INDEMNIFICATION AGREEMENT GREAT HEARTS.DOCX

INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (“Agreement”) is made and entered into as
of effective as of the ____ day of January, 2016, by Great Hearts Academies, an Arizona
nonprofit corporation (“Great Hearts”), for the benefit of the Indemnified Parties (as defined
herein).
WHEREAS, Great Hearts has requested The Industrial Development Authority of the
City of Phoenix, Arizona (the “Authority”) issue and sell not to exceed $55,000,000 of the
Authority’s Education Facility Revenue Bonds (the “Bonds”) and loan the proceeds derived from
the sale of the Bonds to Great Hearts to assist it in financing and refinancing the cost of
acquiring, constructing, renovating, improving and equipping charter school educational
facilities at locations in Maricopa County, Arizona, including specifically (a) the Archway
Classical Academy – Glendale and Glendale Preparatory Academy campus at 23276 North 83rd
Avenue, Peoria, Maricopa County, Arizona, (b) the Scottsdale Preparatory Academy campus
located at 16537 North 92nd Street, Scottsdale, Maricopa County, Arizona, and (c) the Scottsdale
Preparatory Academy athletic fields to be located at 9112 East Verde Grove View, Scottsdale,
Maricopa County, Arizona (the “Maricopa County Projects”); and
WHEREAS, prior to the issuance of the Bonds, Great Hearts and the Authority must
satisfy the public hearing and approval requirements of Section 147(f) of the Internal Revenue
Code of 1986, as amended (the “Code”) and the regulations promulgated thereunder (the
“Regulations”), which require that the “governmental unit having jurisdiction over the area in
which any facility, with respect to which the financing is to be provided from the net proceeds of
such issue, is located” approve the issuance of the Bonds; and
WHEREAS, Maricopa County is a governmental unit having jurisdiction over the areas
of Maricopa County in which the Maricopa County Projects are located and Maricopa County is
a governmental unit which must approve the issuance of the Bonds for the purpose of satisfying
the requirements of Section 147(f) of the Code; and
WHEREAS, the Board of Supervisors of Maricopa County is the governing body of
Maricopa County and the individuals who are members of this Board are the highest elected
officials of Maricopa County; and
WHEREAS, the Borrower has requested Maricopa County to approve the issuance of the
Bonds, a portion of which, in an amount not to exceed $34,000,000, will be for the Maricopa
County Projects in order to satisfy the requirements of Section 147(f) of the Code; and
WHEREAS, Maricopa County as a condition to approving the issuance of the Bonds for
the purpose of satisfying Section 147(f) of the Code has required that Great Hearts indemnify the
Indemnified Parties in the manner and to the extent provided herein; and
WHEREAS, the term “Indemnified Parties” shall, for all purposes of this Agreement,
mean Maricopa County, the past, present and future members of the Board of Supervisors of
Maricopa County, and its employees and agents, individually and collectively.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Great Hearts agrees as follows:
Great Hearts hereby covenants and agrees that it shall indemnify and hold harmless each
of the Indemnified Parties from and against any and all claims by or on behalf of any person
arising from any cause whatsoever in connection with this Agreement, the Maricopa County
Projects or the sale of the Bonds, or the validity or enforceability of the Bonds or the tax-exempt
status of interest thereon, and all costs, reasonable counsel fees, expenses or liabilities incurred in
connection with any such claim or proceeding brought thereon; except that Great Hearts shall not
be required to indemnify any person for damages caused by the negligence or willful misconduct
or breach of contract of such person. In the event that any action or proceeding is brought
against any one or more of the Indemnified Parties with respect to which indemnity may be
sought hereunder, Great Hearts, upon written notice from the Indemnified Party (which notice
shall be given in a timely manner so as not to impair Great Hearts’ rights to defend), shall
assume the investigation and defense thereof, including the employment of counsel acceptable to
the Indemnified Party and the payment of all expenses. An Indemnified Party shall have the
right to employ separate counsel in any such action or proceeding and to participate in the
defense thereof, but, unless such separate counsel is employed with the approval and consent of
Great Hearts, or because of a conflict of interest between Great Hearts and the Indemnified
Party, Great Hearts shall not be required to pay the fees and expenses of such separate counsel.
Great Hearts agrees to execute any additional documents deemed necessary by an Indemnified
Party to evidence the indemnification provided for in this Agreement. At the request of
Maricopa County, Great Hearts agrees, in addition to the above indemnification, to pay the
reasonable costs and expenses of the County Attorney of Maricopa County or special counsel
engaged to represent Maricopa County in connection with the action or proceeding giving rise to
indemnification.
Great Hearts hereby further indemnifies, and agrees to defend and hold harmless, the
Indemnified Parties against any and all losses, claims, damages, liabilities or expenses
whatsoever caused by any untrue or misleading statement, or alleged untrue or misleading
statement, of a material fact contained in any offering or disclosure document relating to the
Bonds (“Disclosure Statement”) or the omission or alleged omission of any material fact of any
Disclosure Statement.
Any party entitled to indemnification hereunder shall notify Great Hearts of the existence
of any claim, demand, or other matter to which Great Hearts’ indemnification obligation applies,
and shall give Great Hearts a reasonable opportunity to defend the same at its own expense and
with counsel satisfactory to the Indemnified Party; provided that an Indemnified Party shall at all
times also have the right to fully participate in the defense. If an Indemnified Party is advised in
an opinion of counsel that there may be legal defenses available to it which are different from or
in addition to those available to Great Hearts or if Great Hearts shall, after receiving notice of
Great Hearts’ indemnification obligation and within a period of time necessary to preserve any
and all defenses to any claim asserted, fails to assume the defense or to employ counsel for that
purpose satisfactory to an Indemnified Party, the Indemnified Party shall have the right, but not
the obligation, to undertake the defense of, and to compromise or settle the claim or other matter
on behalf of, for the account of, and at the risk of, Great Hearts. Great Hearts shall be
2

responsible for the reasonable counsel fees, costs, and expenses of the Indemnified Party in
conducting its defense.
Great Hearts’ obligations under this Agreement shall survive the payment and retirement
of the Bonds and the termination of the documents under which the Bonds were authorized.
IN WITNESS WHEREOF, Great Hearts has caused this Agreement to be duly executed
as of the date and year first above written.
GREAT HEARTS ACADEMIES, an Arizona
nonprofit corporation
By:
Name:
Title:
PHX 331621219v3
3