How does Indemnification work? Let’s discuss examples.
How does Indemnification work? Let’s discuss examples.
Which indemnification are you referring to? Indemnification happens across the set of agreements. Rich brought up the example in the GP: "If a vendor sues a Member for a breach of an agreement by the General Partner, the General Partner will indemnify the Member from such adverse judgment out of the assets of the General Partner."
Indemnification provides certain protection for a party by contract. For example, in the Cornerstone, the General Partner is indemnified by the Fund for its services in connection with the Fund provided that the General Partner acted in good faith and in the best interests of the Fund and such actions did not constitute Malfeasance. The indemnification means that the fund will pay for damages as well as legal and other expenses suffered by the general partner in connection with the fund.