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Extract to table / insurance-due-diligence-memo.docx
insurance-due-diligence-memo.docx
Parties
DILIGENCE MEMORANDUM NovaMart Global Inc
HARKNESS LLP
Cascade Retail Holdings Inc
NovaMart Global Inc
PayStream Financial Technologies Inc
Strand Insurance Brokers Inc
Redline Freight Corp
Pinnacle Cloud Solutions Inc
Dates
February 18, 2025
December 31, 2024
December 31, 2022
March 4, 2025
March 19, 2025
March 12, 2025
February 26, 2025
March 14, 2025
March 28, 2025
July 1, 2025
Amounts
$1,200,000,000
$891
$6.2
$1,800,000
$216,000,000
$12,000,000
$15,000,000
$25,000,000
$50,000,000
$10,000,000
Obligations
Notwithstanding the foregoing, our review has identified several coverage gaps and adequacy issues, as well as a number of action items that must be addressed at or prior to closing
This placement must be finalized and bound at closing in coordination with the SPA indemnification provisions and the escrow arrangement
Under the terms of NovaMart's lease agreements, the respective landlords are generally responsible for maintaining property insurance on the building structures themselves, while NovaMart is required to maintain property insurance on its tenant improvements, equipment, and contents at each location
• Tail Period: Six (6) years from the closing date • Limits: $10,000,000 per claim / $10,000,000 aggregate (same as existing policy) • Coverage: Claims made during the six-year tail period for wrongful acts by NovaMart's pre-closing directors and officers occurring prior to the closing date • Estimated Tail Premium: $1,800,000 (payable in a lump sum at binding) • Cost Allocation: The $1,800,000 tail premium is a Cascade-side transaction cost, included in the estimated $47,300,000 total transaction costs for the Transaction The tail policy must be bound at or prior to the closing of the Transaction
A six-year tail policy must be bound at or prior to closing to ensure uninterrupted protection for NovaMart's pre-closing directors and officers
E above) must be addressed in this process to ensure continuity of coverage for that pending matter