Does the Even Hotels license agreement extend the licensee's indemnification obligations to liabilities arising from the offer and sale of securities?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
Licensee agrees that its obligations to indemnify and hold harmless IHG and the other indemnitees under paragraphs 8.A. and 13.K. of this License extends to and embraces liabilities arising from or relating
to, directly or indirectly, any and every element of Licensee's offer and/or sale of Securities which Licensee may propose to or does engage in, including (without limitation) any statements, representations or warranties that Licensee and/or its Affiliates may give to or receive from any proposed or actual purchaser of such Securities and/or any claim that Licensee, its Affiliates and/or the officers, directors, managers, members, agents and employees of each of the foregoing, or Licensee's assignee, engaged in fraud, deceit, violation of securities laws or other illegality in connection with Licensee's proposed or actual offer and/or sale of Securities. As with all other indemnification obligations set forth in this License, this specific indemnification obligation will survive the termination or expiration of this License.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, the licensee's indemnification obligations to IHG extend to liabilities arising from the offer and sale of securities. Specifically, the licensee agrees to indemnify and hold IHG harmless for liabilities stemming from any element of the licensee's offer or sale of securities. This includes any statements, representations, or warranties made by the licensee or its affiliates to potential or actual purchasers of securities. It also covers any claims of fraud, deceit, violation of securities laws, or other illegal activities related to the offer or sale of securities. This indemnification obligation survives the termination or expiration of the license.
This means that as an Even Hotels franchisee, you are responsible for any legal or financial repercussions that IHG might face due to your actions or misrepresentations when offering or selling securities related to your franchise. This could include covering IHG's legal costs, settlements, or any damages awarded against them.
Even Hotels requires the franchisee to disclose to all purchasers and offerees in any and all Securities offer and/or sale materials that: (i) neither IHG, nor any of its Affiliates, nor any of their respective officers, directors, managers, agents or employees, will in any way be deemed an issuer or underwriter of the Securities, as those terms are defined in applicable securities laws; (ii) neither IHG, its Affiliates nor any of their respective officers, directors, managers, agents and employees will have any liability or responsibility for any financial statements, projections or other financial information contained in any prospectus, offering and solicitation material or similar written or oral communication; plays (or will play) any role in the offer or sale of Licensee's securities; has any responsibility for the creation or contents of any offering and/or solicitation materials (including any prospectus); in no fashion controls (or will control) Licensee's day-to-day business operations or any element or instrumentality thereof; that any individual or entity purchasing Securities must understand that its sole recourse for any alleged or actual impropriety relating to the offer and sale of such Securities and/or Licensee's operation of its business will be against Licensee (and/or, as may be applicable, the seller of such Securities); and, that in no event may such purchaser seek to impose liability arising from or related to such activity, directly or indirectly, upon any of IHG, its Affiliates or any of their respective officers, directors, managers, agents or employees.