Indemnification and Limitation of Liability of the Back-Up Manager. (a) The Back-Up Manager will indemnify each of the Service Recipients and their respective members, officers, directors, managers, employees and agents for all claims, losses, penalties, fines, forfeitures, legal fees, liabilities, obligations, damages, actions, suits, and related costs and judgments and other costs, fees and reasonable expenses that any of them may incur as a result of: (i) the breach by the Back- Up Manager of any representation, warranty or covenant under the Back-Up Managementthis Agreement or (ii) the Back-Up Manager’s gross negligence, bad faith, willful misconduct or fraudulent behavior in the performance of its duties under the Back-Up Managementthis Agreement; provided, that the Back-Up Manager will have no obligation of indemnity to any such party to the extent any such claims, losses, penalties, fines, forfeitures, legal fees, liabilities, obligations, damages, actions, suits, and related costs and judgments and other costs, fees and reasonable expenses are caused by such party’s gross negligence, bad faith, willful misconduct or fraudulent behavior. (b) Except as set forth in the prior paragraph, neither the Back-Up Manager nor any of its members, officers, directors, managers, employees or agents (collectively, the “Back-Up Manager Indemnified Parties”) shall be under any liability to the Service Recipients, the ManagerManagers, the Servicer, the Control Party, the Controlling Class Representative, the Trustee, or the Noteholders for any action taken, or not taken, in good faith pursuant to this Agreement, for any action taken, or not taken, in good faith pursuant to this Agreement due to a Manager failing to comply with the terms and conditions of the Transaction Documents (including but not limited to any applicable Management Agreement and this Agreement) after reasonable request therefor (it being understood that such a reasonable request shall not be construed to require the Back-Up Manager to affirmatively take any legal, administrative, judicial or other action to enforce the provisions of the Transaction Documents), or for errors in judgment made in good faith unless it is proven that the Back-Up Manager was grossly negligent in ascertaining the pertinent facts; provided, however, that this provision shall not protect the Back-Up Manager Indemnified Parties against liability for any material breach of a representation, warranty or covenant made herein, or against any expense or liability specifically required to be borne thereby without right of reimbursement pursuant to the terms hereof, or against any liability that would otherwise be imposed by reason of gross negligence, bad faith, willful misconduct or fraudulent behavior in the performance of their obligations or duties hereunder or by reason of the Back-Up Manager’s grossly negligent disregard of such obligations or duties. The Back-Up Manager Indemnified Parties may rely in good faith on any document of any kind which, prima facie, is properly executed and submitted by any Person respecting any matters arising hereunder. (c) The Securitization Entities (including on behalf of the other Service Recipients) shall jointly and severally indemnify and hold harmless the Back-Up Manager Indemnified Parties from and against any claims, losses, penalties, fines, forfeitures, legal fees, liabilities, obligations, damages, actions, suits and related costs and judgments and other costs, fees and reasonable expenses that any of them may incur arising out of or incurred in connection with this Agreement, the Notes, any other Transaction Document or any of the Collateral, other than any such claim, loss, penalty, fine, forfeiture, legal fee, liability, obligation, damage, action, suit and related cost, judgment or other cost, fee or reasonable expense: (i) specifically required to be borne by the Back-Up Manager pursuant to the terms hereof or otherwise incidental to the performance of obligations and duties under this Agreement; or (ii) that was incurred in connection with claims against such party resulting from (A) any material breach of a representation, warranty or covenant made herein by such party or (B) the gross negligence, bad faith, willful misconduct or fraudulent behavior of such party. (d) The Back-Up Manager shall not be under any obligation under this Agreement to appear in, prosecute or defend any legal action unless such action is related to its respective duties under this Agreement and in its opinion does not involve it in any ultimate expense or liability; provided, however, that the Back-Up Manager may, in its discretion, undertake any such action which it may reasonably deem necessary or desirable with respect to the enforcement and/or protection of its rights and duties. In such event, the reasonable legal expenses and costs of such action, and any liability resulting therefrom, shall be expenses, costs and liabilities of the Securitization Entities (including on behalf of the other Service Recipients) and the Back-Up Manager shall be entitled to the direct payment of such expense, or to be reimbursed therefor. All indemnities and reimbursements on account of the Back-Up Manager Indemnified Parties pursuant to this Section 4.3 shall be payable out of funds on deposit in the Collection Account in accordance with the Priority of Payments. (e) The Back-Up Manager may rely upon, and shall have no liability for actions taken or not taken in good faith and in reasonable reliance upon any resolution, certificate, statement, instrument, report, notice, request, direction, consent or other written information reasonably believed by it to be genuine and delivered by or on behalf of the ManagerManagers, the Service Recipients or the Servicer, without the obligation to investigate the accuracy or completeness of any such Certification or written information. (f) In the exercise and performance of its duties and obligations hereunder or under any of the Transaction Documents, the Back-Up Manager (i) may act directly or through agents or attorneys pursuant to agreements entered into with any of them and (ii) may, except as otherwise provided in Section 4.3(c), at its own expense if it is acting solely on its own behalf and not on behalf of or for the benefit of the Noteholders, consult with counsel, accountants and other professionals or experts selected and monitored by the Back-Up Manager in good faith and in the absence of gross negligence, and the Back-Up Manager shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the advice or opinion of any such counsel, accountants or other professionals or experts. (g) No recourse may be taken, directly or indirectly, with respect to the obligations of the Back-Up Manager under this Agreement or any other Related Document or any certificate or other writing delivered in connection herewith or therewith, against any partner, owner, beneficiary, agent, officer, director, employee or agent of the Back-Up Manager, in its individual capacity, any holder of equity in the Back-Up Manager or in any successor or assign of the Back-Up Manager in its individual capacity, except as any such Person may have expressly agreed. (h) Notwithstanding anything herein or in any other Transaction Document to the contrary, in performing its duties as Successor Manager, in no event shall the Back-Up Manager assume or be responsible for any financial obligations or liabilities in connection with the performance of such duties pursuant to the Back-Up Management Agreement, any Management Agreement or any other Transaction Document. Any such obligations or liabilities shall be the sole responsibility of the Co- Issuers and/or the applicable Manager.
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Indemnification and Limitation of Liability of the Back-Up Manager. (a) The Back-Up Manager will indemnify each of the Service Recipients Securitization Entities and their respective members, officers, directors, managers, employees and agents for all claims, losses, penalties, fines, forfeitures, legal fees, liabilities, obligations, damages, actions, suits, and related costs and judgments and other costs, fees and reasonable expenses that any of them may incur as a result of: (i) the material breach by the Back- Back-Up Manager of any representation, warranty or covenant under the Back-Up Managementthis this Agreement or (ii) the Back-Up Manager’s gross negligence, bad faith, willful misconduct or fraudulent behavior in the performance of its duties under the Back-Up Managementthis this Agreement; provided, that the Back-Up Manager will have no obligation of indemnity to any such party to the extent any such claims, losses, penalties, fines, forfeitures, legal fees, liabilities, obligations, damages, actions, suits, and related costs and judgments and other costs, fees and reasonable expenses are caused by such party’s gross negligence, bad faith, willful misconduct or fraudulent behavior.
(b) Except as set forth in the prior paragraphclause (a) above, neither the Back-Up Manager nor any of its members, officers, directors, managers, employees or agents (collectively, the “Back-Up Manager Indemnified Parties”) shall be under any liability to the Service RecipientsSecuritization Entities, the ManagerManagers, the ServicerManager, the Control Party, the Controlling Class Representative, the Trustee, or the Noteholders for any action taken, or not taken, by the Back-Up Manager in good faith pursuant to this Agreement, or for any action taken, or not taken, taken by Back-Up Manager in good faith pursuant to this Agreement due to a the Manager or any other party (including the Control Party) failing to comply with the terms and conditions of the Transaction Documents (including but not limited to any applicable the Management Agreement, the Control Party Agreement and this Agreement) after reasonable request therefor (it being understood that such a reasonable request shall not be construed to require the Back-Up Manager to affirmatively take any legal, administrative, judicial or other action to enforce the provisions of the Transaction Documents), or for errors in judgment made in good faith by the Back-Up Manager unless it is proven that the Back-Up Manager was grossly negligent in ascertaining the pertinent facts; provided, however, that this provision shall not protect the Back-Up Manager Indemnified Parties against liability for any material breach of a representation, warranty or covenant made by the Back-Up Manager herein, or against any expense or liability specifically required to be borne thereby by the Back-Up Manager without right of reimbursement pursuant to the terms hereof, or against any liability that would otherwise be imposed by reason of gross negligence, bad faith, willful misconduct or fraudulent behavior in the performance of their the Back-Up Manager’s obligations or duties hereunder or by reason of the Back-Up Manager’s grossly negligent disregard of such obligations or duties. The Back-Up Manager Indemnified Parties may rely in good faith on any document of any kind which, prima facie, is properly executed and submitted by any Person respecting any matters arising hereunderhereunder or under any other Transaction Document.
(c) The Securitization Entities (including on behalf of the other Service Recipients) shall jointly and severally indemnify and hold harmless the Back-Up Manager Indemnified Parties from and against any claims, losses, penalties, fines, forfeitures, legal fees, liabilities, obligations, damages, actions, suits and related costs and judgments and other costs, fees and reasonable expenses that any of them may incur arising out of or incurred in connection with this Agreement, the Notes, any other Transaction Document or any of the Collateral, other than any such claim, loss, penalty, fine, forfeiture, legal fee, liability, obligation, damage, action, suit and related costcosts, judgment judgments or other costcosts, fee fees or reasonable expenseexpenses: (i) specifically required to be borne by the Back-Up Manager pursuant to the terms hereof or otherwise incidental to the performance of its obligations and duties under this AgreementAgreement without right of reimbursement pursuant to the terms thereof; or (ii) that was incurred in connection with claims against such party the Back-Up Manager resulting from (A) any material breach of a representation, warranty or covenant made herein by such party the Back-Up Manager or (B) the gross negligence, bad faith, willful misconduct or fraudulent behavior of such partythe Back-Up Manager.
(d) The Back-Up Manager shall not be under any obligation under this Agreement to appear in, prosecute or defend any legal action unless such action is related to its respective duties under this Agreement and in its opinion does not involve it in any ultimate expense or liability; provided, however, that the Back-Up Manager may, in its discretion, undertake any such action which it may reasonably deem necessary or desirable with respect to the enforcement and/or protection of its rights and duties. In such event, the reasonable legal expenses and costs of such action, and any liability resulting therefrom, shall be expenses, costs and liabilities of the Securitization Entities (including on behalf except to the extent contemplated by clauses (i) and (ii) of the other Service RecipientsSection 4.4(c)) and the Back-Up Manager shall be entitled to the direct payment of such expense, or to be reimbursed therefor. All indemnities and reimbursements on account of payable to the Back-Up Manager Indemnified Parties pursuant to this Section 4.3 4.4 shall be payable out of funds on deposit in the Collection Account in accordance with the Priority of Payments.
(e) The Back-Up Manager may rely upon, and shall have no liability for actions taken or not taken in good faith and in reasonable reliance upon any resolution, certificate, statement, instrument, report, notice, request, direction, consent or other written information reasonably believed by it to be genuine and delivered by or on behalf of the ManagerManagers, the Service Recipients or the Servicer, without the obligation to investigate the accuracy or completeness of any such Certification or written information.
(f) In the exercise and performance of its duties and obligations hereunder or under any of the Transaction Documents, the Back-Up Manager (i) may act directly or through agents or attorneys pursuant to agreements entered into with any of them and (ii) may, except as otherwise provided in Section 4.3(c4.4(d), at its own expense if it is acting solely on its own behalf and not on behalf of or for the benefit of the Noteholders, consult with counsel, accountants and other professionals or experts selected and monitored by the Back-Up Manager in good faith and in the absence of gross negligence, and the Back-Up Manager shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the advice or opinion of any such counsel, accountants or other professionals or experts.
(gf) No recourse may be taken, directly or indirectly, with respect to the obligations of the Back-Up Manager under this Agreement or any other Related Transaction Document or any certificate or other writing delivered in connection herewith or therewith, against any partner, owner, beneficiary, agent, officer, director, employee or agent of the Back-Up Manager, in its individual capacity, any holder of equity in the Back-Up Manager or in any successor or assign of the Back-Up Manager in its individual capacity, except as any such Person may have expressly agreedagreed in writing.
(g) In no event will the Back-Up Manager or any partner, owner, beneficiary, agent, officer, director, employee or agent of the Back-Up Manager be held liable for any exemplary, punitive, special, indirect or consequential damages of any kind resulting from any action taken or omitted to be taken by it or them under this Agreement. Additionally, the Back-Up Manager will not be liable for any claims, losses, penalties, fines, forfeitures, legal fees, liabilities, obligations, damages, actions suits and related costs and judgments and other costs, fees and reasonable expenses, suffered by any party to any of the Transaction Documents arising out of or caused by any delay in, or failure of, performance by the Back-Up Manager, in whole or in part, arising out of, or caused by, circumstances beyond the Back-Up Manager’s control, including, without limitation: acts of God, earthquakes, fires, floods, wars, civil or military disturbances, sabotage, epidemics, pandemics, riots, interruptions, loss or malfunctions of utilities, computer (hardware or software) or communications service, accidents, labor disputes, acts of civil or military authority or governmental actions, natural disasters, floods, earthquakes, fires or other catastrophe or similar occurrences (it being understood that the Back-Up Manager shall use commercially reasonable efforts to resume performance as soon as practicable under the circumstances).
(h) Notwithstanding anything herein or in any other Transaction Document to the contrary, in performing (a) if the Manager fails to fulfill any of its duties as Successor Manageror obligations (including, in no event shall but not limited to, providing the Back-Up Manager assume with reasonably requested information or be responsible for any financial obligations access to management team members on a timely basis) or liabilities in connection fails to otherwise cooperate with the performance of such duties pursuant to the Back-Up Management AgreementManager, as required under any of the Transaction Documents, in all cases, as determined by the Back-Up Manager in its sole discretion, then to the extent such failure results in the Back-Up Manager not being able to fulfill any of its duties or obligations under this Agreement or any other Transaction Document, the Back-Up Manager will have no obligation to perform such duties or obligations and (b) if the Manager fails to fulfill any of its services or duties required pursuant to the Management Agreement or any other Transaction Document. Any Document (including but not limited to the provision of disentanglement services), the Back-Up Manager shall have no duty or obligation to provide such obligations services or liabilities shall be duties (including as Interim Successor Manager or Successor Manager), and, in the sole responsibility cases of clauses (a) and (b), the Back-Up Manager will have no liability for such action or inaction in connection therewith.
(i) Following the termination or resignation of the Co- Issuers and/or Back-Up Manager pursuant to Section 7.1 or 7.2 of this Agreement, the applicable Back-Up Manager is entitled to receive all accrued and unpaid Back-Up Manager Fees and Back-Up Manager Consent Consultation Fees and any unpaid indemnification payments then due and payable through the effective date of termination or resignation (to the extent the Back-Up Manager is entitled to payment thereof) and the Securitization Entities shall pay all such amounts to the Back-Up Manager in accordance with the Priority of Payments promptly following the termination or resignation of the Back-Up Manager.
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Sources: Back Up Management and Consulting Agreement (Fat Brands, Inc)