Common use of Certain Limitations on Indemnification Obligations Clause in Contracts

Certain Limitations on Indemnification Obligations. (a) Except as otherwise expressly provided in this Section 11, the Purchaser Parties and Seller Parties shall not be entitled to receive any indemnification payments under Section 11.1 or 11.2 in connection with the inaccuracy in or breach of any representation or warranty, until the aggregate amount of Losses incurred by the Purchaser Parties or Seller Parties, as the case may be, exceed One Hundred Thousand Dollars ($100,000) (the “Basket Amount”), and Sellers or the Purchaser (as applicable) shall only be liable for the amount of all such Losses that exceeds the Basket Amount. (b) Except as otherwise expressly provided in this Section 11, the maximum aggregate amount of indemnification payments under this Section 11 in connection with the inaccuracy in or breach of any representation or warranty to which the Purchaser Parties or Seller Parties shall be entitled to receive, upon the triggering of any indemnification obligation hereunder, shall not exceed Seven Million Dollars ($7,000,000). (c) Notwithstanding anything to the contrary in this Agreement, any indemnification payments based upon any and all (i) Litigation Claims, (ii) Tax Claims, (iii) ERISA Claims involving fraud, false claims or criminal misconduct, (iv) Government Contract Claims involving fraud, false claims or criminal misconduct, (v) breaches of the representations contained in Sections 3.3 or 3.4 and/or (vi) claims of fraud or willful misconduct shall not be subject to either (i) the Basket Amount set forth in Section 11.5(a) or (ii) the maximum aggregate indemnification limitation set forth in Section 11.5(b). (d) Any indemnity claims of Purchaser shall first be settled through disbursements from the Escrow Account in accordance with the terms and conditions set forth in the Escrow Agreement in the following order, first in cash and then in Purchaser Common Shares. Any Purchaser Common Shares disbursed from the Escrow Account shall have a value determined in accordance with the Indemnification Valuation. For the avoidance of doubt, the Escrow Account is part of and not an addition to the maximum aggregate indemnification limitation set forth in Section 11.5(b); provided, however, that if all or any amounts in the Escrow Account are distributed to Sellers before a timely and valid indemnification claim is made by Purchaser, such Escrow Account amounts distributed to Sellers shall not reduce the maximum aggregate indemnification limitation set forth in Section 11.5(b).

Appears in 2 contracts

Samples: Stock Purchase Agreement (Analex Corp), Stock Purchase Agreement (Analex Corp)

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Certain Limitations on Indemnification Obligations. Notwithstanding anything in this Agreement to the contrary: (a) Except as No Seller will be required to indemnify or otherwise expressly provided be liable to Buyer for any matter described in this Section 11, the Purchaser Parties 10.2 unless and Seller Parties shall not be entitled to receive any indemnification payments under Section 11.1 or 11.2 in connection with the inaccuracy in or breach of any representation or warranty, until the aggregate amount of all Losses incurred by the Purchaser Parties or Seller Parties, as the case may be, exceed One Hundred Thousand Dollars ($100,000) (the “Basket Amount”of Buyer arising therefrom for which Sellers would have indemnification liability to Buyer but for this Section 10.5(a), and exceeds $1,000,000, in which event Sellers or the Purchaser (as applicable) shall only will be liable for the amount of all such Losses that exceeds the Basket Amount. (b) Except as otherwise expressly provided in this Section 11, the maximum aggregate amount of indemnification payments under this Section 11 in connection with the inaccuracy in or breach of any representation or warranty to which the Purchaser Parties or Seller Parties shall be entitled to receive, upon the triggering of any indemnification obligation hereunder, shall not exceed Seven Million Dollars ($7,000,000). (c) Notwithstanding anything to the contrary in this Agreement, any indemnification payments based upon any and all (i) Litigation Claims, (ii) Tax Claims, (iii) ERISA Claims involving fraud, false claims or criminal misconduct, (iv) Government Contract Claims involving fraud, false claims or criminal misconduct, (v) breaches of the representations contained in Sections 3.3 or 3.4 and/or (vi) claims of fraud or willful misconduct shall not be subject to either (i) the Basket Amount set forth in Section 11.5(a) or (ii) the maximum aggregate indemnification limitation set forth in Section 11.5(b). (d) Any indemnity claims of Purchaser shall first be settled through disbursements from the Escrow Account in accordance with the terms and conditions set forth in the Escrow Agreement in the following order, first in cash and then in Purchaser Common Shares. Any Purchaser Common Shares disbursed from the Escrow Account shall have a value determined in accordance with the Indemnification Valuation. For the avoidance of doubt, the Escrow Account is part of and not an addition to the maximum aggregate indemnification limitation set forth in Section 11.5(b)Losses; provided, however, that this Section 10.5(a) shall not apply to any amount payable to Buyer pursuant to Section 2.7 or Section 2.9 or Section 10.2(c) (but only in respect of a claim that Buyer could have made under Section 10.2(c) immediately after the Closing) or Section 10.2(d) or Section 10.2(e) (but only in respect of a claim that Buyer could have made under Section 10.2(e) immediately after the Closing) or Section 10.2(f) or Section 10.2(g), but no amounts paid to Buyer pursuant to the sections referred to in this proviso (as limited in this proviso) shall be treated as Losses for purposes of determining when Buyer's Losses exceed $1,000,000. (b) No Seller will be required to indemnify or otherwise be liable to Buyer with respect to any Losses arising under Section 10.2 unless Buyer gives Sellers written notice of a claim pursuant to Section 10.2 on or prior to the date that is eighteen months after the Closing Date; provided that, the Post-Closing Indemnity Property shall be released to Sellers as follows: (1) On the first business day following the date that is six months after the Closing Date (the "Initial Release Date"): (A) if on the Initial Release Date the Post-Closing Indemnity Property consists solely of shares of ACC Class A Common Stock or other Stock Consideration Registrable Securities, then the number of shares of ACC Class A Common Stock or other Stock Consideration Registrable Securities equal to one-half of the total number of such shares deposited into the Post- Closing Indemnity Escrow on the Closing Date, less the total number of shares that were previously paid out to Buyer in respect of claim(s) made by Buyer pursuant to this Article 10 or Article 2, and less the number of shares the fair market value of which equals the aggregate dollar value of all bona fide claims made by Buyer pursuant to this Article 10 or Article 2 that remain outstanding on the Initial Release Date, shall be released from escrow and paid over to Sellers (the number of shares to be appropriately adjusted to give effect to any stock split, combination or similar event); (B) if on the Initial Release Date the Post-Closing Indemnity Property consists solely of cash funds, then an amount in cash equal to one-half of the total amount of cash funds that would have been in the Post-Closing Indemnity Escrow on the Initial Release Date if no payments had been made to Buyer out of the Post-Closing Indemnity Escrow during such period, less the dollar value of all payments (whether in the form of shares or cash) that were previously paid out to Buyer in respect of claim(s) made by Buyer pursuant to this Article 10 or Article 2, and less the aggregate dollar value of all bona fide claims made by Buyer pursuant to this Article 10 or Article 2 that remain outstanding on the Initial Release Date, shall be released from escrow and paid over to Sellers; (C) if on the Initial Release Date the Post-Closing Indemnity Property consists partly of shares of ACC Class A Common Stock or other Stock Consideration Registrable Securities and partly of cash funds, then the number of shares of ACC Class A Common Stock or other Stock Consideration Registrable Securities equal to one-half the total number of such shares that would have been in the Post-Closing Indemnity Escrow on the Initial Release Date if no payments in the form of such shares had been made to Buyer out of the Post-Closing Indemnity Escrow during such period, less the total number of shares that were paid out to Buyer in respect of claim(s) made by Buyer pursuant to this Article 10 or Article 2, and less the number of shares the fair market value of which equals the aggregate dollar value of all bona fide claims made by Buyer pursuant to this Article 10 or Article 2 that remain outstanding on the Initial Release Date (except to the extent an amount in cash has been reserved for any portion of such outstanding claims), shall be released from escrow and paid over to Sellers (the number of shares to be appropriately adjusted to give effect to any stock split, combination or similar event), and an amount in cash equal to one-half of the total amount of cash funds that would have been in the Post-Closing Indemnity Escrow on the Initial Release Date if no payments in the form of cash had been made to Buyer out of the Post-Closing Indemnity Escrow during such period, less the dollar value of all payments that were previously paid out in the form of cash to Buyer in respect of claim(s) made by Buyer pursuant to this Article 10 or Article 2, and less the aggregate dollar value of all bona fide claims made by Buyer pursuant to this Article 10 or Article 2 that remain outstanding on the Initial Release Date (except to the extent a number of shares has been reserved for any portion of such outstanding claims), shall be released from escrow and paid over to Sellers; and (2) on the first business day following the date that is eighteen months after the Closing Date (the "Second Release Date") all remaining Post-Closing Indemnity Property, less a number of shares of ACC Class A Common Stock or other Stock Consideration Registrable Securities or an amount in cash or a combination thereof as directed by the General Partner the aggregate dollar value of which is equal to the aggregate dollar amount of any bona fide claims made by Buyer that remain outstanding on the Second Release Date, shall be released from escrow and paid over to Sellers. Attached hereto as Exhibit I for illustrative purposes only is an example of how the preceding provisions are intended to work. Thereafter, any remaining Post-Closing Indemnity Property shall be released from escrow and paid over to Sellers or Buyer in accordance with this Agreement and the Post- Closing Escrow Agreement. To the extent any payment is made to Buyer out of the Post-Closing Indemnity Property pursuant to Sections 2.7, 2.8 or 2.9 or this Article 10, and the Post-Closing Indemnity Property consists of both Stock Consideration Registrable Securities and cash, the General Partner shall designate which portion of the payment shall be made in the form of shares (based on its fair market value on the date of payment as computed as provided in Section 10.5(c)) or cash or combination of both. On the business day that it is determined in accordance with this Section 10.5(b) and this Article 10 that Buyer and/or Sellers are entitled to all or any amounts in portion of the Post-Closing Indemnity Property, the General Partner and Buyer will execute and deliver to the Escrow Account are distributed Agent joint written instructions containing appropriate disbursement instructions consistent with this Section 10.5(b) and this Article 10 and the Post-Closing Escrow Agreement. (c) All payments required to Sellers before a timely and valid indemnification claim is be made by PurchaserSellers or any Seller in respect of their indemnification obligations under this Article 10 shall be made solely from the Post-Closing Indemnity Property. For purposes of this Article 10 and the Post-Closing Escrow Agreement, the fair market value of a share of ACC Class A Common Stock or other Stock Consideration Registrable Security on any day shall be computed by reference to the Weighted Average Trading Price of such Escrow Account amounts distributed stock or other security for the ten trading day period beginning on the thirteenth trading day prior to Sellers shall not reduce the maximum aggregate indemnification limitation set forth date of determination. (d) Anything in this Agreement or applicable law to the contrary notwithstanding, other than with respect to the Post-Closing Indemnity Property as provided for and limited in this Article 10 (and other than with respect to the Post-Closing Adjustment Funds as provided for and limited in Section 11.5(b).2.7, the Post-Closing Section

Appears in 1 contract

Samples: Purchase Agreement (Adelphia Communications Corp)

Certain Limitations on Indemnification Obligations. (a) Except as otherwise expressly provided in this Section 117, other than with respect to the Fundamental Representations, Statutory Representations or Fraud-Type Claims, the Purchaser Buyer Parties and Seller Parties shall will not be entitled to receive any indemnification payments under Section 11.1 or 11.2 in connection with the inaccuracy in or breach of any representation or warranty, 7.2(a) until the aggregate amount of Losses incurred by the Purchaser Buyer Parties or Seller Parties, as the case may be, exceed One Hundred Thousand Dollars ($100,000) 350,000 (the “Basket Amount”), and Sellers or the Purchaser (as applicable) shall then only be liable for to the amount of all such Losses that exceeds incurred in excess of one-half of the Basket Amount. (b) Except as otherwise expressly provided in this Section 11Agreement, the maximum aggregate amount of indemnification payments for which the Seller and the Majority Owners will have liability to the Buyer Parties under this Section 11 7, and the maximum aggregate amount that the Buyer Parties will be entitled to recover from the Seller and the Owners will not exceed: (i) ten percent (10%) of the Purchase Price with respect to Claims under Section 7.2(a), other than with respect to the Fundamental Representations, Statutory Representations or the Government Representations; (ii) thirty percent (30%) of the Purchase Price with respect to Claims under Section 7.2(a), solely with respect to the Government Representations and all claims that are subject to the additional limitation set forth in Section 7.5(b)(i), collectively (for purposes of clarity, any Claims under Section 7.2(a), other than with respect to the Fundamental Representations, Statutory Representations or Government Representations, shall be subject to the 10% limitation set forth in Section 7.5(b)(i), and any such Claims together with any Claims with respect to the Government Representations shall also be subject to the additional limitation set forth in this paragraph (ii), such that if the 10% limitation in Section 7.5(b)(i) was reached, the maximum aggregate amount that the Buyer Parties would be entitled to recover from the Seller and the Owners could not exceed 20% of the Purchase Price with respect to the Government Representations); and (iii) the Purchase Price with respect to all Claims arising under or in connection with this Agreement or the inaccuracy transactions contemplated hereby, other than Fraud-Type Claims. For the avoidance of doubt, Fraud-Type Claims will not be limited in or breach of any representation or warranty to which amount that the Purchaser Buyer Parties or Seller Parties shall will be entitled to receive, upon the triggering of any indemnification obligation hereunder, shall not exceed Seven Million Dollars ($7,000,000). receive under this Section 7. (c) Notwithstanding anything to the contrary in this Agreement, : (i) any indemnification payments based upon or any Losses related to any and all (i) Litigation Claims, (ii) Tax Claims, (iii) ERISA Claims involving fraud, false claims or criminal misconduct, (iv) Government Contract Claims involving fraud, false claims or criminal misconduct, (v) breaches of the representations contained in Sections 3.3 Fundamental Representations, the Statutory Representations, or 3.4 and/or (vi) claims of fraud or willful misconduct shall Fraud-Type Claims will not be subject to either (i) the Basket Amount set forth in Section 11.5(a) or 7.5(a); (ii) for purposes of determining the maximum aggregate indemnification limitation amount of Losses resulting from, arising out of or relating to breach of any such representation or warranty (but not for determining whether a breach has occurred), all of the representations and warranties set forth in Section 11.5(b). this Agreement (d) Any indemnity claims of Purchaser shall first be settled through disbursements from the Escrow Account in accordance with the terms and conditions set forth in the Escrow Agreement in the following orderincluding, first in cash and then in Purchaser Common Shares. Any Purchaser Common Shares disbursed from the Escrow Account shall have a value determined in accordance with the Indemnification Valuation. For for the avoidance of doubt, the Escrow Account is part Disclosure Schedules) or any other Transaction Document that are qualified by materiality, Material Adverse Effect or words of similar import or effect will be deemed to have been made without any such qualification; (A) each Loss shall be reduced by the amount of any insurance proceeds actually paid to any indemnified party with respect to such Loss (net of any related deductibles, increase in premium and not an addition any out-of-pocket expenses to obtain such proceeds) and any indemnity, contribution or other similar payment actually paid to any of the indemnified parties by any third party with respect to such Loss (net of any out-of-pocket expenses incurred by the indemnified parties in obtaining such third party payment); (B) the indemnified parties shall promptly reimburse the indemnifying party for any amounts previously paid to any indemnified party on account of Losses for which any indemnified party later recovers any insurance proceeds or receives any indemnity, contribution or similar payment (subject to the maximum aggregate indemnification limitation reductions set forth in Section 11.5(bitem (A) above); and (C) the indemnified parties shall use commercially reasonable efforts to recover under insurance policies or indemnity, contribution or other similar agreements for any Losses; provided, howeverthat no indemnified party will be required to bring any litigation or proceeding (arbitral, that if administrative, legal or otherwise, including any informal proceeding) against a third party under this item (iv); and (v) any and all liability of the Seller Parties under Section 7.2 or any amounts Section 7.3 shall first be satisfied from the amount remaining in the Escrow Account are distributed to Sellers before a timely and valid indemnification claim is made by Purchaser, such Escrow Account amounts distributed to Sellers shall not reduce the maximum aggregate indemnification limitation set forth in Section 11.5(b)Account.

Appears in 1 contract

Samples: Equity Purchase Agreement (DLH Holdings Corp.)

Certain Limitations on Indemnification Obligations. (a) Except as otherwise expressly provided in this The aggregate amount of Losses for which the Sellers and the Company collectively shall be liable to the Purchaser Indemnities for indemnification payments under Section 117.1(a)(i) above shall not exceed an amount equal to the Purchase Price received by Sellers (the “Cap”). Notwithstanding the foregoing, the Cap shall not apply to indemnification claims by the Purchaser Parties Indemnities under any of the Fundamental Representations or any claims based upon fraud, willful misconduct or intentional misrepresentation by the Sellers or the Company, in each case with respect to which the Purchaser Indemnities shall be entitled to receive indemnification for all Losses from the Sellers and, if prior to the Closing, the Company, on a joint and several basis. (b) The aggregate amount of Losses for which Purchaser shall be liable to the Seller Parties Indemnities for indemnification payments under Section 7.1(b)(i) above shall not exceed the Cap. Notwithstanding the foregoing, the Cap shall not apply to indemnification claims by the Seller Indemnities based upon the fraud, willful misconduct or intentional misrepresentation of the Purchaser, in each case with respect to which the Seller Indemnities shall be entitled to receive indemnification for all Losses. (c) Purchaser Indemnitees shall not be entitled to receive indemnification for any indemnification payments Losses under Section 11.1 or 11.2 in connection with the inaccuracy in or breach of any representation or warranty, 7.1(a)(i) above until the aggregate amount of all Losses incurred by the Purchaser Parties or Seller Parties, as the case may be, exceed One Hundred Thousand Dollars (Indemnitees exceeds $100,000) 250,000.00 (the “Basket Threshold Amount”), and Sellers or in which case the Purchaser (as applicable) shall only be liable for the amount of all such Losses that exceeds the Basket Amount. (b) Except as otherwise expressly provided in this Section 11, the maximum aggregate amount of indemnification payments under this Section 11 in connection with the inaccuracy in or breach of any representation or warranty to which the Purchaser Parties or Seller Parties Indemnitees shall be entitled to receive, upon the triggering of any indemnification obligation hereunder, shall not exceed Seven Million Dollars ($7,000,000). (c) Notwithstanding anything to the contrary in this Agreement, any indemnification payments based upon any and for all (i) Litigation Claims, (ii) Tax Claims, (iii) ERISA Claims involving fraud, false claims or criminal misconduct, (iv) Government Contract Claims involving fraud, false claims or criminal misconduct, (v) breaches of the representations contained in Sections 3.3 or 3.4 and/or (vi) claims of fraud or willful misconduct shall not be subject to either (i) the Basket Amount set forth in Section 11.5(a) or (ii) the maximum aggregate indemnification limitation set forth in Section 11.5(b)Losses. (d) Any indemnity claims Seller Indemnitees shall not be entitled to indemnification for any Losses under Section 7.1(b)(i) until the aggregate amount of Purchaser shall first be settled through disbursements from all Losses incurred by the Escrow Account in accordance with the terms and conditions set forth in the Escrow Agreement in the following order, first in cash and then in Purchaser Common Shares. Any Purchaser Common Shares disbursed from the Escrow Account shall have a value determined in accordance with the Indemnification Valuation. For the avoidance of doubt, the Escrow Account is part of and not Seller Indemnitees exceeds an addition amount equal to the maximum aggregate Threshold Amount, in which case the Seller Indemnitees shall be entitled to indemnification limitation set forth in Section 11.5(b); providedfor all Losses. (e) The representations, howeverwarranties and covenants of the Indemnifying Party, and the Indemnified Party’s right to indemnification with respect thereto, shall not be affected or deemed waived by reason of any investigation made by or on behalf of the Indemnified Party (including by any of its representatives) or by reason of the fact that if all the Indemnified Party or any amounts in of its representatives knew or should have known that any such representation or warranty is, was or might be inaccurate or by reason of the Escrow Account are distributed to Sellers before a timely and valid indemnification claim is made by Purchaser, such Escrow Account amounts distributed to Sellers shall not reduce the maximum aggregate indemnification limitation set forth in Section 11.5(b)Indemnified Party’s waiver of any condition hereunder.

Appears in 1 contract

Samples: Share Purchase Agreement

Certain Limitations on Indemnification Obligations. (a) Except as otherwise expressly provided in this Section 11, the The Purchaser Parties and Seller Parties shall not be entitled to receive any indemnification payments under Section 11.1 7.1, except those based upon, arising out of or 11.2 otherwise in connection with respect of Sections 1.1, 1.3, 1.5, 1.6, 2.1(A), 2.1(B), 2.1(C), 2.1(D), 2.1(M), 2.1(Q), Article III, Article V and Section 7.3 (the inaccuracy in or breach of any representation or warranty"BASKET EXCLUSIONS"), until the aggregate amount indemnification payments, exclusive of Losses incurred by the Basket Exclusions, equal $125,000 (the "BASKET AMOUNT"), whereupon the Purchaser Parties or Seller Parties, as shall be entitled to receive in full indemnity payments in excess of the case may be, exceed One Hundred Thousand Dollars ($100,000) (the “Basket Amount”); PROVIDED, and Sellers or the Purchaser (as applicable) shall only be liable HOWEVER, that solely for purposes of determining whether the amount of the Sellers' indemnification obligations exceed $125,000 in the aggregate, a breach of the Sellers' representations or warranties (other than the representations and warranties contained in Sections 2.1(F) (absence of certain changes or events) and 2.1(R)(a) (Additional Representations)) shall be determined without regard to any limitation or qualification as to materiality set forth in such representation or warranty. Any amount, paid to the Purchaser out of the Indemnification Escrow Fund shall not be included in determining whether the Basket Amount has been reached. (b) The Purchaser shall be entitled to receive any indemnification payments in respect of the Basket Exclusions without regard to the individual or aggregate amounts thereof and without regard to whether the aggregate of all such Losses that exceeds other indemnification payments shall have exceeded, in the aggregate, the Basket Amount. (bc) Except as otherwise expressly provided in this Section 11, the The maximum aggregate amount of indemnification payments under this Section 11 7.1 with respect to any breach of a representation or warranty, excluding those based upon, arising out of or otherwise in connection respect of Sections 2.1(A), 2.1(B), 2.1(C), 2.1(D), 2.1(M) or 2.1(Q) and amounts paid to the Purchaser under the Escrow Agreement, shall not exceed $5,000,000. The amount of indemnification payments based upon, arising out of or otherwise in respect of breaches of Sections 2.1(A), 2.1(B), 2.1(C), 2.1(D), 2.1(M) or 2.1(Q) shall not exceed the Purchase Price. (d) The indemnification obligations of the parties under Section 7.1 and 7.2 shall terminate on April 30, 1999, except with respect to any claims for indemnification as to which an indemnified person shall have given an indemnifying person written notice setting forth its claim with reasonable specificity (in contradistinction to generalized allegations) as to the nature thereof on or prior to April 30, 1999; PROVIDED, HOWEVER, that the indemnification obligations of the parties under Section 7.1 and 7.2 with respect to Losses that may be incurred by virtue of or result from (i) the inaccuracy in or breach of any representation or warranty to which the Purchaser Parties or Seller Parties shall be entitled to receive, upon the triggering of any indemnification obligation hereunder, shall not exceed Seven Million Dollars ($7,000,000). (c) Notwithstanding anything to the contrary in this Agreement, any indemnification payments based upon any and all (i) Litigation Claims, (ii) Tax Claims, (iii) ERISA Claims involving fraud, false claims or criminal misconduct, (iv) Government Contract Claims involving fraud, false claims or criminal misconduct, (v) breaches of the representations contained in Sections 3.3 or 3.4 and/or (vi) claims of fraud or willful misconduct shall not be subject to either (i) the Basket Amount set forth made in Section 11.5(a2.1(A), 2.1(B), 2.1(C), 2.1(D), 2.1(M), the last sentence of 2.1(P), 2.1(Q), 2.1(R) or 2.2(A) or 2.2(B), or (ii) the maximum aggregate indemnification limitation set forth audit of any U.S. government contract with respect to services performed or data submitted on or before the Closing Date, or (iii) the breach of any covenant or agreement made in Section 11.5(b). this Agreement, or (div) Any indemnity claims of Purchaser shall first be settled through disbursements from the Escrow Account in accordance with the terms and conditions set forth in the Escrow Agreement in the following orderany claim based upon, first in cash and then in Purchaser Common Shares. Any Purchaser Common Shares disbursed from the Escrow Account shall have a value determined in accordance with the Indemnification Valuation. For the avoidance of doubtarising out or otherwise related to any event, the Escrow Account is part of and not an addition condition, occurrence or circumstance occurring on or prior to the maximum aggregate indemnification limitation set forth in Section 11.5(b); provided, however, Closing Date that if all is insured against under any insurance policy or arrangement carried by or on behalf of the Company prior to the Closing (or any amounts renewal or extension thereof), shall in each case survive until the Escrow Account are distributed expiration of the applicable statutes of limitations with respect to Sellers before a timely each such item, or (v) any Tax Claim, shall survive until the later of (a) the date upon which the liability to which any such Tax Claim may relate is barred by all applicable statutes of limitation and valid indemnification (b) the date upon which any claim for refund or credit related to such Tax Claim is made barred by Purchaserall applicable statutes of limitations, such Escrow Account amounts distributed to Sellers or (vi) any Environmental Claim, shall not reduce survive until the maximum aggregate indemnification limitation set forth in Section 11.5(b)tenth anniversary of the Closing Date.

Appears in 1 contract

Samples: Stock Purchase Agreement (Interactive Media Corp)

Certain Limitations on Indemnification Obligations. (a) Except as otherwise expressly provided in this Section 11, the Purchaser Parties and Seller Parties shall not be entitled to receive any indemnification payments under Section 11.1 or 11.2 in connection with the inaccuracy in or breach of any representation or warranty, until the aggregate amount of Losses incurred by the Purchaser Parties or Seller Parties, as the case may be, exceed One Three Hundred Thousand Dollars ($100,000300,000) (the “Basket Amount”), but if such Losses exceed the Basket Amount, Sellers and Sellers or Former Option Holders, on the Purchaser one hand, and the Purchaser, on the other hand (as applicable) shall only be liable for the entire amount of all of such Losses that exceeds the Basket AmountLosses. (b) Except as otherwise expressly provided in this Section 11, the maximum aggregate amount of indemnification payments under this Section Article 11 in connection with the inaccuracy in or breach of any representation or warranty to which the Purchaser Parties or Seller Parties shall be entitled to receive, upon the triggering of any indemnification obligation hereunder, shall not exceed Seven Twenty-Five Million Dollars ($7,000,00025,000,000). (c) Notwithstanding anything to the contrary in this Agreement, any indemnification payments based upon or any Losses related to any and all (i) Litigation Tax Claims, (ii) Tax Reorganization Claims, (iii) ERISA Special Items Indemnity Claims involving fraud, false claims or criminal misconduct, and (iv) Government Contract Claims involving fraud, false claims or criminal misconduct, (v) breaches of the representations contained set forth in Sections 3.3 3.2, 3.3, 3.4, 3.17 and/or 3.31 shall not be subject to either the Basket Amount set forth in Section 11.5(a) or 3.4 and/or (vithe maximum aggregate indemnification limitation set forth in Section 11.5(b) and shall not be used in calculating whether the maximum aggregate indemnification limitation set forth in Section 11.5(b) has been met, provided that any indemnification payments based upon or any Losses related to the foregoing, together with any other indemnification obligations hereunder, shall not exceed the Closing Date Purchase Price. Notwithstanding anything to the contrary in this Agreement, any indemnification payments based upon or any Losses related to any and all claims of fraud or willful misconduct shall not be subject to either (i) the Basket Amount set forth in Section 11.5(a) or (ii) the maximum aggregate indemnification limitation set forth in Section 11.5(b). (d) Any indemnity claims of Purchaser or in this Section 11.5(c) and shall first not be settled through disbursements from the Escrow Account used in accordance with the terms and conditions set forth in the Escrow Agreement in the following order, first in cash and then in Purchaser Common Shares. Any Purchaser Common Shares disbursed from the Escrow Account shall have a value determined in accordance with the Indemnification Valuation. For the avoidance of doubt, the Escrow Account is part of and not an addition to calculating whether the maximum aggregate indemnification limitation set forth in Section 11.5(b) or in this Section 11.5(c) has been met. (d) Notwithstanding anything to the contrary in this Agreement, (i) each Minor Holder shall severally, and not jointly, indemnify and hold the Purchaser Parties harmless against and from and in respect of any and all Losses which are incurred by virtue of or result from a breach by such Minor Holder of the representations or warranties set forth in Section 3.2(b); provided, however3.3(a), that if 3.4(b), 3.5(b), 3.6(b), 3.8(b), 3.14(b), 3.18(b) or 3.23(b) (collectively, the “Designated Representations”), and (ii) except in connection with a breach by any Minor Holder of the representations or warranties set forth in, or in connection with any and all or any amounts claims based upon, the Designated Representations (in which case the Escrow Account are distributed to Sellers before a timely and valid indemnification claim is made by Purchaser, such Escrow Account amounts distributed to Sellers shall not reduce the maximum aggregate indemnification limitation set forth in Section 11.5(bthis subsection (d)(ii) shall not apply and the provisions of subsection (d)(i) shall apply), the indemnification obligations of any Minor Holder shall not exceed 25% of such Minor Holder’s Total Consideration and such obligations described in this subsection (d)(ii) shall be several and not joint. The limitations set forth in this subsection (d) shall not limit in any respect the indemnity obligations of any (A) Minor Holder in connection with any and all claims based upon fraud or willful misconduct or (B) Major Holder. (e) Any indemnity claims of Purchaser Parties that are finally determined to be due and owing by the Sellers or Former Option Holders shall first be satisfied through disbursements from the Indemnity Escrow Account; provided that, in all cases subject to the terms of the Escrow Agreement, the Purchaser Parties must make claims with respect to breaches of the Designated Representations by Minor Holders first up to such Minor Holder’s interest in the Indemnity Escrow Account, and thereafter from the Major Holders pro rata in accordance with their remaining interests in the Indemnity Escrow Account.

Appears in 1 contract

Samples: Stock Purchase Agreement (Sra International Inc)

Certain Limitations on Indemnification Obligations. (a) Except as otherwise expressly provided in this Section 119, the Purchaser Buyer Parties and Seller Parties shall will not be entitled to receive any indemnification payments under Section 11.1 9.2(a)(i) or 11.2 in connection with the inaccuracy in or breach of any representation or warranty, 9.2(b) until the aggregate amount of Losses incurred by the Purchaser Buyer Parties or Seller Parties, as the case may be, exceed One Hundred Seventy Five Thousand Dollars ($100,00075,000) (the “Basket Amount”); provided, and Sellers or however, that if such Basket Amount is exceeded, the Purchaser (as applicable) Buyer Parties shall be entitled to receive only be liable for the amount of all such Losses in excess Thirty Seven Thousand Five Hundred Dollars ($37,500); provided, further, that exceeds the Basket Amountforegoing limitations shall not apply to the Fundamental Representations, the representations and warranties set forth in Section 2.11, the Statutory Representations, or Claims for fraud or willful misconduct. (b) The indemnification obligations of Sellers under Section 9.2(a)(i) and Section 9.2(b) shall be limited to an amount equal to Three Million Five Hundred Thousand Dollars ($3,500,000) provided, however, that the indemnification obligations of Sellers under Section 9.2(a)(i) relating to Section 2.30 will be limited to an amount equal to Four Million Five Hundred Thousand Dollars ($4,500,000) and provided further that the foregoing limitations shall not apply to the Fundamental Representations, the Statutory Representations or Claims for fraud or willful misconduct. (c) Except as otherwise expressly provided in this Section 11Agreement, the maximum aggregate amount of indemnification payments to which the Buyer Parties or the Seller Parties, as applicable, will be entitled to receive under this Section 11 in connection with the inaccuracy in or breach of any representation or warranty to which the Purchaser Parties or Seller Parties shall be entitled to receive, upon the triggering of any indemnification obligation hereunder, shall 9 will not exceed Seven Million Dollars ($7,000,000)the Purchase Price. (cd) Notwithstanding anything to the contrary in this Agreement, any indemnification payments based upon any and all Agreement (i) Litigation Claimsfor purposes of the parties’ indemnification obligations under this Section 9, (ii) Tax Claims, (iii) ERISA Claims involving fraud, false claims or criminal misconduct, (iv) Government Contract Claims involving fraud, false claims or criminal misconduct, (v) breaches all of the representations contained in Sections 3.3 or 3.4 and/or (vi) claims of fraud or willful misconduct shall not be subject to either (i) the Basket Amount and warranties set forth in Section 11.5(a) or this Agreement (ii) the maximum aggregate indemnification limitation set forth in Section 11.5(b). (d) Any indemnity claims of Purchaser shall first be settled through disbursements from the Escrow Account in accordance with the terms and conditions set forth in the Escrow Agreement in the following orderincluding, first in cash and then in Purchaser Common Shares. Any Purchaser Common Shares disbursed from the Escrow Account shall have a value determined in accordance with the Indemnification Valuation. For for the avoidance of doubt, the Escrow Account is part Disclosure Schedules) or any certificate delivered in connection with the transactions contemplated hereby that are qualified by materiality, Material Adverse Effect, or words of similar import or effect will be deemed to have been made without any such qualification, solely for purposes of determining the amount of Losses resulting from a breach of any such representation or warranty; and not an addition (ii) none of the Buyer Parties or the Seller Parties will be permitted to recover any Losses pursuant to this Section 9 to the maximum aggregate indemnification limitation set forth in Section 11.5(b); provided, however, that if all extent such party has been indemnified or reimbursed for such amount under any amounts in the Escrow Account are distributed to Sellers before a timely and valid indemnification claim is made by Purchaser, such Escrow Account amounts distributed to Sellers shall not reduce the maximum aggregate indemnification limitation set forth in Section 11.5(b)other provision of this Agreement.

Appears in 1 contract

Samples: Stock Purchase Agreement (Gtsi Corp)

Certain Limitations on Indemnification Obligations. Notwithstanding anything to the contrary contained in this Agreement: (a) Except as otherwise expressly provided in this Other than with respect to the Seller Fundamental Representations and the representations and warranties made pursuant to Section 112.7 (Tax Matters), the Purchaser Indemnified Parties and Seller Parties shall will not be entitled to receive any indemnification payments under Section 11.1 or 11.2 in connection with the inaccuracy in or breach of any representation or warranty, 9.2(a) until the aggregate amount of Losses incurred by the Purchaser Indemnified Parties or Seller Partiesunder Section 9.2(a), as collectively, exceeds equal to 1.0% of the case may be, exceed One Hundred Thousand Dollars ($100,000) Estimated Purchase Price (the “Basket AmountDeductible”); provided that, and Sellers or in the case of this Section 9.4(a), if the aggregate amount of all Losses exceeds the Deductible, the Purchaser (as applicable) Indemnified Parties shall be entitled to indemnification only be liable for the amount of all such Losses that exceeds the Basket Amount.excess; (b) Except as otherwise expressly provided in this Other than with respect to the Seller Fundamental Representations and the representations and warranties made pursuant to Section 112.7 (Tax Matters), the maximum aggregate amount that the Purchaser Indemnified Parties will be entitled to recover under Section 9.2(a), collectively, shall not exceed an amount equal to 7.5% of the Estimated Purchase Price. The maximum aggregate amount that the Purchaser Indemnified Parties will be entitled to recover under Section 9.2(a), collectively, shall not exceed the Final Purchase Price; (c) The maximum aggregate amount that the Seller Indemnified Parties will be entitled to recover under Section 9.3(a), collectively, shall not exceed the Final Purchase Price; (d) None of the Indemnified Parties will be permitted to recover any Losses pursuant to this ARTICLE 9 in the event that any Indemnified Party has been indemnified or reimbursed for such amount under any other provision of this Agreement to the extent of such indemnification payments under or reimbursement; (e) No claim for indemnification pursuant to this Section 11 in connection ARTICLE 9 shall be made for consequential damages, punitive or exemplary damages, special damages, lost profits, incidental damages, indirect damages, unrealized expectations or other similar items, nor shall any damages be calculated using a “multiplier” or any other similar method having a similar effect; provided, however, that the foregoing limitations shall not apply to any such Losses (i) for consequential damages to the extent reasonably foreseeable or (ii) to the extent awarded to, a third party with respect to an Indemnity Claim; and (f) For the inaccuracy in or purposes of determining whether a breach of any representation or warranty has occurred for the purposes of Section 9.2(a) and calculating the amount of Losses related thereto, any qualification as to which the Purchaser Parties materiality, “Company Material Adverse Effect” or Seller Parties any other similar qualification or standard contained in ARTICLE 2 or ARTICLE 3 shall be entitled disregarded (it being understood that the word “Material” in the defined term “Material Contract(s)” and the qualification as to receive, upon the triggering of any indemnification obligation hereunder, shall not exceed Seven Million Dollars ($7,000,000). (c) Notwithstanding anything to the contrary in this Agreement, any indemnification payments based upon any and all (i) Litigation Claims, (ii) Tax Claims, (iii) ERISA Claims involving fraud, false claims or criminal misconduct, (iv) Government Contract Claims involving fraud, false claims or criminal misconduct, (v) breaches of the representations “Company Material Adverse Effect” contained in Sections 3.3 or 3.4 and/or (vi) claims of fraud or willful misconduct Section 2.6 shall not be subject to either (i) the Basket Amount set forth in Section 11.5(a) or (ii) the maximum aggregate indemnification limitation set forth in Section 11.5(bdisregarded for any of such purposes). (d) Any indemnity claims of Purchaser shall first be settled through disbursements from the Escrow Account in accordance with the terms and conditions set forth in the Escrow Agreement in the following order, first in cash and then in Purchaser Common Shares. Any Purchaser Common Shares disbursed from the Escrow Account shall have a value determined in accordance with the Indemnification Valuation. For the avoidance of doubt, the Escrow Account is part of and not an addition to the maximum aggregate indemnification limitation set forth in Section 11.5(b); provided, however, that if all or any amounts in the Escrow Account are distributed to Sellers before a timely and valid indemnification claim is made by Purchaser, such Escrow Account amounts distributed to Sellers shall not reduce the maximum aggregate indemnification limitation set forth in Section 11.5(b).

Appears in 1 contract

Samples: Membership Interest Purchase Agreement (Resource Capital Corp.)

Certain Limitations on Indemnification Obligations. (a) Except as otherwise expressly provided in this Section 11, the The Purchaser Parties and Seller Parties shall not be entitled to receive any indemnification payments under under: (i) Section 11.1 or 11.2 7.1(a) in connection with the inaccuracy in or breach of any representation or warranty, until except those based upon, arising out of or otherwise in respect of Sections 2.1(A), 2.1(B), 2.1(C), 2.1(D), 2.1(G)(ii), 2.1(Q) and 5.1 (the "Basket Exclusions"); and (ii) clauses (ii) and (iii) of the second sentence of Section 7.3(A) and Sections 7.3(B), 7.3(E) and 7.3(F),until the aggregate amount of Losses incurred by the Purchaser Parties or Seller Parties, as exclusive of the case may beBasket Exclusions, exceed One Hundred Thousand Dollars (equal $100,000) 600,000 (the "Basket Amount"), and Sellers or whereupon the Purchaser (as applicable) shall only be liable entitled to receive in full indemnity payments in excess of the Basket Amount; provided, however, that solely for purposes of determining whether the amount of the Sellers' indemnification obligations exceeds the Basket Amount, a breach of the Sellers' and the Company's representations or warranties shall be determined without regard to any limitation or qualification as to materiality or Company Material Adverse Effect (or similar concept) set forth in such representation or warranty. (b) Notwithstanding the provisions of Section 7.5(a), the Purchaser Parties shall be entitled to receive any indemnification payments in respect of the Basket Exclusions without regard to the individual or aggregate amounts thereof and without regard to whether the aggregate of all such Losses that exceeds other indemnification payments shall have exceeded, in the aggregate, the Basket Amount. (bc) Except as otherwise expressly provided in this Section 11, the The maximum aggregate amount of indemnification payments under this Section 11 7.1(a) to which the Purchaser Parties shall be entitled to receive in connection with the inaccuracy in or breach of any representation or warranty to which (excluding those based upon, arising out of or otherwise in respect of, the Purchaser Parties or Seller Parties shall be entitled to receiveBasket Exclusions) and under Sections 7.3(A), upon the triggering of any indemnification obligation hereunder7.3(B), 7.3(E), 7.3(F) and 7.3(G), shall not exceed Seven Million Dollars ($7,000,000). (c) Notwithstanding anything to 24,000,000, in the contrary in this Agreementaggregate, including any indemnification payments based upon any and all (i) Litigation Claims, (ii) Tax Claims, (iii) ERISA Claims involving fraud, false claims or criminal misconduct, (iv) Government Contract Claims involving fraud, false claims or criminal misconduct, (v) breaches of the representations contained in Sections 3.3 or 3.4 and/or (vi) claims of fraud or willful misconduct shall not be subject to either (i) the Basket Amount set forth in Section 11.5(a) or (ii) the maximum aggregate indemnification limitation set forth in Section 11.5(b). (d) Any indemnity claims of Purchaser shall first be settled through disbursements from amounts paid out under the Escrow Account in accordance with the terms and conditions set forth in the Escrow Agreement in the following order, first in cash and then in Purchaser Common Shares. Any Purchaser Common Shares disbursed from the Escrow Account shall have a value determined in accordance with the Indemnification Valuation. For the avoidance of doubt, the Escrow Account is part of and not an addition to the maximum aggregate indemnification limitation set forth in Section 11.5(b); provided, however, that if all or any amounts in the Escrow Account are distributed to Sellers before a timely and valid indemnification claim is made by Purchaser, such Escrow Account amounts distributed to Sellers shall not reduce the maximum aggregate indemnification limitation set forth in Section 11.5(b)Agreement.

Appears in 1 contract

Samples: Stock Purchase Agreement (Anteon International Corp)

Certain Limitations on Indemnification Obligations. Notwithstanding anything in this Agreement to the contrary: (a) Except as otherwise expressly provided in this Section 11, The following limitations shall apply to any of the Purchaser Parties and Seller Parties shall not be entitled to receive any indemnification payments under Section 11.1 or 11.2 in connection with the inaccuracy in or breach of any representation or warranty, until the aggregate amount of Losses incurred by the Purchaser Charter Parties or Seller any of the Sellers, as the Claimant, with respect to its claims against the Sellers or the Charter Parties, as the Indemnifying Party, for indemnity for matters described in Section 10.2 or 10.3, as the case may be, exceed One Hundred Thousand Dollars other than any claim by Sellers regarding the nonfulfillment of the Charter Parties' obligation to pay the Cash Consideration or issue the Preferred LLC Interest ($100,000in which event the following limitations shall not apply): (1) The Indemnifying Party will not be required to indemnify or otherwise be liable to the Claimant for matters described in Section 10.2 or 10.3 (as the “Basket Amount”case may be) unless and until the aggregate amount of all Losses of the Claimant arising therefrom for which the Indemnifying Party would have indemnification liability to the Claimant but for this Section 10.5(a)(1), exceeds, and then only to the extent of the excess above, $400,000; provided, however, that this Section 10.5(a)(1) shall not apply to any amount payable to Buyer or Sellers pursuant to Section 2.6, or as a result of a breach of any of the Purchaser representations and warranties set forth in Sections 4.3 or 4.4. (2) No Indemnifying Party will be required to indemnify or otherwise be liable to the Claimant with respect to any Losses arising under Section 10.2 or 10.3 (as applicablethe case may be) unless the Claimant gives the Indemnifying Party written notice of a claim pursuant to Section 10.2 or 10.3 (as the case may be) on or prior to the date that is twelve months after the Closing Date, provided, that such twelve-month limitation shall only not apply in the case of any breach of any of the representations and warranties set forth in Sections 4.3 or 4.4; and (3) Except for a claim of a breach of any of the representations and warranties set forth in Sections 4.3 and 4.4, the sole and exclusive remedy available to the Claimant shall be liable a claim for indemnity pursuant to the terms of this Section 10. (4) The amount payable to the Claimant by the Indemnifying Party in respect of a Loss shall be computed net of any insurance payments received with respect thereto that reduces the amount of such Loss that would otherwise be sustained. The parties hereto agree to use commercially reasonable efforts to collect any and all insurance proceeds to which it may be entitled in respect of any Loss prior to seeking indemnity as Claimant from the Indemnifying Party. (5) No party shall have any liability or obligation (for indemnification or otherwise) arising as a result of any other party's waiver of any closing condition, nor shall any adjustment be made to the Cash Consideration in respect of the foregoing. (6) No Indemnifying Party will have any liability or obligation for any inaccuracy in any representation or warranty made by such Losses that exceeds party in this Agreement (1) which did not exist as of the Basket Amountdate of this Agreement and which arose other than by reason of any breach by a Indemnifying Party of any covenant or agreement of such party set forth in this Agreement, or (2) if such inaccuracy does not exist at the time of the Closing. (b) Except as otherwise expressly provided Notwithstanding anything in this Section 11Agreement to the contrary, the maximum aggregate amount following additional limitations shall apply with respect to claims against the Sellers, as the Indemnifying Party, by the Charter Parties, as Claimants, for indemnity for any matter described in Section 10.2: (1) Anything in this Agreement or applicable law to the contrary notwithstanding, other than claims (i) with respect to the Indemnity Fund as provided for in this Agreement and (ii) for breaches of indemnification payments representations and warranties contained in Sections 4.3 and 4.4, no Seller, its Affiliates or any of their respective officers, directors, shareholders, members, partners, employees or agents shall have any -66- 68 obligation or liability to any Charter Party under this Section 11 10 or otherwise, and no Charter Party will have any claim or recourse against Seller, its Affiliates or any of their respective officers, directors, shareholders, members, partners, employees or agents as a result of the breach of any representation, warranty, covenant or agreement of any Helicon Party or any Seller contained herein or otherwise arising out of or in connection with the transactions contemplated by this Agreement or the Transaction Documents or the business or operations of the Helicon Companies prior to the Closing. (2) All payments required to be made by Sellers or any Seller in respect of their indemnification obligations under this Section 10 shall be made solely from the Indemnity Fund except for any misrepresentation or breach by any Seller of any representations and warranties by such Seller in Section 4.3 or 4.4 hereof, in which event such Seller shall be solely liable with respect to any indemnity due the Charter Parties under Section 10.2(b) above. (3) Sellers shall not be liable with respect to any Loss to the extent that the amount of such Loss was included as an Adjustment Liability in the computation of Closing Net Liabilities in accordance with Section 2. (4) No Seller will have any liability or obligation for any inaccuracy in any representation or warranty made by any Helicon Party in this Agreement which relates to any Excluded Asset. (5) Sellers shall have no obligation to indemnify or otherwise be liable to the Charter Parties with respect to any claim for breach of any representation or warranty to which by any of the Purchaser Helicon Parties or Seller Parties shall be entitled to receiveotherwise, upon arising from any presence of Hazardous Substances on any of the triggering of any indemnification obligation hereunder, shall not exceed Seven Million Dollars ($7,000,000). (c) Notwithstanding anything Real Property described on Schedule 3.9 to the contrary in this Agreement, any indemnification payments based upon any and all (i) Litigation Claims, (ii) Tax Claims, (iii) ERISA Claims involving fraud, false claims or criminal misconduct, (iv) Government Contract Claims involving fraud, false claims or criminal misconduct, (v) breaches extent that such presence of the representations contained in Sections 3.3 or 3.4 and/or (vi) claims of fraud or willful misconduct shall not be subject to either (i) the Basket Amount set forth in Section 11.5(a) or (ii) the maximum aggregate indemnification limitation set forth in Section 11.5(b). (d) Any indemnity claims of Purchaser shall first be settled through disbursements from the Escrow Account in accordance with the terms and conditions set forth in the Escrow Agreement in the following order, first in cash and then in Purchaser Common Shares. Any Purchaser Common Shares disbursed from the Escrow Account Hazardous Substances shall have a value determined in accordance with the Indemnification Valuation. For the avoidance of doubt, the Escrow Account is part of and not an addition been disclosed or revealed to the maximum aggregate indemnification limitation set forth Charter Parties in Section 11.5(b)any environmental assessments undertaken between the date hereof and the Closing Date; provided, however, that if all notwithstanding the foregoing, the representations and warranties on environmental matters by Helicon in Section 3.14, unqualified by the results of such environmental assessments, shall continue to comprise a closing condition under Section 7.1(a) hereof. (6) No Seller will have any liability or obligation for any amounts untrue representation or breach of warranty with respect to inaccuracy in the Escrow Account are distributed to Sellers before a timely and valid indemnification claim is made by Purchaser, such Escrow Account amounts distributed to Sellers shall not reduce the maximum aggregate indemnification limitation any representation or warranty set forth in Section 11.5(b)3.20 that exists as of the Closing Date that did not exist as of the date of this Agreement. (c) The foregoing limitations shall not apply with respect to claims arising following the Closing relating to any breach of the terms of the Amended LLC Agreement, the Put Agreement, Option Agreement or the release from Debt Obligations.

Appears in 1 contract

Samples: Purchase Agreement (Charter Communications Holdings Capital Corp)

Certain Limitations on Indemnification Obligations. (a) Except as otherwise expressly provided in this Section 11, the The Purchaser Parties and Seller Parties Stockholders shall not be entitled to receive any indemnification payments under Section 11.1 or 11.2 in connection with the inaccuracy in or breach of any representation or warranty11.2, until the aggregate amount of Losses incurred by the Purchaser Parties or Seller PartiesStockholders, as the case may be, exceed One Hundred Thousand Dollars (exceeds $100,000) 200,000 (the “Basket Amount”), and Sellers Stockholders, collectively, or the Purchaser (as applicable) shall only be liable for the amount of all such Losses that exceeds exceed the Basket Amount. (b) Except as otherwise expressly provided set forth in this Section 1111.5(b), the maximum aggregate amount of indemnification payments under this Section 11 in connection with the inaccuracy in or breach of any representation or warranty to which the Purchaser Parties or Seller Parties Stockholders shall be entitled to receive, upon the triggering of any indemnification obligation hereunder, shall not exceed Seven Million Dollars the Initial Escrow Amount ($7,000,000the “Aggregate Cap Amount”). No Stockholder shall have any personal liability to the Purchaser Parties in excess of such Stockholder’s pro rata proportion of the Aggregate Cap Amount hereunder, other than for a claim brought by the Purchaser Parties based upon such individual Stockholder’s fraud or willful misconduct with respect to the Letter of Transmittal or the Principal Stockholders Agreement and Knowledge Certificate, as applicable, executed by such Stockholder, in which event such Stockholder shall have personal liability only to the extent of the Aggregate Share Price actually received by such individual Stockholder (the “Individual Cap Amount”). The foregoing limitation applies regardless of whether such damages are sought based upon the Company’s or such Stockholder’s indemnification obligations hereunder, the Company’s or such Stockholder’s other covenants or agreements contained herein or any other Transaction Document (excluding, for this purpose only, any Non-Competition Agreement, Employee Agreement or Confidential Severance Agreement entered into by such Stockholder), and regardless of whether such damages are sought based upon fraud, willful misconduct, gross negligence, breach of contract, breach of warranty, negligence or any other legal or equitable theory. (c) Notwithstanding anything to the contrary in this Agreement, any indemnification payments based upon any and all (i) Litigation ERISA Claim, any Government Contract Claim, any Tax Claim, any Special Claims, (ii) Tax Claimsany Certificate of Capitalization Claim, (iii) ERISA Claims involving fraudthe supplemental indemnification provisions contained in Section 11.3, false claims or criminal misconduct, (iv) Government Contract Claims involving fraud, false claims or criminal misconduct, (v) breaches a breach of the representations representation contained in Sections 3.3 3.2, 3.3, 3.4, or 3.4 and/or (vi3.8, the amount owed to a Dissenting Stockholder pursuant to Section 2.9(g) claims of or based upon fraud or willful misconduct shall not be subject to either (i) the Basket Amount set forth in Section 11.5(a) or (ii) the maximum aggregate indemnification limitation set forth in Section 11.5(b). (d) Any indemnity claims of Purchaser shall first be settled through disbursements from the Escrow Account in accordance with the terms and conditions set forth in the Escrow Agreement in the following order, first in cash and then in Purchaser Common Shares. Any Purchaser Common Shares disbursed from the Escrow Account shall have a value determined in accordance with the Indemnification Valuation. For the avoidance of doubt, the Escrow Account is part of and not an addition nothing herein shall limit any Stockholder’s liability to the maximum aggregate indemnification limitation set forth Purchaser Parties for any and all acts or omissions of such Stockholder (i) in Section 11.5(b); provided, however, that if all any capacity other than as a stockholder of the Company or any amounts in (ii) with respect to matters outside of the Escrow Account are distributed to Sellers before a timely scope of this Agreement and valid indemnification claim is made by Purchaser, such Escrow Account amounts distributed to Sellers shall not reduce the maximum aggregate indemnification limitation set forth in Section 11.5(b)transactions contemplated herein.

Appears in 1 contract

Samples: Merger Agreement (Analex Corp)

Certain Limitations on Indemnification Obligations. Notwithstanding anything else in this Agreement to the contrary: (a) Except Neither the Buyer Parties nor the Seller Parties, as otherwise expressly provided in this Section 11applicable, the Purchaser Parties and Seller Parties shall not be entitled to receive any indemnification payments under Section as set forth in Sections 11.1 or 11.2 in connection with the inaccuracy in or breach of any representation or warrantyand 11.2, until the aggregate amount of all Losses incurred by such party seeking indemnification exceeds One Hundred Twenty-Five Thousand Dollars ($125,000) (the Purchaser “Deductible Amount”), after which, such party shall only be entitled to receive indemnification payments for the amount of such indemnifiable Losses in excess of the Deductible Amount. (b) The maximum aggregate amount of indemnification payments payable by each of the Buyer Parties or Seller Parties under Section 11 shall not exceed Two Million One Hundred Twenty-Five Thousand Dollars ($2,125,000) (the "Cap Amount”). In the event that the Buyer Parties or Seller Parties, as applicable, have incurred any indemnifiable Losses in excess of any applicable Deductible Amount, upon written notice thereof to the case may be, exceed One Hundred Thousand Dollars ($100,000) (the “Basket Amount”), and Sellers or the Purchaser (as applicable) shall only be liable for indemnifying party describing the amount of and basis for such Loss, the parties will attempt in good faith to reach an agreement as to any matters or amounts in dispute. If the authorized parties of each of Buyer and Seller, notwithstanding such good faith effort, fail to resolve all matters in dispute within thirty (30) days after an indemnified party notifies the indemnifying party of the Losses incurred thereby, then either party may be submit the disputed matters to an independent mediator selected by Buyer and Seller if the other party consents to such Losses that exceeds mediation, which mediator will, for a period of not more than sixty (60) days, attempt to assist the Basket Amount. (b) Except as otherwise expressly provided parties to resolve all disputes in connection with such matter. Notwithstanding anything to the contrary contained in this Section 1111.4(b), at any time before, during or after the maximum aggregate amount procedures described above, an indemnified party may bring a claim on account of indemnification payments under a Loss with an appropriate Governmental Authority pursuant to the terms of this Section 11 in connection with the inaccuracy in or breach of any representation or warranty to which the Purchaser Parties or Seller Parties shall be entitled to receive, upon the triggering of any indemnification obligation hereunder, shall not exceed Seven Million Dollars ($7,000,000)Agreement. (c) Notwithstanding anything to the contrary limitations set forth in Sections 11.3 and subsections (a) and (b) of this AgreementSection 11.4, any indemnification payments based upon any and all in the case of Losses resulting from (i) Litigation Claimsany fraudulent misrepresentation contained herein or in any other Transaction Documents, (ii) Tax Claims, (iii) ERISA Claims involving fraud, false claims or criminal misconduct, (iv) Government Contract Claims involving fraud, false claims or criminal misconduct, (v) breaches the time periods for indemnification shall commence running upon the discovery of the representations contained in Sections 3.3 or 3.4 and/or (vi) claims of fraud or willful misconduct such fraudulent misrepresentation and each party’s indemnification obligation shall not be subject to either (i) the Basket Deductible Amount set forth in Section 11.5(a) or limited by the Cap Amount, (ii) the maximum aggregate Washington Mutual Bank, FA indemnification limitation set forth described in Section 11.5(b11.1(c). , Seller’s indemnification shall not be subject to the Deductible Amount or limited by the Cap Amount, and the time periods for indemnification shall commence running upon the discovery of such failure to make adequate payment by Washington Mutual Bank, FA or (diii) Any indemnity claims breach by Seller of Purchaser shall first be settled through disbursements from the Escrow Account in accordance with the terms and conditions set forth its representation in the Escrow Agreement in the following orderlast sentence of Section 3.19(g) hereof, first in cash and then in Purchaser Common Shares. Any Purchaser Common Shares disbursed from the Escrow Account Seller’s indemnification shall have a value determined in accordance with the Indemnification Valuation. For the avoidance of doubt, the Escrow Account is part of and not an addition be subject to the maximum aggregate indemnification limitation set forth in Section 11.5(b); provided, however, that if all Deductible Amount or any amounts in limited by the Escrow Account are distributed to Sellers before a timely and valid indemnification claim is made by Purchaser, such Escrow Account amounts distributed to Sellers shall not reduce the maximum aggregate indemnification limitation set forth in Section 11.5(b)Cap Amount.

Appears in 1 contract

Samples: Stock Purchase Agreement (Alion Science & Technology Corp)

Certain Limitations on Indemnification Obligations. (a) Except as otherwise expressly provided in this Section 11, the Purchaser Parties and Seller Parties shall not be entitled to receive any indemnification payments under Section 11.1 9.1(a), except those based upon, arising out of or 11.2 otherwise in connection with respect of Sections 3.1, 3.2, 3.11, 3.15, 3.17, 3.22 and Article VII, (the inaccuracy in or breach of any representation or warranty"BASKET EXCLUSIONS"), until the aggregate amount indemnification payments, exclusive of Losses incurred by the Purchaser Parties or Seller PartiesBasket Exclusions, as the case may be, exceed One Hundred equal Fifty Thousand Dollars ($100,00050,000) (the "BASKET AMOUNT"), whereupon Purchaser shall be entitled to receive in full indemnity payments in excess of the Basket Amount”); PROVIDED, and Sellers or the Purchaser (as applicable) shall only be liable HOWEVER, that solely for purposes of determining whether the amount of Seller's indemnification obligations exceed Fifty Thousand Dollars ($50,000) in the aggregate, a breach of Seller's representations or warranties shall be determined without regard to any limitation or qualification as to materiality or Business Material Adverse Effect (or similar concepts) set forth in such representation or warranty. (b) Notwithstanding the foregoing provisions of this Section 9.5, Purchaser shall be entitled to receive any indemnification payments in respect of the Basket Exclusions without regard to the individual or aggregate amounts thereof and without regard to whether the aggregate of all such Losses that exceeds other indemnification payments shall have exceeded, in the aggregate, the Basket Amount. (bc) Except as otherwise expressly provided in this Section 11, the The maximum aggregate amount of indemnification payments under this Section 11 9.1(a) (excluding those based upon, arising out of or otherwise in connection with respect of the inaccuracy in or breach of any representation or warranty to which the Purchaser Parties or Seller Parties shall be entitled to receive, upon the triggering of any indemnification obligation hereunderBasket Exclusions), shall not exceed Seven exceed, in the aggregate, Five Million Dollars ($7,000,000). (c) Notwithstanding anything to the contrary in this Agreement, any indemnification payments based upon any and all (i) Litigation Claims, (ii) Tax Claims, (iii) ERISA Claims involving fraud, false claims or criminal misconduct, (iv) Government Contract Claims involving fraud, false claims or criminal misconduct, (v) breaches of the representations contained in Sections 3.3 or 3.4 and/or (vi) claims of fraud or willful misconduct shall not be subject to either (i) the Basket Amount set forth in Section 11.5(a) or (ii) the maximum aggregate indemnification limitation set forth in Section 11.5(b5,000,000). (d) Any indemnity claims The maximum amount of Purchaser indemnification payments under Section 9.2 with respect to any inaccuracy in or breach of a representation or warranty shall first be settled through disbursements from the Escrow Account in accordance with the terms and conditions set forth not exceed, in the Escrow Agreement in the following orderaggregate, first in cash and then in Purchaser Common Shares. Any Purchaser Common Shares disbursed from the Escrow Account shall have a value determined in accordance with the Indemnification Valuation. For the avoidance of doubtFive Million Dollars ($5,000,000), the Escrow Account is part of and not an addition to the maximum aggregate indemnification limitation set forth in Section 11.5(b); provided, however, provided that if all or any amounts in the Escrow Account are distributed to Sellers before a timely and valid indemnification claim is made by Purchaser, such Escrow Account amounts distributed to Sellers Seller shall not reduce be entitled to receive any indemnification payments under Section 9.2 until the maximum aggregate amount of all such indemnification limitation set forth payments exceeds the Basket Amount, whereupon Seller shall be entitled to receive in Section 11.5(bfull indemnity payments exclusive of the Basket Amount up to Five Million Dollars ($5,000,000).

Appears in 1 contract

Samples: Asset Purchase Agreement (Anteon Corp)

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Certain Limitations on Indemnification Obligations. (a) Except as otherwise expressly provided Notwithstanding anything in this Section 11, Agreement to the Purchaser Parties and Seller Parties shall contrary: (i) Holdings will not be entitled required to receive indemnify and will not otherwise be liable to Buyer or Charter for any indemnification payments under matter described in Section 11.1 or 11.2 in connection with the inaccuracy in or breach of any representation or warranty, 10.2 unless and until the aggregate amount of all Losses incurred by of Buyer and Charter in the Purchaser Parties or Seller Partiesaggregate arising therefrom for which Holdings would have indemnification liability to Buyer and Charter but for this Section 10.5(a) (i) exceeds, as and then only to the case may beextent of the excess above, exceed One Seven Hundred Fifty Thousand Dollars ($100,000) (the “Basket Amount”), and Sellers or the Purchaser (as applicable) shall only be liable for the amount of all such Losses that exceeds the Basket Amount. (b) Except as otherwise expressly provided in this Section 11, the maximum aggregate amount of indemnification payments under this Section 11 in connection with the inaccuracy in or breach of any representation or warranty to which the Purchaser Parties or Seller Parties shall be entitled to receive, upon the triggering of any indemnification obligation hereunder, shall not exceed Seven Million Dollars ($7,000,000750,000.00). (cii) Notwithstanding anything Buyer and Charter will not be required to indemnify and will not otherwise be liable to Holdings for a breach of their representations and warranties set forth herein unless and until the aggregate amount of all Losses of Holdings in the aggregate arising therefrom for which Buyer or Charter would have indemnification liability to Holdings but for this Section 10.5(a)(ii) exceeds, and then only to the contrary in this Agreement, any indemnification payments based upon any and all (i) Litigation Claims, (ii) Tax Claims, (iii) ERISA Claims involving fraud, false claims or criminal misconduct, (iv) Government Contract Claims involving fraud, false claims or criminal misconduct, (v) breaches extent of the representations contained in Sections 3.3 or 3.4 and/or excess above, Seven Hundred Fifty Thousand Dollars (vi) claims of fraud or willful misconduct shall not be subject to either (i) the Basket Amount set forth in Section 11.5(a) or (ii) the maximum aggregate indemnification limitation set forth in Section 11.5(b). (d) Any indemnity claims of Purchaser shall first be settled through disbursements from the Escrow Account in accordance with the terms and conditions set forth in the Escrow Agreement in the following order, first in cash and then in Purchaser Common Shares. Any Purchaser Common Shares disbursed from the Escrow Account shall have a value determined in accordance with the Indemnification Valuation. For the avoidance of doubt, the Escrow Account is part of and not an addition to the maximum aggregate indemnification limitation set forth in Section 11.5(b$750,000.00); provided, however, that if all it is understood and agreed that this Section 10.5(a)(ii) shall not apply to any amount payable to Holdings in respect of the nonfulfillment of any covenant to be performed by Buyer or Charter contained in this Agreement or any amounts other document or instrument delivered pursuant hereto by Buyer or Charter. (iii) Buyer and Charter will not be required to indemnify, and will not otherwise be liable to, Holdings for a breach of their representations and warranties for any amount in excess of Seven Million Five Hundred Thousand Dollars ($7,500,000) in the Escrow Account are distributed aggregate; provided, however, that it is understood and agreed this Section 10.5(a)(iii) shall not apply to Sellers before any amount payable to Holdings in respect of the breach of any covenant to be performed by Buyer or Charter contained in this Agreement or any other document or instrument delivered pursuant hereto. (i) Holdings will not be required to indemnify and will not otherwise be liable to Buyer or Charter with respect to any Losses arising under Section 10.2 unless Buyer or Charter (as the case may be) gives Holdings written notice of a timely claim pursuant to Section 10.6(a), (i) in respect of any breach of the representation and valid indemnification warranty contained in Section 4.4, 62 - 54 - prior to the expiration of the applicable statute of limitations (without any extension or waiver) in respect of such claim, and (ii) in respect of any other claim, on or prior to the date that is nine (9) months after the Closing Date. Notwithstanding the foregoing, all amounts held pursuant to the Indemnity Agreement in excess of amounts previously notified by Buyer or Charter to Holdings as subject to a then outstanding bona fide claim by Buyer or Charter shall be released to Holdings on the first business day following the nine (9) month anniversary of the Closing Date in accordance with the Indemnity Agreement. Thereafter, any amounts remaining under the Indemnity Agreement shall be released from escrow and paid over to Holdings in accordance with the Indemnity Agreement. (ii) Buyer and Charter will not be required to indemnify and will not otherwise be liable to Holdings with respect to any Losses arising under Section 10.3 with respect to any breach of the representations and warranties of Buyer and Charter set forth herein unless Holdings gives Buyer or Charter (as the case may be) written notice of such a claim pursuant to Section 10.6(a) on or prior to the date that is nine (9) months after the Closing Date. (c) All payments required to be made by PurchaserHoldings in respect of its indemnification obligations under this Section 10 shall be made solely from the Indemnity Fund (except in respect of any breach of the representation and warranty contained in Section 4.4) and the sole and exclusive remedy available to Buyer and Charter for any breach by Holdings or Group of its representations, such Escrow Account amounts distributed warranties, covenants, obligations or agreements hereunder or under any of the documents or instruments delivered pursuant hereto by Group or Holdings shall be a claim for indemnification pursuant to Sellers shall not reduce the maximum aggregate indemnification limitation terms of this Section 10. (d) (i) Anything in this Agreement or applicable law to the contrary notwithstanding, other than claims pursuant to Section 10, other than claims against the Indemnity Fund as provided for in this Agreement, and subject to the limitations set forth herein, after the Closing and except in respect of any claim for a breach of the representation and warranty contained in Section 11.5(b4.4, none of Holdings, its Affiliates or any of their respective officers, directors, shareholders, members, partners, employees or agents shall have any obligation or liability to Buyer or Charter under this Section 10 or otherwise, and neither Buyer nor Charter will have any claim or recourse against Holdings, its Affiliates or any of their respective officers, directors, shareholders, members, partners, employees or agents as a result of the breach of any representation, warranty, covenant or agreement of Holdings or Group contained herein or otherwise arising out of or in connection with the transactions contemplated by this Agreement or the Transaction Documents or the business or operations of the Renaissance Companies prior to the Closing (except in respect of any claim for a breach of the representation and warranty contained in Section 4.4) and the provisions of this Section 10 shall be the sole and exclusive remedy for any such claim by Buyer or Charter for any such matters (except in respect of any claim for a breach of the representation and warranty contained in Section 4.4), whether such claims are framed in contract, tort or otherwise.

Appears in 1 contract

Samples: Purchase Agreement (Charter Communications Holdings Capital Corp)

Certain Limitations on Indemnification Obligations. (a) Except as otherwise expressly provided in this Section 11, the Purchaser Parties and Seller Parties shall not be entitled to receive any indemnification payments under Section 11.1 or 11.2 in connection with the inaccuracy in or breach of any representation or warranty, until the aggregate amount of Losses incurred by the Purchaser Parties or Seller Parties, as the case may be, exceed One Three Hundred Thousand Dollars ($100,000300,000) (the “Basket Deductible Amount”), and thereafter, the Sellers or the Purchaser (and Parent, as applicable) the case may be, shall only be liable for Losses greater than the amount of all such Losses that exceeds the Basket Deductible Amount. (b) Except as otherwise expressly provided in this Section 11, the maximum aggregate amount of indemnification payments under this Section 11 in connection with the inaccuracy in or breach of any representation or warranty to which the Purchaser Parties or Seller Parties shall be entitled to receive, upon the triggering of any indemnification obligation hereunder, shall not exceed Nineteen Million Five Hundred Thirty Seven Million Thousand Five Hundred Dollars ($7,000,00019,537,500). (c) Notwithstanding anything to the contrary in this Agreement, any indemnification payments based upon or any and all Losses related to (i) Litigation Special Items Indemnity Claims, (ii) Tax Claimsadjustments to the Purchase Price pursuant to Section 2.4, and/or (iii) ERISA Claims involving fraud, false claims or criminal misconduct, (iv) Government Contract Claims involving fraud, false claims or criminal misconduct, (v) any and all breaches of the representations contained and warranties in Sections 3.3 Section 3.17, 3.19, 3.29 or 3.4 and/or (vi3.33 or set forth in Section 11.4(a) claims of fraud or willful misconduct shall not be subject to either (i) the Basket Deductible Amount set forth in Section 11.5(a) or the maximum aggregate indemnification limitation set forth in Section 11.5(b) and shall not be used in calculating whether the maximum aggregate indemnification limitation set forth in Section 11.5(b) has been met, provided that any indemnification payments based upon or any Losses related to the foregoing shall not exceed the Purchase Price. (iid) Notwithstanding anything to the contrary in this Agreement, any indemnification payments based upon or any Losses related to any and all claims of fraud shall not be subject to either the Deductible Amount set forth in Section 11.5(a) or the maximum aggregate indemnification limitation set forth in Section 11.5(b). (d) Any indemnity claims of Purchaser and shall first not be settled through disbursements from the Escrow Account used in accordance with the terms and conditions set forth in the Escrow Agreement in the following order, first in cash and then in Purchaser Common Shares. Any Purchaser Common Shares disbursed from the Escrow Account shall have a value determined in accordance with the Indemnification Valuation. For the avoidance of doubt, the Escrow Account is part of and not an addition to calculating whether the maximum aggregate indemnification limitation set forth in Section 11.5(b); provided) has been met. (e) Notwithstanding anything to the contrary in this Agreement, howeverthe maximum liability of any Seller under this Section 11 shall not exceed the Seller Payment received by such Seller. Notwithstanding anything to the contrary in this Agreement, that if all or the maximum liability of any amounts in Option Holder under this Section 11 shall not exceed the Escrow Account are distributed (including any interest or other increases thereon) that such Option Holder is deemed to Sellers before a timely and valid indemnification claim is made by have contributed to the Escrow Account. (f) Except in connection with certain adjustments to the Purchase Price pursuant to Section 2.4 (which explicitly provides for certain amounts, at the option of the Purchaser, such to be paid directly by Sellers), any indemnity claims of Purchaser Parties hereunder for breach of this Agreement or the Escrow Account amounts distributed Agreement that are finally determined to Sellers be due and owing by the Seller Parties shall not reduce first be satisfied through disbursements from the maximum aggregate indemnification limitation set forth in Section 11.5(b)Escrow Account.

Appears in 1 contract

Samples: Equity Purchase Agreement (Sra International Inc)

Certain Limitations on Indemnification Obligations. Notwithstanding anything in this Agreement to the contrary: (a) Except as No Seller will be required to indemnify or otherwise expressly provided be liable to Buyer for any matter described in this Section 11, the Purchaser Parties 10.2 unless and Seller Parties shall not be entitled to receive any indemnification payments under Section 11.1 or 11.2 in connection with the inaccuracy in or breach of any representation or warranty, until the aggregate amount of all Losses incurred by the Purchaser Parties or Seller Parties, as the case may be, exceed One Hundred Thousand Dollars ($100,000) (the “Basket Amount”of Buyer arising therefrom for which Sellers would have indemnification liability to Buyer but for this Section 10.5(a), and exceeds $1,000,000, in which event Sellers or the Purchaser (as applicable) shall only will be liable for the amount of all such Losses that exceeds the Basket Amount. (b) Except as otherwise expressly provided in this Section 11, the maximum aggregate amount of indemnification payments under this Section 11 in connection with the inaccuracy in or breach of any representation or warranty to which the Purchaser Parties or Seller Parties shall be entitled to receive, upon the triggering of any indemnification obligation hereunder, shall not exceed Seven Million Dollars ($7,000,000). (c) Notwithstanding anything to the contrary in this Agreement, any indemnification payments based upon any and all (i) Litigation Claims, (ii) Tax Claims, (iii) ERISA Claims involving fraud, false claims or criminal misconduct, (iv) Government Contract Claims involving fraud, false claims or criminal misconduct, (v) breaches of the representations contained in Sections 3.3 or 3.4 and/or (vi) claims of fraud or willful misconduct shall not be subject to either (i) the Basket Amount set forth in Section 11.5(a) or (ii) the maximum aggregate indemnification limitation set forth in Section 11.5(b). (d) Any indemnity claims of Purchaser shall first be settled through disbursements from the Escrow Account in accordance with the terms and conditions set forth in the Escrow Agreement in the following order, first in cash and then in Purchaser Common Shares. Any Purchaser Common Shares disbursed from the Escrow Account shall have a value determined in accordance with the Indemnification Valuation. For the avoidance of doubt, the Escrow Account is part of and not an addition to the maximum aggregate indemnification limitation set forth in Section 11.5(b)Losses; provided, however, that this Section 10.5(a) shall not apply to any amount payable to Buyer pursuant to Section 2.7 or Section 2.9 or Section 10.2(c) (but only in respect of a claim that Buyer could have made under Section 10.2(c) immediately after the Closing) or Section 10.2(d) or Section 10.2(e) (but only in respect of a claim that Buyer could have made under Section 10.2(e) immediately after the Closing) or Section 10.2(f) or Section 10.2(g), but no amounts paid to Buyer pursuant to the sections referred to in this proviso (as limited in this proviso) shall be treated as Losses for purposes of determining when Buyer's Losses exceed $1,000,000. (b) No Seller will be required to indemnify or otherwise be liable to Buyer with respect to any Losses arising under Section 10.2 unless Buyer gives Sellers written notice of a claim pursuant to Section 10.2 on or prior to the date that is eighteen months after the Closing Date; provided that, the Post-Closing Indemnity Property shall be released to Sellers as follows: (1) On the first business day following the date that is six months after the Closing Date (the "Initial Release Date"): (A) if on the Initial Release Date the Post-Closing Indemnity Property consists solely of shares of ACC Class A Common Stock or other Stock Consideration Registrable Securities, then the number of shares of ACC Class A Common Stock or other Stock Consideration Registrable Securities equal to one-half of the total number of such shares deposited into the Post-Closing Indemnity Escrow on the Closing Date, less the total number of shares that were previously paid out to Buyer in respect of claim(s) made by Buyer pursuant to this Article 10 or Article 2, and less the number of shares the fair market value of which equals the aggregate dollar value of all bona fide claims made by Buyer pursuant to this Article 10 or Article 2 that remain outstanding on the Initial Release Date, shall be released from escrow and paid over to Sellers (the number of shares to be appropriately adjusted to give effect to any stock split, combination or similar event); (B) if on the Initial Release Date the Post-Closing Indemnity Property consists solely of cash funds, then an amount in cash equal to one-half of the total amount of cash funds that would have been in the Post-Closing Indemnity Escrow on the Initial Release Date if no payments had been made to Buyer out of the Post-Closing Indemnity Escrow during such period, less the dollar value of all payments (whether in the form of shares or cash) that were previously paid out to Buyer in respect of claim(s) made by Buyer pursuant to this Article 10 or Article 2, and less the aggregate dollar value of all bona fide claims made by Buyer pursuant to this Article 10 or Article 2 that remain outstanding on the Initial Release Date, shall be released from escrow and paid over to Sellers; (C) if on the Initial Release Date the Post-Closing Indemnity Property consists partly of shares of ACC Class A Common Stock or other Stock Consideration Registrable Securities and partly of cash funds, then the number of shares of ACC Class A Common Stock or other Stock Consideration Registrable Securities equal to one-half the total number of such shares that would have been in the Post-Closing Indemnity Escrow on the Initial Release Date if no payments in the form of such shares had been made to Buyer out of the Post-Closing Indemnity Escrow during such period, less the total number of shares that were paid out to Buyer in respect of claim(s) made by Buyer pursuant to this Article 10 or Article 2, and less the number of shares the fair market value of which equals the aggregate dollar value of all bona fide claims made by Buyer pursuant to this Article 10 or Article 2 that remain outstanding on the Initial Release Date (except to the extent an amount in cash has been reserved for any portion of such outstanding claims), shall be released from escrow and paid over to Sellers (the number of shares to be appropriately adjusted to give effect to any stock split, combination or similar event), and an amount in cash equal to one-half of the total amount of cash funds that would have been in the Post-Closing Indemnity Escrow on the Initial Release Date if no payments in the form of cash had been made to Buyer out of the Post-Closing Indemnity Escrow during such period, less the dollar value of all payments that were previously paid out in the form of cash to Buyer in respect of claim(s) made by Buyer pursuant to this Article 10 or Article 2, and less the aggregate dollar value of all bona fide claims made by Buyer pursuant to this Article 10 or Article 2 that remain outstanding on the Initial Release Date (except to the extent a number of shares has been reserved for any portion of such outstanding claims), shall be released from escrow and paid over to Sellers; and (2) on the first business day following the date that is eighteen months after the Closing Date (the "Second Release Date") all remaining Post-Closing Indemnity Property, less a number of shares of ACC Class A Common Stock or other Stock Consideration Registrable Securities or an amount in cash or a combination thereof as directed by the General Partner the aggregate dollar value of which is equal to the aggregate dollar amount of any bona fide claims made by Buyer that remain outstanding on the Second Release Date, shall be released from escrow and paid over to Sellers. Attached hereto as Exhibit I for illustrative purposes only is an example of how the preceding provisions are intended to work. Thereafter, any remaining Post-Closing Indemnity Property shall be released from escrow and paid over to Sellers or Buyer in accordance with this Agreement and the Post-Closing Escrow Agreement. To the extent any payment is made to Buyer out of the Post-Closing Indemnity Property pursuant to Sections 2.7, 2.8 or 2.9 or this Article 10, and the Post-Closing Indemnity Property consists of both Stock Consideration Registrable Securities and cash, the General Partner shall designate which portion of the payment shall be made in the form of shares (based on its fair market value on the date of payment as computed as provided in Section 10.5(c)) or cash or combination of both. On the business day that it is determined in accordance with this Section 10.5(b) and this Article 10 that Buyer and/or Sellers are entitled to all or any amounts in portion of the Post-Closing Indemnity Property, the General Partner and Buyer will execute and deliver to the Escrow Account are distributed Agent joint written instructions containing appropriate disbursement instructions consistent with this Section 10.5(b) and this Article 10 and the Post-Closing Escrow Agreement. (c) All payments required to Sellers before a timely and valid indemnification claim is be made by PurchaserSellers or any Seller in respect of their indemnification obligations under this Article 10 shall be made solely from the Post-Closing Indemnity Property. For purposes of this Article 10 and the Post-Closing Escrow Agreement, the fair market value of a share of ACC Class A Common Stock or other Stock Consideration Registrable Security on any day shall be computed by reference to the Weighted Average Trading Price of such Escrow Account amounts distributed stock or other security for the ten trading day period beginning on the thirteenth trading day prior to Sellers shall not reduce the maximum aggregate indemnification limitation set forth date of determination. (d) Anything in this Agreement or applicable law to the contrary notwithstanding, other than with respect to the Post-Closing Indemnity Property as provided for and limited in this Article 10 (and other than with respect to the Post-Closing Adjustment Funds as provided for and limited in Section 11.5(b).2.7, the Post-Closing Section

Appears in 1 contract

Samples: Purchase Agreement (Frontiervision Holdings Capital Corp)

Certain Limitations on Indemnification Obligations. (a) Except as otherwise expressly provided in this Section 11, The Parent and the Purchaser Parties and Seller Parties Merger Sub shall not be entitled to receive any indemnification payments under Section 11.1 or 11.2 in connection 8.1 with the respect to any inaccuracy in or breach of any representation or warranty, except those based upon, arising out of or otherwise in respect of Sections 3.1(A), 3.1(B), 3.1(C), 3.1(D), 3.1(M), 3.1(Q) and 3.1(S), (the "BASKET EXCLUSIONS"), until the aggregate amount indemnification payments, exclusive of Losses incurred by the Purchaser Parties or Seller PartiesBasket Exclusions, as the case may be, exceed One Hundred Thousand Dollars (equal $100,000) 350,000 (the "BASKET AMOUNT"), whereupon the Parent and the Merger Sub shall be entitled to receive in full indemnity payments in excess of the Basket Amount”); PROVIDED, and Sellers or the Purchaser HOWEVER, that (as applicablei) shall only be liable solely for purposes of determining whether the amount of all the Sellers' indemnification obligations exceed $350,000 in the aggregate, a breach of the Sellers' representations or warranties (other than the representations and warranties contained in Sections 3.1(F) (absence of certain changes or events) and 3.1(R)(a) (Additional Representations)) shall be determined without regard to any limitation or qualification as to materiality set forth in such representation or warranty and (ii) the representations and warranties in this Agreement respecting compliance with laws and Permits set forth in Sections 3.1(I), 3.1(G), 3.1(K)(i)(d), 3.1(K)(i)(e), 3.1(K)(ii)(d), 3.1(K)(ii)(e) and 3.1(W) shall not be deemed to be inaccurate or breached with respect to matters involving Losses under such Sections, taken as a whole, not exceeding $10,000 individually unless such Losses that exceeds exceed $50,000 in the aggregate. (b) The Parent and the Merger Sub shall be entitled to receive any indemnification payments in respect of the Basket Exclusions without regard to the individual or aggregate amounts thereof and without regard to whether the aggregate of all other indemnification payments shall have exceeded, in the aggregate, the Basket Amount. (bc) Except as otherwise expressly provided in this Section 11, the The maximum aggregate amount of indemnification payments under this (i) under Section 11 in connection 8.1 with the respect to any inaccuracy in or breach of any a representation or warranty to which the Purchaser Parties (excluding those based upon, arising out of or Seller Parties shall be entitled to receiveotherwise in respect of Sections 3.1(A), upon the triggering of any indemnification obligation hereunder3.1(B), 3.1(C), 3.1(D), or 3.1(Q)), (ii) under Section 8.1(c), and (iii) under Section 8.3(c), shall not exceed Seven Million Dollars ($7,000,000). (c) Notwithstanding anything in the aggregate, with respect to claims asserted on or prior to the contrary in this Agreement, any second anniversary of the Closing Date the aggregate amounts owed but until then not due to be paid under the Notes and Section 2.8 and after the second anniversary of the Closing Date shall not exceed $6,000,000. The amount of indemnification payments under Section 8.1 based upon any and all (i) Litigation Claimsupon, (ii) Tax Claims, (iii) ERISA Claims involving fraud, false claims arising out of or criminal misconduct, (iv) Government Contract Claims involving fraud, false claims or criminal misconduct, (v) otherwise in respect of breaches of the representations contained in Sections 3.3 3.1(A), 3.1(B), 3.1(C), 3.1(D) or 3.4 and/or (vi3.1(Q) claims of fraud or willful misconduct shall not be subject to either (i) exceed the Basket Amount set forth in Section 11.5(a) or (ii) the maximum aggregate indemnification limitation set forth in Section 11.5(b)Purchase Price. (d) Any indemnity claims The Parent and Merger Sub agree to first collect any indemnification through set-off on a several basis against any amounts owed but not paid under the Notes or Section 2.8 of Purchaser this Agreement. All indemnification obligations under this Article VIII or any other provision of this Agreement shall first be settled through disbursements from joint and several with respect to the Escrow Account in accordance Parent and the Merger Sub and shall be several, but not joint, with respect to the terms and conditions set forth in Sellers; it being understood that with respect to the Escrow Agreement in the following order, first in cash and then in Purchaser Common Shares. Any Purchaser Common Shares disbursed from the Escrow Account shall have a value determined in accordance with the Indemnification Valuation. For the avoidance of doubtSellers, the Escrow Account is part of and not an addition to the maximum aggregate term "several" means that each Seller's indemnification limitation set forth in Section 11.5(b); provided, however, that if all or any amounts in the Escrow Account are distributed to Sellers before a timely and valid indemnification claim is made by Purchaser, such Escrow Account amounts distributed to Sellers obligation shall not reduce the maximum aggregate indemnification limitation set forth in Section 11.5(b).be

Appears in 1 contract

Samples: Merger Agreement (Interactive Media Corp)

Certain Limitations on Indemnification Obligations. (a) Except as otherwise expressly provided Notwithstanding anything in this Section 11, Agreement to the Purchaser Parties and Seller Parties shall contrary: (i) Holdings will not be entitled required to receive indemnify and will not otherwise be liable to Buyer or Charter for any indemnification payments under matter described in Section 11.1 or 11.2 in connection with the inaccuracy in or breach of any representation or warranty, 10.2 unless and until the aggregate amount of all Losses incurred by of Buyer and Charter in the Purchaser Parties or Seller Partiesaggregate arising therefrom for which Holdings would have indemnification liability to Buyer and Charter but for this Section 10.5(a) (i) exceeds, as and then only to the case may beextent of the excess above, exceed One Seven Hundred Fifty Thousand Dollars ($100,000) (the “Basket Amount”), and Sellers or the Purchaser (as applicable) shall only be liable for the amount of all such Losses that exceeds the Basket Amount. (b) Except as otherwise expressly provided in this Section 11, the maximum aggregate amount of indemnification payments under this Section 11 in connection with the inaccuracy in or breach of any representation or warranty to which the Purchaser Parties or Seller Parties shall be entitled to receive, upon the triggering of any indemnification obligation hereunder, shall not exceed Seven Million Dollars ($7,000,000750,000.00). (cii) Notwithstanding anything Buyer and Charter will not be required to indemnify and will not otherwise be liable to Holdings for a breach of their representations and warranties set forth herein unless and until the aggregate amount of all Losses of Holdings in the aggregate arising therefrom for which Buyer or Charter would have indemnification liability to Holdings but for this Section 10.5(a)(ii) exceeds, and then only to the contrary in this Agreement, any indemnification payments based upon any and all (i) Litigation Claims, (ii) Tax Claims, (iii) ERISA Claims involving fraud, false claims or criminal misconduct, (iv) Government Contract Claims involving fraud, false claims or criminal misconduct, (v) breaches extent of the representations contained in Sections 3.3 or 3.4 and/or excess above, Seven Hundred Fifty Thousand Dollars (vi) claims of fraud or willful misconduct shall not be subject to either (i) the Basket Amount set forth in Section 11.5(a) or (ii) the maximum aggregate indemnification limitation set forth in Section 11.5(b). (d) Any indemnity claims of Purchaser shall first be settled through disbursements from the Escrow Account in accordance with the terms and conditions set forth in the Escrow Agreement in the following order, first in cash and then in Purchaser Common Shares. Any Purchaser Common Shares disbursed from the Escrow Account shall have a value determined in accordance with the Indemnification Valuation. For the avoidance of doubt, the Escrow Account is part of and not an addition to the maximum aggregate indemnification limitation set forth in Section 11.5(b$750,000.00); provided, however, that if all it is understood and agreed that this Section 10.5(a)(ii) shall not apply to any amount payable to Holdings in respect of the nonfulfillment of any covenant to be performed by Buyer or Charter contained in this Agreement or any amounts other document or instrument delivered pursuant hereto by Buyer or Charter. (iii) Buyer and Charter will not be required to indemnify, and will not otherwise be liable to, Holdings for a breach of their representations and warranties for any amount in excess of [Confidential Information Omitted and filed separately with the Securities and Exchange Commission] in the Escrow Account are distributed aggregate; provided, however, that it is understood and agreed this Section 10.5(a)(iii) shall not apply to Sellers before any amount payable to Holdings in respect of the breach of any covenant to be performed by Buyer or Charter contained in this Agreement or any other document or instrument delivered pursuant hereto. (i) Holdings will not be required to indemnify and will not otherwise be liable to Buyer or Charter with respect to any Losses arising under Section 10.2 unless Buyer or Charter (as the case may be) gives Holdings written notice of a timely claim pursuant to Section 10.6(a), (i) in respect of any breach of the representation and valid indemnification warranty contained in Section 4.4, prior to the expiration of the applicable statute of limitations (without any extension or waiver) in respect of such claim, and (ii) in respect of any other claim, on or prior to the date that is nine (9) months after the Closing Date. Notwithstanding the foregoing, all amounts held pursuant to the Indemnity Agreement in excess of amounts previously notified by Buyer or Charter to Holdings as subject to a then outstanding bona fide claim by Buyer or Charter shall be released to Holdings on the first business day following the nine (9) month anniversary of the Closing Date in accordance with the Indemnity Agreement. Thereafter, any amounts remaining under the Indemnity Agreement shall be released from escrow and paid over to Holdings in accordance with the Indemnity Agreement. (ii) Buyer and Charter will not be required to indemnify and will not otherwise be liable to Holdings with respect to any Losses arising under Section 10.3 with respect to any breach of the representations and warranties of Buyer and Charter set forth herein unless Holdings gives Buyer or Charter (as the case may be) written notice of such a claim pursuant to Section 10.6(a) on or prior to the date that is nine (9) months after the Closing Date. (c) All payments required to be made by PurchaserHoldings in respect of its indemnification obligations under this Section 10 shall be made solely from the Indemnity Fund (except in respect of any breach of the representation and warranty contained in Section 4.4) and the sole and exclusive remedy available to Buyer and Charter for any breach by Holdings or Group of its representations, such Escrow Account amounts distributed warranties, covenants, obligations or agreements hereunder or under any of the documents or instruments delivered pursuant hereto by Group or Holdings shall be a claim for indemnification pursuant to Sellers shall not reduce the maximum aggregate indemnification limitation terms of this Section 10. (d) (i) Anything in this Agreement or applicable law to the contrary notwithstanding, other than claims pursuant to Section 10, other than claims against the Indemnity Fund as provided for in this Agreement, and subject to the limitations set forth herein, after the Closing and except in respect of any claim for a breach of the representation and warranty contained in Section 11.5(b4.4, none of Holdings, its Affiliates or any of their respective officers, directors, shareholders, members, partners, employees or agents shall have any obligation or liability to Buyer or Charter under this Section 10 or otherwise, and neither Buyer nor Charter will have any claim or recourse against Holdings, its Affiliates or any of their respective officers, directors, shareholders, members, partners, employees or agents as a result of the breach of any representation, warranty, covenant or agreement of Holdings or Group contained herein or otherwise arising out of or in connection with the transactions contemplated by this Agreement or the Transaction Documents or the business or operations of the Renaissance Companies prior to the Closing (except in respect of any claim for a breach of the representation and warranty contained in Section 4.4) and the provisions of this Section 10 shall be the sole and exclusive remedy for any such claim by Buyer or Charter for any such matters (except in respect of any claim for a breach of the representation and warranty contained in Section 4.4), whether such claims are framed in contract, tort or otherwise.

Appears in 1 contract

Samples: Purchase Agreement (Renaissance Media Capital Corp)

Certain Limitations on Indemnification Obligations. (a) Except as otherwise expressly provided in this Section 1110, the Purchaser Parties and Seller Parties shall not be entitled to receive any indemnification payments under Section 11.1 10.1 or 11.2 10.2 in connection with the inaccuracy in or breach of any representation or warranty, until the aggregate amount of Losses incurred by the Purchaser Parties or Seller Parties, as the case may be, exceed One Hundred Fifty Thousand Dollars ($100,00050,000) (the “Basket Amount”), and Sellers or the Purchaser (as applicable) shall then only be liable for the amount amounts of all such Losses that exceeds in excess of the Basket Amount. (b) Except as otherwise expressly provided in this Section 1110, the maximum aggregate amount of indemnification payments under this Section 11 10.1 or Section 10.2 in connection with the inaccuracy in or breach of any representation or warranty to which the Purchaser Parties or Seller Parties shall be entitled to receive, upon the triggering of any indemnification obligation hereunder, shall not exceed Seven One Million Five Hundred Thousand Dollars ($7,000,0001,500,000). (c) Notwithstanding anything to the contrary in this Agreement, any indemnification payments based upon or any Losses related to any and all (i) Litigation Claims, (ii) Tax Claims, Expense Claims, Equity Holder Claims, IP Claims, Audit Claims or Additional Claims and (iii) ERISA Claims involving fraud, false claims or criminal misconduct, (iv) Government Contract Claims involving fraud, false claims or criminal misconduct, (vii) breaches of the representations contained and warranties set forth in Sections 3.3 10.4(a) and 10.4(b) shall not be subject to either the Basket Amount set forth in Section 10.5(a) or 3.4 and/or (vithe maximum aggregate indemnification limitation set forth in Section 10.5(b), and shall not be used in calculating whether the maximum aggregate indemnification limitation set forth in Section 10.5(b) has been met. Notwithstanding anything to the contrary in this Agreement, any indemnification payments based upon or any Losses related to any and all claims of fraud fraud, bad faith or willful misconduct shall not be subject to either (i) the Basket Amount set forth in Section 11.5(a10.5(a) or (ii) the maximum aggregate indemnification limitation set forth in Section 11.5(b10.5(b) or in this Section 10.5(c). (d) Any indemnity claims of Purchaser , and shall first not be settled through disbursements from the Escrow Account used in accordance with the terms and conditions set forth in the Escrow Agreement in the following order, first in cash and then in Purchaser Common Shares. Any Purchaser Common Shares disbursed from the Escrow Account shall have a value determined in accordance with the Indemnification Valuation. For the avoidance of doubt, the Escrow Account is part of and not an addition to calculating whether the maximum aggregate indemnification limitation set forth in Section 11.5(b); provided, however, that if all 10.5(b) or any amounts in the Escrow Account are distributed to Sellers before a timely and valid indemnification claim is made by Purchaser, such Escrow Account amounts distributed to Sellers shall not reduce the maximum aggregate indemnification limitation set forth in this Section 11.5(b)10.5(c) has been met.

Appears in 1 contract

Samples: Equity Purchase Agreement (ARGON ST, Inc.)

Certain Limitations on Indemnification Obligations. Notwithstanding anything else in this Agreement to the contrary: (a) Except Neither the Buyer Parties nor the Seller Parties, as otherwise expressly provided in this Section 11applicable, the Purchaser Parties and Seller Parties shall not be entitled to receive any indemnification payments under Section as set forth in Sections 11.1 or 11.2 in connection with the inaccuracy in or breach of any representation or warrantyand 11.2, until the aggregate amount of all Losses incurred by such party seeking indemnification exceeds (the Purchaser “Deductible Amount”), after which, such party shall only be entitled to receive indemnification payments for the amount of such indemnifiable Losses in excess of the Deductible Amount. (b) The maximum aggregate amount of indemnification payments payable by each of the Buyer Parties or Seller Parties under Section 11 shall not exceed (the “Cap Amount”). In the event that the Buyer Parties or Seller Parties, as applicable, have incurred any indemnifiable Losses in excess of any applicable Deductible Amount, upon written notice thereof to the case may be, exceed One Hundred Thousand Dollars ($100,000) (the “Basket Amount”), and Sellers or the Purchaser (as applicable) shall only be liable for indemnifying party describing the amount of and basis for such Loss, the parties will attempt in good faith to reach an agreement as to any matters or amounts in dispute. If the authorized parties of each of Buyer and Seller, notwithstanding such good faith effort, fail to resolve all matters in dispute within thirty (30) days after an indemnified party notifies the indemnifying party of the Losses incurred thereby, then either party may be submit the disputed matters to an independent mediator selected by Buyer and Seller if the other party consents to such Losses that exceeds mediation, which mediator will, for a period of not more than sixty (60) days, attempt to assist the Basket Amount. (b) Except as otherwise expressly provided parties to resolve all disputes in connection with such matter. Notwithstanding anything to the contrary contained in this Section 1111.4(b), at any time before, during or after the maximum aggregate amount procedures described above, an indemnified party may bring a claim on account of indemnification payments under a Loss with an appropriate Governmental Authority pursuant to the terms of this Section 11 in connection with the inaccuracy in or breach of any representation or warranty to which the Purchaser Parties or Seller Parties shall be entitled to receive, upon the triggering of any indemnification obligation hereunder, shall not exceed Seven Million Dollars ($7,000,000)Agreement. (c) Notwithstanding anything to the contrary limitations set forth in Sections 11.3 and subsections (a) and (b) of this AgreementSection 11.4, any indemnification payments based upon any and all in the case of Losses resulting from (i) Litigation Claimsany fraudulent misrepresentation contained herein or in any other Transaction Documents, (ii) Tax Claims, (iii) ERISA Claims involving fraud, false claims or criminal misconduct, (iv) Government Contract Claims involving fraud, false claims or criminal misconduct, (v) breaches the time periods for indemnification shall commence running upon the discovery of the representations contained in Sections 3.3 or 3.4 and/or (vi) claims of fraud or willful misconduct such fraudulent misrepresentation and each party’s indemnification obligation shall not be subject to either (i) the Basket Deductible Amount set forth in Section 11.5(a) or limited by the Cap Amount, (ii) the maximum aggregate indemnification limitation set forth described in Section 11.5(b11.1(c). , Seller’s indemnification shall not be subject to the Deductible Amount or limited by the Cap Amount, and the time periods for indemnification shall commence running upon the discovery of such failure to make adequate payment by or (diii) Any indemnity claims breach by Seller of Purchaser shall first be settled through disbursements from the Escrow Account in accordance with the terms and conditions set forth its representation in the Escrow Agreement in the following orderlast sentence of Section 3.19(g) hereof, first in cash and then in Purchaser Common Shares. Any Purchaser Common Shares disbursed from the Escrow Account Seller’s indemnification shall have a value determined in accordance with the Indemnification Valuation. For the avoidance of doubt, the Escrow Account is part of and not an addition be subject to the maximum aggregate indemnification limitation set forth in Section 11.5(b); provided, however, that if all Deductible Amount or any amounts in limited by the Escrow Account are distributed to Sellers before a timely and valid indemnification claim is made by Purchaser, such Escrow Account amounts distributed to Sellers shall not reduce the maximum aggregate indemnification limitation set forth in Section 11.5(b)Cap Amount.

Appears in 1 contract

Samples: Stock Purchase Agreement (Identix Inc)

Certain Limitations on Indemnification Obligations. (a) Except as otherwise expressly provided in this Section 1110, the Purchaser Parties and Seller Parties shall not be entitled to receive any indemnification payments under Section 11.1 or 11.2 10.1 in connection with the inaccuracy in or breach of any representation or warranty, until the aggregate amount of Losses incurred by the Purchaser Parties or Seller Parties, as the case may be, exceed exceeds One Hundred Fifty Thousand and 00/100 Dollars ($100,000150,000.00) (the “Basket Deductible Amount”), and Sellers or the Purchaser (as applicable) thereafter Seller shall only be liable for all Losses (including the amount of all such Losses that exceeds the Basket Deductible Amount). (b) Except as otherwise expressly provided in this Section 1110, the maximum aggregate amount of indemnification payments under this Section 11 in connection with the inaccuracy in or breach of any representation or warranty to 10, which the Purchaser Parties or Seller Parties shall be entitled to receive, upon the triggering in connection with Losses associated with inaccuracies in or breaches of any indemnification obligation hereunder, representations or warranties shall not exceed Seven One Million One Hundred Thousand and 00/100 Dollars ($7,000,0001,100,000.00) or, in the event that the Contingent Purchase Price is payable, Three Million Four Hundred Thousand and 00/100 Dollars ($3,400,000.00). (c) Notwithstanding anything to the contrary in this Agreement, any indemnification payments payment based upon upon, or any Loss related to, any and all (i) Litigation Claimsclaims of fraud, (ii) Tax Claims, Expense Claims, Equity Holder Claims, Benefits Claims, Seller Shareholder Claims or Xxxxxxxx Lease Guaranty Claims or (iii) ERISA Claims involving fraud, false claims inaccuracies in or criminal misconduct, (iv) Government Contract Claims involving fraud, false claims or criminal misconduct, (v) breaches of any representation or warranty set forth in Section 10.4(a) or 10.4(b) (each an “Excluded Matter” and together the representations contained in Sections 3.3 or 3.4 and/or (vi“Excluded Matters”) claims of fraud or willful misconduct shall not be subject to either (i) the Basket Deductible Amount set forth in Section 11.5(a10.5(a) or (ii) the maximum aggregate indemnification limitation set forth in Section 11.5(b). (d10.5(b) Any indemnity claims of Purchaser and shall first not be settled through disbursements from the Escrow Account used in accordance with the terms and conditions set forth in the Escrow Agreement in the following order, first in cash and then in Purchaser Common Shares. Any Purchaser Common Shares disbursed from the Escrow Account shall have a value determined in accordance with the Indemnification Valuation. For the avoidance of doubt, the Escrow Account is part of and not an addition to calculating whether the maximum aggregate indemnification limitation set forth in Section 11.5(b10.5(b) has been met; provided that the maximum aggregate amount of indemnification payments under this Section 10, which the Purchaser Parties shall be entitled to receive, in connection with any Tax Claim, Expense Claim, Equity Holder Claim, Benefits Claim or inaccuracy in or breach of any representation or warranty set forth in Section 10.4(a) or 10.4(b) shall not exceed the Purchase Price. (d) Except as set forth in Section 2.4 and subject to Sections 10.5(a) and 10.5(b), any indemnity claim of the Purchaser Parties hereunder that is finally determined to be due and owing by Seller shall first be satisfied through disbursements from the Escrow Account and, to the extent that the Escrow Account does not contain sufficient funds, all or any portion of the Contingent Purchase Price, if any is payable, may be used by the Purchaser Parties to satisfy such claim. Notwithstanding anything herein to the contrary, any dispute arising out of or related to the Contingent Purchase Price shall be addressed as set forth in Exhibit A. (e) The Purchaser Parties hereto agree that the indemnification provisions of this Section 10 are intended to provide the exclusive remedy as to all Losses they may incur arising from or related to the transactions contemplated hereby that are intended to be indemnified hereunder, and each Purchaser Party hereby waives, to the extent it may do so, any other rights or remedies that may arise under applicable statute, rule or regulation; provided, however, that if all the foregoing shall not be interpreted to limit the equitable remedies, including specific performance, which may be sought in connection with the breach of any covenant or agreement contained in this Agreement. (f) Notwithstanding anything herein to the contrary, no party shall be entitled to indemnification or reimbursement under any provision of this Agreement for any amount to the extent such party or its Affiliate has been indemnified or reimbursed for such amount under any other provision of this Agreement the Exhibits or Schedules attached hereto, or any amounts document executed in the Escrow Account are distributed to Sellers before a timely and valid indemnification claim is made by Purchaser, such Escrow Account amounts distributed to Sellers shall not reduce the maximum aggregate indemnification limitation set forth in Section 11.5(b)connection with this Agreement or otherwise.

Appears in 1 contract

Samples: Stock Purchase Agreement (Technest Holdings Inc)

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