D&O Indemnification; Tail Insurance Coverage Sample Clauses
The D&O Indemnification; Tail Insurance Coverage clause ensures that directors and officers of a company are protected against personal liability for actions taken in their official capacities, both during and after their tenure. This clause typically requires the company to indemnify its directors and officers for legal expenses and damages arising from lawsuits related to their corporate roles, and mandates the purchase of 'tail' insurance coverage to extend this protection for a specified period after they leave the company. Its core function is to provide ongoing financial security for directors and officers, encouraging qualified individuals to serve in these roles without fear of personal financial loss from legal claims.
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D&O Indemnification; Tail Insurance Coverage. (a) From and after the Effective Time, the Surviving Corporation and its Subsidiaries shall honor and fulfill in all respects the obligations of the Company and its Subsidiaries in favor of those Persons who are former or current directors and officers of the Company and its Subsidiaries (the “D&O Indemnified Persons”) for claims arising out of their acts and omissions as directors and officers occurring prior to the Effective Time that are asserted after the Effective Time, as and to the extent provided in the certificate of incorporation (or equivalent documents) of the Company and its Subsidiaries (as in effect on April 1, 2014) and as and to the extent provided in any indemnification agreements between the Company or any of its Subsidiaries and said Indemnified Persons (as in effect on April 1, 2014) (collectively, the “Company Indemnification Provisions”), which obligations shall survive the Merger and shall continue in full force and effect for a period of six years from the Effective Time and shall not be terminated or modified in such a manner as to adversely affect any Indemnified Person to whom this Section 5.20 applies without the consent of such affected Indemnified Person; provided that (i) the Surviving Corporation’s obligations under this Section 5.20 shall not apply to (A) any claim or matter based on Fraud or (B) any claim based on a claim for indemnification made by an Indemnified Person pursuant to ARTICLE 8, and (ii) recourse shall first be against the Tail Insurance Coverage (as defined below). Notwithstanding anything to the contrary contained in the, no D&O Indemnified Person shall be entitled to coverage under any Acquiror director and officer insurance policy or errors and omission policy unless such D&O Indemnified Person is separately eligible for coverage under such policy pursuant to Acquiror’s policies and procedures and the terms of such insurance policy. It is expressly agreed that the Indemnified Persons to whom this Section 5.20 applies shall be third party beneficiaries of this Section 5.20, each of whom may enforce the provisions of this Section 5.20.
(b) Prior to the Effective Time, the Company shall purchase D&O and fiduciary tail insurance coverage (the “Tail Insurance Coverage”) for each D&O Indemnified Person in a form reasonably acceptable to Acquiror, which shall provide such directors and officers with coverage for six (6) years following the Effective Time in an amount not less than $2,000,000 in coverage plus s...