require us to indemnify the director or officer party thereto, the indemnitee, against all judgments, penalties, fines and amounts paid in settlement and all expenses actually and reasonably incurred by the indemnitee or on his or her behalf in connection with a proceeding, unless it is established that one of the exceptions to indemnification under Maryland law set forth above exists. The indemnification agreements also provide that we agree to hold harmless and indemnify these persons against expenses incurred by reason of the fact that such person is or was a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at our request, including, without limitation, the Delaware Registrants (as defined below).
The indemnification agreements prohibit indemnification in connection with a proceeding that is brought by or in the right of our company if the director or officer is adjudged liable to us.
In addition, the indemnification agreements require us to advance reasonable expenses incurred by the indemnitee within ten days of the receipt by us of a statement from the indemnitee requesting the advance, provided the statement evidences the expenses and is accompanied by:
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a written affirmation of the indemnitee’s good faith belief that he or she has met the standard of conduct necessary for indemnification, and
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an undertaking by or on behalf of the Indemnitee to repay the amount if it is ultimately determined that the standard of conduct was not met.
The indemnification agreements provide for procedures for the determination of entitlement to indemnification, including requiring such determination be made by independent counsel after a change of control of us.
In addition, we have purchased directors’ and officers’ liability insurance for the benefit of our directors and officers.
Insofar as the foregoing provisions permit indemnification of directors, officers or persons controlling us for liability arising under the Securities Act, we have been informed that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Delaware Registrants
The following registrants are, as specified below, limited partnerships or limited liability companies organized under the laws of the State of Delaware: IIP Operating Partnership, LP, IIP-CA 1 LP, IIP-CA 2 LP, IIP-CA 3 LP, IIP-CA 4 LP and IIP-CA 5 LP (together, the “Delaware LP Registrants”), and the entities listed on the Table of Co-Registrants, other than Innovative Industrial Properties, Inc. and the Delaware LP Registrants.
Section 18-108 of the Delaware Limited Liability Company Act empowers a Delaware limited liability company to indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever. Section 17-108 of the Delaware Revised Uniform Limited Partnership Act, or the LP Act, empowers a Delaware limited partnership to indemnify and hold harmless any partner or other person from and against any and all claims and demands whatsoever.
In addition, our directors and officers are indemnified for specified liabilities and expenses pursuant to the partnership agreement of IIP Operating Partnership, LP, the partnership in which IIP serves as sole general partner.
The description of the indemnification agreements in this Item 20 under the caption “Maryland Registrant” is incorporated herein by reference.
Insofar as the foregoing provisions permit indemnification of directors, officers or persons controlling us for liability arising under the Securities Act, we have been informed that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.