company may, however, lend money to a director to fund the director's defence costs. Frequently, an indemnity will include a provision under which the company agrees to lend the director the amounts necessary to fund the director's defence costs.
Insurance ? The indemnification agreement typically will require that the company provide D&O liability insurance that protects the indemnitee to the same extent as the most favorably insured of the company's and its affiliates' current directors and officers.
In the indemnification agreement, the corporation agrees to reimburse the director or officer for losses incurred in legal proceedings related to their service as a corporate director or officer to the maximum extent permitted by law.
Indemnification Agreement to secure against loss or damage; to give security for the reimbursement of a person in case of an anticipated loss falling upon him. Also to make good; to compensate; to make reimbursement to one of a loss already incurred by him.
A director and officer indemnification agreement is a contract that allows executives to protect themselves from claims made against them while performing job. Indemnification means that in the event a lawsuit is filed against a company, the indemnified party is "held harmless" from claims.