Common use of Computation of Losses Subject to Indemnification Clause in Contracts

Computation of Losses Subject to Indemnification. Losses for which an Indemnified Party would be entitled to indemnification hereunder shall be determined net of: (i) any insurance proceeds actually recovered by such Indemnified Party, provided, however, that the Indemnified Party shall not be required to submit an insurance claim; (ii) indemnity payments to which such party or its Affiliates receives from parties other than the Indemnifying Party hereunder in respect of such matter; (iii) reserves reflected in the Final Statement of Net Assets or adjustments to the Purchase Price which relate to the Loss being determined hereunder; and (iv) any other economic benefit, cost of offset (including any Tax savings, benefits of Tax losses and deferrals, and the Tax offset of the receipt of any indemnification or insurance payments) realized by such party or its Affiliates by the receipt of cash, cash equivalents or other customarily quantifiable property by such party in respect of such matter, or any other direct demonstrable economic gain, except that with respect to Losses in the nature of additional Taxes, (a) such economic benefit need not be in the form of cash, cash equivalents or customarily quantifiable property, and (b) with respect to adjustments relating to the timing of Tax deductions and similar items, such losses shall be limited to the time value of the Loss. Notwithstanding anything to the contrary, Losses shall not include any damages to the extent attributable to a failure to mitigate damages after the Indemnified Party or its Affiliates became aware of the event or omissions which caused such damages (it being understood that the concept of mitigation of damages shall be applied with regard to what is commercially reasonable under the circumstances). Notwithstanding anything in this Section 7.5, in no event shall an Indemnifying Party be required to pay more than 100% of the gross Losses of an Indemnified Party under this Agreement.

Computation of Losses Subject to Indemnification. (a) Purchaser, Life Reinsurer, Seller and USA Holdco agree, on behalf of all Purchaser Indemnified Parties and Seller Indemnified Parties, that Losses for which an Indemnified Party would be entitled to indemnification hereunder shall be determined net of: limited to actual monetary damages only and shall not include any exemplary, consequential (including lost profits) or punitive damages; provided, that Losses shall include (i) lost profits in respect of any claim under Sections 7.2(a)(2), 7.2(c)(2) or 7.3(a)(2) and (ii) any such exemplary, consequential (including lost profits) and punitive damages awarded by a court of competent jurisdiction in respect of a Third-Party Claim. Except to the extent governed by Article 8 (Tax Matters), any Indemnified Party seeking indemnification under this Agreement shall use reasonable efforts to mitigate the amount of its Losses, including, subject to Section 7.6(b), by using reasonable efforts to recover from insurance proceeds actually recovered policies or other applicable sources of recovery, any Losses of such Indemnified Parties; it being understood that in the event that an Indemnified Party’s rights against a Third Party with respect to any occurrence, claim or loss that results in a payment by an Indemnifying Party under this Article 7, such Indemnifying Party shall be subrogated to such rights to the extent of such payment; provided, further, that the Purchaser Indemnified Parties shall use their reasonable efforts to protect and preserve any rights to indemnification from Third Parties to which the Company is entitled as of the date of this Agreement (the “Company Indemnification Rights”) and the Purchaser Indemnified Parties shall not take any action that would prejudice or adversely affect any Company Indemnification Right without the written consent of Seller. (b) The Indemnified Parties’ obligations under this Section 7.6 shall not, nor shall they be construed to, require Purchaser, Life Reinsurer or any of their respective Affiliates to (i) mitigate, net or reduce the amount of their Losses or (ii) otherwise reimburse an Indemnifying Party, in each of case (i) and (ii), to the extent doing so would require any of them to recover any payments pursuant to any agreement entered into by such Indemnified Party with Purchaser, Life Reinsurer or any of their respective Affiliates in connection with the transactions contemplated by the Transaction Agreements, nor shall such Indemnifying Party be subrogated to any right under any such agreement in respect of any payment made by an Indemnifying Party, ; provided, however, that such Indemnified Parties shall nevertheless be required to use reasonable efforts to recover ordinary course policyholder claims under the Closing Date Reinsurance Agreements (but not Extra-Contractual Obligations, as defined therein). (c) Seller and USA Holdco shall be liable for the reasonable out-of-pocket fees and expenses incurred by the Purchaser Indemnified Parties that are directly related to the pursuit by the Purchaser Indemnified Parties of recoveries from insurance policies or Third Parties in accordance with Section 7.6(a); provided, however, that Seller and USA Holdco shall only be liable to Purchaser Indemnified Parties for such fees and expenses if Purchaser Indemnified Parties consult with Seller or USA Holdco with respect to the pursuit of any such recovery and the incurrence of any such fees and expenses (including the Persons to whom such fees or expenses are contemplated to be paid). (d) Any liability for indemnification under this Agreement shall be determined without duplication of recovery by reason of the state of facts giving rise to such liability constituting a breach of more than one representation or warranty or agreement and shall be net of any insurance or other recoveries (subject to Section 7.6(b)) relating to the relevant claims actually received by the Indemnified Party (after taking into account any deductibles, copayments or other cost-sharing arrangements) in connection with the facts giving rise to such right of indemnification, net of all actual out-of-pocket costs and expenses reasonably incurred by the Indemnified Party in obtaining such recovery, but it being understood and agreed that Purchaser and Life Reinsurer shall not be required indemnified by Seller or USA Holdco in respect of the same Loss except to submit the extent (and solely to the extent) that Purchaser and Life Reinsurer have each actually suffered such Loss or portion thereof. If the Indemnified Party or an Affiliate receives any amounts under applicable insurance claim; policies or from any other Person (iisubject to Section 7.6(b)) indemnity payments alleged to which be responsible for any Losses, subsequent to an indemnification payment by the Indemnifying Party, then such party or its Affiliates receives from parties other than Indemnified Party shall promptly reimburse the Indemnifying Party hereunder for any payment made or expense incurred by such Indemnifying Party in respect of connection with providing such matter; (iii) reserves reflected in the Final Statement of Net Assets or adjustments indemnification payment up to the Purchase Price which relate to the Loss being determined hereunder; and (iv) any other economic benefit, cost of offset (including any Tax savings, benefits of Tax losses and deferrals, and the Tax offset of the receipt of any indemnification or insurance payments) realized amount received by such party or its Affiliates by the receipt of cash, cash equivalents or other customarily quantifiable property by such party in respect of such matter, or any other direct demonstrable economic gain, except that with respect to Losses in the nature of additional Taxes, (a) such economic benefit need not be in the form of cash, cash equivalents or customarily quantifiable property, and (b) with respect to adjustments relating to the timing of Tax deductions and similar items, such losses shall be limited to the time value of the Loss. Notwithstanding anything to the contrary, Losses shall not include any damages to the extent attributable to a failure to mitigate damages after the Indemnified Party or its Affiliates became aware Affiliate, net of all actual out-of-pocket costs and expenses reasonably incurred by the Indemnified Party in obtaining such recovery. (e) No Loss shall be recoverable by any Indemnified Party with respect to any matter to the extent (but only to the extent) reflected or reserved against in the preparation of the Final Balance Sheet. In calculating the amount of any Loss, there shall be deducted an amount equal to any net Tax benefit realized as a result of such Loss by the party claiming such Loss, and there shall be added an amount equal to any Tax imposed (including the utilization of a Tax loss or Tax credit carried forward) on the receipt of any indemnity payment with respect thereto. All such calculations shall be made at the time of the relevant indemnification payment using reasonable assumptions (as agreed to by the Indemnifying Party and the Indemnified Party) and present value concepts (using a discount rate equal to the applicable federal rate in effect at the time of the event or omissions which caused such damages giving rise to the Loss (it being understood that based on the concept of mitigation of damages shall be applied with regard to what is commercially reasonable under the circumstancesfederal mid-term rate). Notwithstanding anything in this Section 7.5, in no event shall an Indemnifying Party be required to pay more than 100% of the gross Losses of an Indemnified Party under this Agreement).

Computation of Losses Subject to Indemnification. (a) Losses for which an Indemnified Party would be entitled to indemnification hereunder shall be determined net of: of and by taking into account: (i) any insurance proceeds actually recovered by such Indemnified Party, provided, however, that the Indemnified Party shall not be required to submit an insurance claim; ; (ii) indemnity payments to which such party or its Affiliates receives is entitled from parties other than the Indemnifying Party hereunder in respect of such matter; and (iii) reserves reflected in the Final Statement of Net Assets or adjustments to the Purchase Price which relate to the Loss being determined hereunder; and (iv) any other economic benefit, cost of offset (including any Tax savings, benefits of Tax losses and deferrals, and the Tax offset of the receipt extent of any indemnification Indemnified Party’s direct or insurance payments) realized by indirect equity holding position of any entities to which such party or its Affiliates by the receipt of cash, cash equivalents or other customarily quantifiable property by such party Losses relate in respect of the proportional amount of Losses for which indemnification is properly due and owing. (b) If an Indemnifying Party indemnifies an Indemnified Party with respect to Taxes, and such matterIndemnified Party actually realizes a Tax Benefit in the year the indemnification payment is made, or any other direct demonstrable economic gainyear thereafter, except that the Indemnified Party shall pay to the Indemnifying Party the amount of such Tax Benefit, but not in excess of the indemnification payment or payments actually received by the Indemnified Party from the Indemnifying Party with respect to Losses in such Losses. For purposes of this Section 8.5(b), the nature of additional Taxes, Indemnified Party shall be deemed to actually realize a tax benefit (a) such economic benefit need not be in the form of cash, cash equivalents or customarily quantifiable property, and (b“Tax Benefit”) with respect to adjustments relating to the timing of Tax deductions a taxable year if, and similar items, such losses shall be limited to the time value of the Loss. Notwithstanding anything to the contrary, Losses shall not include any damages to the extent attributable to that, the Indemnified Party’s liability for Taxes of a failure to mitigate damages after taxable year is less than the actual liability for Taxes that would have been imposed on the Indemnified Party or its Affiliates became aware for such taxable year if the circumstances giving rise to the Indemnifying Party’s obligation to indemnify the Indemnified Party had not occurred and the indemnity had not been paid. The amount of such Tax Benefit shall be determined by the Indemnified Party; provided, however, that if the Indemnifying Party shall dispute such calculation the Indemnified Party shall, at the request of the event or omissions which caused Indemnifying Party, submit such damages (it being understood that determination to the concept of mitigation of damages Indemnified Party’s independent public accounting firm for verification and shall be applied permit the Indemnifying Party to discuss such calculation with regard to what is commercially reasonable under the circumstances). Notwithstanding anything in this Section 7.5Indemnified Party’s independent public accounting firm, but in no event shall an the Indemnifying Party be required provided access to pay any confidential information including tax returns or reports of the Indemnified Party, and the determination of the independent public accounting firm shall be final. The cost of the independent accounting firm shall be paid by the Indemnifying Party unless the accountant determines that the Tax Benefit should be increased by more than 1005% of the gross Losses Tax Benefit set forth in the Indemnified Party’s calculation, in which case the Indemnified Party shall pay the costs of the accountant. For the purposes of this Section 8.5(b) any Pre-Closing Period Taxes paid by Seller (or, prior to Closing, by EPE) pursuant to the resolution or settlement of an Indemnified Party under this Agreementaudit pursuant to Section 6.5 shall be deemed to have been paid to Purchasers as an indemnification payment.