MHG LLC GROUP.
In the event that any member of the MHG LLC Group makes a payment to the Morgans
Group LLC Indemnitees hereunder, and any of the Morgans Group LLC Indemnitees
subsequently diminishes the Liabilities on account of which such payment was
made, either directly or through a third-party recovery, Morgans Group LLC will
promptly repay (or will procure an Morgans Group LLC Indemnitee to promptly
repay) such member of the MHG LLC Group the amount by which the payment made by
such member of the MHG LLC Group exceeds the actual cost to the Morgans Group
LLC Indemnitee of the indemnified Liability; provided, however, that in the
event that any indemnified Liability that was diminished is subsequently
reinstated such that the net amount paid by such member of the MHG LLC Group is
less than the amount of the
5
reinstated Liability, such member of the MHG LLC Group shall pay the difference
to Morgans Group LLC or the Morgans Group LLC Indemnitee, as applicable.
SECTION 2.4
INDEMNIFICATION OF SPECIFIC CLAIMS.
NOTWITHSTANDING
ANYTHING HEREIN TO THE CONTRARY:
(A)
INDEMNIFICATION BY MORGANS GROUP LLC.
MORGANS GROUP LLC SHALL
INDEMNIFY, DEFEND AND HOLD HARMLESS THE MHG LLC GROUP INDEMNITEES FROM AND
AGAINST ANY AND ALL LIABILITIES THAT ANY THIRD PARTY SEEKS TO IMPOSE UPON THE
MHG LLC GROUP INDEMNITEES, OR WHICH ARE IMPOSED UPON THE MHG LLC GROUP
INDEMNITEES, IF AND TO THE EXTENT SUCH LIABILITIES RELATE TO, ARISE OUT OF OR
RESULT FROM ANY OF THE FOLLOWING AGREEMENTS (COLLECTIVELY, THE "GUARANTEES AND
OTHER OBLIGATIONS"):
(I)
THE GUARANTY AGREEMENT, DATES AS OF AUGUST 28, 2000, BY MHG LLC
IN FAVOR OF CHEVRON, TCI, INC., AND
(II)
THE JOINT VENTURE AGREEMENT, DATED AS OF SEPTEMBER 7, 1999,
BETWEEN MHG LLC AND CHODOROW VENTURES LLC;
(III)
ANY OTHER GUARANTIES OR INDEMNIFICATION OBLIGATIONS GRANTED TO
THIRD PARTIES RELATING TO THE TRANSFERRED BUSINESS.
(B)
RELEASE. FOLLOWING THE DATE HEREOF, MORGANS GROUP LLC WILL USE ITS
REASONABLE BEST EFFORTS TO OBTAIN A COMPLETE RELEASE OF MHG LLC (AND ALL OTHER
MEMBERS OF THE MHG LLC GROUP IF APPLICABLE) FROM ALL LIABILITIES AND OBLIGATIONS
UNDER THE GUARANTEES AND OTHER OBLIGATIONS.
THE RELEASE RELATING TO SUCH
GUARANTEES SHALL BE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO MHG LLC;
PROVIDED, HOWEVER, THAT MORGANS GROUP LLC SHALL NOT BE REQUIRED TO SPEND MORE
THAN A NOMINAL AMOUNT OF ITS OWN FUNDS TO OBTAIN SUCH RELEASE.
(C)
LIMITATIONS ON INDEMNIFICATION.
IN DETERMINING INDEMNIFICATION
PAYMENTS PURSUANT TO THIS SECTION 2.4, THE PARTIES SHALL MAKE APPROPRIATE
ADJUSTMENTS FOR RECOVERY OF TAX BENEFITS AND INSURANCE COVERAGE. A PARTY
ENTITLED TO INDEMNIFICATION PURSUANT TO THIS SECTION 2.4 SHALL USE ITS
COMMERCIALLY REASONABLE EFFORTS TO MITIGATE ANY DAMAGES FOR WHICH IT MAY BE
ENTITLED TO INDEMNIFICATION HEREUNDER. IF EACH PARTY OWES AN AMOUNT TO THE
OTHER, THE TWO AMOUNTS SHALL BE OFFSET AND NETTED AGAINST EACH OTHER AND ONLY
THE NET AMOUNT SHALL BE PAID.
SECTION 2.5
PROCEDURES FOR DEFENSE, SETTLEMENT AND INDEMNIFICATION
OF THIRD PARTY CLAIMS.
(A)
NOTICE OF CLAIMS.
IF AN MHG