§ 1.7.5.3 ADVANCEMENT FOR EXPENSES.

• Jurisdiction: Arizona

§ 1.7.5.3 Advancement for Expenses. A.R.S. § 10-853(A) permits a corporation to advance the reasonable expenses incurred by a director who is a party to a proceeding prior to a final disposition of the proceeding if both of the following conditions exist: (1) the director furnishes the corporation with a written affirmation of a good faith belief that he or she has met the standard of conduct described in A.R.S. § 10-851 (see Permissive Indemnification of Directors section above) or that the proceeding involves conduct for which liability has been eliminated by the corporation's articles of incorporation, and (2) the director furnishes the corporation with a written undertaking, executed personally or on the director's behalf, to repay the advance if he or she is not entitled to mandatory indemnification under A.R.S. § 10-852 and it is ultimately determined under A.R.S. § 10-854 (see Court Ordered Indemnification section below) or § 10-855 (see Determination and Authorization of Indemnification below) that he or she did not meet the standard of conduct.³⁸

The undertaking to repay the advance is an unlimited obligation, but need not be...