Additional Indemnification Provisions. In addition to any other limitations contained in Article IX or this Article X, the obligations of Seller, Parent and Purchaser to indemnify any Purchaser Indemnified Party or Seller Indemnified Party, as the case may be, are subject to the following: (a) Seller and Parent shall be obligated to provide indemnification pursuant to Section 10.1(a)(i) (other than with respect to the Seller Fundamental Representations and the representations and warranties set forth in Section 3.20) only if the aggregate dollar amount of Losses with respect to all breaches of, or inaccuracies in, representations and warranties referred to in Section 10.1(a)(i) (other than with respect to the Seller Fundamental Representations and the representations and warranties set forth in Section 3.20) exceeds $12,500,000 (the “Deductible”), and then only for the amount of such Losses in excess of the Deductible. (b) The maximum aggregate liability of Seller and Parent for indemnification for all Losses pursuant to Section 10.1(a)(i) (other than with respect to the Seller Fundamental Representations and the representations and warranties set forth Section 3.20) shall be an amount equal to 22.5% of the sum of (i) the Purchase Price as finally adjusted in accordance with Section 2.5 and (ii) the Ceding Commission as finally adjusted as set forth in the MLOA Reinsurance Agreement. (c) For purposes of this Article X (i) the amount of Losses arising out of or relating to a breach of or an inaccuracy in a representation or warranty that is subject to indemnification pursuant to Section 10.1(a)(i) or Section 10.1(b)(i) shall be deemed to exist either if such representation or warranty is actually inaccurate or breached or would have been inaccurate or breached if such representation or warranty had not contained any qualification as to materiality, Business Material Adverse Effect, Purchaser Material Adverse Effect (which, in each case, instead will be read as any adverse effect or change) or similar language or, with respect to the representation and warranty in Section 3.21(e) only, if such representation and warranty had not contained any qualification as to Knowledge, and (ii) the amount of Losses in respect of a breach resulting from the application of clause (i) above shall be determined without regard to any limitation or qualification as to materiality, “Business Material Adverse Effect,” “Purchaser Material Adverse Effect” (which instead will be read as any adverse effect or change) or similar materiality qualification or, with respect to the representation and warranty in Section 3.21(e) only, without regard to the limitation or qualification as to the “Knowledge of Seller,” contained in such representation or warranty, other than any such limitation or qualification contained in Section 3.15 (Absence of Certain Changes) or Section 3.17 (No Undisclosed Liabilities), or that is inherent in the methods, procedures and practices that constitute Applicable Accounting Principles for purposes of the second sentence of Section 3.16(a)(i) (Financial Statements). (d) The amount of any indemnification payments finally determined to be due to an Indemnified Party pursuant to this Article X or in Article VI shall be (i) decreased by the amount of any Tax benefit (in the form of cash actually received or reduction in cash Taxes actually paid) actually recognized by any Purchaser Indemnified Party in respect of such Loss prior to the end of the taxable year in which an indemnity payment is made by an Indemnifying Party to an Indemnified Party with respect to such Loss, to the extent that such Tax benefit does not exceed the amount of the indemnity payment received by the Indemnified Party, net of any expenses incurred by such Purchaser Indemnified Party in pursuing such Tax benefit, and (ii) increased by the amount of any Tax cost realized prior to the end of such taxable year by any Purchaser Indemnified Party as a result of the receipt or accrual of the indemnity payment with respect to such Loss. If any such Tax benefit (or portion thereof) is disallowed, as a result of an audit or otherwise, the applicable Indemnifying Party shall promptly pay to the applicable Indemnified Party the amount of such disallowed Tax benefit within 30 days after the Indemnified Party notifies the Indemnifying Party that the adjustment with respect to such disallowance has been paid or otherwise taken into account. (e) Upon making any indemnification payment in respect of a Loss with respect to all or a portion of which the Indemnified Party could have recovered from an unaffiliated third party (other than a Taxing Authority), if the Indemnified Party shall have received full payment of all Losses with respect to the underlying claim, the Indemnifying Party will, to the extent of such payment and to the extent permitted under Applicable Law and any applicable contractual obligations to third parties, be subrogated to all rights of the Indemnified Party against such unaffiliated third party in respect of the Loss to which the payment relates; provided that if the Indemnified Party shall not have received payment in full with respect to all Losses resulting from such underlying claim (including as a result of any limits on indemnification in this Article X), then no such subrogation shall be effective until such full payment has been received by the Indemnified Party from the Indemnifying Party and such unaffiliated third party. Each such Indemnified Party and Indemnifying Party will duly execute upon request all instruments reasonably necessary to evidence and perfect the above-described subrogation rights. (f) The amount of any Losses sustained by an Indemnified Party and owed by an Indemnifying Party shall be reduced by any amount actually recovered by such Indemnified Party with respect thereto under any insurance or reinsurance coverage, or from any other party alleged to be responsible therefor, in each case subject to the same limitations that are applicable to reimbursements as contemplated by the last sentence of this Section 10.5(f). The Indemnified Party shall use commercially reasonable efforts to collect any amounts available under such insurance or reinsurance coverage and from such other party alleged to have responsibility. If, at any time subsequent to any indemnification actually having been paid pursuant to this Article X, the Indemnified Party receives an amount under insurance or reinsurance coverage or from such other party with respect to Losses so indemnified, then such Indemnified Party shall promptly reimburse by that amount the applicable Indemnifying Party for any such indemnification payment actually made by such Indemnifying Party up to the amount received by the Indemnified Party, net of any expenses incurred by the Indemnified Party in collecting any such amount or any increases in insurance premiums attributable to such recovery; provided that such reimbursement shall only be required to the extent the Indemnified Party would otherwise retain an amount greater than the full amount of the Losses incurred by the Indemnified Party as a result of the underlying claim. (g) For the avoidance of doubt, neither Seller nor Parent shall be under any obligation to indemnify any Purchaser Indemnified Party for any Loss that was specifically reflected or reserved for on the Closing Statement, as finally determined pursuant to Section 2.5, or that was otherwise specifically included in the calculation of the Closing Date Value as reflected on such Closing Statement. For the avoidance of doubt, amounts recorded in a general ledger account or in the supporting workpapers or other detail to a balance sheet used to calculate amounts reflected on the Closing Statement shall be considered included in the calculation of the Closing Date Value on such Closing Statement. (h) Purchaser shall be obligated to provide indemnification pursuant to Section 10.1(b)(i) only if the aggregate dollar amount of Losses with respect to all breaches of, or inaccuracies in, representations and warranties referred to in Section 10.1(b)(i) exceeds the Deductible, and then only for the amount of Losses in excess of the Deductible. The maximum aggregate liability of Purchaser for indemnification for all Losses pursuant to Section 10.1(b)(i) (other than with respect to the Purchaser Fundamental Representations) shall be an amount equal to 22.5% of the sum of (i) the Purchase Price as finally adjusted in accordance with Section 2.5 and (ii) the Ceding Commission as finally adjusted as set forth in the MLOA Reinsurance Agreement. (i) The rights and remedies of any party in respect of any inaccuracy or breach of any representation, warranty, covenant or agreement shall in no way be limited by the fact that the act, omission, occurrence or other state of facts or circumstances upon which any claim of any such inaccuracy or breach is based may also be the subject matter of any other representation, warranty, covenant or agreement as to which there is no inaccuracy or breach. The representations, warranties and covenants of Seller and Parent, and the Purchaser Indemnified Parties’ rights to indemnification pursuant to Article VI or this Article X with respect thereto, shall not be affected or deemed waived by reason of (and the Purchaser Indemnified Parties shall be deemed to have relied upon the representations and warranties of Seller and Parent set forth herein notwithstanding) (i) any investigation made by or on behalf of any of the Purchaser Indemnified Parties (including by any of its advisers, consultants or representatives) or by reason of any knowledge obtained by any of the Purchaser Indemnified Parties or any of their advisers, consultants or representatives, regardless of whether such investigation was made or such knowledge was obtained before or after the execution and delivery of this Agreement or (ii) Purchaser’s waiver of any condition set forth in Article VII. The representations, warranties and covenants of Purchaser, and the Seller Indemnified Parties’ rights to indemnification with respect thereto, shall not be affected or deemed waived by reason of (and the Seller Indemnified Parties shall be deemed to have relied upon the representations and warranties of Purchaser set forth herein notwithstanding) (i) any investigation made by or on behalf of any of the Seller Indemnified Parties (including by any of its advisers, consultants or representatives) or by reason of any knowledge obtained by any of the Seller Indemnified Parties or any of such advisers, consultants or representatives, regardless of whether such investigation was made or such knowledge was obtained before or after the execution and delivery of this Agreement or (ii) the waiver by Seller or Parent of any condition set forth in Article VIII.
Appears in 3 contracts
Samples: Master Agreement (AXA Equitable Holdings, Inc.), Master Agreement (Protective Life Insurance Co), Master Agreement (Protective Life Corp)
Additional Indemnification Provisions. In addition (a) The Seller indemnity obligations for Indemnity Losses arising under Sections 6.01(a)(i), 6.01(b)(i) or 6.01(b)(ii), shall not exceed 12.5% of the Greenlane Interests (the “Indemnification Cap”); provided, however, that the Indemnification Cap shall not apply to any other limitations contained in Article IX or this Article X, indemnification for Indemnity Losses the obligations of Seller, Parent and Purchaser to indemnify any Purchaser Indemnified Party or Seller Indemnified Partymay suffer resulting from, as arising out of, relating to, the case may bebreach of any of the following (the “Specified Provisions”); (i) the Fundamental Representations, are subject to the following:
(aii) Seller and Parent shall be obligated to provide indemnification pursuant to Section 10.1(a)(i) (other than with respect to the Seller Fundamental Representations and the representations and warranties set forth in Section 3.204.06 (Tax Matters) only if or (iii) the aggregate dollar amount covenants of the Seller contained in this Agreement, and no such Indemnity Losses shall be taken into account to determine whether the Indemnification Cap has been exceeded with respect to all breaches of, or inaccuracies in, representations and warranties claims for indemnification not referred to in Section 10.1(a)(i) (other than with respect to the Seller Fundamental Representations and the representations and warranties set forth in Section 3.20) exceeds $12,500,000 (the “Deductible”), and then only for the amount of such Losses in excess of the Deductiblethis proviso.
(b) The maximum No Indemnifying Party shall be required to indemnify applicable Indemnified Parties for Indemnity Losses arising under Sections 6.01(a)(i), 6.01(b)(i), or 6.01(b)(ii) as applicable, unless and until, and only to the extent that the aggregate liability amount of Seller and Parent all such Indemnity Losses for which such Indemnified Parties are otherwise entitled to indemnification for all Losses pursuant to Section 10.1(a)(i) (other than with respect to the Seller Fundamental Representations and the representations and warranties set forth Section 3.20) shall be this Article VI exceeds an amount equal to 22.50.75% of the sum Greenlane Interests (the “Basket Amount”), following which the Indemnified Parties shall be entitled to recover all of (itheir respective Indemnity Losses after the Basket Amount; provided, however, that the limitations in this Section 6.06(a) shall not apply to Indemnity Losses from claims for indemnification arising out of the Purchase Price as finally adjusted in accordance with Section 2.5 and (ii) the Ceding Commission as finally adjusted as set forth in the MLOA Reinsurance AgreementSpecified Provisions.
(c) For purposes of this Section 6.06, (x) if any obligation to pay a claim for indemnification under this Article X VI arises prior to the consummation of an IPO of Purchaser, then the value of the Greenlane Interests for purposes of determining the Indemnification Cap and Basket Amount shall be $9,760,000 and (iy) if any claim for indemnification under this Article VI arises on or subsequent to the amount consummation of Losses arising out an IPO of Purchaser, then the value of the Greenlane Interests for purposes of determining the Indemnification Cap and Basket Amount shall be based upon Purchaser’s IPO valuation prior to the beginning of trading.
(d) For purposes of this Article VI, any inaccuracy in or relating to a breach of or an inaccuracy in a any representation or warranty that is subject to indemnification pursuant to Section 10.1(a)(i(and any Indemnity Losses arising therefrom or related thereto) or Section 10.1(b)(i) shall be deemed to exist either if such representation or warranty is actually inaccurate or breached or would have been inaccurate or breached if such representation or warranty had not contained any qualification as to materiality, Business Material Adverse Effect, Purchaser Material Adverse Effect (which, in each case, instead will be read as any adverse effect or change) or similar language or, with respect to the representation and warranty in Section 3.21(e) only, if such representation and warranty had not contained any qualification as to Knowledge, and (ii) the amount of Losses in respect of a breach resulting from the application of clause (i) above shall be determined without regard to any limitation or qualification as to materiality, “Business Material Adverse Effect,” “Purchaser Material Adverse Effect” (which instead will be read as any adverse effect or change) or similar materiality qualification or, with respect to the representation and warranty in Section 3.21(e) only, without regard to the limitation or qualification as to the “Knowledge of Seller,” contained in or otherwise applicable to such representation or warranty, other than any such limitation or qualification contained in Section 3.15 (Absence of Certain Changes) or Section 3.17 (No Undisclosed Liabilities), or that is inherent in the methods, procedures and practices that constitute Applicable Accounting Principles for purposes of the second sentence of Section 3.16(a)(i) (Financial Statements).
(d) The amount of any indemnification payments finally determined to be due to an Indemnified Party pursuant to this Article X or in Article VI shall be (i) decreased by the amount of any Tax benefit (in the form of cash actually received or reduction in cash Taxes actually paid) actually recognized by any Purchaser Indemnified Party in respect of such Loss prior to the end of the taxable year in which an indemnity payment is made by an Indemnifying Party to an Indemnified Party with respect to such Loss, to the extent that such Tax benefit does not exceed the amount of the indemnity payment received by the Indemnified Party, net of any expenses incurred by such Purchaser Indemnified Party in pursuing such Tax benefit, and (ii) increased by the amount of any Tax cost realized prior to the end of such taxable year by any Purchaser Indemnified Party as a result of the receipt or accrual of the indemnity payment with respect to such Loss. If any such Tax benefit (or portion thereof) is disallowed, as a result of an audit or otherwise, the applicable Indemnifying Party shall promptly pay to the applicable Indemnified Party the amount of such disallowed Tax benefit within 30 days after the Indemnified Party notifies the Indemnifying Party that the adjustment with respect to such disallowance has been paid or otherwise taken into account.
(e) Upon making any indemnification payment in respect of a Loss with respect to all or a portion of which the Indemnified Party could have recovered from an unaffiliated third party (other than a Taxing Authority), if the Indemnified Party shall have received full payment of all Losses with respect to the underlying claim, the Indemnifying Party will, to the extent of such payment and to the extent permitted under Applicable Law and any applicable contractual obligations to third parties, be subrogated to all rights of the Indemnified Party against such unaffiliated third party in respect of the Loss to which the payment relates; provided that if the Indemnified Party shall not have received payment in full with respect to all Losses resulting from such underlying claim (including as a result of any limits on indemnification in this Article X), then no such subrogation shall be effective until such full payment has been received by the Indemnified Party from the Indemnifying Party and such unaffiliated third party. Each such Indemnified Party and Indemnifying Party will duly execute upon request all instruments reasonably necessary to evidence and perfect the above-described subrogation rights.
(f) The amount of any Losses sustained by an Indemnified Party and owed by an Indemnifying Party shall be reduced by any amount actually recovered by such Indemnified Party with respect thereto under any insurance or reinsurance coverage, or from any other party alleged to be responsible therefor, in each case subject to the same limitations that are applicable to reimbursements as contemplated by the last sentence of this Section 10.5(f). The Indemnified Party shall use commercially reasonable efforts to collect any amounts available under such insurance or reinsurance coverage and from such other party alleged to have responsibility. If, at any time subsequent to any indemnification actually having been paid pursuant to this Article X, the Indemnified Party receives an amount under insurance or reinsurance coverage or from such other party with respect to Losses so indemnified, then such Indemnified Party shall promptly reimburse by that amount the applicable Indemnifying Party for any such indemnification payment actually made by such Indemnifying Party up to the amount received by the Indemnified Party, net of any expenses incurred by the Indemnified Party in collecting any such amount or any increases in insurance premiums attributable to such recovery; provided that such reimbursement shall only be required to the extent the Indemnified Party would otherwise retain an amount greater than the full amount of the Losses incurred by the Indemnified Party as a result of the underlying claim.
(g) For the avoidance of doubt, neither Seller nor Parent shall be under any obligation to indemnify any Purchaser Indemnified Party for any Loss that was specifically reflected or reserved for on the Closing Statement, as finally determined pursuant to Section 2.5, or that was otherwise specifically included in the calculation of the Closing Date Value as reflected on such Closing Statement. For the avoidance of doubt, amounts recorded in a general ledger account or in the supporting workpapers or other detail to a balance sheet used to calculate amounts reflected on the Closing Statement shall be considered included in the calculation of the Closing Date Value on such Closing Statement.
(h) Purchaser shall be obligated to provide indemnification pursuant to Section 10.1(b)(i) only if the aggregate dollar amount of Losses with respect to all breaches of, or inaccuracies in, representations and warranties referred to in Section 10.1(b)(i) exceeds the Deductible, and then only for the amount of Losses in excess of the Deductible. The maximum aggregate liability of Purchaser for indemnification for all Losses pursuant to Section 10.1(b)(i) (other than with respect to the Purchaser Fundamental Representations) shall be an amount equal to 22.5% of the sum of (i) the Purchase Price as finally adjusted in accordance with Section 2.5 and (ii) the Ceding Commission as finally adjusted as set forth in the MLOA Reinsurance Agreement.
(i) The rights and remedies of any party in respect of any inaccuracy or breach of any representation, warranty, covenant or agreement shall in no way be limited by the fact that the act, omission, occurrence or other state of facts or circumstances upon which any claim of any such inaccuracy or breach is based may also be the subject matter of any other representation, warranty, covenant or agreement as to which there is no inaccuracy or breach. The representations, warranties and covenants of Seller and Parent, and the Purchaser Indemnified Parties’ rights to indemnification pursuant to Article VI or this Article X with respect thereto, shall not be affected or deemed waived by reason of (and the Purchaser Indemnified Parties shall be deemed to have relied upon the representations and warranties of Seller and Parent set forth herein notwithstanding) (i) any investigation made by or on behalf of any of the Purchaser Indemnified Parties (including by any of its advisers, consultants or representatives) or by reason of any knowledge obtained by any of the Purchaser Indemnified Parties or any of their advisers, consultants or representatives, regardless of whether such investigation was made or such knowledge was obtained before or after the execution and delivery of this Agreement or (ii) Purchaser’s waiver of any condition set forth in Article VII. The representations, warranties and covenants of Purchaser, and the Seller Indemnified Parties’ rights to indemnification with respect thereto, shall not be affected or deemed waived by reason of (and the Seller Indemnified Parties shall be deemed to have relied upon the representations and warranties of Purchaser set forth herein notwithstanding) (i) any investigation made by or on behalf of any of the Seller Indemnified Parties (including by any of its advisers, consultants or representatives) or by reason of any knowledge obtained by any of the Seller Indemnified Parties or any of such advisers, consultants or representatives, regardless of whether such investigation was made or such knowledge was obtained before or after the execution and delivery of this Agreement or (ii) the waiver by Seller or Parent of any condition set forth in Article VIII.
Appears in 2 contracts
Samples: Contribution Agreement (Greenlane Holdings, Inc.), Contribution Agreement (Greenlane Holdings, Inc.)
Additional Indemnification Provisions. In addition to any other limitations contained The indemnification provided for in Article IX or this Article X, the obligations of Seller, Parent Section 12.1 and Purchaser to indemnify any Purchaser Indemnified Party or Seller Indemnified Party, as the case may be, are Section 12.2 shall be subject to the followingfollowing limitations:
(a) In no event shall Seller and Parent be required to indemnify or hold the Buyer Indemnified Parties harmless under Section 12.1(a)(i) with respect to a breach of a representation or warranty if such breach is a Seller Closing Rep Breach unless all of the following are satisfied:
(i) the Policy Condition has been satisfied;
(ii) the Seller Closing Rep Breach for which indemnification is sought did not exist as of the date hereof;
(iii) Buyer did not have Actual Knowledge (as defined in the R&W Insurance Policy) as of the Closing of the Seller Closing Rep Breach for which indemnification is sought; and
(iv) any Losses in respect of the Seller Closing Rep Breach for which indemnification is sought are not fully covered by the R&W Insurance Policy (but solely to the extent such Losses are not covered by the R&W Insurance Policy). For the avoidance of doubt, the limitations in this Section 12.6(a) shall not be obligated applicable to provide indemnification pursuant to Section 10.1(a)(iany Seller Excluded Rep Breach.
(b) (other Other than with respect to any claims for indemnification based upon, resulting from, arising out of or relating to any inaccuracy in or breach of any Specified Representations, Seller shall not be required to indemnify or hold the Seller Fundamental Representations Buyer Indemnified Parties harmless under Section 12.1(a)(i) unless and the representations and warranties set forth in Section 3.20) only if until the aggregate dollar amount of all Losses with respect suffered or incurred by the Buyer Indemnified Parties based upon, resulting from, arising out of or relating to all breaches of, Seller Closing Rep Breaches or inaccuracies in, representations and warranties referred to in Section 10.1(a)(i) Seller Excluded Rep Breaches (other than with respect those based upon, resulting from, arising out of or relating to the Seller Fundamental Representations and the representations and warranties set forth in Section 3.20Specified Representations) exceeds $12,500,000 (the “Deductible”)Seller Indemnification Threshold, and then once the Seller Indemnification Threshold has been exceeded, Seller shall be required to indemnify and hold the Buyer Indemnified Parties harmless for only for the amount of such Losses in excess of the DeductibleSeller Indemnification Threshold.
(bc) The maximum aggregate liability total amount of indemnification payments that Seller shall be required to make to the Buyer Indemnified Parties under Section 12.1(a)(i) shall be limited to $165,000,000.
(d) For the purposes of determining whether a breach of representation or warranty has occurred for the purposes of Section 12.1(a)(i) and calculating the amount of Losses related thereto, any qualification as to materiality, Material Adverse Effect or any other similar qualification or standard contained in any representation or warranty made by Seller or Parent in this Agreement shall be disregarded, other than for purposes of Section 5.4(e) (Financial Statements), “Material Contracts,” “Material Leased Real Property,” “Material Leases,” “Material Licenses,” “Material Supplier,” and “Material Tower Leases” and the term “Material Adverse Effect” in Section 5.5(a) (Operations Since Reference Date). No claim for indemnification may be made under this Article XII, and the Indemnifying Party shall not be liable to, and shall not be required to indemnify, hold harmless, pay or reimburse, the Indemnified Party with respect to any claim for all Losses indemnification first asserted or delivered after the Notice Deadline as set forth in Section 12.3. Notwithstanding anything to the contrary herein, (i) any claim for indemnification under this Article XII, whether or not relating to a Third Party Claim, with respect to which a notice has been delivered pursuant to Section 10.1(a)(i12.3 prior to the expiration of the applicable survival period set forth in Section 13.1 shall survive until such claim is fully and finally resolved, and (ii) the delivery of such notice shall extend the applicable survival period for the applicable claim until such claim is fully and finally resolved, irrespective of whether the party delivering such notice has initiated any Action or otherwise taken any further action in connection with the matters constituting the basis for such claim.
(other than e) With respect to each indemnification obligation in this Agreement (except for any claims in connection with any Seller Note Liability), all Losses shall be net of (i) any Eligible Insurance Proceeds and (ii) to the extent Buyer makes the Stock Purchase Request and such Losses are incurred by USCC Services, any net Tax benefits actually realized by USCC Services LLC as a result of such Losses in any taxable year prior to or including the year the indemnification payment is made (provided that (1) for this purpose the Tax benefits shall be measured on a “with and without basis”, (2) the Tax benefits shall be deemed realized at the time cash is received or, if such Tax benefits is in the nature of a credit or offset, at the time the Tax Return in which such savings are realized is required to be filed under applicable Law, and that (3) if such Tax benefit is reduced or disallowed as a result of a Tax Contest, Seller shall promptly pay the amount so reduced or disallowed to Buyer).
(f) In any case where an Indemnified Party recovers from a Third Party any amount with respect to any Loss paid by the Seller Fundamental Representations Indemnifying Party pursuant to this Article XII, such Indemnified Party shall reasonably promptly pay over to the Indemnifying Party the amount so recovered (after deducting therefrom the amount of reasonable costs and expenses incurred by it in procuring such recovery, which costs shall not exceed the representations and warranties set forth Section 3.20) shall be an amount equal to 22.5% so recovered), but not in excess of the sum of (i) any amount previously paid by the Purchase Price as finally adjusted in accordance Indemnifying Party to or on behalf of the Indemnified Party with Section 2.5 respect to such claim and (ii) any amount reasonably expended by the Ceding Commission as finally adjusted as set forth Indemnifying Party in the MLOA Reinsurance Agreementpursuing or defending any claim arising out of such Loss.
(cg) For purposes If any portion of Losses to be paid by the Indemnifying Party pursuant to this Article X XII would reasonably be expected to be recoverable from a Third Party not affiliated with the relevant Indemnified Party (other than Representatives (other than R&W Insurers), customers or subscribers) based on the underlying matter or the underlying claim or demand asserted against such Indemnifying Party, then the Indemnified Party shall, upon the reasonable request of the Indemnifying Party, use reasonable best efforts to collect the maximum amount recoverable from such Third Party, in which event the Indemnifying Party shall reimburse the Indemnified Party for all reasonable costs and expenses incurred in connection with such collection (which costs and expenses of collection shall not exceed the amount recoverable from such Third Party); provided, however, that in no event shall the Indemnifying Party (i) be responsible for any costs or expenses of an Indemnified Party incurred in connection with collection under the R&W Insurance Policy or (ii) be required to pursue litigation, arbitration or any other adversarial proceeding against any such Third Party.
(h) The Parties shall treat any indemnification payment made under this Agreement as an adjustment to the Purchase Price, unless otherwise required by applicable Law.
(i) If any portion of Losses to be paid by the Indemnifying Party pursuant to this Article XII may be covered, in whole or in part, by third party insurance coverage (including the R&W Insurance Policy), the Indemnified Party shall reasonably promptly give written notice thereof to the Indemnifying Party. The Indemnified Party shall use reasonable best efforts to collect the maximum amount of insurance proceeds thereunder, and all such proceeds actually collected with respect to any Loss (net of (i) the amount of Losses arising out of or relating to a breach of or an inaccuracy in a representation or warranty that is subject to indemnification pursuant to Section 10.1(a)(i) or Section 10.1(b)(i) shall be deemed to exist either if such representation or warranty is actually inaccurate or breached or would have been inaccurate or breached if such representation or warranty had not contained any qualification as to materiality, Business Material Adverse Effect, Purchaser Material Adverse Effect (which, in each case, instead will be read as any adverse effect or change) or similar language or, with respect to the representation reasonable costs and warranty in Section 3.21(e) only, if such representation and warranty had not contained any qualification as to Knowledge, and (ii) the amount of Losses in respect of a breach resulting from the application of clause (i) above shall be determined without regard to any limitation or qualification as to materiality, “Business Material Adverse Effect,” “Purchaser Material Adverse Effect” (which instead will be read as any adverse effect or change) or similar materiality qualification or, with respect to the representation and warranty in Section 3.21(e) only, without regard to the limitation or qualification as to the “Knowledge of Seller,” contained in such representation or warranty, other than any such limitation or qualification contained in Section 3.15 (Absence of Certain Changes) or Section 3.17 (No Undisclosed Liabilities), or that is inherent in the methods, procedures and practices that constitute Applicable Accounting Principles for purposes of the second sentence of Section 3.16(a)(i) (Financial Statements).
(d) The amount of any indemnification payments finally determined to be due to an Indemnified Party pursuant to this Article X or in Article VI shall be (i) decreased by the amount of any Tax benefit (in the form of cash actually received or reduction in cash Taxes actually paid) actually recognized by any Purchaser Indemnified Party in respect of such Loss prior to the end of the taxable year in which an indemnity payment is made by an Indemnifying Party to an Indemnified Party with respect to such Loss, to the extent that such Tax benefit does not exceed the amount of the indemnity payment received by the Indemnified Party, net of any expenses incurred by such Purchaser Indemnified Party in pursuing such Tax benefit, and (ii) increased by the amount of any Tax cost realized prior to the end of such taxable year by any Purchaser Indemnified Party as a result of the receipt or accrual of the indemnity payment with respect to such Loss. If any such Tax benefit (or portion thereof) is disallowed, as a result of an audit or otherwise, the applicable Indemnifying Party shall promptly pay to the applicable Indemnified Party the amount of such disallowed Tax benefit within 30 days after the Indemnified Party notifies the Indemnifying Party that the adjustment with respect to such disallowance has been paid or otherwise taken into account.
(e) Upon making any indemnification payment in respect of a Loss with respect to all or a portion of which the Indemnified Party could have recovered from an unaffiliated third party (other than a Taxing Authority), if the Indemnified Party shall have received full payment of all Losses with respect to the underlying claim, the Indemnifying Party will, to the extent of such payment and to the extent permitted under Applicable Law and any applicable contractual obligations to third parties, be subrogated to all rights of the Indemnified Party against such unaffiliated third party in respect of the Loss to which the payment relates; provided that if the Indemnified Party shall not have received payment in full with respect to all Losses resulting from such underlying claim (including as a result of any limits on indemnification in this Article X), then no such subrogation shall be effective until such full payment has been received by the Indemnified Party from the Indemnifying Party and such unaffiliated third party. Each such Indemnified Party and Indemnifying Party will duly execute upon request all instruments reasonably necessary to evidence and perfect the above-described subrogation rights.
(f) The amount of any Losses sustained by an Indemnified Party and owed by an Indemnifying Party shall be reduced by any amount actually recovered by such Indemnified Party with respect thereto under any insurance or reinsurance coverage, or from any other party alleged to be responsible therefor, in each case subject to the same limitations that are applicable to reimbursements as contemplated by the last sentence of this Section 10.5(f). The Indemnified Party shall use commercially reasonable efforts to collect any amounts available under such insurance or reinsurance coverage and from such other party alleged to have responsibility. If, at any time subsequent to any indemnification actually having been paid pursuant to this Article X, the Indemnified Party receives an amount under insurance or reinsurance coverage or from such other party with respect to Losses so indemnified, then such Indemnified Party shall promptly reimburse by that amount the applicable Indemnifying Party for any such indemnification payment actually made by such Indemnifying Party up to the amount received by the Indemnified Party, net of any expenses incurred by the Indemnified Party or any of its Affiliates in collecting any such amount or any increases in insurance premiums attributable to such recovery; provided that such reimbursement shall only be required to the extent the Indemnified Party would otherwise retain an amount greater than the full amount of the Losses incurred by the Indemnified Party as a result of the underlying claim.
(g) For the avoidance of doubt, neither Seller nor Parent shall be under any obligation to indemnify any Purchaser Indemnified Party for any Loss that was specifically reflected or reserved for on the Closing Statement, as finally determined pursuant to Section 2.5, or that was otherwise specifically included in the calculation of the Closing Date Value as reflected on such Closing Statement. For the avoidance of doubt, amounts recorded in a general ledger account or in the supporting workpapers or other detail to a balance sheet used to calculate amounts reflected on the Closing Statement shall be considered included in the calculation of the Closing Date Value on such Closing Statement.
(h) Purchaser shall be obligated to provide indemnification pursuant to Section 10.1(b)(i) only if the aggregate dollar amount of Losses with respect to all breaches of, or inaccuracies in, representations and warranties referred to in Section 10.1(b)(i) exceeds the Deductible, and then only for the amount of Losses in excess of the Deductible. The maximum aggregate liability of Purchaser for indemnification for all Losses pursuant to Section 10.1(b)(i) (other than with respect to the Purchaser Fundamental Representations) shall be an amount equal to 22.5% of the sum of (i) the Purchase Price as finally adjusted in accordance with Section 2.5 proceeds and (ii) the Ceding Commission present value of any increased costs incurred by such Indemnified Party or any of its Affiliates as finally adjusted as a result of such Loss, including any retroactive or prospective premium adjustments resulting from such Loss) shall be considered “Eligible Insurance Proceeds”. Notwithstanding anything to the contrary in this Agreement, Seller and Parent hereby acknowledge and agree that (i) the Buyer Indemnified Parties may make claims for the same Losses or series of related Losses under both Article XII and the R&W Insurance Policy, (ii) nothing in this Article XII shall be construed to prohibit a Buyer Indemnified Party from making a claim for indemnification under Article XII prior to the Notice Deadline or otherwise impair or limit a Buyer Indemnified Party’s right or ability to comply with the notice requirements set forth in Section 12.3, and (iii) the MLOA Reinsurance Agreement.
(i) The rights and remedies denial of any party in respect of any inaccuracy or breach of any representation, warranty, covenant or agreement shall in no way be limited by claim under the fact that the act, omission, occurrence or other state of facts or circumstances upon which any claim of any such inaccuracy or breach is based may also be the subject matter of any other representation, warranty, covenant or agreement as to which there is no inaccuracy or breach. The representations, warranties and covenants of Seller and Parent, and the Purchaser Indemnified Parties’ rights to indemnification pursuant to Article VI or this Article X with respect thereto, R&W Insurance Policy shall not be affected construed or deemed waived by reason of (used as evidence that any Buyer Indemnified Party is not entitled to be indemnified under Article XII. Buyer shall have the same obligations under this Agreement in relation to the R&W Binder and the Purchaser Indemnified Parties shall be deemed to R&W Insurance Policy as it would have relied upon had if Buyer (rather than the representations and warranties of Seller and Parent set forth herein notwithstandingSpecified Buyer Affiliate) (i) any investigation made by or on behalf of any of were the Purchaser Indemnified Parties (including by any of its advisers, consultants or representatives) or by reason of any knowledge obtained by any of the Purchaser Indemnified Parties or any of their advisers, consultants or representatives, regardless of whether such investigation was made or such knowledge was obtained before or after the execution and delivery of this Agreement or (ii) Purchaser’s waiver of any condition set forth in Article VII. The representations, warranties and covenants of Purchaser, and the Seller Indemnified Parties’ rights to indemnification with respect thereto, shall not be affected or deemed waived by reason of (and the Seller Indemnified Parties shall be deemed to have relied upon the representations and warranties of Purchaser set forth herein notwithstanding) (i) any investigation made by or on behalf of any of the Seller Indemnified Parties (including by any of its advisers, consultants or representatives) or by reason of any knowledge obtained by any of the Seller Indemnified Parties or any of such advisers, consultants or representatives, regardless of whether such investigation was made or such knowledge was obtained before or after the execution and delivery of this Agreement or (ii) the waiver by Seller or Parent of any condition set forth in Article VIIInamed insured thereunder.
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Samples: Securities Purchase Agreement (Telephone & Data Systems Inc /De/), Securities Purchase Agreement (United States Cellular Corp)
Additional Indemnification Provisions. In addition (a) Any Indemnification Claim to any other limitations contained in Article IX be made by the Purchaser or this Article X, the obligations of Seller, Parent and Purchaser to indemnify any Purchaser Indemnified Party or Seller Indemnified Party, as the case may be, are subject shall be made on or prior to the following:expiration of the applicable survival period set forth in Section 9.1, except as otherwise provided therein.
(ab) Seller and Parent shall be obligated to provide indemnification pursuant to Section 10.1(a)(i) (other Other than with respect to the Seller Fundamental Representations and the or any representations and warranties set forth in the inaccuracy or breach of which is the result of fraud, on or prior to the Closing, to which the Indemnity Threshold (as defined below) shall not apply, none of the Purchaser Indemnified Parties shall be permitted to recover any Losses under Section 3.20) only if 9.2(a), unless and until the aggregate dollar amount of Losses with respect to all breaches of, or inaccuracies in, representations and warranties referred to in under such Section 10.1(a)(i) (other than with respect to the Seller Fundamental Representations and the representations and warranties set forth in Section 3.20) considered together exceeds $12,500,000 75,000 (the “DeductibleIndemnity Threshold”), and then only whereupon the Purchaser Indemnified shall be entitled to indemnification hereunder for the amount of all such Losses in excess of the Deductible.
(b) The maximum aggregate liability of Seller and Parent for indemnification for all Losses pursuant to Section 10.1(a)(i) (other than with respect to the Seller Fundamental Representations and the representations and warranties set forth Section 3.20) shall be an amount equal to 22.5% of the sum of (i) the Purchase Price as finally adjusted in accordance with Section 2.5 and (ii) the Ceding Commission as finally adjusted as set forth in the MLOA Reinsurance AgreementIndemnity Threshold.
(c) For purposes Other than with respect to any representations and warranties the inaccuracy or breach of which is the result of intentional or willful misrepresentation of material facts in this Article X (i) Agreement which constitutes common law fraud under applicable laws, on or prior to the Closing, to which the Indemnity Threshold shall not apply, none of the Seller Indemnified Parties shall be permitted to recover any Losses under Section 9.3(a), unless and until the aggregate amount of Losses arising out of or relating to a breach of or an inaccuracy in a representation or warranty that is subject under such Section considered together exceeds the Indemnity Threshold, whereupon the Seller Indemnified shall be entitled to indemnification pursuant to Section 10.1(a)(i) or Section 10.1(b)(i) shall be deemed to exist either if hereunder for all such representation or warranty is actually inaccurate or breached or would have been inaccurate or breached if such representation or warranty had not contained any qualification as to materiality, Business Material Adverse Effect, Purchaser Material Adverse Effect (which, in each case, instead will be read as any adverse effect or change) or similar language or, with respect to the representation and warranty in Section 3.21(e) only, if such representation and warranty had not contained any qualification as to Knowledge, and (ii) the amount of Losses in respect of a breach resulting from the application of clause (i) above shall be determined without regard to any limitation or qualification as to materiality, “Business Material Adverse Effect,” “Purchaser Material Adverse Effect” (which instead will be read as any adverse effect or change) or similar materiality qualification or, with respect to the representation and warranty in Section 3.21(e) only, without regard to the limitation or qualification as to the “Knowledge of Seller,” contained in such representation or warranty, other than any such limitation or qualification contained in Section 3.15 (Absence of Certain Changes) or Section 3.17 (No Undisclosed Liabilities), or that is inherent in the methods, procedures and practices that constitute Applicable Accounting Principles for purposes excess of the second sentence of Section 3.16(a)(i) (Financial Statements)Indemnity Threshold.
(d) The amount of any In no event shall the total indemnification payments finally determined to be due to an Indemnified Party pursuant to this Article X or in Article VI shall be (i) decreased by the amount of any Tax benefit (in the form of cash actually received or reduction in cash Taxes actually paid) actually recognized by any Purchaser Indemnified Party in respect of such Loss prior to the end of the taxable year in which an indemnity payment is made by an Indemnifying Party to an Indemnified Party with respect to such Loss, to the extent that such Tax benefit does not exceed the amount of the indemnity payment received by the Indemnified Party, net of any expenses incurred by such Purchaser Indemnified Party in pursuing such Tax benefit, and (ii) increased by the amount of any Tax cost realized prior to the end of such taxable year by any Purchaser Indemnified Party as a result of the receipt or accrual of the indemnity payment with respect to such Loss. If any such Tax benefit (or portion thereof) is disallowed, as a result of an audit or otherwise, the applicable Indemnifying Party shall promptly pay to the applicable Indemnified Party the amount of such disallowed Tax benefit within 30 days after the Indemnified Party notifies the Indemnifying Party that the adjustment with respect to such disallowance has been paid or otherwise taken into account.
(e) Upon making any indemnification payment in respect of a Loss under Section 9.2 for Losses arising with respect to all or a portion matters exceed $900,000, with the exception of which the Indemnified Party could have recovered from an unaffiliated third party (other than a Taxing Authority), if the Indemnified Party shall have received full payment of all Losses with respect to the underlying claim, the Indemnifying Party will, to the extent of such payment and to the extent permitted under Applicable Law and any applicable contractual obligations to third parties, be subrogated to all rights of the Indemnified Party against such unaffiliated third party in respect of the Loss to which the payment relates; provided that if the Indemnified Party shall not have received payment in full with respect to all Losses resulting from such underlying claim (including as a result of any limits on indemnification in this Article X), then no such subrogation shall be effective until such full payment has been received by the Indemnified Party from the Indemnifying Party and such unaffiliated third party. Each such Indemnified Party and Indemnifying Party will duly execute upon request all instruments reasonably necessary to evidence and perfect the above-described subrogation rights.
(f) The amount of any Losses sustained by an Indemnified Party and owed by an Indemnifying Party shall be reduced by any amount actually recovered by such Indemnified Party with respect thereto under any insurance or reinsurance coverage, or from any other party alleged to be responsible therefor, in each case subject to the same limitations that are applicable to reimbursements as contemplated by the last sentence of this Section 10.5(f). The Indemnified Party shall use commercially reasonable efforts to collect any amounts available under such insurance or reinsurance coverage and from such other party alleged to have responsibility. If, at any time subsequent to any indemnification actually having been paid pursuant to this Article X, the Indemnified Party receives an amount under insurance or reinsurance coverage or from such other party with respect to Losses so indemnified, then such Indemnified Party shall promptly reimburse by that amount the applicable Indemnifying Party for any such indemnification payment actually made by such Indemnifying Party up to the amount received by the Indemnified Party, net of any expenses incurred by the Indemnified Party in collecting any such amount or any increases in insurance premiums attributable to such recovery; provided that such reimbursement shall only be required to the extent the Indemnified Party would otherwise retain an amount greater than the full amount of the Losses incurred by the Indemnified Party as a result of the underlying claim.
(g) For the avoidance of doubt, neither Seller nor Parent shall be under any obligation to indemnify any Purchaser Indemnified Party for any Loss that was specifically reflected or reserved for on the Closing Statement, as finally determined pursuant to Section 2.5, or that was otherwise specifically included in the calculation of the Closing Date Value as reflected on such Closing Statement. For the avoidance of doubt, amounts recorded in a general ledger account or in the supporting workpapers or other detail to a balance sheet used to calculate amounts reflected on the Closing Statement shall be considered included in the calculation of the Closing Date Value on such Closing Statement.
(h) Purchaser shall be obligated to provide indemnification pursuant to Section 10.1(b)(i) only if the aggregate dollar amount of Losses with respect to all breaches of, or inaccuracies in, representations and warranties referred to in Section 10.1(b)(i) exceeds the Deductible, and then only for the amount of Losses in excess of the Deductible. The maximum aggregate liability of Purchaser for indemnification for all Losses pursuant to Section 10.1(b)(i(x) (other than with respect to the Purchaser Fundamental Representations) shall be an amount equal to 22.5% of the sum of (i) the Purchase Price as finally adjusted in accordance with Section 2.5 and (ii) the Ceding Commission as finally adjusted as set forth in the MLOA Reinsurance Agreement.
(i) The rights and remedies of any party in respect of any inaccuracy or breach of any representationof the representations and warranties as a result of intentional or willful misrepresentation of material facts in this Agreement which constitutes common law fraud under applicable laws and (y) any inaccuracy or breach of any of the Fundamental Representations to which the total indemnification to be paid under Section 9.2 for Losses arising with respect to such matters exceed the Purchase Price.
(e) No Indemnifying Party shall have any liability for Losses under Section 9.2 or Section 9.3, warrantyas applicable, covenant to the extent the Indemnified Party(s) fails to use its reasonable best efforts to mitigate such Losses, and no Losses related thereto shall be aggregated for purposes of Section 9.5(b).
(f) In the event an Indemnified Party shall recover Losses in respect of a claim of indemnification under this Article IX, no other Indemnified Party shall be entitled to recover the same Losses in respect of a separate claim for indemnification related to the same subject matter.
(g) Except as set forth in Section 9.5(i), an Indemnified Party shall have no right to satisfy, in whole or agreement shall in no way be limited part, any amounts owing to the Indemnified Party under this Agreement, including this Article IX, or any of the documents and instruments executed and delivered pursuant hereto by setting off any amounts owed to the Indemnifying Party by the fact that Indemnified Party.
(h) The obligation of the act, omission, occurrence Seller and Principals to indemnify the Purchaser Indemnified Parties against any Losses under Section 9.2 shall be reduced by the amount of insurance proceeds or other state cash receipts or sources of facts reimbursement receivable by the Purchaser Indemnified Parties from third parties, including third party insurers, with respect to such Losses or circumstances upon which the underlying reasons therefor. No party shall take any claim action to provide that a right of subrogation shall accrue or inure to the benefit of any source of any amounts described in this Section 9.5(h).
(i) In the event any Purchaser Indemnified Party incurs or sustains any Losses in connection with any sales Taxes relating to any Pre-Closing Tax Period with respect to the Business or the Purchased Assets (“Sales Tax Indemnifiable Losses”), any Earn-out Payments payable under Section 3.2 shall be available to compensate such Purchaser Indemnified Party for the amount of any such inaccuracy or breach is based may also be Sales Tax Indemnifiable Losses and subject to set-off for any such Sales Tax Indemnifiable Losses; provided, however, that the subject matter payment of any other representation, warranty, covenant or agreement the Earn-out Payments shall not serve as a bar to which there is no inaccuracy or breach. The representations, warranties and covenants of Seller and Parent, and recovery by the Purchaser Indemnified Parties’ rights to indemnification pursuant to Article VI or this Article X with respect thereto, shall not be affected or deemed waived by reason Parties from the Seller and the Principals of (any Sales Tax Indemnifiable Losses and the Purchaser Indemnified Parties shall be deemed entitled to have relied upon look directly to the representations and warranties of Seller and Parent set forth herein notwithstanding) (i) the Principals for any investigation made by or on behalf of any Sales Tax Indemnifiable Losses in excess of the Purchaser Indemnified Parties (including by any of its advisers, consultants or representatives) or by reason of any knowledge obtained by any of the Purchaser Indemnified Parties or any of their advisers, consultants or representatives, regardless of whether such investigation was made or such knowledge was obtained before or after the execution and delivery of this Agreement or (ii) Purchaser’s waiver of any condition set forth in Article VII. The representations, warranties and covenants of Purchaser, and the Seller Indemnified Parties’ rights to indemnification with respect thereto, shall not be affected or deemed waived by reason of (and the Seller Indemnified Parties shall be deemed to have relied upon the representations and warranties of Purchaser set forth herein notwithstanding) (i) any investigation made by or on behalf of any of the Seller Indemnified Parties (including by any of its advisers, consultants or representatives) or by reason of any knowledge obtained by any of the Seller Indemnified Parties or any of such advisers, consultants or representatives, regardless of whether such investigation was made or such knowledge was obtained before or after the execution and delivery of this Agreement or (ii) the waiver by Seller or Parent of any condition set forth in Article VIIIEarn-out Payments.
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Additional Indemnification Provisions. In addition (a) Any Indemnification Claim to any other limitations contained in Article IX be made by Purchaser or this Article X, the obligations of a Seller, Parent and Purchaser to indemnify any Purchaser Indemnified Party or Seller Indemnified Party, as the case may be, are subject shall be made on or prior to the following:expiration of the applicable survival period set forth in Section 8.1, except as otherwise provided therein.
(ab) Seller and Parent shall be obligated to provide indemnification pursuant to Section 10.1(a)(i) (other Other than with respect to the Seller Fundamental Representations and the representations and warranties (i) set forth in Sections 5.1 (Organization and Good Standing), 5.2 (Authorization of Agreement), 5.4 (Capitalization), Section 3.205.9 (Taxes), 5.20 (Financial Advisors), 6.1 (Organization and Good Standing), 6.2 (Authorization of Agreement), 6.5 (Financial Advisors) only if and the third sentence of Section 5.11 (Tangible Personal Property; Title to and Sufficiency of Assets), or (ii) the inaccuracy or breach of which is the result of fraud, on or prior to the Closing, to which the Indemnity Threshold (as defined below) shall not apply, none of the Purchaser Indemnified Parties or Seller Indemnified Parties shall be permitted to recover any Losses under Section 8.2(a) or Section 8.3(a), respectively, unless and until the aggregate dollar amount of Losses with respect to all breaches of, or inaccuracies in, representations and warranties referred to in under such Section 10.1(a)(i) (other than with respect to the Seller Fundamental Representations and the representations and warranties set forth in Section 3.20) considered together exceeds $12,500,000 100,000 (the “DeductibleIndemnity Threshold”), and then only whereupon the Purchaser Indemnified Parties or Seller Indemnified Parties, as applicable, shall be entitled to indemnification hereunder for the amount of all such Losses in excess of the Deductible.
(b) The maximum aggregate liability of Seller and Parent for indemnification for all Losses pursuant to Section 10.1(a)(i) (other than with respect to the Seller Fundamental Representations and the representations and warranties set forth Section 3.20) shall be an amount equal to 22.5% of the sum of (i) the Purchase Price as finally adjusted in accordance with Section 2.5 and (ii) the Ceding Commission as finally adjusted as set forth in the MLOA Reinsurance AgreementIndemnity Threshold.
(c) For purposes of this Article X (i) In no event shall the amount of total indemnification to be paid under Section 8.2 for Losses arising out of or relating to a breach of or an inaccuracy in a representation or warranty that is subject to indemnification pursuant to Section 10.1(a)(i) or Section 10.1(b)(i) shall be deemed to exist either if such representation or warranty is actually inaccurate or breached or would have been inaccurate or breached if such representation or warranty had not contained any qualification as to materiality, Business Material Adverse Effect, Purchaser Material Adverse Effect (which, in each case, instead will be read as any adverse effect or change) or similar language or, with respect to all matters exceed One Million Dollars ($1,000,000), with the representation exception of indemnification for (x) any inaccuracy or breach of any of the representations and warranty in Section 3.21(e) only, if such representation and warranty had not contained any qualification warranties as to Knowledge, a result of fraud and (iiy) any inaccuracy or breach of any of the amount of Losses in respect of a breach resulting from the application of clause representations and warranties under Sections 5.9 (iTaxes) above and 5.20 (Financial Advisors) to which no such limit shall apply and to which there shall be determined without regard no limit on the ability to any limitation or qualification as to materiality, “Business Material Adverse Effect,” “Purchaser Material Adverse Effect” (which instead will be read as any adverse effect or change) or similar materiality qualification or, with respect to the representation and warranty in Section 3.21(e) only, without regard to the limitation or qualification as to the “Knowledge of Seller,” contained in such representation or warranty, other than any such limitation or qualification contained in Section 3.15 (Absence of Certain Changes) or Section 3.17 (No Undisclosed Liabilities), or that is inherent in the methods, procedures and practices that constitute Applicable Accounting Principles for purposes of the second sentence of Section 3.16(a)(i) (Financial Statements)pursue all legal remedies.
(d) The amount of any indemnification payments finally determined to be due to an Indemnified Party pursuant to this Article X or in Article VI shall be (i) decreased by the amount of any Tax benefit (in the form of cash actually received or reduction in cash Taxes actually paid) actually recognized by any Purchaser Indemnified Party in respect of such Loss prior to the end of the taxable year in which an indemnity payment is made by an Indemnifying Party to an Indemnified Party with respect to such Loss, to the extent that such Tax benefit does not exceed the amount of the indemnity payment received by the Indemnified Party, net of any expenses incurred by such Purchaser Indemnified Party in pursuing such Tax benefit, and (ii) increased by the amount of any Tax cost realized prior to the end of such taxable year by any Purchaser Indemnified Party as a result of the receipt or accrual of the indemnity payment with respect to such Loss. If any such Tax benefit (or portion thereof) is disallowed, as a result of an audit or otherwise, the applicable Indemnifying Party shall promptly pay to the applicable Indemnified Party the amount of such disallowed Tax benefit within 30 days after the Indemnified Party notifies the Indemnifying Party that the adjustment with respect to such disallowance has been paid or otherwise taken into account.
(e) Upon making any indemnification payment in respect of a Loss with respect to all or a portion of which the Indemnified Party could have recovered from an unaffiliated third party (other than a Taxing Authority), if the Indemnified Party shall have received full payment of all Losses with respect to the underlying claim, the Indemnifying Party will, to the extent of such payment and to the extent permitted under Applicable Law and any applicable contractual obligations to third parties, be subrogated to all rights right of the Indemnified Party against such unaffiliated third party in respect of the Loss to which the payment relates; provided that if the Indemnified Party shall not have received payment in full with respect to all Losses resulting from such underlying claim (including as a result of any limits on indemnification in this Article X), then no such subrogation shall be effective until such full payment has been received by the Indemnified Party from the Indemnifying Party and such unaffiliated third party. Each such Indemnified Party and Indemnifying Party will duly execute upon request all instruments reasonably necessary to evidence and perfect the above-described subrogation rights.
(f) The amount of any Losses sustained by an Indemnified Party and owed by an Indemnifying Party shall be reduced by any amount actually recovered by such Indemnified Party with respect thereto under any insurance or reinsurance coverage, or from any other party alleged to be responsible therefor, in each case subject to the same limitations that are applicable to reimbursements as contemplated by the last sentence of this Section 10.5(f). The Indemnified Party shall use commercially reasonable efforts to collect any amounts available under such insurance or reinsurance coverage and from such other party alleged to have responsibility. If, at any time subsequent to any indemnification actually having been paid pursuant to this Article X, the Indemnified Party receives an amount under insurance or reinsurance coverage or from such other party with respect to Losses so indemnified, then such Indemnified Party shall promptly reimburse by that amount the applicable Indemnifying Party for any such indemnification payment actually made by such Indemnifying Party up to the amount received by the Indemnified Party, net of any expenses incurred by the Indemnified Party in collecting any such amount or any increases in insurance premiums attributable to such recovery; provided that such reimbursement shall only be required to the extent the Indemnified Party would otherwise retain an amount greater than the full amount of the Losses incurred by the Indemnified Party as a result of the underlying claim.
(g) For the avoidance of doubt, neither Seller nor Parent shall be under any obligation to indemnify any Purchaser Indemnified Party for any Loss that was specifically reflected or reserved for on the Closing Statement, as finally determined pursuant to Section 2.5, or that was otherwise specifically included in the calculation of the Closing Date Value as reflected on such Closing Statement. For the avoidance of doubt, amounts recorded in a general ledger account or in the supporting workpapers or other detail to a balance sheet used to calculate amounts reflected on the Closing Statement shall be considered included in the calculation of the Closing Date Value on such Closing Statement.
(h) Purchaser shall be obligated to provide indemnification pursuant to Section 10.1(b)(i) only if the aggregate dollar amount of Losses with respect to all breaches of, or inaccuracies in, representations and warranties referred to in Section 10.1(b)(i) exceeds the Deductible, and then only for the amount of Losses in excess of the Deductible. The maximum aggregate liability of Purchaser for indemnification for all Losses pursuant to Section 10.1(b)(i) (other than with respect to the Purchaser Fundamental Representations) shall be an amount equal to 22.5% of the sum of (i) the Purchase Price as finally adjusted in accordance with Section 2.5 and (ii) the Ceding Commission as finally adjusted as set forth in the MLOA Reinsurance Agreement.
(i) The rights and remedies of any party in respect of any inaccuracy or breach of any representation, warranty, covenant or agreement shall in no way be limited by the fact that the act, omission, occurrence or other state of facts or circumstances upon which any claim of any such inaccuracy or breach is based may also be the subject matter of any other representation, warranty, covenant or agreement as to which there is no inaccuracy or breach. The representations, warranties and covenants of Seller and Parent, and the Purchaser Indemnified Parties’ rights Parties to indemnification pursuant or to Article VI assert or this Article X with respect thereto, recover on any Indemnification Claim shall not be affected or deemed waived by reason of (and the Purchaser Indemnified Parties shall be deemed to have relied upon the representations and warranties of Seller and Parent set forth herein notwithstanding) (i) any investigation made by conducted, or on behalf of any of the Purchaser Indemnified Parties (including by any of its advisers, consultants or representatives) or by reason of any knowledge obtained by acquired (or capable of being acquired) at any of the Purchaser Indemnified Parties or any of their adviserstime, consultants or representatives, regardless of whether such investigation was made or such knowledge was obtained before or after the execution and delivery of this Agreement, with respect to the accuracy or performance of, or compliance with, any of the representations, warranties, covenants or agreements set forth in this Agreement or (ii) Purchaser’s any of the other Transaction Documents. The waiver of any condition set forth in Article VII. The representationsbased on the accuracy of any representation or warranty, warranties and covenants or on the performance of Purchaser, and the Seller Indemnified Parties’ rights to indemnification or compliance with respect theretoany covenant or agreement, shall not be affected affect the right to indemnification or deemed waived by reason of (and the Seller Indemnified Parties shall be deemed to have relied upon the representations and warranties of Purchaser set forth herein notwithstanding) (i) other remedy based on any investigation made by such representation, warranty, covenant or on behalf of any of the Seller Indemnified Parties (including by any of its advisers, consultants or representatives) or by reason of any knowledge obtained by any of the Seller Indemnified Parties or any of such advisers, consultants or representatives, regardless of whether such investigation was made or such knowledge was obtained before or after the execution and delivery of this Agreement or (ii) the waiver by Seller or Parent of any condition set forth in Article VIIIagreement.
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Additional Indemnification Provisions. In addition (a) Any Indemnification Claim to any other limitations contained in Article IX be made by the Purchaser or this Article X, the obligations of Seller, Parent and Purchaser to indemnify any Purchaser Indemnified Party or Seller Indemnified PartySellers, as the case may be, are subject shall be made on or prior to the following:expiration of the applicable survival period set forth in Section 9.1, except as otherwise provided therein.
(ab) Seller and Parent shall be obligated to provide indemnification pursuant to Section 10.1(a)(i) (other Other than with respect to the Seller Fundamental Representations and the or any representations and warranties set forth in the inaccuracy or breach of which is the result of fraud, on or prior to the Closing, to which the Indemnity Threshold (as defined below) shall not apply, none of the Purchaser Indemnified Parties shall be permitted to recover any Losses under Section 3.20) only if 9.2(a), unless and until the aggregate dollar amount of Losses with respect to all breaches of, or inaccuracies in, representations and warranties referred to in under such Section 10.1(a)(i) (other than with respect to the Seller Fundamental Representations and the representations and warranties set forth in Section 3.20) considered together exceeds $12,500,000 100,000 (the “DeductibleIndemnity Threshold”), and then only whereupon the Purchaser Indemnified shall be entitled to indemnification hereunder for the amount of such Losses in excess of the Deductible.
Indemnity Threshold, which, in no event, shall exceed Two Million Five Hundred Thousand Dollars (b) The maximum aggregate liability of Seller and Parent for indemnification for all Losses pursuant to Section 10.1(a)(i) (other than with respect to the Seller Fundamental Representations and the representations and warranties set forth Section 3.20) shall be an amount equal to 22.5% of the sum of (i) the Purchase Price as finally adjusted in accordance with Section 2.5 and (ii) the Ceding Commission as finally adjusted as set forth in the MLOA Reinsurance Agreement$2,500,000.00).
(c) For purposes Other than with respect to any representations and warranties the inaccuracy or breach of this Article X (i) which is the result of fraud, on or prior to the Closing, to which the Indemnity Threshold shall not apply, none of the Seller Indemnified Parties shall be permitted to recover any Losses under Section 9.3(a), unless and until the aggregate amount of Losses arising out of or relating to a breach of or an inaccuracy in a representation or warranty that is subject under such Section considered together exceeds the Indemnity Threshold, whereupon the Seller Indemnified shall be entitled to indemnification pursuant to Section 10.1(a)(i) or Section 10.1(b)(i) shall be deemed to exist either if such representation or warranty is actually inaccurate or breached or would have been inaccurate or breached if such representation or warranty had not contained any qualification as to materiality, Business Material Adverse Effect, Purchaser Material Adverse Effect (which, in each case, instead will be read as any adverse effect or change) or similar language or, with respect to the representation and warranty in Section 3.21(e) only, if such representation and warranty had not contained any qualification as to Knowledge, and (ii) the amount of Losses in respect of a breach resulting from the application of clause (i) above shall be determined without regard to any limitation or qualification as to materiality, “Business Material Adverse Effect,” “Purchaser Material Adverse Effect” (which instead will be read as any adverse effect or change) or similar materiality qualification or, with respect to the representation and warranty in Section 3.21(e) only, without regard to the limitation or qualification as to the “Knowledge of Seller,” contained in such representation or warranty, other than any such limitation or qualification contained in Section 3.15 (Absence of Certain Changes) or Section 3.17 (No Undisclosed Liabilities), or that is inherent in the methods, procedures and practices that constitute Applicable Accounting Principles hereunder for purposes of the second sentence of Section 3.16(a)(i) (Financial Statements).
(d) The amount of any indemnification payments finally determined to be due to an Indemnified Party pursuant to this Article X or in Article VI shall be (i) decreased by the amount of any Tax benefit (in the form of cash actually received or reduction in cash Taxes actually paid) actually recognized by any Purchaser Indemnified Party in respect of such Loss prior to the end of the taxable year in which an indemnity payment is made by an Indemnifying Party to an Indemnified Party with respect to such Loss, to the extent that such Tax benefit does not exceed the amount of the indemnity payment received by the Indemnified Party, net of any expenses incurred by such Purchaser Indemnified Party in pursuing such Tax benefit, and (ii) increased by the amount of any Tax cost realized prior to the end of such taxable year by any Purchaser Indemnified Party as a result of the receipt or accrual of the indemnity payment with respect to such Loss. If any such Tax benefit (or portion thereof) is disallowed, as a result of an audit or otherwise, the applicable Indemnifying Party shall promptly pay to the applicable Indemnified Party the amount of such disallowed Tax benefit within 30 days after the Indemnified Party notifies the Indemnifying Party that the adjustment with respect to such disallowance has been paid or otherwise taken into account.
(e) Upon making any indemnification payment in respect of a Loss with respect to all or a portion of which the Indemnified Party could have recovered from an unaffiliated third party (other than a Taxing Authority), if the Indemnified Party shall have received full payment of all Losses with respect to the underlying claim, the Indemnifying Party will, to the extent of such payment and to the extent permitted under Applicable Law and any applicable contractual obligations to third parties, be subrogated to all rights of the Indemnified Party against such unaffiliated third party in respect of the Loss to which the payment relates; provided that if the Indemnified Party shall not have received payment in full with respect to all Losses resulting from such underlying claim (including as a result of any limits on indemnification in this Article X), then no such subrogation shall be effective until such full payment has been received by the Indemnified Party from the Indemnifying Party and such unaffiliated third party. Each such Indemnified Party and Indemnifying Party will duly execute upon request all instruments reasonably necessary to evidence and perfect the above-described subrogation rights.
(f) The amount of any Losses sustained by an Indemnified Party and owed by an Indemnifying Party shall be reduced by any amount actually recovered by such Indemnified Party with respect thereto under any insurance or reinsurance coverage, or from any other party alleged to be responsible therefor, in each case subject to the same limitations that are applicable to reimbursements as contemplated by the last sentence of this Section 10.5(f). The Indemnified Party shall use commercially reasonable efforts to collect any amounts available under such insurance or reinsurance coverage and from such other party alleged to have responsibility. If, at any time subsequent to any indemnification actually having been paid pursuant to this Article X, the Indemnified Party receives an amount under insurance or reinsurance coverage or from such other party with respect to Losses so indemnified, then such Indemnified Party shall promptly reimburse by that amount the applicable Indemnifying Party for any such indemnification payment actually made by such Indemnifying Party up to the amount received by the Indemnified Party, net of any expenses incurred by the Indemnified Party in collecting any such amount or any increases in insurance premiums attributable to such recovery; provided that such reimbursement shall only be required to the extent the Indemnified Party would otherwise retain an amount greater than the full amount of the Losses incurred by the Indemnified Party as a result of the underlying claim.
(g) For the avoidance of doubt, neither Seller nor Parent shall be under any obligation to indemnify any Purchaser Indemnified Party for any Loss that was specifically reflected or reserved for on the Closing Statement, as finally determined pursuant to Section 2.5, or that was otherwise specifically included in the calculation of the Closing Date Value as reflected on such Closing Statement. For the avoidance of doubt, amounts recorded in a general ledger account or in the supporting workpapers or other detail to a balance sheet used to calculate amounts reflected on the Closing Statement shall be considered included in the calculation of the Closing Date Value on such Closing Statement.
(h) Purchaser shall be obligated to provide indemnification pursuant to Section 10.1(b)(i) only if the aggregate dollar amount of Losses with respect to all breaches of, or inaccuracies in, representations and warranties referred to in Section 10.1(b)(i) exceeds the Deductible, and then only for the amount of Losses in excess of the Deductible. The maximum aggregate liability Indemnity Threshold, which, in no event, shall exceed Two Million Five Hundred Thousand Dollars ($2,500,000.00)
(d) In the event of Purchaser for an indemnification for all Losses pursuant to Section 10.1(b)(i(x) (other than with respect to the Purchaser Fundamental Representations) shall be an amount equal to 22.5% of the sum of (i) the Purchase Price as finally adjusted in accordance with Section 2.5 and (ii) the Ceding Commission as finally adjusted as set forth in the MLOA Reinsurance Agreement.
(i) The rights and remedies of any party in respect of any inaccuracy or breach of any representation, warranty, covenant or agreement shall in no way be limited by the fact that the act, omission, occurrence or other state of facts or circumstances upon which any claim of any such inaccuracy or breach is based may also be the subject matter of any other representation, warranty, covenant or agreement as to which there is no inaccuracy or breach. The representations, warranties and covenants of Seller and Parent, and the Purchaser Indemnified Parties’ rights to indemnification pursuant to Article VI or this Article X with respect thereto, shall not be affected or deemed waived by reason of (and the Purchaser Indemnified Parties shall be deemed to have relied upon the representations and warranties as a result of Seller fraud and Parent set forth herein notwithstanding) (iy) any investigation made by inaccuracy or on behalf breach of any of the Fundamental Representations no limit shall apply and to which there shall be no limit on the ability to pursue all legal remedies. In the event that Purchaser Indemnified Parties (including by any chooses not to proceed to Closing for a reason other than the fraud or breach of its adviserscontract/breach of warranty of Seller(s), consultants or representatives) or by reason of any knowledge obtained by any of Purchaser shall reimburse Sellers for the Purchaser Indemnified Parties or any actual amount of their advisersdeal costs including attorneys’ and accountants’ fees, consultants or representatives, regardless but only to the maximum amount of whether such investigation was made or such knowledge was obtained before or after the execution and delivery of this Agreement or (ii) Purchaser’s waiver of any condition set forth in Article VII. The representations, warranties and covenants of Purchaser, and the Seller Indemnified Parties’ rights to indemnification with respect thereto, shall not be affected or deemed waived by reason of (and the Seller Indemnified Parties shall be deemed to have relied upon the representations and warranties of Purchaser set forth herein notwithstanding) (i) any investigation made by or on behalf of any of the Seller Indemnified Parties (including by any of its advisers, consultants or representatives) or by reason of any knowledge obtained by any of the Seller Indemnified Parties or any of such advisers, consultants or representatives, regardless of whether such investigation was made or such knowledge was obtained before or after the execution and delivery of this Agreement or (ii) the waiver by Seller or Parent of any condition set forth in Article VIII$100,000.
Appears in 1 contract
Samples: Asset Purchase Agreement (Ruths Hospitality Group, Inc.)
Additional Indemnification Provisions. In addition to any other limitations contained in Article IX or this Article X, the obligations of Seller, Parent and Purchaser to indemnify any Purchaser Indemnified Party or Seller Indemnified Party, as the case may be, are subject to the following:
(a) Seller and Parent With respect to each indemnification obligation in this Agreement, all Losses shall be obligated to provide indemnification pursuant to Section 10.1(a)(i) (other than with respect to the Seller Fundamental Representations and the representations and warranties set forth in Section 3.20) only if the aggregate dollar amount net of Losses with respect to all breaches of, or inaccuracies in, representations and warranties referred to in Section 10.1(a)(i) (other than with respect to the Seller Fundamental Representations and the representations and warranties set forth in Section 3.20) exceeds $12,500,000 (the “Deductible”), and then only for the amount of such Losses in excess of the Deductibleany related Eligible Insurance Proceeds.
(b) The maximum aggregate liability In order to fulfill the obligations of Seller and Parent for indemnification for all Losses claims made pursuant to Section 10.1(a)(i13.01(a)(i) (other than with respect after, in each case, giving effect to the Seller Fundamental Representations and limitations set forth in Section 13.01(b) or otherwise set forth in this Article XIII to the extent applicable), Losses owed to any Buyer Indemnified Party for inaccuracies or breaches of the representations and warranties made in Articles IV and V, shall be paid (i) first, from the Indemnification Escrowed Funds until the Indemnification Escrowed Funds are exhausted, depleted or expired, (ii) second, after the exhaustion, depletion or expiration of the Indemnification Escrowed Funds directly from Seller (including payment under the Parent Guarantee); provided, that any such amounts paid pursuant to Section 13.01(a)(i) shall in all instances be subject to the limitations set forth in Section 3.2013.01(b).
(c) In order to fulfill the obligations of Seller for indemnification claims made pursuant to Sections 13.01(a)(ii), 13.01(a)(iii), 13.01(a)(iv) and Article X, Losses owed to any Buyer Indemnified Party shall be paid (i) first from the Indemnification Escrowed Funds until the Indemnification Escrowed Funds are exhausted, depleted or expired, and (ii) second, after the exhaustion, depletion or expiration of the Indemnification Escrowed Funds, directly from Seller (including payments under the Parent Guarantee); provided, that any such amounts paid pursuant to Sections 13.01(a) and Article X shall not, in the aggregate, exceed the Indemnification Cap.
(d) In any case where an Indemnified Party recovers from a third party not affiliated with such Indemnified Party, including any third-party insurer, any amount equal in respect of any Loss paid by the Indemnifying Party pursuant to 22.5% Article X or this Article XIII, such Indemnified Party shall promptly pay over to the Indemnifying Party the amount so recovered (after deducting therefrom the amount of reasonable costs incurred by it or its Affiliates in procuring or with respect to such recovery, which costs shall not exceed the amount so recovered and, if applicable, net of such Indemnified Party’s (i) retroactive or prospective premium adjustments from a third-party insurer and (ii) actual increase(s) in such Person’s and its Affiliates’ insurance premium, in each case as a result of such recovery (collectively, the “Premium Increase”)), but not in excess of the sum of (iA) any amount previously paid by the Purchase Price as finally adjusted in accordance with Section 2.5 and (ii) the Ceding Commission as finally adjusted as set forth in the MLOA Reinsurance Agreement.
(c) For purposes of this Article X (i) the amount of Losses arising out of Indemnifying Party to or relating to a breach of or an inaccuracy in a representation or warranty that is subject to indemnification pursuant to Section 10.1(a)(i) or Section 10.1(b)(i) shall be deemed to exist either if such representation or warranty is actually inaccurate or breached or would have been inaccurate or breached if such representation or warranty had not contained any qualification as to materiality, Business Material Adverse Effect, Purchaser Material Adverse Effect (which, in each case, instead will be read as any adverse effect or change) or similar language or, with respect to the representation and warranty in Section 3.21(e) only, if such representation and warranty had not contained any qualification as to Knowledge, and (ii) the amount of Losses in respect of a breach resulting from the application of clause (i) above shall be determined without regard to any limitation or qualification as to materiality, “Business Material Adverse Effect,” “Purchaser Material Adverse Effect” (which instead will be read as any adverse effect or change) or similar materiality qualification or, with respect to the representation and warranty in Section 3.21(e) only, without regard to the limitation or qualification as to the “Knowledge of Seller,” contained in such representation or warranty, other than any such limitation or qualification contained in Section 3.15 (Absence of Certain Changes) or Section 3.17 (No Undisclosed Liabilities), or that is inherent in the methods, procedures and practices that constitute Applicable Accounting Principles for purposes on behalf of the second sentence of Section 3.16(a)(i) (Financial Statements).
(d) The amount of any indemnification payments finally determined to be due to an Indemnified Party pursuant to this Article X or in Article VI shall be (i) decreased by the amount of any Tax benefit (in the form of cash actually received or reduction in cash Taxes actually paid) actually recognized by any Purchaser Indemnified Party in respect of such Loss prior to claim and (B) any amount expended by the end Indemnifying Party in pursuing or defending any claim arising out of the taxable year in which an such Loss.
(e) The indemnity payment is made by an Indemnifying Party to an Indemnified Party hereunder with respect to such Lossany Loss shall be calculated after taking into account all actual and as realized reductions in federal, to the extent that such Tax benefit does not exceed the amount of the indemnity payment received state, local and foreign Taxes (including estimated Taxes) realized by the Indemnified Party, net of any expenses incurred by such Purchaser Indemnified Party in pursuing such Tax benefit, and (ii) increased by the amount of any Tax cost realized prior to the end of such taxable year by any Purchaser Indemnified Party as a result of the receipt or accrual of the indemnity payment with respect event giving rise to such Loss. If any such Tax benefit (or portion thereof) is disallowed, as a result All calculations shall be made at the time of an audit or otherwise, the applicable Indemnifying Party shall promptly pay to the applicable Indemnified Party the amount of such disallowed Tax benefit within 30 days after the Indemnified Party notifies the Indemnifying Party that the adjustment with respect to such disallowance has been paid or otherwise taken into account.
(e) Upon making any relevant indemnification payment in respect of a Loss with respect using reasonable assumptions (as agreed to all or a portion of which the Indemnified Party could have recovered from an unaffiliated third party (other than a Taxing Authority), if the Indemnified Party shall have received full payment of all Losses with respect to the underlying claim, the Indemnifying Party will, to the extent of such payment and to the extent permitted under Applicable Law and any applicable contractual obligations to third parties, be subrogated to all rights of the Indemnified Party against such unaffiliated third party in respect of the Loss to which the payment relates; provided that if the Indemnified Party shall not have received payment in full with respect to all Losses resulting from such underlying claim (including as a result of any limits on indemnification in this Article X), then no such subrogation shall be effective until such full payment has been received by the Indemnified Party from the Indemnifying Party and Indemnified Party) and present value concepts (using a discount rate equal to the applicable federal rate in effect at the time of such unaffiliated third party. Each such Indemnified Party and Indemnifying Party will duly execute upon request all instruments reasonably necessary to evidence and perfect event (based on the aboveFederal mid-described subrogation rightsterm rate) using semi-annual compounding).
(f) If any portion of Losses to be paid by the Indemnifying Party pursuant to this Article XIII would reasonably be expected to be recoverable from a third party not affiliated with the relevant Indemnified Party based on the underlying claim or demand asserted against such Indemnifying Party, then the Indemnified Party shall promptly give notice thereof to the Indemnifying Party after becoming aware of such fact. The Indemnified Party shall be under no obligation to collect any amounts recoverable from such third party, and if the Indemnified Party attempts to collect such amounts from any third party, the Indemnifying Party shall reimburse the Indemnified Party for all reasonable costs and expenses incurred in connection with such collection (which costs and expenses of collection shall not exceed the amount recoverable from such third party). Except as otherwise provided herein and other than with respect to third-party insurance coverage, Eligible Insurance Proceeds, if any portion of Losses actually paid by the Indemnifying Party pursuant to this Article XIII could have been recovered from a third party not affiliated with the relevant Indemnified Party based on the underlying claim or demand asserted against such Indemnifying Party, then the Indemnified Party shall use commercially reasonable efforts to transfer, to the extent transferable, such of its rights to proceed against such third party as are necessary to permit the Indemnifying Party to recover from such third party any amount actually paid by the Indemnifying Party pursuant to this Article XIII.
(g) Seller shall not be liable under Article X or this Article XIII in respect of any Losses sustained by an Indemnified Party Loss, if the fact, matter, event or circumstance giving rise to the claim or on which it is based is specifically accrued or reserved for in the Closing Statement and owed by an expressly taken into account in the adjustments to the Purchase Price provided for in Sections 2.03 and 2.04.
(h) No Indemnifying Party shall be reduced liable under Article X or this Article XIII in respect of any Loss which is contingent unless and until such contingent Loss becomes an actual liability and is due and payable.
(i) If any portion of Losses to be paid by the Indemnifying Party pursuant to this Article XIII are covered, in whole or in part, by third-party insurance coverage, the Indemnified Party shall promptly give notice thereof to the Indemnifying Party after becoming aware of such fact; provided, that the failure to provide such notice shall not release the Indemnifying Party from any amount of its obligations under this Article XIII except to the extent the Indemnifying Party is actually recovered prejudiced by such Indemnified Party with respect thereto under any insurance or reinsurance coverage, or from any other party alleged to be responsible therefor, in each case subject to the same limitations that are applicable to reimbursements as contemplated by the last sentence of this Section 10.5(f)failure. The Indemnified Party shall use commercially reasonable efforts to collect any amounts available under the maximum amount of insurance proceeds thereunder, and all such insurance or reinsurance coverage and from such other party alleged to have responsibility. If, at proceeds actually collected in respect of any time subsequent to any indemnification actually having been paid pursuant to this Article X, the Indemnified Party receives an amount under insurance or reinsurance coverage or from such other party with respect to Losses so indemnified, then such Indemnified Party shall promptly reimburse by that amount the applicable Indemnifying Party for any such indemnification payment actually made by such Indemnifying Party up to Loss (net of (i) the amount received by the Indemnified Party, net of any reasonable costs and expenses (including reasonable attorneys’ fees) incurred by the Indemnified Party or its Affiliates in collecting any such amount or any increases in insurance premiums attributable to such recovery; provided that such reimbursement shall only be required to the extent the Indemnified Party would otherwise retain an amount greater than the full amount of the Losses incurred by the Indemnified Party as a result of the underlying claim.
(g) For the avoidance of doubt, neither Seller nor Parent shall be under any obligation to indemnify any Purchaser Indemnified Party for any Loss that was specifically reflected or reserved for on the Closing Statement, as finally determined pursuant to Section 2.5, or that was otherwise specifically included in the calculation of the Closing Date Value as reflected on such Closing Statement. For the avoidance of doubt, amounts recorded in a general ledger account or in the supporting workpapers or other detail to a balance sheet used to calculate amounts reflected on the Closing Statement shall be considered included in the calculation of the Closing Date Value on such Closing Statement.
(h) Purchaser shall be obligated to provide indemnification pursuant to Section 10.1(b)(i) only if the aggregate dollar amount of Losses with respect to all breaches of, or inaccuracies in, representations and warranties referred to in Section 10.1(b)(i) exceeds the Deductible, and then only for the amount of Losses in excess of the Deductible. The maximum aggregate liability of Purchaser for indemnification for all Losses pursuant to Section 10.1(b)(i) (other than with respect to the Purchaser Fundamental Representations) shall be an amount equal to 22.5% of the sum of (i) the Purchase Price as finally adjusted in accordance with Section 2.5 proceeds and (ii) the Ceding Commission as finally adjusted as set forth present value of any related Premium Increase or other charges paid or reasonably expected to be paid by such Indemnified Party or its Affiliates arising out of such Loss) shall be considered “Eligible Insurance Proceeds.” 110
(j) The Indemnified Parties shall use commercially reasonable efforts to avoid or mitigate any Losses, which in the MLOA Reinsurance Agreement.
(i) The rights and remedies absence of any party mitigation might give rise to or increase a Loss in respect of any inaccuracy claim under Article X or this Article XIII; provided, that, (i) the costs and expenses of such efforts shall constitute Losses and (ii) an Indemnified Party shall not be required to initiate or pursue litigation against third parties. Any failure by an Indemnified Party to so mitigate a Loss shall not relieve any Indemnifying Party of its obligations under Article X or this Article XIII.
(k) For purposes of determining whether, breach of any representationrepresentation or warranty in this Agreement has occurred, warrantyand calculating the amount of Losses under this Article XIII, covenant or agreement shall in no way be limited by the fact that the actany “materiality,” “Company Material Adverse Effect”, omission, occurrence “Buyer Material Adverse Effect” or other state of facts or circumstances upon which any claim of any such inaccuracy or breach is based may also be the subject matter of any other representation, warranty, covenant or agreement as to which there is no inaccuracy or breach. The representations, warranties and covenants of Seller and Parent, and the Purchaser Indemnified Parties’ rights to indemnification pursuant to Article VI or this Article X with respect thereto, shall not be affected or deemed waived by reason of (and the Purchaser Indemnified Parties shall be deemed to have relied upon similar qualifications in the representations and warranties of Seller and Parent set forth herein notwithstanding) shall be disregarded, other than (i) any investigation made by or on behalf of any of the Purchaser Indemnified Parties (including by any of its advisers, consultants or representatives) or by reason of any knowledge obtained by any of the Purchaser Indemnified Parties or any of their advisers, consultants or representatives, regardless of whether such investigation was made or such knowledge was obtained before or after the execution and delivery of this Agreement or (ii) Purchaser’s waiver of any condition set forth in Article VII. The representations, warranties and covenants of Purchaser, and the Seller Indemnified Parties’ rights to indemnification with respect thereto, shall not be affected or deemed waived by reason of (and the Seller Indemnified Parties shall be deemed to have relied upon the representations and warranties in (A) Section 5.04(b), (B) Section 5.08(a)(ii), (C) Section 5.13(a), (D) Section 5.14(b)(i) and (iii), and (E) the second sentence of Purchaser set forth herein notwithstandingSection 5.14(g) (i) any investigation made by or on behalf of any of the Seller Indemnified Parties (including by any of its advisers, consultants or representatives) or by reason of any knowledge obtained by any of the Seller Indemnified Parties or any of such advisers, consultants or representatives, regardless of whether such investigation was made or such knowledge was obtained before or after the execution and delivery of this Agreement or (ii) any use of the waiver by Seller or Parent of any condition set forth in Article VIIIdefined term “Material Contract”.
Appears in 1 contract
Samples: Stock Purchase Agreement
Additional Indemnification Provisions. In addition to any other limitations contained in Article IX or this Article X, the obligations of Seller, Parent and Purchaser to indemnify any Purchaser Indemnified Party or Seller Indemnified Party, as the case may be, are subject to the following:
(a) Parent, the Seller and Parent shall be obligated the Acquiror agree that for all purposes of this Article X (including both determining whether there has been a breach of representation, warranty and covenant and determining the amount of indemnifiable Losses relating to provide indemnification pursuant to Section 10.1(a)(i) (any such breach), each representation, warranty, covenant and other than with respect to the Seller Fundamental Representations and the representations and warranties agreement set forth in Section 3.20) only if this Agreement shall be read and construed without giving effect to any limitations as to materiality or “Material Adverse Effect” set forth therein. The parties agree that the aggregate dollar foregoing allocation of risk is equitable in light of the agreed amount of Losses with respect to all breaches of, or inaccuracies in, representations and warranties referred to in Section 10.1(a)(i) (other than with respect to the Seller Fundamental Representations and the representations and warranties limitations set forth in Section 3.20Sections 10.01(b) exceeds $12,500,000 (the “Deductible”and 10.02(b), and then only for the amount of such Losses in excess of the Deductibleabove.
(b) The maximum aggregate liability of Parent, the Seller and Parent the Acquiror agree, for themselves and on behalf of their respective Controlled Affiliates, that with respect to each indemnification for obligation in this Agreement, any other Transaction Agreement or any other document executed or delivered in connection with the Closing (i) each such obligation shall be calculated on an After-Tax Basis, (ii) all Losses pursuant shall be net of any Eligible Insurance Proceeds, (iii) in no event shall the Indemnifying Party have liability to Section 10.1(a)(i) the Indemnified Party (other than in connection with Section 10.02(a)(ii); provided, however, that the limitation in Section 10.06(b)(iii)(A) with respect to punitive damages shall apply to Section 10.02(a)(ii)) for: (A) any consequential, special, incidental or punitive damages, or any Losses calculated by using multiples or any valuation methodologies or similar measures used in arriving at or that may be reflective of the Purchase Price (other than any such damages or similar items actually paid to any unaffiliated third party in a Third Party Claim), (B) Losses to the extent based on reputational harm (other than any such damages or similar items that are paid to any unaffiliated third party in a Third Party Claim) or (C) any costs and expenses of investigation, assertion, dispute, enforcement, defense or resolution, including attorneys’, actuaries’, accountants’ and other professionals’ fees, disbursements and expenses, to the extent incurred in connection with any claim or dispute among the parties hereto as to whether a Seller Fundamental Representations and Indemnified Party, on the representations and warranties set forth one hand, or an Acquiror Indemnified Party, on the other hand, is entitled to indemnification under Article VII or this Article X for any particular Loss or Losses or to specific enforcement under Section 3.2011.14 (for the avoidance of doubt, the limitations in the subsection (C) shall be not apply with respect to costs and expenses relating to the investigation, assertion, dispute, enforcement, defense or resolution in respect of any Third Party Claim, including reasonable attorneys’, actuaries’, accountants’ and other professionals’ fees, disbursements and expenses in respect of any Third Party Claim) and (iv) in no event shall the Indemnifying Party have liability to the Indemnified Party for any Loss, or portion thereof, as applicable to the extent reflected or reserved for or otherwise taken into account in determining the Final Working Capital.
(c) To the extent that an Indemnified Party has a right to seek indemnification from a third Person (other than an Indemnifying Party) for any Loss covered under this Article X, such Indemnified Party shall use its commercially reasonable efforts to obtain a recovery from such third Person; provided, that the foregoing shall not limit such Indemnified Party’s rights under this Article X. In any case where an Indemnified Party recovers from a third Person any amount equal in respect of any Loss for which an Indemnifying Party has actually reimbursed it pursuant to 22.5% this Article X (other than Retained Insurance Proceeds), such Indemnified Party shall promptly pay over to the Indemnifying Party the amount so recovered (after deducting therefrom the amount of expenses incurred by it in procuring such recovery), but not in excess of the sum of (i) any amount previously paid by the Purchase Price as finally adjusted Indemnifying Party to or on behalf of the Indemnified Party in accordance with Section 2.5 respect of such claim and (ii) any amount expended by the Ceding Commission as finally adjusted as set forth Indemnifying Party in the MLOA Reinsurance Agreement.
(c) For purposes of this Article X (i) the amount of Losses pursuing or defending any claim arising out of or relating to a breach of or an inaccuracy in a representation or warranty that is subject to indemnification pursuant to Section 10.1(a)(i) or Section 10.1(b)(i) shall be deemed to exist either if such representation or warranty is actually inaccurate or breached or would have been inaccurate or breached if such representation or warranty had not contained any qualification as to materiality, Business Material Adverse Effect, Purchaser Material Adverse Effect (which, in each case, instead will be read as any adverse effect or change) or similar language or, with respect to the representation and warranty in Section 3.21(e) only, if such representation and warranty had not contained any qualification as to Knowledge, and (ii) the amount of Losses in respect of a breach resulting from the application of clause (i) above shall be determined without regard to any limitation or qualification as to materiality, “Business Material Adverse Effect,” “Purchaser Material Adverse Effect” (which instead will be read as any adverse effect or change) or similar materiality qualification or, with respect to the representation and warranty in Section 3.21(e) only, without regard to the limitation or qualification as to the “Knowledge of Seller,” contained in such representation or warranty, other than any such limitation or qualification contained in Section 3.15 (Absence of Certain Changes) or Section 3.17 (No Undisclosed Liabilities), or that is inherent in the methods, procedures and practices that constitute Applicable Accounting Principles for purposes of the second sentence of Section 3.16(a)(i) (Financial Statements)matter.
(d) The amount of parties hereto shall treat any indemnification payment made under this Agreement including any indemnity payments finally determined to be due to an Indemnified Party made pursuant to this Article X or in Article VI shall be (i) decreased by the amount of any Tax benefit (in the form of cash actually received or reduction in cash Taxes actually paid) actually recognized by any Purchaser Indemnified Party in respect of such Loss prior VII, as an adjustment to the end of the taxable year in which an indemnity payment is made by an Indemnifying Party to an Indemnified Party with respect to such Loss, to the extent that such Tax benefit does not exceed the amount of the indemnity payment received by the Indemnified Party, net of any expenses incurred by such Purchaser Indemnified Party in pursuing such Tax benefit, and (ii) increased by the amount of any Tax cost realized prior to the end of such taxable year by any Purchaser Indemnified Party as a result of the receipt or accrual of the indemnity payment with respect to such Loss. If any such Tax benefit (or portion thereof) is disallowed, as a result of an audit or otherwise, the applicable Indemnifying Party shall promptly pay to the applicable Indemnified Party the amount of such disallowed Tax benefit within 30 days after the Indemnified Party notifies the Indemnifying Party that the adjustment with respect to such disallowance has been paid or otherwise taken into accountPurchase Price.
(e) Upon making The parties hereto acknowledge and agree that the same Loss may be subject to indemnification under more than one subsection of Section 10.01(a) or Section 10.02(a), respectively; provided, however, that in no event shall any Indemnified Party be entitled to duplicative recoveries for the same underlying Loss; and provided, further, that there shall be no indemnification payment in respect of a Loss pursuant to Section 10.01 or Section 10.02 with respect to all or a portion any Losses which are expressly subject to indemnification under any of which the Indemnified Party could have recovered from an unaffiliated third party (other than a Taxing Authority), if the Indemnified Party shall have received full payment of all Losses with respect to the underlying claimTransaction Agreements, the Indemnifying Party will, to the extent of such payment and to the extent permitted under Applicable Law and any applicable contractual obligations to third parties, be subrogated to all rights of the Indemnified Party against such unaffiliated third party in respect of the Loss to sole remedy for which the payment relates; provided that if the Indemnified Party shall not have received payment in full with respect to all Losses resulting from such underlying claim (including as a result of any limits on indemnification in this Article X), then no such subrogation shall be effective until as set forth in such full payment has been received by the Indemnified Party from the Indemnifying Party and such unaffiliated third party. Each such Indemnified Party and Indemnifying Party will duly execute upon request all instruments reasonably necessary to evidence and perfect the above-described subrogation rightsother Transaction Agreement.
(f) The amount If any portion of any Losses sustained to be reimbursed by the Indemnifying Party may be covered, in whole or in part, by third-party insurance coverage (each, an “Insurance Policy”), the Indemnified Party and owed by an shall promptly give notice thereof to the Indemnifying Party shall be reduced by any amount actually recovered by such Indemnified Party with respect thereto under any insurance or reinsurance coverage, or from any other party alleged to be responsible therefor, in each case subject to the same limitations that are applicable to reimbursements as contemplated by the last sentence (a “Notice of this Section 10.5(fInsurance”). The If the Indemnifying Party so requests within sixty (60) days after receipt of a Notice of Insurance, the Indemnified Party shall use its commercially reasonable efforts to collect any amounts available under the maximum amount of insurance proceeds thereunder, in which event (i) all such insurance or reinsurance coverage and from such other party alleged to have responsibility. If, at any time subsequent to any indemnification proceeds actually having been paid pursuant to this Article X, the Indemnified Party receives an amount under insurance or reinsurance coverage or from such other party with respect to Losses so indemnified, then such Indemnified Party shall promptly reimburse by that amount the applicable Indemnifying Party for any such indemnification payment actually made by such Indemnifying Party up to the amount received by the Indemnified Partyreceived, net of any expenses costs reasonably incurred by the Indemnified Party in collecting any seeking such amount or any increases in insurance premiums attributable to such recovery; provided that such reimbursement shall only be required to the extent the Indemnified Party would otherwise retain an amount greater than the full amount of the Losses incurred by the Indemnified Party as a result of the underlying claim.
(g) For the avoidance of doubtcollection, neither Seller nor Parent shall be under any obligation to indemnify any Purchaser Indemnified Party for any Loss that was specifically reflected or reserved for on the Closing Statement, as finally determined pursuant to Section 2.5, or that was otherwise specifically included in the calculation of the Closing Date Value as reflected on such Closing Statement. For the avoidance of doubt, amounts recorded in a general ledger account or in the supporting workpapers or other detail to a balance sheet used to calculate amounts reflected on the Closing Statement shall be considered included in the calculation of the Closing Date Value on such Closing Statement.
(h) Purchaser shall be obligated to provide indemnification pursuant to Section 10.1(b)(i) only if the aggregate dollar amount of Losses with respect to all breaches of, or inaccuracies in, representations and warranties referred to in Section 10.1(b)(i) exceeds the Deductible, and then only for the amount of Losses in excess of the Deductible. The maximum aggregate liability of Purchaser for indemnification for all Losses pursuant to Section 10.1(b)(i) (other than with respect to the Purchaser Fundamental Representations) shall be an amount equal to 22.5% of the sum of (i) the Purchase Price as finally adjusted in accordance with Section 2.5 “Eligible Insurance Proceeds” and (ii) the Ceding Commission as finally adjusted as set forth Indemnifying Party shall reimburse the Indemnified Party for all reasonable costs incurred in connection with such collection. If the MLOA Reinsurance Agreement.
(i) The rights and remedies Indemnifying Party does not request that the Indemnified Party seek coverage of any party in respect portion of such Loss under the Insurance Policy within sixty (60) days after receipt of a Notice of Insurance, any inaccuracy or breach of any representation, warranty, covenant or agreement shall in no way be limited by the fact proceeds that the act, omission, occurrence or other state of facts or circumstances upon which any claim of any such inaccuracy or breach is based Indemnified Party may also be the subject matter of any other representation, warranty, covenant or agreement as to which there is no inaccuracy or breach. The representations, warranties and covenants of Seller and Parent, and the Purchaser Indemnified Parties’ rights to indemnification pursuant to Article VI or this Article X with respect thereto, shall not be affected or deemed waived by reason of (and the Purchaser Indemnified Parties receive thereunder shall be deemed to have relied upon the representations and warranties of Seller and Parent set forth herein notwithstanding) (i) any investigation made by or on behalf of any of the Purchaser Indemnified Parties (including by any of its advisers, consultants or representatives) or by reason of any knowledge obtained by any of the Purchaser Indemnified Parties or any of their advisers, consultants or representatives, regardless of whether such investigation was made or such knowledge was obtained before or after the execution and delivery of this Agreement or (ii) Purchaser’s waiver of any condition set forth in Article VII. The representations, warranties and covenants of Purchaser, and the Seller Indemnified Parties’ rights to indemnification with respect thereto, shall not be affected or deemed waived by reason of (and the Seller Indemnified Parties shall be deemed to have relied upon the representations and warranties of Purchaser set forth herein notwithstanding) (i) any investigation made by or on behalf of any of the Seller Indemnified Parties (including by any of its advisers, consultants or representatives) or by reason of any knowledge obtained by any of the Seller Indemnified Parties or any of such advisers, consultants or representatives, regardless of whether such investigation was made or such knowledge was obtained before or after the execution and delivery of this Agreement or (ii) the waiver by Seller or Parent of any condition set forth in Article VIIIconsidered “Retained Insurance Proceeds.”
Appears in 1 contract
Samples: Master Transaction Agreement (National General Holdings Corp.)
Additional Indemnification Provisions. In addition (a) The Sellers indemnity obligations for Indemnified Losses arising under Section 6.01(a)(i), shall not exceed $5,000,000 (the “Indemnification Cap”); provided, however, that the Indemnification Cap shall not apply to any other limitations contained in Article IX or this Article X, indemnification for Indemnified Losses the obligations of Seller, Parent and Purchaser to indemnify any Purchaser Indemnified Party may suffer resulting from, arising out of, relating to, the breach or Seller Indemnified Partyalleged breach of any of the following (the “Specified Provisions”); (i) the Fundamental Representations; (ii) the Environmental Representations, as (iii) the case may beitems set forth on Schedule 6.01 or (iv) the covenants of the Sellers contained in this Agreement, are subject to the following:
(a) Seller and Parent no such Damages shall be obligated taken into account to provide indemnification pursuant to Section 10.1(a)(i) (other than determine whether the Indemnification Cap has been exceeded with respect to claims for Indemnification not referred to in this proviso. Notwithstanding the Seller Fundamental Representations foregoing, Sellers’ indemnity obligations for Indemnified Losses under the indemnification provisions of the Specified Provisions shall not exceed $10,000,000 if such claim is made prior to the twelve (12) month anniversary of the Closing Date and shall not exceed $5,000,000 if any such claim is mad thereafter and through the representations and warranties applicable survival period as set forth in Section 3.20) only if the aggregate dollar amount of Losses with respect to all breaches of, or inaccuracies in, representations and warranties referred to in Section 10.1(a)(i) (other than with respect to the Seller Fundamental Representations and the representations and warranties set forth in Section 3.20) exceeds $12,500,000 (the “Deductible”6.05(b), and then only for the amount of such Losses in excess of the Deductible.
(b) The maximum No Indemnifying Party shall be required to indemnify applicable Indemnified Parties for Indemnity Losses arising under Section 6.01(a)(i) or Section 6.02(a), as applicable, unless and until, and only to the extent that the aggregate liability amount of Seller and Parent all such Indemnity Losses for which such Indemnified Parties are otherwise entitled to indemnification for all Losses pursuant to Section 10.1(a)(i) (other than with respect to the Seller Fundamental Representations and the representations and warranties set forth Section 3.20) shall be this Article VI exceeds an amount equal to 22.5% $50,000 (the “Aggregate Minimum Loss”), following which the Indemnified Parties shall be entitled to recover all of their respective Indemnity Losses, subject to the sum of (i) the Purchase Price as finally adjusted in accordance with Section 2.5 and (ii) the Ceding Commission as finally adjusted as provisions set forth in subsection (b) below; provided, however, that the MLOA Reinsurance Agreementlimitations in this Section 6.06(a) shall not apply to Indemnity Losses from claims for indemnification arising out of the Specified Provisions.
(c) For purposes of this Article X (i) the amount of Losses arising out of Article VI, any inaccuracy in or relating to a breach of or an inaccuracy in a any representation or warranty that is subject to indemnification pursuant to Section 10.1(a)(i(and any Indemnity Losses arising therefrom or related thereto) or Section 10.1(b)(i) shall be deemed to exist either if such representation or warranty is actually inaccurate or breached or would have been inaccurate or breached if such representation or warranty had not contained any qualification as to materiality, Business Material Adverse Effect, Purchaser Material Adverse Effect (which, in each case, instead will be read as any adverse effect or change) or similar language or, with respect to the representation and warranty in Section 3.21(e) only, if such representation and warranty had not contained any qualification as to Knowledge, and (ii) the amount of Losses in respect of a breach resulting from the application of clause (i) above shall be determined without regard to any limitation or qualification as to materiality, “Business Material Adverse Effect,” “Purchaser Material Adverse Effect” (which instead will be read as any adverse effect or change) or similar materiality qualification or, with respect to the representation and warranty in Section 3.21(e) only, without regard to the limitation or qualification as to the “Knowledge of Seller,” contained in or otherwise applicable to such representation or warranty, other than any such limitation or qualification contained in Section 3.15 (Absence of Certain Changes) or Section 3.17 (No Undisclosed Liabilities), or that is inherent in the methods, procedures and practices that constitute Applicable Accounting Principles for purposes of the second sentence of Section 3.16(a)(i) (Financial Statements).
(d) The amount of any indemnification payments finally determined to be due to an Indemnified Party pursuant to this Article X or in Article VI shall be (i) decreased by the amount of any Tax benefit (in the form of cash actually received or reduction in cash Taxes actually paid) actually recognized by any Purchaser Indemnified Party in respect of such Loss prior to the end of the taxable year in which an indemnity payment is made by an Indemnifying Party to an Indemnified Party with respect to such Loss, to the extent that such Tax benefit does not exceed the amount of the indemnity payment received by the Indemnified Party, net of any expenses incurred by such Purchaser Indemnified Party in pursuing such Tax benefit, and (ii) increased by the amount of any Tax cost realized prior to the end of such taxable year by any Purchaser Indemnified Party as a result of the receipt or accrual of the indemnity payment with respect to such Loss. If any such Tax benefit (or portion thereof) is disallowed, as a result of an audit or otherwise, the applicable Indemnifying Party shall promptly pay to the applicable Indemnified Party the amount of such disallowed Tax benefit within 30 days after the Indemnified Party notifies the Indemnifying Party that the adjustment with respect to such disallowance has been paid or otherwise taken into account.
(e) Upon making any indemnification payment in respect of a Loss with respect to all or a portion of which the Indemnified Party could have recovered from an unaffiliated third party (other than a Taxing Authority), if the Indemnified Party shall have received full payment of all Losses with respect to the underlying claim, the Indemnifying Party will, to the extent of such payment and to the extent permitted under Applicable Law and any applicable contractual obligations to third parties, be subrogated to all rights of the Indemnified Party against such unaffiliated third party in respect of the Loss to which the payment relates; provided that if the Indemnified Party shall not have received payment in full with respect to all Losses resulting from such underlying claim (including as a result of any limits on indemnification in this Article X), then no such subrogation shall be effective until such full payment has been received by the Indemnified Party from the Indemnifying Party and such unaffiliated third party. Each such Indemnified Party and Indemnifying Party will duly execute upon request all instruments reasonably necessary to evidence and perfect the above-described subrogation rights.
(f) The amount of any Losses sustained by an Indemnified Party and owed by an Indemnifying Party shall be reduced by any amount actually recovered by such Indemnified Party with respect thereto under any insurance or reinsurance coverage, or from any other party alleged to be responsible therefor, in each case subject to the same limitations that are applicable to reimbursements as contemplated by the last sentence of this Section 10.5(f). The Indemnified Party shall use commercially reasonable efforts to collect any amounts available under such insurance or reinsurance coverage and from such other party alleged to have responsibility. If, at any time subsequent to any indemnification actually having been paid pursuant to this Article X, the Indemnified Party receives an amount under insurance or reinsurance coverage or from such other party with respect to Losses so indemnified, then such Indemnified Party shall promptly reimburse by that amount the applicable Indemnifying Party for any such indemnification payment actually made by such Indemnifying Party up to the amount received by the Indemnified Party, net of any expenses incurred by the Indemnified Party in collecting any such amount or any increases in insurance premiums attributable to such recovery; provided that such reimbursement shall only be required to the extent the Indemnified Party would otherwise retain an amount greater than the full amount of the Losses incurred by the Indemnified Party as a result of the underlying claim.
(g) For the avoidance of doubt, neither Seller nor Parent shall be under any obligation to indemnify any Purchaser Indemnified Party for any Loss that was specifically reflected or reserved for on the Closing Statement, as finally determined pursuant to Section 2.5, or that was otherwise specifically included in the calculation of the Closing Date Value as reflected on such Closing Statement. For the avoidance of doubt, amounts recorded in a general ledger account or in the supporting workpapers or other detail to a balance sheet used to calculate amounts reflected on the Closing Statement shall be considered included in the calculation of the Closing Date Value on such Closing Statement.
(h) Purchaser shall be obligated to provide indemnification pursuant to Section 10.1(b)(i) only if the aggregate dollar amount of Losses with respect to all breaches of, or inaccuracies in, representations and warranties referred to in Section 10.1(b)(i) exceeds the Deductible, and then only for the amount of Losses in excess of the Deductible. The maximum aggregate liability of Purchaser for indemnification for all Losses pursuant to Section 10.1(b)(i) (other than with respect to the Purchaser Fundamental Representations) shall be an amount equal to 22.5% of the sum of (i) the Purchase Price as finally adjusted in accordance with Section 2.5 and (ii) the Ceding Commission as finally adjusted as set forth in the MLOA Reinsurance Agreement.
(i) The rights and remedies of any party in respect of any inaccuracy or breach of any representation, warranty, covenant or agreement shall in no way be limited by the fact that the act, omission, occurrence or other state of facts or circumstances upon which any claim of any such inaccuracy or breach is based may also be the subject matter of any other representation, warranty, covenant or agreement as to which there is no inaccuracy or breach. The representations, warranties and covenants of Seller and Parent, and the Purchaser Indemnified Parties’ rights to indemnification pursuant to Article VI or this Article X with respect thereto, shall not be affected or deemed waived by reason of (and the Purchaser Indemnified Parties shall be deemed to have relied upon the representations and warranties of Seller and Parent set forth herein notwithstanding) (i) any investigation made by or on behalf of any of the Purchaser Indemnified Parties (including by any of its advisers, consultants or representatives) or by reason of any knowledge obtained by any of the Purchaser Indemnified Parties or any of their advisers, consultants or representatives, regardless of whether such investigation was made or such knowledge was obtained before or after the execution and delivery of this Agreement or (ii) Purchaser’s waiver of any condition set forth in Article VII. The representations, warranties and covenants of Purchaser, and the Seller Indemnified Parties’ rights to indemnification with respect thereto, shall not be affected or deemed waived by reason of (and the Seller Indemnified Parties shall be deemed to have relied upon the representations and warranties of Purchaser set forth herein notwithstanding) (i) any investigation made by or on behalf of any of the Seller Indemnified Parties (including by any of its advisers, consultants or representatives) or by reason of any knowledge obtained by any of the Seller Indemnified Parties or any of such advisers, consultants or representatives, regardless of whether such investigation was made or such knowledge was obtained before or after the execution and delivery of this Agreement or (ii) the waiver by Seller or Parent of any condition set forth in Article VIII.
Appears in 1 contract
Additional Indemnification Provisions. In addition (a) Any Indemnification Claim to any other limitations contained in Article IX be made by the Purchaser or this Article X, the obligations of Seller, Parent and Purchaser to indemnify any Purchaser Indemnified Party or Seller Indemnified PartySellers, as the case may be, are subject shall be made on or prior to the following:expiration of the applicable survival period set forth in Section 9.1, except as otherwise provided therein.
(ab) Seller and Parent shall be obligated to provide indemnification pursuant to Section 10.1(a)(i) (other Other than with respect to the Seller Fundamental Representations and the any representations and warranties set forth in the inaccuracy or breach of which is the result of fraud, on or prior to the Closing, or any Losses under Section 3.209.2(j), to which the Indemnity Threshold (as defined below) only if shall not apply, none of the Purchaser Indemnified Parties shall be permitted to recover any Losses under Section 9.2, unless and until the aggregate dollar amount of Losses with respect to all breaches of, or inaccuracies in, representations and warranties referred to in under such Section 10.1(a)(i) (other than with respect to the Seller Fundamental Representations and the representations and warranties set forth in Section 3.20) considered together exceeds $12,500,000 200,000 (the “DeductibleIndemnity Threshold”), and then only whereupon the Purchaser Indemnified Parties shall be entitled to indemnification hereunder or otherwise for the amount of all such Losses in excess of the Deductible.
(b) The maximum aggregate liability of Seller and Parent for indemnification for all Losses pursuant to Section 10.1(a)(i) (other than with respect to the Seller Fundamental Representations and the representations and warranties set forth Section 3.20) shall be an amount equal to 22.5% of the sum of (i) the Purchase Price as finally adjusted in accordance with Section 2.5 and (ii) the Ceding Commission as finally adjusted as set forth in the MLOA Reinsurance AgreementIndemnity Threshold.
(c) For purposes Other than with respect to any representations and warranties the inaccuracy or breach of this Article X (i) which is the result of fraud, on or prior to the Closing, to which the Indemnity Threshold shall not apply, none of the Seller Indemnified Parties shall be permitted to recover any Losses under Section 9.3(a), unless and until the aggregate amount of Losses arising out of or relating to a breach of or an inaccuracy in a representation or warranty that is subject under such Section considered together exceeds the Indemnity Threshold, whereupon the Seller Indemnified Parties shall be entitled to indemnification pursuant to Section 10.1(a)(i) or Section 10.1(b)(i) shall be deemed to exist either if hereunder for all such representation or warranty is actually inaccurate or breached or would have been inaccurate or breached if such representation or warranty had not contained any qualification as to materiality, Business Material Adverse Effect, Purchaser Material Adverse Effect (which, in each case, instead will be read as any adverse effect or change) or similar language or, with respect to the representation and warranty in Section 3.21(e) only, if such representation and warranty had not contained any qualification as to Knowledge, and (ii) the amount of Losses in respect of a breach resulting from the application of clause (i) above shall be determined without regard to any limitation or qualification as to materiality, “Business Material Adverse Effect,” “Purchaser Material Adverse Effect” (which instead will be read as any adverse effect or change) or similar materiality qualification or, with respect to the representation and warranty in Section 3.21(e) only, without regard to the limitation or qualification as to the “Knowledge of Seller,” contained in such representation or warranty, other than any such limitation or qualification contained in Section 3.15 (Absence of Certain Changes) or Section 3.17 (No Undisclosed Liabilities), or that is inherent in the methods, procedures and practices that constitute Applicable Accounting Principles for purposes excess of the second sentence of Section 3.16(a)(i) (Financial Statements)Indemnity Threshold.
(d) The amount of any In no event shall the total indemnification payments finally determined to be due to an Indemnified Party pursuant to this Article X paid under Section 9.2 or in Article VI shall be (i) decreased by the amount of any Tax benefit (in the form of cash actually received or reduction in cash Taxes actually paid) actually recognized by any Purchaser Indemnified Party in respect of such Loss prior to the end of the taxable year in which an indemnity payment is made by an Indemnifying Party to an Indemnified Party with respect to such Loss, to the extent that such Tax benefit does not exceed the amount of the indemnity payment received by the Indemnified Party, net of any expenses incurred by such Purchaser Indemnified Party in pursuing such Tax benefit, and (ii) increased by the amount of any Tax cost realized prior to the end of such taxable year by any Purchaser Indemnified Party as a result of the receipt or accrual of the indemnity payment with respect to such Loss. If any such Tax benefit (or portion thereof) is disallowed, as a result of an audit or otherwise, the applicable Indemnifying Party shall promptly pay to the applicable Indemnified Party the amount of such disallowed Tax benefit within 30 days after the Indemnified Party notifies the Indemnifying Party that the adjustment with respect to such disallowance has been paid or otherwise taken into account.
(e) Upon making any indemnification payment in respect of a Loss Section 9.3 for Losses arising with respect to all or a portion matters exceed the Purchase Price, provided that the indemnification obligation of which the Indemnified Party could have recovered from an unaffiliated third party Principal under this Article IX shall not exceed Fifteen Million Dollars (other than a Taxing Authority$15,000,000), if with the Indemnified Party shall have received full payment exception of all Losses with respect to the underlying claim, the Indemnifying Party will, to the extent of such payment and to the extent permitted under Applicable Law and any applicable contractual obligations to third parties, be subrogated to all rights of the Indemnified Party against such unaffiliated third party in respect of the Loss to which the payment relates; provided that if the Indemnified Party shall not have received payment in full with respect to all Losses resulting from such underlying claim (including as a result of any limits on indemnification in this Article X), then no such subrogation shall be effective until such full payment has been received by the Indemnified Party from the Indemnifying Party and such unaffiliated third party. Each such Indemnified Party and Indemnifying Party will duly execute upon request all instruments reasonably necessary to evidence and perfect the above-described subrogation rights.
(f) The amount of any Losses sustained by an Indemnified Party and owed by an Indemnifying Party shall be reduced by any amount actually recovered by such Indemnified Party with respect thereto under any insurance or reinsurance coverage, or from any other party alleged to be responsible therefor, in each case subject to the same limitations that are applicable to reimbursements as contemplated by the last sentence of this Section 10.5(f). The Indemnified Party shall use commercially reasonable efforts to collect any amounts available under such insurance or reinsurance coverage and from such other party alleged to have responsibility. If, at any time subsequent to any indemnification actually having been paid pursuant to this Article X, the Indemnified Party receives an amount under insurance or reinsurance coverage or from such other party with respect to Losses so indemnified, then such Indemnified Party shall promptly reimburse by that amount the applicable Indemnifying Party for any such indemnification payment actually made by such Indemnifying Party up to the amount received by the Indemnified Party, net of any expenses incurred by the Indemnified Party in collecting any such amount or any increases in insurance premiums attributable to such recovery; provided that such reimbursement shall only be required to the extent the Indemnified Party would otherwise retain an amount greater than the full amount of the Losses incurred by the Indemnified Party as a result of the underlying claim.
(g) For the avoidance of doubt, neither Seller nor Parent shall be under any obligation to indemnify any Purchaser Indemnified Party for any Loss that was specifically reflected or reserved for on the Closing Statement, as finally determined pursuant to Section 2.5, or that was otherwise specifically included in the calculation of the Closing Date Value as reflected on such Closing Statement. For the avoidance of doubt, amounts recorded in a general ledger account or in the supporting workpapers or other detail to a balance sheet used to calculate amounts reflected on the Closing Statement shall be considered included in the calculation of the Closing Date Value on such Closing Statement.
(h) Purchaser shall be obligated to provide indemnification pursuant to Section 10.1(b)(i) only if the aggregate dollar amount of Losses with respect to all breaches of, or inaccuracies in, representations and warranties referred to in Section 10.1(b)(i) exceeds the Deductible, and then only for the amount of Losses in excess of the Deductible. The maximum aggregate liability of Purchaser for indemnification for all Losses pursuant to Section 10.1(b)(i(x) (other than with respect to the Purchaser Fundamental Representations) shall be an amount equal to 22.5% of the sum of (i) the Purchase Price as finally adjusted in accordance with Section 2.5 and (ii) the Ceding Commission as finally adjusted as set forth in the MLOA Reinsurance Agreement.
(i) The rights and remedies of any party in respect of any inaccuracy or breach of any of the representations and warranties as a result of fraud and (y) any inaccuracy or breach of any of the Fundamental Representations to which no such limit shall apply and to which there shall be no limit on the ability to pursue all legal remedies.
(e) The waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or agreement, shall not affect the right to indemnification or other remedy based on any such representation, warranty, covenant or agreement shall in no way be limited by the fact that the act, omission, occurrence or other state of facts or circumstances upon which any claim of any such inaccuracy or breach is based may also be the subject matter of any other representation, warranty, covenant or agreement as to which there is no inaccuracy or breachagreement. The representations, warranties and covenants of Seller and Parent, and the Purchaser Indemnified Parties’ rights to indemnification pursuant to Article VI or this Article X with respect thereto, shall not be affected or deemed waived by reason of (and the Purchaser Indemnified Parties shall be deemed to have relied upon the representations and warranties of Seller and Parent set forth herein notwithstanding) (i) any investigation made by or on behalf of any of the Purchaser Indemnified Parties (including by any of its advisers, consultants or representatives) or by reason of any knowledge obtained by any of the Purchaser Indemnified Parties or any of their advisers, consultants or representatives, regardless of whether such investigation was made or such knowledge was obtained before or after the execution and delivery of this Agreement or (ii) Purchaser’s waiver of any condition set forth in Article VII. The representations, warranties and covenants of Purchaser, and the Seller Indemnified Parties’ rights to indemnification with respect thereto, shall not be affected or deemed waived by reason of (and the Seller Indemnified Parties shall be deemed to have relied upon the representations and warranties of Purchaser set forth herein notwithstanding) (i) any investigation made by or on behalf of any of the Seller Indemnified Parties (including by any of its advisers, consultants or representatives) or by reason of any knowledge obtained by any of the Seller Indemnified Parties or any of such advisers, consultants or representatives, regardless of whether such investigation was made or such knowledge was obtained before or after the execution and delivery of this Agreement or (ii) the waiver by Seller or Parent of any condition set forth in Article VIII.4306983-11
Appears in 1 contract
Samples: Asset Purchase Agreement (Ruths Hospitality Group, Inc.)
Additional Indemnification Provisions. In addition (a) Any Indemnification Claim to any other limitations contained in Article IX be made by a Purchaser or this Article X, the obligations of a Seller, Parent and Purchaser to indemnify any Purchaser Indemnified Party or Seller Indemnified Party, as the case may be, are subject shall be made on or prior to the following:expiration of the applicable survival period set forth in Section 8.1, except as otherwise provided therein.
(ab) Seller and Parent shall be obligated to provide indemnification pursuant to Section 10.1(a)(i) (other Other than with respect to the Seller Fundamental Representations and the representations and warranties (i) set forth in Sections 5.1 (Organization and Good Standing), 5.2 (Authorization of Agreement), 5.4 (Capitalization), Section 3.205.9 (Taxes), 5.21 (Financial Advisors), 6.1 (Organization and Good Standing), 6.2 (Authorization of Agreement), 6.8 (Financial Advisors) only if and the third sentence of Section 5.11 (Tangible Personal Property; Title to and Sufficiency of Assets), or (ii) the inaccuracy or breach of which is the result of fraud, on or prior to the Closing, to which the Indemnity Threshold (as defined below) shall not apply, none of the Purchaser Indemnified Parties or Seller Indemnified Parties shall be permitted to recover any Losses under Section 8.2(a) or Section 8.3(a), respectively, unless and until the aggregate dollar amount of Losses with respect to all breaches of, or inaccuracies in, representations and warranties referred to in under such Section 10.1(a)(i) (other than with respect to the Seller Fundamental Representations and the representations and warranties set forth in Section 3.20) considered together exceeds $12,500,000 25,000 (the “DeductibleIndemnity Threshold”), and then only whereupon the Purchaser Indemnified Parties or Seller Indemnified Parties, as applicable, shall be entitled to indemnification hereunder for the amount of all such Losses in excess of the Deductible.
(b) The maximum aggregate liability of Seller and Parent for indemnification for all Losses pursuant to Section 10.1(a)(i) (other than with respect to the Seller Fundamental Representations and the representations and warranties set forth Section 3.20) shall be an amount equal to 22.5% of the sum of (i) the Purchase Price as finally adjusted in accordance with Section 2.5 and (ii) the Ceding Commission as finally adjusted as set forth in the MLOA Reinsurance AgreementIndemnity Threshold.
(c) For purposes of this Article X (i) In no event shall the amount of total indemnification to be paid under Section 8.2 for Losses arising out of or relating to a breach of or an inaccuracy in a representation or warranty that is subject to indemnification pursuant to Section 10.1(a)(i) or Section 10.1(b)(i) shall be deemed to exist either if such representation or warranty is actually inaccurate or breached or would have been inaccurate or breached if such representation or warranty had not contained any qualification as to materiality, Business Material Adverse Effect, Purchaser Material Adverse Effect (which, in each case, instead will be read as any adverse effect or change) or similar language or, with respect to all matters exceed the representation Purchase Price, with the exception of indemnification for (x) any inaccuracy or breach of any of the representations and warranty in Section 3.21(e) only, if such representation and warranty had not contained any qualification warranties as to Knowledge, a result of fraud and (iiy) any inaccuracy or breach of any of the amount of Losses in respect of a breach resulting from the application of clause representations and warranties under Sections 5.9 (iTaxes), 5.18 (Environmental Matters) above and 5.21 (Financial Advisors) to which no such limit shall apply and to which there shall be determined without regard no limit on the ability to any limitation or qualification as to materiality, “Business Material Adverse Effect,” “Purchaser Material Adverse Effect” (which instead will be read as any adverse effect or change) or similar materiality qualification or, with respect to the representation and warranty in Section 3.21(e) only, without regard to the limitation or qualification as to the “Knowledge of Seller,” contained in such representation or warranty, other than any such limitation or qualification contained in Section 3.15 (Absence of Certain Changes) or Section 3.17 (No Undisclosed Liabilities), or that is inherent in the methods, procedures and practices that constitute Applicable Accounting Principles for purposes of the second sentence of Section 3.16(a)(i) (Financial Statements)pursue all legal remedies.
(d) The amount of any indemnification payments finally determined to be due to an Indemnified Party pursuant to this Article X or in Article VI shall be (i) decreased by the amount of any Tax benefit (in the form of cash actually received or reduction in cash Taxes actually paid) actually recognized by any Purchaser Indemnified Party in respect of such Loss prior to the end of the taxable year in which an indemnity payment is made by an Indemnifying Party to an Indemnified Party with respect to such Loss, to the extent that such Tax benefit does not exceed the amount of the indemnity payment received by the Indemnified Party, net of any expenses incurred by such Purchaser Indemnified Party in pursuing such Tax benefit, and (ii) increased by the amount of any Tax cost realized prior to the end of such taxable year by any Purchaser Indemnified Party as a result of the receipt or accrual of the indemnity payment with respect to such Loss. If any such Tax benefit (or portion thereof) is disallowed, as a result of an audit or otherwise, the applicable Indemnifying Party shall promptly pay to the applicable Indemnified Party the amount of such disallowed Tax benefit within 30 days after the Indemnified Party notifies the Indemnifying Party that the adjustment with respect to such disallowance has been paid or otherwise taken into account.
(e) Upon making any indemnification payment in respect of a Loss with respect to all or a portion of which the Indemnified Party could have recovered from an unaffiliated third party (other than a Taxing Authority), if the Indemnified Party shall have received full payment of all Losses with respect to the underlying claim, the Indemnifying Party will, to the extent of such payment and to the extent permitted under Applicable Law and any applicable contractual obligations to third parties, be subrogated to all rights right of the Indemnified Party against such unaffiliated third party in respect of the Loss to which the payment relates; provided that if the Indemnified Party shall not have received payment in full with respect to all Losses resulting from such underlying claim (including as a result of any limits on indemnification in this Article X), then no such subrogation shall be effective until such full payment has been received by the Indemnified Party from the Indemnifying Party and such unaffiliated third party. Each such Indemnified Party and Indemnifying Party will duly execute upon request all instruments reasonably necessary to evidence and perfect the above-described subrogation rights.
(f) The amount of any Losses sustained by an Indemnified Party and owed by an Indemnifying Party shall be reduced by any amount actually recovered by such Indemnified Party with respect thereto under any insurance or reinsurance coverage, or from any other party alleged to be responsible therefor, in each case subject to the same limitations that are applicable to reimbursements as contemplated by the last sentence of this Section 10.5(f). The Indemnified Party shall use commercially reasonable efforts to collect any amounts available under such insurance or reinsurance coverage and from such other party alleged to have responsibility. If, at any time subsequent to any indemnification actually having been paid pursuant to this Article X, the Indemnified Party receives an amount under insurance or reinsurance coverage or from such other party with respect to Losses so indemnified, then such Indemnified Party shall promptly reimburse by that amount the applicable Indemnifying Party for any such indemnification payment actually made by such Indemnifying Party up to the amount received by the Indemnified Party, net of any expenses incurred by the Indemnified Party in collecting any such amount or any increases in insurance premiums attributable to such recovery; provided that such reimbursement shall only be required to the extent the Indemnified Party would otherwise retain an amount greater than the full amount of the Losses incurred by the Indemnified Party as a result of the underlying claim.
(g) For the avoidance of doubt, neither Seller nor Parent shall be under any obligation to indemnify any Purchaser Indemnified Party for any Loss that was specifically reflected or reserved for on the Closing Statement, as finally determined pursuant to Section 2.5, or that was otherwise specifically included in the calculation of the Closing Date Value as reflected on such Closing Statement. For the avoidance of doubt, amounts recorded in a general ledger account or in the supporting workpapers or other detail to a balance sheet used to calculate amounts reflected on the Closing Statement shall be considered included in the calculation of the Closing Date Value on such Closing Statement.
(h) Purchaser shall be obligated to provide indemnification pursuant to Section 10.1(b)(i) only if the aggregate dollar amount of Losses with respect to all breaches of, or inaccuracies in, representations and warranties referred to in Section 10.1(b)(i) exceeds the Deductible, and then only for the amount of Losses in excess of the Deductible. The maximum aggregate liability of Purchaser for indemnification for all Losses pursuant to Section 10.1(b)(i) (other than with respect to the Purchaser Fundamental Representations) shall be an amount equal to 22.5% of the sum of (i) the Purchase Price as finally adjusted in accordance with Section 2.5 and (ii) the Ceding Commission as finally adjusted as set forth in the MLOA Reinsurance Agreement.
(i) The rights and remedies of any party in respect of any inaccuracy or breach of any representation, warranty, covenant or agreement shall in no way be limited by the fact that the act, omission, occurrence or other state of facts or circumstances upon which any claim of any such inaccuracy or breach is based may also be the subject matter of any other representation, warranty, covenant or agreement as to which there is no inaccuracy or breach. The representations, warranties and covenants of Seller and Parent, and the Purchaser Indemnified Parties’ rights Parties to indemnification pursuant or to Article VI assert or this Article X with respect thereto, recover on any Indemnification Claim shall not be affected or deemed waived by reason of (and the Purchaser Indemnified Parties shall be deemed to have relied upon the representations and warranties of Seller and Parent set forth herein notwithstanding) (i) any investigation made by conducted, or on behalf of any of the Purchaser Indemnified Parties (including by any of its advisers, consultants or representatives) or by reason of any knowledge obtained by acquired (or capable of being acquired) at any of the Purchaser Indemnified Parties or any of their adviserstime, consultants or representatives, regardless of whether such investigation was made or such knowledge was obtained before or after the execution and delivery of this Agreement, with respect to the accuracy or performance of, or compliance with, any of the representations, warranties, covenants or agreements set forth in this Agreement or (ii) Purchaser’s any of the other Transaction Documents. The waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or agreement, shall not affect the right to indemnification or other remedy based on any such representation, warranty, covenant or agreement.
(e) Subject to the provisions set forth in this Article VII. The representationsVIII, warranties and covenants of Purchaser, the Purchasers and the Seller Sellers hereby acknowledge and agree that the Deferred Payments and the Earn-out Amount shall be available to compensate the Purchaser Indemnified Parties’ rights Parties for any Losses incurred or sustained by such parties and subject to indemnification with respect theretoset-off for any such Losses; provided, however, that the payment of the Deferred Payments and the Earn-out Amount shall not be affected or deemed waived serve as a bar to recovery by reason the Purchaser Indemnified Parties from the Sellers of (any indemnifiable Losses and the Seller Purchaser Indemnified Parties shall be deemed entitled to have relied upon look directly to the representations and warranties of Purchaser set forth herein notwithstanding) (i) Sellers for any investigation made by or on behalf of any Losses in excess of the Seller Indemnified Parties (including by any of its advisers, consultants or representatives) or by reason of any knowledge obtained by any of Deferred Payments and the Seller Indemnified Parties or any of such advisers, consultants or representatives, regardless of whether such investigation was made or such knowledge was obtained before or after the execution and delivery of this Agreement or (ii) the waiver by Seller or Parent of any condition set forth in Article VIIIEarn-out Amount.
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Additional Indemnification Provisions. In addition to any other limitations contained in Article IX or this Article X, the obligations of Seller, Parent and Purchaser to indemnify any Purchaser Indemnified Party or Seller Indemnified Party, as the case may be, are subject to the following:
(a) Seller and Parent With respect to each indemnification obligation in this Agreement, all Losses shall be obligated to provide indemnification pursuant to Section 10.1(a)(i) (other than with respect to the Seller Fundamental Representations and the representations and warranties set forth in Section 3.20) only if the aggregate dollar amount net of Losses with respect to all breaches of, or inaccuracies in, representations and warranties referred to in Section 10.1(a)(i) (other than with respect to the Seller Fundamental Representations and the representations and warranties set forth in Section 3.20) exceeds $12,500,000 (the “Deductible”), and then only for the amount of such Losses in excess of the Deductibleany related Eligible Insurance Proceeds.
(b) The maximum aggregate liability In order to fulfill the obligations of Seller and Parent for indemnification for all Losses claims made pursuant to Section 10.1(a)(i13.01(a)(i) (other than with respect after, in each case, giving effect to the Seller Fundamental Representations and limitations set forth in Section 13.01(b) or otherwise set forth in this Article XIII to the extent applicable), Losses owed to any Buyer Indemnified Party for inaccuracies or breaches of the representations and warranties made in Articles IV and V, shall be paid (i) first, from the Indemnification Escrowed Funds until the Indemnification Escrowed Funds are exhausted, depleted or expired, (ii) second, after the exhaustion, depletion or expiration of the Indemnification Escrowed Funds directly from Seller (including payment under the Parent Guarantee); provided, that any such amounts paid pursuant to Section 13.01(a)(i) shall in all instances be subject to the limitations set forth in Section 3.2013.01(b).
(c) In order to fulfill the obligations of Seller for indemnification claims made pursuant to Sections 13.01(a)(ii), 13.01(a)(iii), 13.01(a)(iv) and Article X, Losses owed to any Buyer Indemnified Party shall be paid (i) first from the Indemnification Escrowed Funds until the Indemnification Escrowed Funds are exhausted, depleted or expired, and (ii) second, after the exhaustion, depletion or expiration of the Indemnification Escrowed Funds, directly from Seller (including payments under the Parent Guarantee); provided, that any such amounts paid pursuant to Sections 13.01(a) and Article X shall not, in the aggregate, exceed the Indemnification Cap.
(d) In any case where an Indemnified Party recovers from a third party not affiliated with such Indemnified Party, including any third-party insurer, any amount equal in respect of any Loss paid by the Indemnifying Party pursuant to 22.5% Article X or this Article XIII, such Indemnified Party shall promptly pay over to the Indemnifying Party the amount so recovered (after deducting therefrom the amount of reasonable costs incurred by it or its Affiliates in procuring or with respect to such recovery, which costs shall not exceed the amount so recovered and, if applicable, net of such Indemnified Party’s (i) retroactive or prospective premium adjustments from a third-party insurer and (ii) actual increase(s) in such Person’s and its Affiliates’ insurance premium, in each case as a result of such recovery (collectively, the “Premium Increase”)), but not in excess of the sum of (iA) any amount previously paid by the Purchase Price as finally adjusted in accordance with Section 2.5 and (ii) the Ceding Commission as finally adjusted as set forth in the MLOA Reinsurance Agreement.
(c) For purposes of this Article X (i) the amount of Losses arising out of Indemnifying Party to or relating to a breach of or an inaccuracy in a representation or warranty that is subject to indemnification pursuant to Section 10.1(a)(i) or Section 10.1(b)(i) shall be deemed to exist either if such representation or warranty is actually inaccurate or breached or would have been inaccurate or breached if such representation or warranty had not contained any qualification as to materiality, Business Material Adverse Effect, Purchaser Material Adverse Effect (which, in each case, instead will be read as any adverse effect or change) or similar language or, with respect to the representation and warranty in Section 3.21(e) only, if such representation and warranty had not contained any qualification as to Knowledge, and (ii) the amount of Losses in respect of a breach resulting from the application of clause (i) above shall be determined without regard to any limitation or qualification as to materiality, “Business Material Adverse Effect,” “Purchaser Material Adverse Effect” (which instead will be read as any adverse effect or change) or similar materiality qualification or, with respect to the representation and warranty in Section 3.21(e) only, without regard to the limitation or qualification as to the “Knowledge of Seller,” contained in such representation or warranty, other than any such limitation or qualification contained in Section 3.15 (Absence of Certain Changes) or Section 3.17 (No Undisclosed Liabilities), or that is inherent in the methods, procedures and practices that constitute Applicable Accounting Principles for purposes on behalf of the second sentence of Section 3.16(a)(i) (Financial Statements).
(d) The amount of any indemnification payments finally determined to be due to an Indemnified Party pursuant to this Article X or in Article VI shall be (i) decreased by the amount of any Tax benefit (in the form of cash actually received or reduction in cash Taxes actually paid) actually recognized by any Purchaser Indemnified Party in respect of such Loss prior to claim and (B) any amount expended by the end Indemnifying Party in pursuing or defending any claim arising out of the taxable year in which an such Loss.
(e) The indemnity payment is made by an Indemnifying Party to an Indemnified Party hereunder with respect to such Lossany Loss shall be calculated after taking into account all actual and as realized reductions in federal, to the extent that such Tax benefit does not exceed the amount of the indemnity payment received state, local and foreign Taxes (including estimated Taxes) realized by the Indemnified Party, net of any expenses incurred by such Purchaser Indemnified Party in pursuing such Tax benefit, and (ii) increased by the amount of any Tax cost realized prior to the end of such taxable year by any Purchaser Indemnified Party as a result of the receipt or accrual of the indemnity payment with respect event giving rise to such Loss. If any such Tax benefit (or portion thereof) is disallowed, as a result All calculations shall be made at the time of an audit or otherwise, the applicable Indemnifying Party shall promptly pay to the applicable Indemnified Party the amount of such disallowed Tax benefit within 30 days after the Indemnified Party notifies the Indemnifying Party that the adjustment with respect to such disallowance has been paid or otherwise taken into account.
(e) Upon making any relevant indemnification payment in respect of a Loss with respect using reasonable assumptions (as agreed to all or a portion of which the Indemnified Party could have recovered from an unaffiliated third party (other than a Taxing Authority), if the Indemnified Party shall have received full payment of all Losses with respect to the underlying claim, the Indemnifying Party will, to the extent of such payment and to the extent permitted under Applicable Law and any applicable contractual obligations to third parties, be subrogated to all rights of the Indemnified Party against such unaffiliated third party in respect of the Loss to which the payment relates; provided that if the Indemnified Party shall not have received payment in full with respect to all Losses resulting from such underlying claim (including as a result of any limits on indemnification in this Article X), then no such subrogation shall be effective until such full payment has been received by the Indemnified Party from the Indemnifying Party and Indemnified Party) and present value concepts (using a discount rate equal to the applicable federal rate in effect at the time of such unaffiliated third party. Each such Indemnified Party and Indemnifying Party will duly execute upon request all instruments reasonably necessary to evidence and perfect event (based on the aboveFederal mid-described subrogation rightsterm rate) using semi-annual compounding).
(f) If any portion of Losses to be paid by the Indemnifying Party pursuant to this Article XIII would reasonably be expected to be recoverable from a third party not affiliated with the relevant Indemnified Party based on the underlying claim or demand asserted against such Indemnifying Party, then the Indemnified Party shall promptly give notice thereof to the Indemnifying Party after becoming aware of such fact. The Indemnified Party shall be under no obligation to collect any amounts recoverable from such third party, and if the Indemnified Party attempts to collect such amounts from any third party, the Indemnifying Party shall reimburse the Indemnified Party for all reasonable costs and expenses incurred in connection with such collection (which costs and expenses of collection shall not exceed the amount recoverable from such third party). Except as otherwise provided herein and other than with respect to third-party insurance coverage, Eligible Insurance Proceeds, if any portion of Losses actually paid by the Indemnifying Party pursuant to this Article XIII could have been recovered from a third party not affiliated with the relevant Indemnified Party based on the underlying claim or demand asserted against such Indemnifying Party, then the Indemnified Party shall use commercially reasonable efforts to transfer, to the extent transferable, such of its rights to proceed against such third party as are necessary to permit the Indemnifying Party to recover from such third party any amount actually paid by the Indemnifying Party pursuant to this Article XIII.
(g) Seller shall not be liable under Article X or this Article XIII in respect of any Losses sustained by an Indemnified Party Loss, if the fact, matter, event or circumstance giving rise to the claim or on which it is based is specifically accrued or reserved for in the Closing Statement and owed by an expressly taken into account in the adjustments to the Purchase Price provided for in Sections 2.03 and 2.04.
(h) No Indemnifying Party shall be reduced liable under Article X or this Article XIII in respect of any Loss which is contingent unless and until such contingent Loss becomes an actual liability and is due and payable.
(i) If any portion of Losses to be paid by the Indemnifying Party pursuant to this Article XIII are covered, in whole or in part, by third-party insurance coverage, the Indemnified Party shall promptly give notice thereof to the Indemnifying Party after becoming aware of such fact; provided, that the failure to provide such notice shall not release the Indemnifying Party from any amount of its obligations under this Article XIII except to the extent the Indemnifying Party is actually recovered prejudiced by such Indemnified Party with respect thereto under any insurance or reinsurance coverage, or from any other party alleged to be responsible therefor, in each case subject to the same limitations that are applicable to reimbursements as contemplated by the last sentence of this Section 10.5(f)failure. The Indemnified Party shall use commercially reasonable efforts to collect any amounts available under the maximum amount of insurance proceeds thereunder, and all such insurance or reinsurance coverage and from such other party alleged to have responsibility. If, at proceeds actually collected in respect of any time subsequent to any indemnification actually having been paid pursuant to this Article X, the Indemnified Party receives an amount under insurance or reinsurance coverage or from such other party with respect to Losses so indemnified, then such Indemnified Party shall promptly reimburse by that amount the applicable Indemnifying Party for any such indemnification payment actually made by such Indemnifying Party up to Loss (net of (i) the amount received by the Indemnified Party, net of any reasonable costs and expenses (including reasonable attorneys’ fees) incurred by the Indemnified Party or its Affiliates in collecting any such amount or any increases in insurance premiums attributable to such recovery; provided that such reimbursement shall only be required to the extent the Indemnified Party would otherwise retain an amount greater than the full amount of the Losses incurred by the Indemnified Party as a result of the underlying claim.
(g) For the avoidance of doubt, neither Seller nor Parent shall be under any obligation to indemnify any Purchaser Indemnified Party for any Loss that was specifically reflected or reserved for on the Closing Statement, as finally determined pursuant to Section 2.5, or that was otherwise specifically included in the calculation of the Closing Date Value as reflected on such Closing Statement. For the avoidance of doubt, amounts recorded in a general ledger account or in the supporting workpapers or other detail to a balance sheet used to calculate amounts reflected on the Closing Statement shall be considered included in the calculation of the Closing Date Value on such Closing Statement.
(h) Purchaser shall be obligated to provide indemnification pursuant to Section 10.1(b)(i) only if the aggregate dollar amount of Losses with respect to all breaches of, or inaccuracies in, representations and warranties referred to in Section 10.1(b)(i) exceeds the Deductible, and then only for the amount of Losses in excess of the Deductible. The maximum aggregate liability of Purchaser for indemnification for all Losses pursuant to Section 10.1(b)(i) (other than with respect to the Purchaser Fundamental Representations) shall be an amount equal to 22.5% of the sum of (i) the Purchase Price as finally adjusted in accordance with Section 2.5 proceeds and (ii) the Ceding Commission as finally adjusted as set forth present value of any related Premium Increase or other charges paid or reasonably expected to be paid by such Indemnified Party or its Affiliates arising out of such Loss) shall be considered “Eligible Insurance Proceeds.”
(j) The Indemnified Parties shall use commercially reasonable efforts to avoid or mitigate any Losses, which in the MLOA Reinsurance Agreement.
(i) The rights and remedies absence of any party mitigation might give rise to or increase a Loss in respect of any inaccuracy claim under Article X or this Article XIII; provided, that, (i) the costs and expenses of such efforts shall constitute Losses and (ii) an Indemnified Party shall not be required to initiate or pursue litigation against third parties. Any failure by an Indemnified Party to so mitigate a Loss shall not relieve any Indemnifying Party of its obligations under Article X or this Article XIII.
(k) For purposes of determining whether, breach of any representationrepresentation or warranty in this Agreement has occurred, warrantyand calculating the amount of Losses under this Article XIII, covenant or agreement shall in no way be limited by the fact that the actany “materiality,” “Company Material Adverse Effect”, omission, occurrence “Buyer Material Adverse Effect” or other state of facts or circumstances upon which any claim of any such inaccuracy or breach is based may also be the subject matter of any other representation, warranty, covenant or agreement as to which there is no inaccuracy or breach. The representations, warranties and covenants of Seller and Parent, and the Purchaser Indemnified Parties’ rights to indemnification pursuant to Article VI or this Article X with respect thereto, shall not be affected or deemed waived by reason of (and the Purchaser Indemnified Parties shall be deemed to have relied upon similar qualifications in the representations and warranties of Seller and Parent set forth herein notwithstanding) shall be disregarded, other than (i) any investigation made by or on behalf of any of the Purchaser Indemnified Parties (including by any of its advisers, consultants or representatives) or by reason of any knowledge obtained by any of the Purchaser Indemnified Parties or any of their advisers, consultants or representatives, regardless of whether such investigation was made or such knowledge was obtained before or after the execution and delivery of this Agreement or (ii) Purchaser’s waiver of any condition set forth in Article VII. The representations, warranties and covenants of Purchaser, and the Seller Indemnified Parties’ rights to indemnification with respect thereto, shall not be affected or deemed waived by reason of (and the Seller Indemnified Parties shall be deemed to have relied upon the representations and warranties in (A) Section 5.04(b), (B) Section 5.08(a)(ii), (C) Section 5.13(a), (D) Section 5.14(b)(i) and (iii), and (E) the second sentence of Purchaser set forth herein notwithstandingSection 5.14(g) (i) any investigation made by or on behalf of any of the Seller Indemnified Parties (including by any of its advisers, consultants or representatives) or by reason of any knowledge obtained by any of the Seller Indemnified Parties or any of such advisers, consultants or representatives, regardless of whether such investigation was made or such knowledge was obtained before or after the execution and delivery of this Agreement or (ii) any use of the waiver by Seller or Parent of any condition set forth in Article VIIIdefined term “Material Contract”.
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Additional Indemnification Provisions. In addition to any other limitations contained in Article IX or this Article X, the obligations of Seller, Parent and Purchaser to indemnify any Purchaser Indemnified Party or Seller Indemnified Party, as the case may be, are subject to the following:
(a) Seller and Parent shall be obligated to provide indemnification pursuant to Section 10.1(a)(i) (other than with With respect to each indemnification obligation contained in this Agreement or any other document executed in connection with the Seller Fundamental Representations and the representations and warranties set forth in Section 3.20) only if the aggregate dollar amount of Losses with respect to all breaches ofClosing, or inaccuracies in, representations and warranties referred to in Section 10.1(a)(i) (other than with respect to the Seller Fundamental Representations and the representations and warranties set forth in Section 3.20) exceeds $12,500,000 (the “Deductible”), and then only for the amount of such Losses in excess of the Deductible.
(b) The maximum aggregate liability of Seller and Parent for indemnification for all Losses pursuant to Section 10.1(a)(i) (other than with respect to the Seller Fundamental Representations and the representations and warranties set forth Section 3.20) shall be an amount equal to 22.5% of the sum of (i) the Purchase Price as finally adjusted in accordance with Section 2.5 and (ii) the Ceding Commission as finally adjusted as set forth in the MLOA Reinsurance Agreement.
(c) For purposes of this Article X (i) the amount of Losses arising out of or relating to a breach of or an inaccuracy in a representation or warranty that is subject to indemnification pursuant to Section 10.1(a)(i) or Section 10.1(b)(i) shall be deemed to exist either if such representation or warranty is actually inaccurate or breached or would have been inaccurate or breached if such representation or warranty had not contained any qualification as to materiality, Business Material Adverse Effect, Purchaser Material Adverse Effect (which, in each case, instead will be read as any adverse effect or change) or similar language or, with respect to the representation and warranty in Section 3.21(e) only, if such representation and warranty had not contained any qualification as to Knowledge, and (ii) the amount of Losses in respect of a breach resulting from the application of clause (i) above shall be determined without regard to any limitation or qualification as to materiality, “Business Material Adverse Effect,” “Purchaser Material Adverse Effect” (which instead will be read as any adverse effect or change) or similar materiality qualification or, with respect to the representation and warranty in Section 3.21(e) only, without regard to the limitation or qualification as to the “Knowledge of Seller,” contained in such representation or warranty, other than any such limitation or qualification contained in Section 3.15 (Absence of Certain Changes) or Section 3.17 (No Undisclosed Liabilities), or that is inherent in the methods, procedures and practices that constitute Applicable Accounting Principles for purposes of the second sentence of Section 3.16(a)(i) (Financial Statements).
(d) The amount of any indemnification payments finally determined to be due to an Indemnified Party pursuant to this Article X or in Article VI shall be (i) decreased by the amount of any Tax benefit (in the form of cash actually received or reduction in cash Taxes actually paid) actually recognized by any Purchaser Indemnified Party in respect of such Loss prior to the end of the taxable year in which an indemnity payment is made by an Indemnifying Party to an Indemnified Party with respect to such Loss, to the extent that such Tax benefit does not exceed the amount of the indemnity payment received by the Indemnified Party, net of any expenses incurred by such Purchaser Indemnified Party in pursuing such Tax benefit, and (ii) increased by the amount of any Tax cost realized prior to the end of such taxable year by any Purchaser Indemnified Party as a result of the receipt or accrual of the indemnity payment with respect to such Loss. If any such Tax benefit (or portion thereof) is disallowed, as a result of an audit or otherwise, the applicable Indemnifying Party shall promptly pay to the applicable Indemnified Party the amount of such disallowed Tax benefit within 30 days after the Indemnified Party notifies the Indemnifying Party that the adjustment with respect to such disallowance has been paid or otherwise taken into account.
(e) Upon making any indemnification payment in respect of a Loss with respect to all or a portion of which the Indemnified Party could have recovered from an unaffiliated third party (other than a Taxing Authority), if the Indemnified Party shall have received full payment of all Losses with respect to the underlying claim, the Indemnifying Party will, to the extent of such payment and to the extent permitted under Applicable Law and any applicable contractual obligations to third parties, be subrogated to all rights of the Indemnified Party against such unaffiliated third party in respect of the Loss to which the payment relates; provided that if the Indemnified Party shall not have received payment in full with respect to all Losses resulting from such underlying claim (including as a result of any limits on indemnification in this Article X), then no such subrogation shall be effective until such full payment has been received by the Indemnified Party from the Indemnifying Party and such unaffiliated third party. Each such Indemnified Party and Indemnifying Party will duly execute upon request all instruments reasonably necessary to evidence and perfect the above-described subrogation rights.
(f) The amount of any Losses sustained by an Indemnified Party and owed by an Indemnifying Party shall be reduced by any amount actually recovered Third Party insurance proceeds or amounts payable by such Indemnified Party with respect thereto under any insurance or reinsurance coverage, or from any other party alleged to be responsible thereforThird Parties, in each case subject to the same limitations that are applicable to reimbursements as contemplated by the last sentence of this Section 10.5(f). The Indemnified Party shall use commercially reasonable efforts to collect any amounts available under such insurance or reinsurance coverage and from such other party alleged to have responsibility. If, at any time subsequent to any indemnification been actually having been paid pursuant to this Article X, the Indemnified Party receives an amount under insurance or reinsurance coverage or from such other party with respect to Losses so indemnified, then such Indemnified Party shall promptly reimburse by that amount the applicable Indemnifying Party for any such indemnification payment actually made by such Indemnifying Party up to the amount received by the Indemnified Party, net of any expenses incurred recovered by the Indemnified Party in collecting any such amount or any increases in insurance premiums attributable to such recovery; provided that such reimbursement shall only be required connection with the facts giving rise to the extent right of indemnification (which shall be calculated net of (i) any costs incurred in the Indemnified Party would otherwise retain an amount greater than the full amount of the Losses incurred collection thereof, (ii) any amounts actually paid by the Indemnified Party as a result of such Losses as premiums retroactively assessed under any applicable provisions of insurance policies that cover such Losses (in whole or in part), and (iii) the underlying claimpresent value of any increases in insurance premiums on account of such Losses to the extent calculable).
(gb) For Notwithstanding anything to the avoidance of doubtcontrary contained in this Agreement, neither Seller nor Parent shall be under any obligation to indemnify any Purchaser Indemnified Party for any Loss that was specifically reflected or reserved for on the Closing Statement, as finally determined pursuant to Section 2.5, or that was otherwise specifically included in the calculation of the Closing Date Value as reflected on such Closing Statement. For the avoidance of doubt, amounts recorded in a general ledger account or in the supporting workpapers or other detail to a balance sheet used to calculate amounts reflected on the Closing Statement shall be considered included in the calculation of the Closing Date Value on such Closing Statement.
(hi) Purchaser shall be obligated to provide indemnification pursuant to Section 10.1(b)(i) only if the aggregate dollar amount of Losses with respect to all breaches of, or inaccuracies in, representations and warranties referred to in Section 10.1(b)(i) exceeds the Deductible, and then only for the amount of Losses in excess of the Deductible. The maximum aggregate liability of Purchaser for indemnification for all Losses pursuant to Section 10.1(b)(i) (other than with respect to Taxes and the Purchaser Fundamental Representationsmatters set forth in Section 10.02(a)(iii), Section 10.03(b)(iii) and Section 10.04, in no event shall any Indemnified Party be an amount equal entitled to 22.5% of indemnification pursuant to this Agreement as to any fact, matter, circumstance or event to the sum of extent (iand in the amount) that such fact, matter or circumstance is reflected as a liability on the Purchase Price balance sheet in the MH Financial Statements or the CME Group Financial Statements, as finally adjusted in accordance with Section 2.5 applicable, or specifically recorded as a liability on the MH Closing Statement or the CME Group Closing Statement, as applicable, and (ii) an Indemnifying Party shall have no Liability to the Ceding Commission Indemnified Party (x) to the extent any matter or thing done or omitted to be done at the direction or with the prior written consent of the Indemnified Party or its Affiliates is a direct and proximate cause of the related Loss provided that this subclause (x) shall not apply with respect to Taxes, or (y) more than once for the same Loss (including by operation of Section 2.10 and Section 2.11). Notwithstanding anything to the contrary contained in this Agreement, in no event shall the same Loss be taken into account more than once for purposes of calculations in connection with, or application of, the MH Deductible or CME Group Deductible, as finally adjusted applicable, or the applicable MH Cap or the applicable CME Group Cap, as set forth in the MLOA Reinsurance Agreementapplicable.
(ic) The rights MH acknowledges and remedies of any party in respect of any inaccuracy or breach of any representation, warranty, covenant or agreement shall in no way be limited by the fact agrees that the act, omission, occurrence or other state of facts or circumstances upon which any claim of any such inaccuracy or breach is based may also be the subject matter of any other representation, warranty, covenant or agreement as to which there is no inaccuracy or breach. The representations, warranties and covenants of Seller and Parent, CME Group Indemnified Parties’ and the Purchaser Company Indemnified Parties’ rights to indemnification pursuant for the express representations and warranties set forth herein are part of the basis of the bargain contemplated by this Agreement, and that the CME Group Indemnified Parties’ and the Company Indemnified Parties’ rights to Article VI or this Article X with respect thereto, indemnification shall not be affected or deemed waived by reason of (and the Purchaser Indemnified Parties shall be deemed to have relied upon the representations and warranties of Seller and Parent set forth herein notwithstanding) (i) any investigation made by or on behalf of any of the Purchaser Indemnified Parties (including by any of its advisers, consultants or representatives) or by reason virtue of any knowledge obtained by on the part of a CME Group Indemnified Party or a Company Indemnified Party of any untruth of the Purchaser Indemnified Parties any such representation or any warranty of their advisers, consultants or representativesMH expressly set forth in this Agreement, regardless of whether such knowledge was obtained through such CME Group Indemnified Parties’ or Company Indemnified Parties’ own investigation was made or through disclosure by MH or another Person, and regardless of whether such knowledge was obtained before or after the execution and delivery of this Agreement or Agreement.
(iid) Purchaser’s waiver of any condition set forth in Article VII. The representations, warranties CME Group acknowledges and covenants of Purchaser, agrees that the MH Indemnified Parties’ and the Seller Company Indemnified Parties’ rights to indemnification with respect theretofor the express representations and warranties set forth herein are part of the basis of the bargain contemplated by this Agreement, and that the MH Indemnified Parties’ and the Company Indemnified Parties’ rights to indemnification shall not be affected or deemed waived by reason of (and the Seller Indemnified Parties shall be deemed to have relied upon the representations and warranties of Purchaser set forth herein notwithstanding) (i) any investigation made by or on behalf of any of the Seller Indemnified Parties (including by any of its advisers, consultants or representatives) or by reason virtue of any knowledge obtained by on the part of an MH Indemnified Party or a Company Indemnified Party of any untruth of the Seller Indemnified Parties any such representation or any warranty of such advisers, consultants or representativesCME Group expressly set forth in this Agreement, regardless of whether such knowledge was obtained through such MH Indemnified Parties’ or Company Indemnified Parties’ own investigation was made or through disclosure by CME Group or another Person, and regardless of whether such knowledge was obtained before or after the execution and delivery of this Agreement.
(e) Other than with respect to Taxes, nothing in this Agreement shall in any way restrict or limit the general obligation at Law of an Indemnified Party to mitigate any Losses which it may suffer or incur by reason of a breach by an Indemnifying Party of any representation, warranty or failure to perform any covenant or agreement of the Indemnifying Party. None of MH, CME Group or CGIS shall be permitted, and nothing herein shall require the Company as a condition to obtaining indemnification, to seek to collect back sales, use or similar Taxes from clients or customers of the Company.
(f) Other than with respect to Taxes, in any case where an Indemnified Party or any of its Affiliates recovers from third parties any payments in respect of a matter with respect to which an Indemnifying Party has indemnified and paid it pursuant to this Article X, such Indemnified Party shall promptly pay over to the Indemnifying Party the amount so recovered, received or accrued (net of any reasonable costs to such Indemnified Party to obtain such recovery), but not in excess of the sum of (i) any amount previously so paid by the Indemnifying Party to or on behalf of the Indemnified Party in respect of such matter and (ii) any reasonable amount expended by the waiver by Seller Indemnifying Party and its Affiliates in pursuing or Parent defending any claim arising out of any condition set forth in Article VIIIsuch matter.
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