Legal Indemnity and Security Agreement

LEGAL INDEMNITY AND SECURITY AGREEMENT

This Legal Indemnity and Security Agreement ("Agreement") is entered into as of Day: Month: Year: by and between Indemnified Party Name: (Entity Type: Corporation LLC Individual Partnership Other ) with principal place of business at (hereinafter "Indemnitee"), and Security Provider/Obligor Name: (Entity Type: Corporation LLC Individual Partnership Other ) with principal place of business at (hereinafter "Grantor"). Indemnitee and Grantor are sometimes referred to collectively as "Parties" and individually as a "Party."

RECITALS

WHEREAS, Grantor is indebted to Indemnitee under certain obligations described as: in the principal amount of (the "Obligations");

WHEREAS, as a condition to extending credit, performing services, or otherwise dealing with Grantor, Indemnitee requires Grantor to provide indemnity and a security interest in collateral described herein to secure payment and performance of the Obligations; and

WHEREAS, Grantor is willing to grant a security interest and provide indemnification on the terms set forth below.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows:

1. DEFINITIONS

In this Agreement, unless the context otherwise requires, the following terms shall have the following meanings:

"Collateral" means all personal property, assets, and rights described in Section 2 and any and all proceeds, substitutions and replacements thereof.

"Indemnified Claims" means any claim, demand, liability, loss, damage, cost or expense (including reasonable attorneys' fees and costs of investigation) arising out of or relating to the Obligations, the Collateral, this Agreement, or any transaction contemplated hereby.

2. GRANT OF SECURITY INTEREST; COLLATERAL

To secure the prompt and complete payment and performance of the Obligations, Grantor hereby grants to Indemnitee a continuing security interest, lien and charge in, to and upon all of Grantor's right, title and interest in and to the Collateral, including but not limited to the following described property:

The security interest granted herein shall secure payment and performance of the Obligations and any extensions, renewals, or modifications thereof, together with interest, fees, costs and expenses incurred by Indemnitee in enforcing this Agreement.

3. INDEMNITY

Grantor shall indemnify, defend and hold harmless Indemnitee and its officers, directors, employees, agents and affiliates from and against all Indemnified Claims arising out of or relating to (a) any breach by Grantor of this Agreement, (b) the Collateral or Grantor's ownership or use of the Collateral, (c) any act or omission by Grantor in connection with the Obligations, and (d) any claim by any third party with respect to the Obligations or Collateral. This indemnity shall include, without limitation, reasonable attorneys' fees and costs of litigation, court costs, arbitration costs and other expenses incurred by Indemnitee.

Notwithstanding the foregoing, Grantor's indemnity obligation shall not apply to the extent that an Indemnified Claim results directly from the gross negligence or willful misconduct of Indemnitee, as finally determined by a court of competent jurisdiction.

4. REPRESENTATIONS AND WARRANTIES

Grantor represents and warrants to Indemnitee that: (a) Grantor is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization; (b) Grantor has full power and authority to enter into and perform this Agreement and to grant the security interest in the Collateral; (c) the execution and delivery of this Agreement and the granting of the security interest do not violate any law, agreement or instrument to which Grantor is a party; and (d) Grantor has good and marketable title to the Collateral, free and clear of any liens or encumbrances except those disclosed to Indemnitee in writing prior to the Effective Date.

5. COVENANTS

Grantor covenants that during the continuance of the Obligations it will: (a) maintain the Collateral in good condition and repair (ordinary wear and tear excepted); (b) keep the Collateral insured against loss or damage with insurers reasonably satisfactory to Indemnitee and deliver certificates evidencing such insurance upon request; (c) pay when due all taxes, assessments and governmental charges levied or assessed against the Collateral; and (d) execute and deliver such financing statements, instruments and other documents as Indemnitee may reasonably request to perfect or maintain the security interest created hereby.

6. DEFAULT; REMEDIES

The occurrence of any of the following shall constitute an Event of Default: (a) failure to pay any amount when due under the Obligations; (b) breach of any representation, warranty or covenant contained in this Agreement; (c) Grantor's insolvency, appointment of a receiver, or commencement of bankruptcy or similar proceedings; or (d) any material adverse change in Grantor's financial condition or ability to perform its obligations.

Upon the occurrence of an Event of Default, Indemnitee shall have all rights and remedies available at law or in equity, including without limitation the right to accelerate the Obligations, foreclose on the Collateral, take possession of the Collateral, sell or dispose of the Collateral at public or private sale and apply the proceeds to the Obligations, and recover from Grantor any deficiency, together with all costs and expenses (including reasonable attorneys' fees) incurred in connection with enforcement.

7. PERFECTION; PRIORITY

Grantor agrees to execute and deliver (and cause to be filed and recorded) all documents, including financing statements and assignments, that Indemnitee deems necessary to perfect and maintain the security interest granted hereby. Grantor authorizes Indemnitee to file any financing statement or other instrument that names Grantor as debtor and Indemnitee as secured party without Grantor's signature where permitted by applicable law.

Grantor's obligations hereunder shall be subordinate in priority only as expressly set forth in a written agreement signed by Indemnitee.

8. NOTICES

All notices, requests, consents and other communications required or permitted under this Agreement must be in writing and shall be deemed given when delivered personally, sent by nationally recognized overnight courier, or sent by registered or certified mail, return receipt requested, to the respective addresses set forth above (or such other address as a Party may designate by notice pursuant to this Section).

9. FEES, COSTS AND INTEREST

All costs and expenses incurred by Indemnitee in connection with the enforcement of this Agreement, including reasonable attorneys' fees, court costs, collection costs and expenses of sale, shall be borne by Grantor and shall be recoverable by Indemnitee from Grantor on demand. Any past due amounts shall bear interest at the rate of per annum, or the maximum rate permitted by applicable law, whichever is less.

10. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of without regard to conflict of laws principles. Each Party irrevocably submits to the exclusive jurisdiction of the state and federal courts located in that State for resolution of disputes arising hereunder.

11. ENTIRE AGREEMENT; AMENDMENT; SEVERABILITY

This Agreement constitutes the entire agreement and understanding between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written. No amendment or modification of this Agreement shall be effective unless in writing and signed by both Parties. If any provision of this Agreement is held to be invalid or unenforceable, such provision shall be reformed to the extent necessary to make it enforceable or, if it cannot be reformed, shall be severed, and the remainder of this Agreement shall remain in full force and effect.

12. WAIVER; COUNTERPARTS

No failure or delay by a Party in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right preclude any other or further exercise of such right or the exercise of any other right. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

13. FURTHER ASSURANCES

At any time and from time to time upon request of Indemnitee, Grantor shall promptly execute and deliver such further instruments, take such further actions and do such further things as Indemnitee reasonably requests to effect, confirm or evidence the security interest granted herein and to carry out the purposes and intent of this Agreement.

14. MISCELLANEOUS

The headings in this Agreement are for convenience only and do not affect the interpretation of this Agreement. The Parties agree that any ambiguity shall not be construed against any Party as drafter.

Sign Now