Common use of Residual Liabilities Clause in Contracts

Residual Liabilities. The Defaulting Member shall be solely responsible for, and shall indemnify, defend and hold harmless the Non-Defaulting Member and the Company from, all losses, liabilities, damages, costs, and/or expenses (including without limitation Costs of Litigation) incurred by the Company and/or the Non-Defaulting Member (“Residual Liabilities”) as a result of (i) any Event of Default by the Defaulting Member which has not been cured by the Closing Date; or (ii) the condition of title to the Defaulting Member’s Interest not being as required herein. Anything contained herein to the contrary notwithstanding, at the Non-Defaulting Member’s election, a reasonable amount not to exceed ten percent (10%) of the Default Price (the “Holdback Amount”) shall be held back from the Default Price for application to any Residual Liabilities that were not taken into account in the calculation of the Default Price. The Holdback Amount, to the extent not applied to the payment of Residual Liabilities, shall be released to the Defaulting Member eighteen (18) months following the Closing or sooner as reasonably determined by the Non-Defaulting Member; provided, however, that for potential Residual Liabilities as to which the Non-Defaulting Member has given the Defaulting Member written notice prior to the expiration of such eighteen (18) month or sooner period, the Holdback Amount shall be retained until all liabilities arising out of the potential Residual Liabilities described in such written notice have been satisfied.