Common use of COBRA Obligations Clause in Contracts

COBRA Obligations. Within fifteen (15) business days after Closing, Seller shall take the necessary steps to assign to Buyer all insurance policies and agreements relating to Seller's group health and dental plans. If the above contracts are assigned to Buyer within such fifteen business day period, Buyer shall be solely responsible for providing any required notices under federal or state COBRA to all Seller employees (and their eligible dependents) whose employment with Seller has been terminated in connection with the contemplated transaction and who do not become Designated Employees. All eligible Seller employees (and their eligible dependents) who have terminated employment prior to Closing shall be eligible for COBRA coverage under Seller's existing medical insurance plan and , to the extent required by law, dental insurance plan; provided, however, that if Buyer assumes Seller's medical and dental plans, then Buyer will provide COBRA coverage to Seller employees (and their eligible dependents) as required by COBRA. Seller shall be responsible for satisfying obligations under Section 601 et seq. of ERISA and Section 4980B of the Code, to provide continuation coverage to or with respect to all employees and former employees of Seller in accordance with Law with respect to any "QUALIFYING EVENT" occurring before the Closing. Seller agrees to pay and be liable to Buyer for and shall assume, indemnify, defend and hold harmless Buyer from and against any and all losses, damages, liabilities, Taxes, sanctions, interest and penalties, costs and expenses (including, without limitation, disbursements and reasonable legal fees incurred in connection therewith, and any amounts or expenses required to be paid or incurred in connection with any action, suit, proceeding, claim, appeal, demand, assessment or judgement) imposed upon, incurred by, or assessed against Buyer arising by reason of or relating to any failure by Seller to comply with the continuation health care coverage requirements of Section 4980B of the Code and Sections 601 through 608 of ERISA, which failure occurred with respect to any current or prior employee of Seller or any qualified beneficiary of such employee before the Closing. Seller shall provide Buyer with copies of creditable coverage certificates provided to each Designated Employee on or prior to Closing in compliance with the Health Insurance Portability and Accountability Act of 1996, as amended.

COBRA Obligations. Within fifteen (15) business days after Closing, Seller shall take the necessary steps to assign to Buyer all insurance policies and agreements relating to Seller's group health and dental plans. If the above contracts are assigned to Buyer within such fifteen business day period, U.S. Buyer shall be solely responsible for providing any required notices under federal or state COBRA to all Seller U.S. Seller’s employees (and their eligible dependents) whose employment with U.S. Seller has been terminated as of the U.S. Closing Date in connection with the contemplated transaction and who do not become U.S. Designated Employees. All eligible employees of U.S. Seller employees (and their eligible dependents) who have terminated employment prior to the U.S. Closing shall be eligible for COBRA coverage under U.S. Seller's ’s existing medical insurance plan and , to the extent required by lawLaw, dental insurance plan; provided, however, that if plan as assumed by U.S. Buyer assumes Seller's medical and dental plans, then Buyer will provide COBRA coverage to Seller employees (and their eligible dependentsunder Section 7.3(a) as required by COBRAabove. U.S. Seller shall be responsible for satisfying obligations under Section 601 et seq. of ERISA and Section 4980B of the Code, to provide continuation coverage to or with respect to all employees and former employees of U.S. Seller in accordance with Law with respect to any "QUALIFYING EVENT" “qualifying event” occurring before the U.S. Closing. U.S. Seller agrees to pay and be liable to U.S. Buyer for and shall assume, indemnify, defend and hold harmless U.S. Buyer from and against any and all losses, damages, liabilities, Taxes, sanctions, interest and penalties, costs and expenses (including, without limitation, including disbursements and reasonable legal fees incurred in connection therewith, and any amounts or expenses required to be paid or incurred in connection with any action, suit, proceeding, claim, appeal, demand, assessment or judgementjudgment) imposed upon, incurred by, or assessed against U.S. Buyer arising by reason of or relating to any failure by U.S. Seller to comply with the continuation health care coverage requirements of Section 4980B of the Code and Sections 601 through 608 of ERISA, which failure occurred with respect to any current or prior employee of U.S. Seller or any qualified beneficiary of such employee before the U.S. Closing. In addition, if the aggregate cost of providing COBRA coverage to U.S. Seller’s qualified beneficiaries exceeds the amount of payment received by U.S. Buyer from U.S. Seller’s qualified beneficiaries pursuant to Code Regulation Section 54.4980B-8, then U.S. Seller shall provide agrees to indemnify U.S. Buyer with copies for the excess cost of creditable coverage certificates provided providing COBRA to each Designated Employee on or prior to Closing in compliance with the Health Insurance Portability and Accountability Act of 1996, as amendedsuch qualified beneficiaries.

COBRA Obligations. Within fifteen (15a) Buyer and Seller shall cooperate with each other to develop a communication plan to Employees, with the goal of minimizing the number of Employees who do not accept Buyer’s offer of employment. Buyer acknowledges that it will be considered a successor employer under the federal Law commonly known as COBRA to those qualified beneficiaries (including covered employees) formerly covered under Seller’s group health plan whose rights to obtain COBRA coverage arose on or prior to the Closing Date, but only if Seller and its ERISA Affiliates terminate all group health plan coverage on or after the Closing Date and before the COBRA continuation period expires with respect to such qualified beneficiaries. Buyer’s obligation to provide such coverage shall arise at the termination of the last group health plan offered by Seller and its ERISA Affiliates. (b) On the Closing Date, Seller will provide Buyer with Schedule 11.9 setting forth a list of (i) each individual who is receiving or entitled to receive COBRA coverage from Seller as of the date thereof (or potentially entitled to receive COBRA coverage from Seller at a later time in the case of individuals in their COBRA election period) (or is an eligible beneficiary of any of the foregoing) (the “COBRA Beneficiaries”), (ii) the effective date of such coverage for each such individual, (iii) the amount of the monthly COBRA cost with respect to such individual and (iv) the expected duration of such coverage. (c) To the extent Seller ceases to provide any COBRA Beneficiary with COBRA coverage and such liabilities transfer to Buyer in advance of the one year anniversary of the Closing Date, Buyer shall be deemed to have an automatic claim against the Escrow Deposit Fund for payment of any Losses incurred by Buyer arising directly or indirectly from any claim made by a COBRA Beneficiary pursuant to the coverage such COBRA Beneficiary is receiving from Seller or its Affiliates under COBRA for health care claims incurred by such COBRA Beneficiaries during the period from the Closing Date to the first (1st) anniversary of the Closing Date. (d) To the extent any COBRA Beneficiary continues to receive COBRA coverage from the Seller or any Seller Affiliate as of the first (1st) anniversary of the Closing Date, then as of such date, Buyer shall be deemed to have an automatic claim against the Escrow Deposit Fund (the “COBRA Fund”) for an amount in cash equal to the lesser of (i) the product of the number of COBRA Beneficiaries on such date, multiplied by $75,000 or (ii) the balance of the Escrow Deposit Fund. The COBRA Fund shall be used by Buyer as a source for payment of any Losses incurred by Buyer arising directly or indirectly from any claim made by a COBRA Beneficiary pursuant to the coverage such COBRA Beneficiary is receiving from Seller or its Affiliates under COBRA for health care claims incurred by such COBRA Beneficiaries during the period from the first (1st) anniversary of the Closing Date through the second (2nd) anniversary of the Closing Date (such Losses, “COBRA Claims”). No later than ten (10) business days after Closing, Seller shall take the necessary steps to assign to Buyer all insurance policies and agreements relating to Seller's group health and dental plans. If second (2nd) anniversary of the above contracts are assigned to Buyer within such fifteen business day periodClosing Date, Buyer shall be solely responsible for providing any required notices under federal or state COBRA pay to all Seller employees the Shareholder Representative by wire transfer of immediately available funds to the account of the Shareholder Representative notified to Buyer in writing no later than two (and their eligible dependents2) whose employment with Seller has been terminated in connection with the contemplated transaction and who do not become Designated Employees. All eligible Seller employees (and their eligible dependents) who have terminated employment business days prior to Closing shall be eligible for COBRA coverage under Seller's existing medical insurance plan and such tenth (10th) business day an amount, if positive, in cash equal to the extent required COBRA Fund less the aggregate amount of all Losses incurred by lawBuyer arising directly or indirectly from such COBRA Claims, dental reduced by any stop-loss insurance plan; provided, however, that if coverage payments and employee insurance premiums actually received by Buyer assumes Seller's medical and dental plans, then Buyer will provide COBRA coverage to Seller employees (and their eligible dependents) as required by COBRA. Seller shall be responsible for satisfying obligations under Section 601 et seq. of ERISA and Section 4980B of the Code, to provide continuation coverage to or with respect to all employees such claims. Any amounts paid to the Shareholder Representative under this Section 11.9 shall be treated as adjustments to the Purchase Price for Tax purposes and former employees such agreed treatment shall govern for purposes of Seller in accordance with Law with respect to any "QUALIFYING EVENT" occurring before the Closing. Seller agrees to pay and be liable to Buyer for and shall assume, indemnify, defend and hold harmless Buyer from and against any and all losses, damages, liabilities, Taxes, sanctions, interest and penalties, costs and expenses (including, without limitation, disbursements and reasonable legal fees incurred in connection therewith, and any amounts or expenses required to be paid or incurred in connection with any action, suit, proceeding, claim, appeal, demand, assessment or judgement) imposed upon, incurred by, or assessed against Buyer arising by reason of or relating to any failure by Seller to comply with the continuation health care coverage requirements of Section 4980B of the Code and Sections 601 through 608 of ERISA, which failure occurred with respect to any current or prior employee of Seller or any qualified beneficiary of such employee before the Closing. Seller shall provide Buyer with copies of creditable coverage certificates provided to each Designated Employee on or prior to Closing in compliance with the Health Insurance Portability and Accountability Act of 1996, as amendedthis Agreement.