Drafting Indemnification Provisions in Commercial Loan Transactions
Triggering Events, Damages Covered, Standard of Care, Indemnities in Syndicated Loans
Recording of a 90-minute premium CLE webinar with Q&A
This CLE course will provide an analytical framework for drafting and negotiating indemnity provisions in commercial loan agreements. The panel will discuss the types of indemnities typically found in commercial finance transactions and the use of insurance as a substitute or a supplement to indemnity. They will explain the differences between covenant, guaranty, and indemnity.
- The legal effect of indemnity
- Building blocks of an indemnification clause
- Identifying indemnitor(s) and indemnitee(s)
- Defining covered damages and events
- Standard of care as defense
- Triggering events
- Technical elements
- Baskets and caps on the claim
- Term and survival periods
- Limitation on types of damages: consequential, punitive
- Choice of attorneys
- Typical borrower indemnities
- General indemnity of the lender
- Taxes attributable to loan payments, disposition of collateral
- Losses resulting from representation, warranty, or covenant breach
- Indemnity for agent duties under any syndicated loan agreement
- Extended indemnity for information provided to the lender in connection with a syndication or secondary market transaction
- Enforcement Issues
- Addressing insurance in the indemnity
The panel will review these and other vital questions:
- Why is an indemnity different from covenant and guaranty?
- What are the fundamental components of an indemnification provision?
- What are some considerations in negotiating caps on liability, survival periods, and types of damages?
- What types of specific indemnities are standard for commercial loan transactions?
- What additional indemnities should be considered in syndicated and securitized deals?
- When is insurance an appropriate substitute or supplement for an indemnity?
Alison R. Manzer
Cassels Brock & Blackwell
Ms. Manzer is a member of the Firm's Financial Services Group. Her practice encompasses a broad range of commercial... | Read More
Ms. Manzer is a member of the Firm's Financial Services Group. Her practice encompasses a broad range of commercial practice in the financial services sector, including financial institution regulation, corporate and commercial lending, asset-based financing, securitization and structured finance, private equity, project finance, asset finance and leasing, business reorganization, syndicated lending and related areas. A significant part of her practice involves multi-jurisdiction transactions where she has expertise in the structuring requirements of financing, investment and securitization transactions to solve taxation, conflicts of laws, document structure, currency and rate issues, among others.Close
Aimee C. Oleson
Sheppard Mullin Richter & Hampton
Ms. Oleson’s practice focuses on complex, high-stakes business and tort litigation for corporate entities... | Read More
Ms. Oleson’s practice focuses on complex, high-stakes business and tort litigation for corporate entities throughout the U.S. She regularly prosecutes and defends claims for clients in the energy, healthcare, insurance, multi-level marketing, construction and financial industries. In addition to general counsel, owners and executives, Ms. Oleson’s clients include third-party administrators, non-profit entities and membership organizations. Her work often comprises multiple suits in different jurisdictions with a regulatory component.Close