Exhibit 10.81a
AMENDMENT NO. 15 TO INDEMNIFICATION AGREEMENT
THIS AMENDMENT NO. 15 to the Indemnification Agreement is made as of
the [16th] day of October 2003 (as supplemented or modified from time to time,
this "Agreement") by and among AJG Financial Services, Inc., by its Vice
President, General Counsel, as agent (the "Major Shareholder Agent") for Xxxxxxx
X. Xxxxxx, Finova Mezzanine Capital Corp., AJG Financial Services, Inc. ("AJG"),
Environmental Opportunities Fund, Environmental Opportunities Fund Cayman,
Xxxxxxxx Xxxx, M&R Associates, Xxxxxx X. Xxxxxxxx, Xxxxxxx X. Xxxxxxxxx, Xxxxxxx
X. Xxxxxxx and Xxxxxxx Xxxxxxxxx (each, a "Major Shareholder"), US Energy Biogas
Corp., a Delaware Corporation ("Sub"), U.S. Energy Systems, Inc., a Delaware
corporation ("USE") and Cinergy Energy Solutions, Inc., a Delaware corporation
("CES"). Unless indicated otherwise, capitalized terms shall have the same
meanings herein as they have in the Indemnification Agreement (as defined
below).
W I T N E S S E T H:
WHEREAS, the parties hereto, Xxxxxx Alternative Power Corporation
which was merged into Sub and the Major Shareholders have previously entered
into that certain Indemnification Agreement dated as of November 28, 2000 which
was amended by Amendment NO. 1 to the Indemnification Agreement dated as of May
11, 2001, together, (the "Indemnification Agreement");
WHEREAS, the parties hereto now wish to amend the Indemnification
Agreement;
NOW, THEREFORE, in consideration of $10.00 and other consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Section 4(a) of the Indemnification Agreement is hereby amended
by deleting the existing paragraph in its entirety and inserting in its place
the following paragraph:
The Purchaser Indemnitees shall not be entitled to recover under Section
3(a):
i. unless a Notice of Claim (as defined herein) has been
delivered to the Major Shareholders on or prior to October 16, 2003
provided that notwithstanding anything to the contrary in this Section
4(a)(i) Notices of Claim arising from or relating to breaches of Section
3.10, 3.17 and 3.20 of the Merger Agreement may be delivered prior to the
sixth anniversary of the Closing Date and provided further that
notwithstanding anything to the contrary in this Section 4(a)(i) Notices
of Claim arising from or relating to the Specified Section 3(a) Provisions
(as defined below) may only be delivered on or before October 16, 2003;
ii. for Damages to the extent such Damages do not exceed
$4,000,000 (the "Deductible") except that (A) the Deductible for Claims
under Section 3(a)(i) of this Agreement as to Claims relating to breaches
of representations and warranties in Sections
3.01, 3.03, 3.04, 3.05, 3.26 and 3.27 of the Merger Agreement is $500,000,
and (B) the Deductible for Claims under Sections 3(a)(vi) and 3(a)(xii) of
this Agreement is $0;
iii. from any Major Shareholder more than the Merger
Consideration Value of such Shareholder's Scheduled Merger Consideration;
iv. for Damages to the extent such Damages were expressly
included in the Post-Closing Adjustment Amount as provided in Section 2.5
of the Merger Agreement; and
v. with respect to lost profits or punitive damages (other
than punitive damages paid or payable to, or claimed by third parties).
vi. from any Major Shareholder more than the aggregate amount
of the Damages multiplied by a fraction, the numerator of which is the
Merger Consideration Value of such Major Shareholder's Scheduled Merger
Consideration and the denominator of which is the Merger Consideration
Value of all of the Major Shareholders' Scheduled Merger Consideration;
provided however that to the extent that any Major Shareholder does not,
within thirty days following the determination that any Damages are due,
whether by the Major Shareholder Agent, pursuant to Section 4(c) or
otherwise, pay to any Purchaser Indemnitee all of the Damages such Major
Shareholder is obligated to pay, such Purchaser Indemnitee may require
either AJG or Xxxxxxx Xxxxxx or both jointly to pay such amount to the
extent such payment would not require either AJG or Xxxxxxx Xxxxxx to pay
any amount, under this Agreement which would be more than the Merger
Consideration Value of their Scheduled Merger Consideration.
The Specified Section 3(a) Provisions are the following:
(A) Section 3(a)(i) of this Agreement as to Claims relating
to breaches of representations and warranties in
sections 3.06, 3.07, 3.08, 3.09, 3.11, 3.12, 3.13, 3.14,
3.15, 3.16, 3.18, 3.19, 3.21, 3.22, 3.23, 3.24 and 3.28
of the Merger Agreement;
(B) Section 3(a)(ii) of this Agreement;
(C) Section 3(a)(iii) of this Agreement;
(D) Section 3(a)(vii) of this Agreement to the extent a
Claim is incident to a foregoing Claim for which the
deadline has been accelerated to October 16, 2003;
(E) Section 3(a)(viii) of this Agreement;
(F) Section 3(a)(ix) of this Agreement provided that AJG
accelerates the deadline for making its claims against
the Surviving Corporation under the AJG Documents to
October 16, 2003;
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(G) Section 3(a)(x) of this Agreement provided that AJG
accelerates the deadline for making claims against the
Surviving Corporation under the AJG Gasco Documents to
October 16, 2003;
(H) Section 3(a)(xiii) of this Agreement; and
(I) Section 3(a)(xiv) of this Agreement.
The ZAPCO Indemnitees shall not be entitled to recover under Section 3(b):
i. unless a Notice of Claim (as defined herein) has been
delivered to the Beneficiaries, on or prior to October 16, 2003 except that
Notices of Claim arising from or relating to the breaches of Sections 4.09, 4.15
and 4.18 of the Merger Agreement may be delivered prior to the sixth anniversary
of the Closing Date and provided further that notwithstanding anything to the
contrary in this Section 4(a) Notices of Claim arising from or relating to the
Specified Section 3(b) Provisions (as defined below) may only be delivered on or
before October 16, 2003;
ii. for Damages to the extent such Damages do not exceed
$500,000 in the aggregate;
iii. to the extent the aggregate claims actually paid by the
Beneficiaries to the ZAPCO Indemnitees thereunder exceeds $13,000,000 and the
Merger Consideration Value (other than the aggregate Cash Payment (as defined in
the Merger Agreement)) which all of ZAPCO's stockholders are entitled to receive
pursuant to Schedule 2.01 (a);
iv. with respect to lost profits or punitive damages (other
than punitive damages paid or payable to, or claimed by third parties); and
v. unless the claim is brought by the Major Shareholder Agent.
The Specified Section 3(b) Provisions are the following:
(A) Section 3(b)(i) of this Agreement as to Claims
relating to breaches of representations and
warranties in Sections 4.06, 4.07, 4.08, 4.10, 4.11,
4.12, 4.13, 4.14, 4.16, 4.17, 4.19, 4.20, 4.21 and
4.22 of the Merger Agreement;
(B) Section 3(b)(ii) of this Agreement; and
(C) Section 3(b)(iii) of this Agreement to the extent a
Claim is incident to a foregoing Claim for which the
deadline has been accelerated to October 16, 2003.
2. Except as amended hereby, the Indemnification Agreement is
hereby ratified and confirmed and, as so amended, remains in full force and
effect on the date hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first written above.
US ENERGY BIOGAS CORP.
By: ____________________________
Name: Xxxxxxx X. Xxxxxxxxx
Title: President and CEO
MAJOR SHAREHOLDER AGENT:
By: ________________________________
Name: Xxxx X. Xxxxxxxxx
Title: Vice President and General Counsel
For: AJG Financial Services, Inc.
CINERGY ENERGY SOLUTIONS, INC.
By: ________________________________
Name:
Title:
U.S. ENERGY SYSTEMS, INC.
By: _______________________________
Name: Xxxxx Xxxxxxx
Title: Chief Executive Officer
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