A general indemnity clause is a contractual provision in which one party agrees to reimburse the other for any losses, damages, or liabilities incurred due to specified events or actions, regardless of fault. This clause is designed to allocate risk and protect the indemnified party from financial harm resulting from certain events or misconduct.
At the Closing, the General Indemnity Escrow Amount shall be deposited into the General Indemnity Escrow Account and the Special Indemnity Escrow Amount shall be deposited into the Special Indemnity Escrow Account, in each case to be held and distributed by Citizens Bank, N.A. (the “Escrow Agent”) in accordance with the terms of this Agreement and the Escrow Agreement.
“General Indemnity Escrow Amount” shall mean $894,375.
“General Indemnity Escrow Fund” shall mean the General Indemnity Escrow Amount, plus any interest paid or earned on the General Indemnity Escrow Amount.
Release of General Indemnity Escrow Fund. On the date that is twelve (12) months after the Closing Date, any portion of the General Indemnity Escrow Amount then-remaining in the General Indemnity Escrow Fund, less the aggregate of all amounts reasonably necessary to continue to serve as security for any then-unresolved Claim Certificate or Third Party Claim Notice (“Held Back Amounts”) therefore received, shall be released from the General Indemnity Escrow Fund to the Share Seller, and the Share Seller and the applicable Buyer party shall, within five (5) Business Days of such date that is twelve (12) months after the Closing Date, deliver joint instructions to the Escrow Agent to effectuate such release. Any Held Back Amounts shall remain in the General Indemnity Escrow Fund and released to the Share Seller as soon as, and to the extent that, they are no longer in good faith reasonably necessary to continue to serve as security for a Claim Certificate or Third Party Claim Notice, at which time the Share Seller and the applicable Buyer party shall instruct the Escrow Agent to release any such amount in accordance with the final resolution thereof.
All amounts received by the Buyers as indemnification from the General Indemnity Escrow Fund pursuant to this Agreement shall be treated for all Tax purposes as adjustments to the Adjusted Share Purchase Price. None of the parties shall take any position on any Tax Return, or before any Governmental Entity, that is inconsistent with such treatment, except upon a contrary final determination by an applicable Tax authority.
“General Indemnity Escrow Amount” means $155,000 (One Hundred Fifty-Five Thousand U.S. Dollars).
“General Indemnity Escrow Fund” means the General Indemnity Escrow Amount, together with any interest and other income thereon, if any.
(a)Any portion of the General Indemnity Escrow Amount being held by the Escrow Agent on the first year anniversary date of the Closing Date (“General Indemnity Escrow Expiration Date”) shall be paid to Sellers within five (5) Business Days after the General Indemnity Escrow Expiration Date, less the amount of any indemnity claims of the Buyer Indemnified Parties hereunder which are recoverable from the General Indemnity Escrow Fund and which remain unresolved (or resolved but unpaid) as of such date. Upon the final resolution and payment of such unresolved or unpaid indemnity claims of the Buyer Indemnified Parties, any remaining portion of the General Indemnity Escrow Amount, which is then in excess of the aggregate unresolved or unpaid indemnity claims of the Buyer Indemnified Parties recoverable from the General Indemnity Escrow Fund, shall be paid to Sellers by the Escrow Agent within five (5) Business Days. Buyer and Sellers will cooperate to provide joint written instructions to the Escrow Agent with respect to any payments required to be made from the General Indemnity Escrow Fund hereunder.
General Indemnity. The Sellers and the Seller Individuals, jointly and severally, undertake to fully indemnify on demand and hold harmless the Buyer from and against all and any Losses howsoever incurred by the Buyer arising from any breach of any Warranties.
Specific Indemnity. Without prejudice to the generality of clause 9.1 (General Indemnity), the Sellers and Seller Individuals undertake to indemnify and hold harmless the Buyer from and against any Losses incurred by the Buyer arising from any debt or liabilities of any Group Company (including liabilities for Tax and Transaction Expenses incurred by the Sellers, the Seller Individuals and the Group) incurred up to and including the date of this Agreement, save for where such debts or liabilities have been already accounted for and agreed by the Buyer in the Post-Closing Adjustment.
“General Indemnity Escrow Amount” shall mean five million dollars ($5,000,000) together with any earnings thereon, which amount is to be deposited by Parent with the Escrow Agent into the Escrow Account in accordance with the terms of this Agreement and held and released pursuant to the terms and subject to the conditions set forth in this Agreement and the Escrow Agreement.
General Indemnity Escrow Amount, Expense Fund Amount and Adjustment Holdback Amount. Notwithstanding any other provisions of this Agreement to the contrary, (i) the payment of Per Share Merger Consideration shall be reduced by (A) the Pro Rata Share of the General Indemnity Escrow Amount, (B) the Pro Rata Share of the Expense Fund Amount, and (C) the Pro Rata Share of the Adjustment Holdback Amount, (ii) at the Closing, Parent shall deposit an amount equal to the General Indemnity Escrow Amount into the Escrow Account, (iii) at the Closing, Parent shall deposit an amount equal to the Expense Fund Amount into the Expense Fund and (iv) at the Closing, Parent shall withhold and retain an amount equal to the Adjustment Holdback Amount. For the avoidance of doubt, the right to receive the Per Share Merger Consideration shall be deemed to include the pro rata amount per Common Share of any amounts due to Shareholders and the pro rata amount per share of Restricted Stock due to Restricted Stock Holders (as if they were Shareholders who held Common Shares), if any, in connection with the release and/or payment of the General Indemnity Escrow Amount, the Expense Fund Amount and the Adjustment Holdback Amount in accordance with this Agreement.
8. General indemnity 8.1 Indemnity provisions The Service Agent shall, within three Business Days of demand, indemnify each Secured Party and each Secured Party’s officers, employees and agents against any Losses incurred by each Secured Party or any of its officers, employees and agents in connection with this Agreement including any Losses arising in connection with: (a) the Service Agent’s failure to perform its obligations under the terms of this Agreement; (b) any infringement or alleged infringement of any intellectual property by the use or possession of the Leased Asset; and (c) any claims or actions relating to the protection and defence of the title and interest to the Leased Asset of each Secured Party.
General indemnity is a contractual obligation in which one party (the indemnifier) agrees to compensate another party (the indemnified) for certain potential losses or damages. This form of indemnity is a broad concept often included in various agreements to provide a legal mechanism for risk allocation between parties. The terms of indemnity specify the scope of potential claims covered, methods of compensation, and any limitations or exclusions.
General indemnity should be used in contracts where risk allocation needs to be clearly defined. Here are common scenarios for including a general indemnity clause:
Incorporating a general indemnity clause helps manage and mitigate potential legal and financial risks.
When drafting a general indemnity clause, ensure clarity and specificity. Here are key components:
Example clause:
“Party A agrees to indemnify and hold harmless Party B from any and all claims, damages, losses, and expenses, including but not limited to legal fees, arising out of any negligent acts, errors, or omissions by Party A in the performance of this Agreement, subject to the limitations set forth herein.”
General indemnity clauses are common in various types of contracts, particularly those where risk management is crucial. Typical contracts include:
These clauses are vital in sectors where risk exposure is significant, helping to ensure that parties are adequately safeguarded against unforeseen liabilities.
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Dive deeper into the world of clauses and learn more about these other clauses that are used in real contracts.
A general release clause is a contractual provision where one party waives any current or future claims or rights they may have against the other party, often in exchange for a sum of money or other consideration. This clause aims to bring finality to disputes or potential disputes, preventing any further legal actions related to the matters covered by the release.
The "General Terms and Conditions" clause outlines the foundational rules and principles governing a contractual agreement, ensuring both parties understand their rights, responsibilities, and the procedural framework of the contract. It typically includes provisions on payment terms, confidentiality, liability limitations, and dispute resolution mechanisms.
A good faith deposit is an initial sum paid by a buyer to demonstrate their genuine intent to complete a transaction and secure the terms of a contract. This deposit is typically credited towards the total purchase price upon successful completion of the agreement or may be forfeited if the buyer fails to fulfill their obligations.
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