Indemnification by Parent and Seller. From and after the Closing, Parent and Seller (the “Seller Indemnifying Parties”) shall jointly and severally indemnify and hold Purchaser and its respective Affiliates (including the Companies after the Closing) and their respective directors, officers, employees, shareholders, members, partners, agents, successors and assigns (collectively “Purchaser Claimants” and individually a “Purchaser Claimant”) harmless against any Damages, whether or not involving a third party claim, that Purchaser Claimants incurred directly or indirectly by reason of or attributable to: (a) the inaccuracy or breach of any representation or warranty of Seller or Parent contained in Article III of this Agreement to the extent not caused by Purchaser; (b) any failure by Seller or Parent to perform or comply with any covenant or obligation of Seller or Parent, as applicable, contained in this Agreement to the extent not caused by Purchaser, including but not limited to, any failure to satisfy the terms of the Assignment and Assumption Agreement; (c) any Pre-Closing Tax; (d) any brokerage or finder's fees or commissions or similar payments based upon any agreement or understanding alleged to have been made by any Person with a Company, Seller or Parent or any Related Person (or any Person acting on their behalf) in connection with the transactions contemplated hereby; (e) the retained liabilities set forth on Annex D; (f) the Restructuring; (g) any Indebtedness of any other Person, the payment of which any Company is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, either severally or jointly with any other Person, whether contingent or otherwise; and/or (h) Environmental Liabilities to the extent (i) related to or arising from operations at (including without limitation off-site disposal from), or conditions at, on, under or proximate to any properties, landfills, or facilities retained by the Seller Indemnifying Parties after Closing (including but not limited to the properties, landfills or facilities to be transferred out of the Companies pursuant to the Restructuring, whether or not transferred prior to Closing), or which are not otherwise conveyed to Purchaser pursuant to this Agreement, including but not limited to facilities formerly owned by U.S. Pipe (the “Non-Transferred Properties”); or (ii) any remedial, response, abatement, cleanup, investigative, and monitoring work required by a Governmental Entity (collectively, “Remedial Work”) resulting from a Release of Hazardous Materials from any Non-Transferred Properties, including without limitation a Release of Hazardous Materials which is discovered after Closing but which began before Closing. Notwithstanding the preceding, the Seller Indemnifying Parties shall not be liable under this Agreement to the extent (but only to the extent) of that portion of the costs and liabilities of any Environmental Liability or Remedial Work attributable to (y) an affirmative act of any Purchaser Claimant which causes the material aggravation of a then-existing Release of Hazardous Materials or (z) the introduction and initial Release of Hazardous Material by a Person other than either Company or any Seller Indemnifying Party or any Affiliate of any such party, from any Non-Transferred Property(ies) never owned, operated or leased by either Company or any Seller Indemnifying Party or any Affiliate of any such party. (i) The Seller Indemnifying Parties shall not be required to indemnify a Purchaser Claimant under clause (a) of this Section 8.2 unless (i) the Damages for an individual claim (or series of related claims so substantially related as to effectively constitute one claim) exceeds $50,000 and (ii) the aggregate cumulative sum of all Damages for which indemnity would otherwise be due under clause (a) of this Section 8.2 exceeds $1,000,000 (“Seller Basket”) in which case the Seller Indemnifying Parties shall be responsible for the full amount of such Damages, including the Seller Basket. In addition and subject to Section 8.2(j) below, the maximum aggregate liability of the Seller Indemnifying Parties for which indemnification under clause (a) of this Section 8.2 shall equal $10,000,000 (the “Seller Cap”). The limitations set forth in the immediately two preceding sentences shall not apply to claims arising from an inaccuracy or breach of any representations or warranties contained in Sections 3.1, 3.2, 3.3, 3.12 and 3.16 or claims based on fraud. The aggregate liability of the Seller Indemnifying Parties under Section 8.2(a) shall not exceed the Purchase Price. (j) In addition to and without limiting the obligations of the Seller Indemnifying Parties contained in this Section 8.2 and without any application against the Seller Cap, the Purchaser Claimants shall be permitted to claim pursuant to Section 8.2(a), and the Seller Indemnifying Parties shall indemnify and hold harmless Purchaser Claimants against, any Damages, whether or not involving a third party claim, that Purchaser Claimants incurred directly or indirectly by reason of or attributable to the inaccuracy or breach of any representations or warranties contained in Section 3.11 hereof, up to a maximum additional aggregate liability of $5,000,000 (the “Additional Environmental Cap”). At the time Purchaser makes a claim, Purchaser shall notify (which election shall not be reversible) the Seller Indemnifying Parties in writing as to whether its claim for Damages pursuant to Section 8.2(a) will be applied against the Seller Cap or against the Additional Environmental Cap, or both (in which case identifying the amount applied against each). In the event claims for Damages are made against the Additional Environmental Cap, Purchaser and the Seller Indemnifying Parties shall each be responsible for 50% of the first $1,000,000 of any Damages claimed against the Additional Environmental Cap. For clarity, (i) the Seller Indemnifying Parties maximum liability under the Additional Environmental Cap, after considering the foregoing sharing of Damages up to $1,000,000, shall be $4,500,000, (ii) Purchase Claimants may choose, at their discretion, to make a claim for Damages either against the Seller Cap, the Additional Environmental Cap, or both, (iii) any claims made against the Additional Environmental Cap shall in no way apply against, reduce or limit in any way the Seller Cap and any claims made against the Seller Cap shall in no way apply against, reduce or limit in any way the Additional Environmental Cap and (iv) the limitation contained in Section 8.2(i)(a)(i) shall not apply to claims made against the Additional Environmental Cap.
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Indemnification by Parent and Seller. From and after the Closing, Parent and Seller (the “Seller Indemnifying Parties”) shall agree to jointly and severally indemnify and hold Purchaser and harmless the Buyer, its respective Affiliates (including the Companies after the Closing) and their respective parent, subsidiaries, other Affiliates, directors, officers, employees, shareholders, members, partners, agents, successors employees and assigns agents (collectively “Purchaser Claimants” the "Buyer Indemnitees") from and individually a “Purchaser Claimant”) harmless against any Damagesand all Losses incurred by such Buyer Indemnitees in connection with or arising from:
(a) Any breach by Seller or Parent of any of their covenants in this Agreement or in any agreement ancillary hereto, whether or not involving any failure of Seller or Parent to perform any of its obligations in this Agreement or in any ancillary agreement hereto;
(b) Any breach of any warranty or the inaccuracy of any representation of Seller or Parent contained or referred to in this Agreement or any certificate delivered by or on behalf of Parent or Seller pursuant hereto (disregarding for purposes of this Section 9.1(b) any "material," "in all material respects," or similar qualification contained in any such representation or warranty or with respect thereto for purposes of calculating the amount of Losses);
(c) The failure to comply (either by Seller or Buyer) with any applicable bulk sales law;
(d) The failure of a third party claimSeller to perform, satisfy or pay any Excluded Liability; and
(e) Defending any Third Party Claim alleging the occurrence of facts or circumstances or raising claims that, if assumed to be true, would entitle a Buyer Indemnitee to indemnification hereunder. The indemnification provided for in this Section 9.1 shall terminate [thirty-six (36)] months after the Closing Date (and no claims shall be made by the Buyer Indemnitees under this Section 9.1 thereafter), except that Purchaser Claimants incurred directly or indirectly the indemnification by reason of or attributable the Seller Group shall continue thereafter as to:
(a) the inaccuracy or breach of any representation or warranty representations, warranties and covenants relating to title and the failure of Seller to perform, satisfy or Parent contained in Article III pay any Excluded Liabilities, as to all of this Agreement which no time limitation shall apply; and relating to Taxes as to which the extent not caused by Purchaser;applicable statute of limitations shall apply; and
(b) any failure by Seller or Parent to perform or comply with any covenant or obligation of Seller or Parent, as applicable, contained in this Agreement to the extent not caused by Purchaser, including but not limited to, any failure to satisfy the terms of the Assignment and Assumption Agreement;
(c) any Pre-Closing Tax;
(d) any brokerage or finder's fees or commissions or similar payments based upon any agreement or understanding alleged to have been made by any Person with a Company, Seller or Parent or any Related Person (or any Person acting on their behalf) in connection with the transactions contemplated hereby;
(e) the retained liabilities set forth on Annex D;
(f) the Restructuring;
(g) any Indebtedness of any other Person, the payment Loss of which any Company is responsible Buyer Indemnitee has notified Parent or liable, directly Seller in accordance with the requirements of Section 9.3 on or indirectlyprior to the date such indemnification would otherwise terminate in accordance with this Section 9.1, as obligor, guarantor, surety or otherwise, either severally or jointly with any other Person, whether contingent or otherwise; and/or
(h) Environmental Liabilities to which the extent (i) related to or arising from operations at (including without limitation off-site disposal from), or conditions at, on, under or proximate to any properties, landfills, or facilities retained by obligation of the Seller Indemnifying Parties after Closing (including but not limited to Group shall continue until the properties, landfills or facilities to be transferred out liability of the Companies pursuant to the Restructuring, whether or not transferred prior to Closing), or which are not otherwise conveyed to Purchaser Seller Group shall have been determined pursuant to this Agreement, including but not limited to facilities formerly owned by U.S. Pipe (the “Non-Transferred Properties”); or (ii) any remedial, response, abatement, cleanup, investigativeArticle IX, and monitoring work required by a Governmental Entity (collectively, “Remedial Work”) resulting from a Release of Hazardous Materials from any Non-Transferred Properties, including without limitation a Release of Hazardous Materials which is discovered after Closing but which began before Closing. Notwithstanding the preceding, the Seller Indemnifying Parties Group shall not be liable under this Agreement to the extent (but only to the extent) of that portion of the costs and liabilities of any Environmental Liability or Remedial Work attributable to (y) an affirmative act of any Purchaser Claimant which causes the material aggravation of a then-existing Release of Hazardous Materials or (z) the introduction and initial Release of Hazardous Material by a Person other than either Company or any Seller Indemnifying Party or any Affiliate of any such party, from any Non-Transferred Property(ies) never owned, operated or leased by either Company or any Seller Indemnifying Party or any Affiliate of any such party.
(i) The Seller Indemnifying Parties shall not be required to indemnify a Purchaser Claimant under clause (a) of this Section 8.2 unless (i) the Damages for an individual claim (or series of related claims so substantially related as to effectively constitute one claim) exceeds $50,000 and (ii) the aggregate cumulative sum of have reimbursed all Damages for which indemnity would otherwise be due under clause (a) of this Section 8.2 exceeds $1,000,000 (“Seller Basket”) in which case the Seller Indemnifying Parties shall be responsible Buyer Indemnitees for the full amount of such Damages, including the Seller Basket. In addition and subject to Section 8.2(j) below, the maximum aggregate liability of the Seller Indemnifying Parties for which indemnification under clause (a) of Loss in accordance with this Section 8.2 shall equal $10,000,000 (the “Seller Cap”). The limitations set forth in the immediately two preceding sentences shall not apply to claims arising from an inaccuracy or breach of any representations or warranties contained in Sections 3.1, 3.2, 3.3, 3.12 and 3.16 or claims based on fraud. The aggregate liability of the Seller Indemnifying Parties under Section 8.2(a) shall not exceed the Purchase PriceArticle IX.
(j) In addition to and without limiting the obligations of the Seller Indemnifying Parties contained in this Section 8.2 and without any application against the Seller Cap, the Purchaser Claimants shall be permitted to claim pursuant to Section 8.2(a), and the Seller Indemnifying Parties shall indemnify and hold harmless Purchaser Claimants against, any Damages, whether or not involving a third party claim, that Purchaser Claimants incurred directly or indirectly by reason of or attributable to the inaccuracy or breach of any representations or warranties contained in Section 3.11 hereof, up to a maximum additional aggregate liability of $5,000,000 (the “Additional Environmental Cap”). At the time Purchaser makes a claim, Purchaser shall notify (which election shall not be reversible) the Seller Indemnifying Parties in writing as to whether its claim for Damages pursuant to Section 8.2(a) will be applied against the Seller Cap or against the Additional Environmental Cap, or both (in which case identifying the amount applied against each). In the event claims for Damages are made against the Additional Environmental Cap, Purchaser and the Seller Indemnifying Parties shall each be responsible for 50% of the first $1,000,000 of any Damages claimed against the Additional Environmental Cap. For clarity, (i) the Seller Indemnifying Parties maximum liability under the Additional Environmental Cap, after considering the foregoing sharing of Damages up to $1,000,000, shall be $4,500,000, (ii) Purchase Claimants may choose, at their discretion, to make a claim for Damages either against the Seller Cap, the Additional Environmental Cap, or both, (iii) any claims made against the Additional Environmental Cap shall in no way apply against, reduce or limit in any way the Seller Cap and any claims made against the Seller Cap shall in no way apply against, reduce or limit in any way the Additional Environmental Cap and (iv) the limitation contained in Section 8.2(i)(a)(i) shall not apply to claims made against the Additional Environmental Cap.
Appears in 1 contract
Indemnification by Parent and Seller. From (a) Seller and after the ClosingParent agree that they will each, Parent and Seller (the “Seller Indemnifying Parties”) shall jointly and severally indemnify severally, indemnify, defend (as to third party claims only), protect and hold Purchaser and harmless Buyer, its respective Affiliates (including the Companies after the Closing) and their respective directors, officers, employees, shareholders, membersdirectors, partnersdivisions, subdivisions, affiliates, subsidiaries, parent, agents, employees, successors and assigns (collectively “Purchaser Claimants” at all times from and individually a “Purchaser Claimant”) harmless against any Damages, whether or not involving a third party claim, that Purchaser Claimants incurred directly or indirectly by reason of or attributable to:
(a) after the inaccuracy or breach of any representation or warranty of Seller or Parent contained in Article III date of this Agreement to from and against all liabilities, claims, damages, actions, suits, proceedings, demands, assessments, adjustments, penalties, losses, costs and expenses whatsoever (including court costs, reasonable attorneys' and expert witness fees and expenses and expenses of investigation) whether equitable or legal, matured or contingent, known or unknown, foreseen or unforeseen, ordinary or extraordinary, patent or latent, whether arising out of occurrences prior to, at or after the extent not caused by Purchaser;
date of this Agreement, incurred as a result of or incident to: (bi) any failure breach of, misrepresentation in, untruth in or inaccuracy in the representations and warranties by Seller or Parent to perform set forth herein, or comply with any covenant in the Schedules, Exhibits or obligation of certificates attached hereto or delivered pursuant hereto by Seller or Parent; (ii) nonfulfillment or nonperformance of any agreement, as applicable, contained covenant or condition on the part of Parent or Seller made in this Agreement Agreement; (iii) any liability, claim or other cost or obligation arising out of the Old Landfills, including without limitation, liabilities, claims and other costs or obligations arising out of system failures (such as the liner, cap, sideslopes), leachate from the Old Landfills, "hot" wells, methane gas, environmental impact arising out of the Old Landfixxx, and those items set forth in Section 10.4; (iv) any liability, claim or other cost or obligation arising out of any wells installed at the Landfill (whether or not located in the Old Lanxxxxxs) categorized as "hot" including, without limitation, resulting impact to the extent not caused by PurchaserCompany's permits and assessment and remediation costs; (v) any liability, including but not limited toclaim or other cost or obligation arising from or relating to Parent's, any failure to satisfy Sellers or the terms Company's ownership or operation of the Assignment and Assumption Agreement;
Business on or prior to the Closing Date; or (cvi) any Pre-Closing Tax;
(d) any brokerage or finder's fees or commissions or similar payments based upon any agreement or understanding alleged to have been made claim by any Person with a Companythird party that, Seller or Parent or any Related Person (or any Person acting on their behalf) in connection with the transactions contemplated hereby;
(e) the retained liabilities if true, would mean that a condition for indemnification set forth on Annex D;
(f) the Restructuring;
(g) any Indebtedness of any other Person, the payment of which any Company is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, either severally or jointly with any other Person, whether contingent or otherwise; and/or
(h) Environmental Liabilities to the extent in subsections (i) related to or arising from operations at through (including without limitation off-site disposal from), or conditions at, on, under or proximate to any properties, landfills, or facilities retained by the Seller Indemnifying Parties after Closing (including but not limited to the properties, landfills or facilities to be transferred out of the Companies pursuant to the Restructuring, whether or not transferred prior to Closing), or which are not otherwise conveyed to Purchaser pursuant to this Agreement, including but not limited to facilities formerly owned by U.S. Pipe (the “Non-Transferred Properties”); or (ii) any remedial, response, abatement, cleanup, investigative, and monitoring work required by a Governmental Entity (collectively, “Remedial Work”) resulting from a Release of Hazardous Materials from any Non-Transferred Properties, including without limitation a Release of Hazardous Materials which is discovered after Closing but which began before Closing. Notwithstanding the preceding, the Seller Indemnifying Parties shall not be liable under this Agreement to the extent (but only to the extent) of that portion of the costs and liabilities of any Environmental Liability or Remedial Work attributable to (y) an affirmative act of any Purchaser Claimant which causes the material aggravation of a then-existing Release of Hazardous Materials or (z) the introduction and initial Release of Hazardous Material by a Person other than either Company or any Seller Indemnifying Party or any Affiliate of any such party, from any Non-Transferred Property(ies) never owned, operated or leased by either Company or any Seller Indemnifying Party or any Affiliate of any such party.
(i) The Seller Indemnifying Parties shall not be required to indemnify a Purchaser Claimant under clause (avi) of this Section 8.2 unless (i11.2(a) the Damages for an individual claim (or series of related claims so substantially related as to effectively constitute one claim) exceeds $50,000 and (ii) the aggregate cumulative sum of all Damages for which indemnity would otherwise be due under clause (a) of this Section 8.2 exceeds $1,000,000 (“Seller Basket”) in which case the Seller Indemnifying Parties shall be responsible for the full amount of such Damages, including the Seller Basket. In addition and subject to Section 8.2(j) below, the maximum aggregate liability of the Seller Indemnifying Parties for which indemnification under clause (a) of this Section 8.2 shall equal $10,000,000 (the “Seller Cap”). The limitations set forth in the immediately two preceding sentences shall not apply to claims arising from an inaccuracy or breach of any representations or warranties contained in Sections 3.1, 3.2, 3.3, 3.12 and 3.16 or claims based on fraud. The aggregate liability of the Seller Indemnifying Parties under Section 8.2(a) shall not exceed the Purchase Pricehad been satisfied.
(j) In addition to and without limiting the obligations of the Seller Indemnifying Parties contained in this Section 8.2 and without any application against the Seller Cap, the Purchaser Claimants shall be permitted to claim pursuant to Section 8.2(a), and the Seller Indemnifying Parties shall indemnify and hold harmless Purchaser Claimants against, any Damages, whether or not involving a third party claim, that Purchaser Claimants incurred directly or indirectly by reason of or attributable to the inaccuracy or breach of any representations or warranties contained in Section 3.11 hereof, up to a maximum additional aggregate liability of $5,000,000 (the “Additional Environmental Cap”). At the time Purchaser makes a claim, Purchaser shall notify (which election shall not be reversible) the Seller Indemnifying Parties in writing as to whether its claim for Damages pursuant to Section 8.2(a) will be applied against the Seller Cap or against the Additional Environmental Cap, or both (in which case identifying the amount applied against each). In the event claims for Damages are made against the Additional Environmental Cap, Purchaser and the Seller Indemnifying Parties shall each be responsible for 50% of the first $1,000,000 of any Damages claimed against the Additional Environmental Cap. For clarity, (i) the Seller Indemnifying Parties maximum liability under the Additional Environmental Cap, after considering the foregoing sharing of Damages up to $1,000,000, shall be $4,500,000, (ii) Purchase Claimants may choose, at their discretion, to make a claim for Damages either against the Seller Cap, the Additional Environmental Cap, or both, (iii) any claims made against the Additional Environmental Cap shall in no way apply against, reduce or limit in any way the Seller Cap and any claims made against the Seller Cap shall in no way apply against, reduce or limit in any way the Additional Environmental Cap and (iv) the limitation contained in Section 8.2(i)(a)(i) shall not apply to claims made against the Additional Environmental Cap.
Appears in 1 contract
Indemnification by Parent and Seller. (i) From and after the Closing, subject to the other provisions of this Article 9, Parent and Seller (the “Seller Indemnifying Parties”) shall jointly and severally agree to indemnify and hold Purchaser and its respective Buyer, Buyer’s Affiliates (including the Companies after the ClosingAcquired Companies) and each of their respective directorsRepresentatives (collectively, officers, employees, shareholders, members, partners, agents, successors and assigns (collectively the “Purchaser Claimants” and individually a “Purchaser ClaimantIndemnified Buyer Entities”) and to hold each of them harmless against from and against, any Damagesand all Indemnifiable Losses suffered, whether paid or not involving a third party claim, that Purchaser Claimants incurred directly by such Indemnified Buyer Entity resulting from or indirectly by reason of or attributable to:
relating to (ai) the inaccuracy or any breach of any representation or warranty of Seller or Parent contained the representations and warranties made to Buyer in Article III of this Agreement to the extent not any Transaction Document, (ii) caused by Purchaser;
(b) any failure breach by Seller or Parent to perform of any of its covenants or comply with any covenant or obligation of Seller or Parent, as applicable, agreements contained in this Agreement to any Transaction Document, (iii) in respect of any Seller Pre-Closing Taxes, (iv) arising in connection with the extent not caused by PurchaserDistribution Transaction, a Third Party Sale or any Excluded Entities (including the ownership thereof), including but not limited toany Taxes associated therewith, any failure to satisfy the terms (v) in respect of the Assignment and Assumption Agreement;
(c) any Pre-Closing Tax;
Project Casualty Event, (dvi) any brokerage “recapture liability” (within the meaning of the Section 1603 Program Guidance) in respect of the Cash Grant Proceeds, to the extent that any such “recapture liability” results from any act or finder's fees or commissions or similar payments based upon any agreement or understanding alleged to have been made by any Person with a Company, omission of Seller or Parent its Affiliates (including, acts or omissions prior to the Closing, of the Acquired Companies), (vii) to the extent such Indemnifiable Losses arise prior to the Option Closing (as defined in the Option Agreement), in respect of the Indebtedness of the Acquired Companies set forth in Section 1.01(f) of the Seller Disclosure Schedules, (viii) the Cash Grant Capital Contribution, except to the extent resulting from any Related Person act or omission of (A) Riverstone or its Affiliates (other than, prior to the Closing, the Acquired Companies), or (B) Buyer or its Affiliates (including, after the Closing, the Acquired Companies) or (ix) any Person acting on their behalf) Claims in respect of Tax matters arising in connection with the transactions arrangements contemplated hereby;
(e) by the retained liabilities set forth on Annex D;
(f) Assignment and Deferred Conveyance Agreement, if any, in respect of the Restructuring;
(g) any Indebtedness of any other Person, Spain Project Companies and the payment of which any Company is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, either severally or jointly with any other Person, whether contingent or otherwise; and/or
(h) Environmental Liabilities Puerto Rico Project Companies. Notwithstanding anything herein to the extent (i) related to or arising from operations at (including without limitation off-site disposal from)contrary, or conditions at, on, under or proximate to any properties, landfills, or facilities retained by the Parent and Seller Indemnifying Parties after Closing (including but not limited to the properties, landfills or facilities to be transferred out of the Companies pursuant to the Restructuring, whether or not transferred prior to Closing), or which are not otherwise conveyed to Purchaser pursuant to this Agreement, including but not limited to facilities formerly owned by U.S. Pipe (the “Non-Transferred Properties”); or (ii) any remedial, response, abatement, cleanup, investigative, and monitoring work required by a Governmental Entity (collectively, “Remedial Work”) resulting from a Release of Hazardous Materials from any Non-Transferred Properties, including without limitation a Release of Hazardous Materials which is discovered after Closing but which began before Closing. Notwithstanding the preceding, the Seller Indemnifying Parties shall not be liable under this Agreement to the extent (but only to the extent) of that portion of the costs and liabilities of any Environmental Liability or Remedial Work attributable to (y) an affirmative act of any Purchaser Claimant which causes the material aggravation of a then-existing Release of Hazardous Materials or (z) the introduction and initial Release of Hazardous Material by a Person other than either Company or any Seller Indemnifying Party or any Affiliate of any such party, from any Non-Transferred Property(ies) never owned, operated or leased by either Company or any Seller Indemnifying Party or any Affiliate of any such party.
(i) The Seller Indemnifying Parties shall not be required to indemnify a Purchaser Claimant under clause any Indemnified Buyer Entity for more than fifty percent (a50%) of this Section 8.2 unless (iA) any Indemnifiable Losses suffered by any Acquired Company, or (B) any Indemnifiable Losses suffered by any other Buyer Entity that are attributable to or derived from a Loss suffered by any Acquired Company, it being the Damages for an individual claim (or series of related claims so substantially related as to effectively constitute one claim) exceeds $50,000 and (ii) the aggregate cumulative sum of all Damages for which indemnity would otherwise be due under clause (a) of this Section 8.2 exceeds $1,000,000 (“Seller Basket”) in which case the Seller Indemnifying Parties shall be responsible for the full amount of such Damages, including the Seller Basket. In addition and subject to Section 8.2(j) below, the maximum aggregate liability intention of the Seller Indemnifying Parties for which that Parent’s and Seller’s indemnification under clause obligations hereunder shall relate only to the fifty percent (a50%) of this Section 8.2 shall equal $10,000,000 (the “Seller Cap”). The limitations set forth interest in the immediately two preceding sentences shall not apply to claims arising from an inaccuracy or breach of any representations or warranties contained in Sections 3.1, 3.2, 3.3, 3.12 and 3.16 or claims based on fraud. The aggregate liability of the Seller Indemnifying Parties under Section 8.2(a) shall not exceed the Purchase PriceCompany currently held by Seller.
(j) In addition Notwithstanding anything to and without limiting the obligations of the Seller Indemnifying Parties contrary contained in this Section 8.2 and without any application against the Seller CapSection, the Purchaser Claimants Indemnified Buyer Entities shall be permitted entitled to indemnification with respect to any claim for indemnification pursuant to Section 8.2(a)9.01(a)(i):
(i) only if, and the Seller Indemnifying Parties shall indemnify and hold harmless Purchaser Claimants against, any Damages, whether or not involving a third party claim, that Purchaser Claimants incurred directly or indirectly by reason of or attributable then only to the inaccuracy or breach of any representations or warranties contained in Section 3.11 hereofextent that, up the aggregate Indemnifiable Losses to a maximum additional aggregate liability of all Indemnified Buyer Entities with respect to all such claims exceeds Three Million Dollars ($5,000,000 3,000,000) (the “Additional Environmental Deductible”), whereupon (subject to the provisions of clauses (ii) and (iii) below) Parent or Seller shall be obligated to pay in full all such amounts but only to the extent such aggregate Indemnifiable Losses are in excess of the amount of the Deductible; provided, that the Deductible shall not apply to any indemnification obligation of Parent and Seller related to the Specified Representations made by Seller and the representations and warranties made by Seller in Section 4.14;
(ii) only with respect to individual items where the Indemnifiable Losses relating thereto are in excess of One Hundred Fifty Thousand Dollars ($150,000) (any items less than such threshold shall not be aggregated for the purposes of the immediately preceding clause (i) unless such items are related to the same Event); and
(iii) only with respect to such claims made on or before the expiration of the survival period pursuant to Section 8.01 for the applicable representation, warranty, covenant or agreement.
(k) The Indemnified Buyer Entities shall be entitled to indemnification with respect to any claim for indemnification pursuant to Section 9.01(a)(v) only if the aggregate Indemnifiable Losses to all Indemnified Buyer Entities with respect to such claims exceeds Three Million Dollars ($3,000,000) (the “Casualty Event Claims Threshold”), whereupon Parent or Seller shall be obligated to pay in full all such amounts (including the Casualty Event Claims Threshold amount).
(l) Notwithstanding anything to the contrary contained in this Agreement, in no event shall the Indemnified Buyer Entities be entitled to aggregate indemnification with respect to claims pursuant to Section 9.01(a)(i) in excess of fifteen percent (15%) of the Base Purchase Price (the “Cap”). At ; provided, that the time Purchaser makes a claimcap applicable to the aggregate indemnification obligations of Parent and Seller related to the Specified Representations made by Seller, Purchaser shall notify (which election shall not be reversible) the representations and warranties made by Seller Indemnifying Parties in writing as to whether its claim for Damages Section 4.14, and claims pursuant to Section 8.2(a9.01(a)(ii)-(ix) will shall be applied against the Seller Cap or against the Additional Environmental Cap, or both (in which case identifying the full amount applied against each). In the event claims for Damages are made against the Additional Environmental Cap, Purchaser and the Seller Indemnifying Parties shall each be responsible for 50% of the first $1,000,000 of any Damages claimed against Base Purchase Price; and provided, further, that the Additional Environmental Cap. For clarity, (i) the Seller Indemnifying Parties maximum liability under the Additional Environmental Cap, after considering the foregoing sharing of Damages up to $1,000,000, shall be $4,500,000, (ii) Purchase Claimants may choose, at their discretion, to make a claim for Damages either against the Seller Cap, the Additional Environmental Cap, or both, (iii) any claims made against the Additional Environmental Cap shall limitations in no way apply against, reduce or limit in any way the Seller Cap and any claims made against the Seller Cap shall in no way apply against, reduce or limit in any way the Additional Environmental Cap and (iv) the limitation contained in this Section 8.2(i)(a)(i9.01(d) shall not apply in the event of any fraud by Seller or any Affiliate of Seller.
(m) Notwithstanding anything to claims made against the Additional Environmental Capcontrary contained in this Article 9, Losses subject to indemnification pursuant to Section 9.01 shall be determined without duplication of recovery by reason of the state of facts giving rise to such Losses constituting a breach of more than one representation, warranty, covenant or agreement or being addressed by more than one clause under Section 9.01(a).
(n) This Section is subject to the limitations set forth in Section 8.03(b).
Appears in 1 contract
Indemnification by Parent and Seller. From and after the Closing, Parent and Seller (the “Seller Indemnifying Parties”) shall jointly and severally agree to indemnify and hold Purchaser and harmless the Buyer, its respective Affiliates (including the Companies after the Closing) and their respective parent, subsidiaries, other Affiliates, directors, officers, employees, shareholders, members, partners, agents, successors employees and assigns agents (collectively “Purchaser Claimants” the "Buyer Indemnitees") from and individually a “Purchaser Claimant”) harmless against any Damages, whether and all Losses incurred by such Buyer Indemnitees in connection with or not involving a third party claim, that Purchaser Claimants incurred directly or indirectly by reason of or attributable toarising from:
(a) the inaccuracy Any breach by Seller or Parent of any of their covenants in this Agreement or in any agreement ancillary hereto, or any failure of Seller or Parent to perform any of its obligations in this Agreement or in any ancillary agreement hereto;
(b) Any breach of any warranty or the inaccuracy of any representation or warranty of Seller or Parent contained in Article III of this Agreement or referred to the extent not caused by Purchaser;
(b) any failure by Seller or Parent to perform or comply with any covenant or obligation of Seller or Parent, as applicable, contained in this Agreement to or any certificate delivered by or on behalf of Parent or Seller pursuant hereto (disregarding for purposes of this Section 9.1(b) any "material," "in all material respects," or similar qualification contained in any such representation or warranty or with respect thereto for purposes of calculating the extent not caused by Purchaser, including but not limited to, any failure to satisfy the terms amount of the Assignment and Assumption AgreementLosses);
(c) The failure to comply (either by Seller or Buyer) with any Pre-Closing Taxapplicable bulk sales law;
(d) The failure of a Seller to perform, satisfy or pay any brokerage or finder's fees or commissions or similar payments based upon any agreement or understanding alleged to have been made by any Person with a Company, Seller or Parent or any Related Person (or any Person acting on their behalf) in connection with the transactions contemplated hereby;Excluded Liability; and
(e) Defending any Third Party Claim alleging the retained liabilities set forth on Annex D;occurrence of facts or circumstances or raising claims that, if assumed to be true, would entitle a Buyer Indemnitee to indemnification hereunder. The indemnification provided for in this Section 9.1 shall terminate thirty-six (36) months after the Closing Date (and no claims shall be made by the Buyer Indemnitees under this Section 9.1 thereafter), except that the indemnification by Seller and Parent shall continue as to:
(f) the Restructuring;representations, warranties and covenants relating to title and the failure of Seller to perform, satisfy or pay any Excluded Liabilities, as to all of which no time limitation shall apply; and relating to Taxes as to which the applicable statute of limitations shall apply; and
(g) any Indebtedness of any other Person, the payment Loss of which any Company is responsible Buyer Indemnitee has notified Parent in accordance with the requirements of Section 9.3 on or liable, directly or indirectlyprior to the date such indemnification would otherwise terminate in accordance with this Section 9.1, as obligor, guarantor, surety or otherwise, either severally or jointly with any other Person, whether contingent or otherwise; and/or
(h) Environmental Liabilities to which the extent (i) related to or arising from operations at (including without limitation off-site disposal from), or conditions at, on, under or proximate to any properties, landfills, or facilities retained by obligation of Parent and Seller shall continue until the liability of Parent and Seller Indemnifying Parties after Closing (including but not limited to the properties, landfills or facilities to be transferred out of the Companies pursuant to the Restructuring, whether or not transferred prior to Closing), or which are not otherwise conveyed to Purchaser shall have been determined pursuant to this Agreement, including but not limited to facilities formerly owned by U.S. Pipe (the “Non-Transferred Properties”); or (ii) any remedial, response, abatement, cleanup, investigativeArticle IX, and monitoring work required by a Governmental Entity (collectively, “Remedial Work”) resulting from a Release of Hazardous Materials from any Non-Transferred Properties, including without limitation a Release of Hazardous Materials which is discovered after Closing but which began before Closing. Notwithstanding the preceding, the Parent and Seller Indemnifying Parties shall not be liable under this Agreement to the extent (but only to the extent) of that portion of the costs and liabilities of any Environmental Liability or Remedial Work attributable to (y) an affirmative act of any Purchaser Claimant which causes the material aggravation of a then-existing Release of Hazardous Materials or (z) the introduction and initial Release of Hazardous Material by a Person other than either Company or any Seller Indemnifying Party or any Affiliate of any such party, from any Non-Transferred Property(ies) never owned, operated or leased by either Company or any Seller Indemnifying Party or any Affiliate of any such party.
(i) The Seller Indemnifying Parties shall not be required to indemnify a Purchaser Claimant under clause (a) of this Section 8.2 unless (i) the Damages for an individual claim (or series of related claims so substantially related as to effectively constitute one claim) exceeds $50,000 and (ii) the aggregate cumulative sum of have reimbursed all Damages for which indemnity would otherwise be due under clause (a) of this Section 8.2 exceeds $1,000,000 (“Seller Basket”) in which case the Seller Indemnifying Parties shall be responsible Buyer Indemnitees for the full amount of such Damages, including the Seller Basket. In addition and subject to Section 8.2(j) below, the maximum aggregate liability of the Seller Indemnifying Parties for which indemnification under clause (a) of Loss in accordance with this Section 8.2 shall equal $10,000,000 (the “Seller Cap”). The limitations set forth in the immediately two preceding sentences shall not apply to claims arising from an inaccuracy or breach of any representations or warranties contained in Sections 3.1, 3.2, 3.3, 3.12 and 3.16 or claims based on fraud. The aggregate liability of the Seller Indemnifying Parties under Section 8.2(a) shall not exceed the Purchase PriceArticle IX.
(j) In addition to and without limiting the obligations of the Seller Indemnifying Parties contained in this Section 8.2 and without any application against the Seller Cap, the Purchaser Claimants shall be permitted to claim pursuant to Section 8.2(a), and the Seller Indemnifying Parties shall indemnify and hold harmless Purchaser Claimants against, any Damages, whether or not involving a third party claim, that Purchaser Claimants incurred directly or indirectly by reason of or attributable to the inaccuracy or breach of any representations or warranties contained in Section 3.11 hereof, up to a maximum additional aggregate liability of $5,000,000 (the “Additional Environmental Cap”). At the time Purchaser makes a claim, Purchaser shall notify (which election shall not be reversible) the Seller Indemnifying Parties in writing as to whether its claim for Damages pursuant to Section 8.2(a) will be applied against the Seller Cap or against the Additional Environmental Cap, or both (in which case identifying the amount applied against each). In the event claims for Damages are made against the Additional Environmental Cap, Purchaser and the Seller Indemnifying Parties shall each be responsible for 50% of the first $1,000,000 of any Damages claimed against the Additional Environmental Cap. For clarity, (i) the Seller Indemnifying Parties maximum liability under the Additional Environmental Cap, after considering the foregoing sharing of Damages up to $1,000,000, shall be $4,500,000, (ii) Purchase Claimants may choose, at their discretion, to make a claim for Damages either against the Seller Cap, the Additional Environmental Cap, or both, (iii) any claims made against the Additional Environmental Cap shall in no way apply against, reduce or limit in any way the Seller Cap and any claims made against the Seller Cap shall in no way apply against, reduce or limit in any way the Additional Environmental Cap and (iv) the limitation contained in Section 8.2(i)(a)(i) shall not apply to claims made against the Additional Environmental Cap.
Appears in 1 contract
Samples: Asset Purchase Agreement (First Montauk Financial Corp)
Indemnification by Parent and Seller. From and after the Closing, subject to the limitations in this Article IX, Parent and Seller (the “Seller Indemnifying Parties”) shall jointly and severally indemnify and hold harmless Purchaser and its respective Affiliates the Company Entities (including collectively, the Companies after the Closing) and their respective directors, officers, employees, shareholders, members, partners, agents, successors and assigns (collectively “Purchaser Claimants” and individually a “Purchaser ClaimantParties”) harmless against for any Damages, whether or not involving a third party claim, that Purchaser Claimants incurred Losses directly or indirectly by reason of resulting from or attributable toarising out of:
(a) the inaccuracy or any breach of or inaccuracy in any representation or warranty of made by Seller or Parent contained in Article III of and Article IV (other than the Specified Representations and Warranties) or in any certificate in respect thereof delivered by Seller or Parent pursuant to this Agreement to the extent not caused by PurchaserAgreement;
(b) any failure breach of or inaccuracy in any Specified Representations and Warranties or in any certificate in respect of the Specified Representations and Warranties delivered by Seller or Parent pursuant to perform or comply with any covenant or obligation of Seller or Parent, as applicable, contained in this Agreement to the extent not caused by Purchaser, including but not limited to, any failure to satisfy the terms of the Assignment and Assumption Agreement;
(c) any Pre-Closing Taxbreach or default in the performance by Seller of any covenant, obligation or agreement contained herein;
(d) any brokerage Indemnified Taxes, but only to the extent such Indemnified Taxes were not included in the calculation of the Closing Net Working Capital or finder's fees or commissions or similar payments based upon any agreement or understanding alleged Closing Indebtedness as finally determined pursuant to have been made by any Person with a Company, Seller or Parent or any Related Person (or any Person acting on their behalf) in connection with the transactions contemplated herebySection 2.04);
(e) any Company Transaction Costs (but only to the retained liabilities set forth on Annex Dextent not paid at or prior to the Closing or to the extent not included in the calculation of the Closing Net Working Capital or Closing Company Transaction Expenses as finally determined pursuant to Section 2.04);
(f) the Restructuring;
(g) any Indebtedness of any other Person, the payment of which any Company is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, either severally or jointly with any other Person, whether contingent or otherwise; and/or
(h) Environmental Liabilities to the extent (i) related to or arising from operations at (including without limitation off-site disposal from), or conditions at, on, under or proximate to any properties, landfills, or facilities retained by the Seller Indemnifying Parties after Closing (including but not limited to the properties, landfills or facilities to be transferred out of the Companies pursuant to the Restructuring, whether or not transferred prior to Closing), or which are not otherwise conveyed to Purchaser pursuant to this Agreement, including but not limited to facilities formerly owned by U.S. Pipe (the “Non-Transferred Properties”); or (ii) any remedial, response, abatement, cleanup, investigative, and monitoring work required by a Governmental Entity (collectively, “Remedial Work”) resulting from a Release of Hazardous Materials from any Non-Transferred Properties, including without limitation a Release of Hazardous Materials which is discovered after Closing but which began before Closing. Notwithstanding the preceding, the Seller Indemnifying Parties shall not be liable under this Agreement to the extent (but only to the extent) of that portion extent not paid at or prior to the Closing or to the extent not included in the calculation of the costs and liabilities of any Environmental Liability Closing Net Working Capital or Remedial Work attributable to (y) an affirmative act of any Purchaser Claimant which causes the material aggravation of a then-existing Release of Hazardous Materials or (z) the introduction and initial Release of Hazardous Material by a Person other than either Company or any Seller Indemnifying Party or any Affiliate of any such party, from any Non-Transferred Property(ies) never owned, operated or leased by either Company or any Seller Indemnifying Party or any Affiliate of any such party.
(i) The Seller Indemnifying Parties shall not be required to indemnify a Purchaser Claimant under clause (a) of this Section 8.2 unless (i) the Damages for an individual claim (or series of related claims so substantially related Closing Indebtedness as to effectively constitute one claim) exceeds $50,000 and (ii) the aggregate cumulative sum of all Damages for which indemnity would otherwise be due under clause (a) of this Section 8.2 exceeds $1,000,000 (“Seller Basket”) in which case the Seller Indemnifying Parties shall be responsible for the full amount of such Damages, including the Seller Basket. In addition and subject to Section 8.2(j) below, the maximum aggregate liability of the Seller Indemnifying Parties for which indemnification under clause (a) of this Section 8.2 shall equal $10,000,000 (the “Seller Cap”). The limitations set forth in the immediately two preceding sentences shall not apply to claims arising from an inaccuracy or breach of any representations or warranties contained in Sections 3.1, 3.2, 3.3, 3.12 and 3.16 or claims based on fraud. The aggregate liability of the Seller Indemnifying Parties under Section 8.2(a) shall not exceed the Purchase Price.
(j) In addition to and without limiting the obligations of the Seller Indemnifying Parties contained in this Section 8.2 and without any application against the Seller Cap, the Purchaser Claimants shall be permitted to claim finally determined pursuant to Section 8.2(a2.04), ; and
(g) the Corporate Reorganization Liabilities and any Liabilities of the Seller Indemnifying Parties shall indemnify and hold harmless Purchaser Claimants against, any Damages, whether Retained Subsidiaries or not involving a third party claim, that Purchaser Claimants incurred directly arising from or indirectly by reason of or attributable relating to the inaccuracy or breach of any representations or warranties contained in Section 3.11 hereof, up to a maximum additional aggregate liability of $5,000,000 (the “Additional Environmental Cap”). At the time Purchaser makes a claim, Purchaser shall notify (which election shall not be reversible) the Seller Indemnifying Parties in writing as to whether its claim for Damages pursuant to Section 8.2(a) will be applied against the Seller Cap or against the Additional Environmental Cap, or both (in which case identifying the amount applied against each). In the event claims for Damages are made against the Additional Environmental Cap, Purchaser and the Seller Indemnifying Parties shall each be responsible for 50% of the first $1,000,000 of any Damages claimed against the Additional Environmental Cap. For clarity, (i) the Seller Indemnifying Parties maximum liability under the Additional Environmental Cap, after considering the foregoing sharing of Damages up to $1,000,000, shall be $4,500,000, (ii) Purchase Claimants may choose, at their discretion, to make a claim for Damages either against the Seller Cap, the Additional Environmental Cap, or both, (iii) any claims made against the Additional Environmental Cap shall in no way apply against, reduce or limit in any way the Seller Cap and any claims made against the Seller Cap shall in no way apply against, reduce or limit in any way the Additional Environmental Cap and (iv) the limitation contained in Section 8.2(i)(a)(i) shall not apply to claims made against the Additional Environmental CapRetained Business.
Appears in 1 contract
Samples: Stock Purchase Agreement (Advanced Energy Industries Inc)
Indemnification by Parent and Seller. (a) From and after the Closing, except as provided in Article X, which shall exclusively govern any claim for indemnification and obligations and procedures related thereto, in each case, with respect to any Losses related to Taxes and subject to the notice requirement and limitations of Section 9.2(b) hereof, Parent and Seller (the “Seller Indemnifying Parties”) shall agree, jointly and severally severally, to indemnify and hold Purchaser and its respective Affiliates in full (including without duplication) Buyer, the Companies after the Closing) and their respective officers, directors, officers, employees, shareholdersagents and subsidiaries (collectively, members, partners, agents, successors the “Buyer Indemnified Parties“) and assigns (collectively “Purchaser Claimants” hold them harmless from and individually a “Purchaser Claimant”) harmless against any Damagesclaim, demand, loss, liability, obligation, deficiency, action, damage, expense or cost (including, without limitation, interest, penalties, costs of investigation and defense, and reasonable legal and other professional fees and expenses), whether or not actually incurred or paid prior to the date referred to in Section 9.2(b) and whether or not involving a third party claimThird Party Action (as defined in Section 9.5 hereof) (collectively “Losses“), that Purchaser Claimants incurred directly which any of the Buyer Indemnified Parties may suffer, sustain or indirectly by reason of become subject to, arising from or attributable to:
relating to (ai) the any inaccuracy or misrepresentation in or breach of any representation of the representations and warranties of Parent or warranty of Seller or Parent contained in Article III of this Agreement to the extent not caused by Purchaser;
(b) any failure by Seller or Parent to perform or comply with any covenant or obligation of Seller or Parent, as applicable, contained in this Agreement (other than the representations and warranties in Section 3.12) (including in the Disclosure Schedule or closing certificates delivered or to the extent not caused be delivered by Purchaser, including but not limited to, any failure or on behalf of such party pursuant to satisfy the terms of the Assignment and Assumption this Agreement;
) (c) any Pre-Closing Tax;
(d) any brokerage or finder's fees or commissions or similar payments based upon any agreement or understanding alleged to have been made by any Person with a Company, Seller or Parent or any Related Person (or any Person acting on their behalf) in connection with the transactions contemplated hereby;
(e) the retained liabilities set forth on Annex D;
(f) the Restructuring;
(g) any Indebtedness of any other Personcollectively, the payment of which any Company is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, either severally or jointly with any other Person, whether contingent or otherwise; and/or
(h) Environmental Liabilities to the extent (i) related to or arising from operations at (including without limitation off-site disposal from“Related Documents“), or conditions at, on, under or proximate to any properties, landfills, or facilities retained by the Seller Indemnifying Parties after Closing (including but not limited to the properties, landfills or facilities to be transferred out of the Companies pursuant to the Restructuring, whether or not transferred prior to Closing), or which are not otherwise conveyed to Purchaser pursuant to this Agreement, including but not limited to facilities formerly owned by U.S. Pipe (the “Non-Transferred Properties”); or (ii) any remedialbreach of, responseor failure to perform, abatementany covenant of the Companies, cleanup, investigative, and monitoring work required by a Governmental Entity Parent or Seller contained in this Agreement (other than covenants in Article X) (collectively, the “Remedial Work”) resulting from a Release of Hazardous Materials from any Non-Transferred Properties, including without limitation a Release of Hazardous Materials which is discovered after Closing but which began before ClosingBuyer Losses“). Notwithstanding the precedingforegoing, the Seller Indemnifying Parties no recovery shall not be liable available under this Agreement Section 9.2(a) on account of any Loss in respect of which, and to the extent (but only to the extent) of that portion of the costs and liabilities of any Environmental Liability or Remedial Work attributable to (y) an affirmative act of any Purchaser Claimant which causes the material aggravation of that, a then-existing Release of Hazardous Materials or (z) the introduction and initial Release of Hazardous Material by a Person other than either Company or any Seller Indemnifying Party or any Affiliate of any such party, from any Non-Transferred Property(ies) never owned, operated or leased by either Company or any Seller Indemnifying Party or any Affiliate of any such partyprice adjustment was made under Article II.
(ib) The Parent and Seller Indemnifying will be liable to the Buyer Indemnified Parties shall not be required to indemnify a Purchaser Claimant under clause (a) of this Section 8.2 unless for any Buyer Loss (i) only if Buyer delivers to Seller a written notice, pursuant to Section 9.4 or 9.5, as applicable, with respect to such Buyer Indemnified Party’s claim to be indemnified for such Buyer Losses prior to 18 months of the Damages Closing Date, except for an individual claims arising from a breach of or inaccuracy in the representations and warranties made in Sections 2.2, 2.3 and the first and last sentence of 3.2 or for claims arising from a breach of a covenant the performance of which may or is specified to occur after the expiration of such 18-month period, for which a claim (or series of related claims so substantially related as to effectively constitute one claim) exceeds $50,000 may be brought through the survival period described in Section 9.1, and (ii) (A) except as provided in the following clause (B), only if the aggregate cumulative sum amount of all Damages Buyer Losses exceeds 1% of the Final Closing Purchase Price (the “Basket Amount“) or (B) solely in respect of Buyer Losses for which indemnity would otherwise be due under clause Parent and Seller are liable to the Buyer Indemnified Parties as a result of a breach or inaccuracy of the representations and warranties set forth in Section 3.22 hereof (aincluding, for this purpose, any Buyer Losses related to the sites referred to in Section 3.22(d) of this Section 8.2 exceeds the Disclosure Schedule in excess of $1,000,000 2,000,000) (“Seller Basket”) Buyer Environmental Losses“), only if the aggregate amount of all such Buyer Environmental Losses exceeds 0.5% of the Final Closing Purchase Price (the “Environmental Basket Amount“), in which case the Parent and Seller Indemnifying Parties shall be responsible obligated to indemnify the Buyer Indemnified Parties for the full total amount of all such DamagesBuyer Losses or Buyer Environmental Losses, including as the Seller Basket. In addition and subject to Section 8.2(j) belowcase may be, the maximum aggregate liability in excess of the Seller Indemnifying Parties for which indemnification under clause (a) Basket Amount or Environmental Basket Amount, as applicable; provided, however, that the Basket Amount shall apply only to breaches of this Section 8.2 shall equal $10,000,000 (the “Seller Cap”). The limitations or inaccuracies in representations and warranties other than those set forth in Sections 2.2, 2.3 and the immediately two preceding sentences first and last sentence of 3.2 hereof and shall not apply to claims arising from an inaccuracy or breach any breaches of any representations covenants of the Companies or warranties contained Seller or Parent set forth in Sections 3.1this Agreement (except as otherwise provided in Section 10.1(c)); provided further that, 3.2for the avoidance of doubt, 3.3(x) any amounts paid by Parent or Seller in excess of the Environmental Basket Amount in respect to Buyer Environmental Losses shall not be counted for purposes of determining the aggregate amount of Buyer Losses to be applied against the Basket Amount, 3.12 and 3.16 or claims based on fraud(y) the Environmental Basket Amount shall be treated as a subset of the Basket Amount (e.g., if the Environmental Basket Amount has been fully applied against Buyer Environmental Losses, and no other Buyer Losses have been incurred by Buyer, the amount remaining in the Basket Amount would be equal to 0.5% of the Final Closing Purchase Price). The Parent’s and Seller’s aggregate liability in respect of the Seller Indemnifying Parties under all matters covered by this Section 8.2(a9.2 and Section 10.1(c) shall not exceed the Purchase Price.
(j) In addition an amount equal to and without limiting the obligations 25% of the Seller Indemnifying Parties contained in this Section 8.2 and without any application against the Seller CapFinal Closing Purchase Price (such product, the Purchaser Claimants shall be permitted to claim pursuant to Section 8.2(a“Cap“); provided, and the Seller Indemnifying Parties shall indemnify and hold harmless Purchaser Claimants against, any Damages, whether or not involving a third party claimhowever, that Purchaser Claimants incurred directly or indirectly by reason of or attributable to the inaccuracy or breach of any representations or warranties contained in Section 3.11 hereof, up to a maximum additional aggregate liability of $5,000,000 (the “Additional Environmental Cap”). At the time Purchaser makes a claim, Purchaser shall notify (which election such Cap shall not be reversible) the Seller Indemnifying Parties applicable in writing as to whether its claim for Damages pursuant to Section 8.2(a) will be applied against the Seller Cap or against the Additional Environmental Cap, or both (in which case identifying the amount applied against each). In the event claims for Damages are made against that a final, non-appealable judgment finds that Parent or Seller committed intentional fraud in connection with the Additional Environmental Cap, Purchaser and the Seller Indemnifying Parties shall each be responsible for 50% breach of the first $1,000,000 of any Damages claimed against the Additional Environmental Cap. For clarityrepresentations, (i) the Seller Indemnifying Parties maximum liability under the Additional Environmental Cap, after considering the foregoing sharing of Damages up to $1,000,000, shall be $4,500,000, (ii) Purchase Claimants may choose, at their discretion, to make a claim for Damages either against the Seller Cap, the Additional Environmental Cap, warranties or both, (iii) any claims made against the Additional Environmental Cap shall covenants in no way apply against, reduce or limit in any way the Seller Cap and any claims made against the Seller Cap shall in no way apply against, reduce or limit in any way the Additional Environmental Cap and (iv) the limitation contained in Section 8.2(i)(a)(i) shall not apply to claims made against the Additional Environmental Capquestion.
Appears in 1 contract
Samples: Share Purchase Agreement (Adc Telecommunications Inc)
Indemnification by Parent and Seller. (a) From and after the Closing, subject to the other provisions of this Article 9, Parent and Seller (the “Seller Indemnifying Parties”) shall jointly and severally agree to indemnify and hold Purchaser Buyer and its respective officers, directors, employees and Affiliates (including the Companies after Acquired Companies) (collectively, the Closing“Indemnified Buyer Entities”) and their respective directorsto hold each of them harmless from and against, officersany and all Indemnifiable Losses suffered, employeespaid or incurred by such Indemnified Buyer Entity in connection with, shareholders, members, partners, agents, successors and assigns (collectively “Purchaser Claimants” and individually a “Purchaser Claimant”) harmless against any Damages, whether or not involving a third party claim, that Purchaser Claimants incurred directly or indirectly by reason arising out of or attributable to:
resulting from (ai) the inaccuracy or any breach of any representation of the representations and warranties made by Parent or warranty Seller to Buyer in Articles 3 and 4 (including the Exhibits and Schedules hereto), in each case when made and, except for representations and warranties that speak of a specific date and time, on and as of the Closing Date as though made on the Closing Date (provided, that solely with respect to the calculation of damages with respect to such breach, any express qualifier therein as to materiality, Seller Material Adverse Effect or Company Material Adverse Effect shall be disregarded), (ii) any breach by Parent or Seller of any of their covenants or agreements contained in Article III of this Agreement to the extent not caused by Purchaser;or (iii) any Excluded Taxes.
(b) any failure by Seller or Parent Notwithstanding anything to perform or comply with any covenant or obligation of Seller or Parent, as applicable, the contrary contained in this Agreement Section, the Indemnified Buyer Entities shall be entitled to indemnification with respect to any claim for indemnification pursuant to Section 9.01(a)(i), other than (x) claims for Indemnifiable Losses arising out of or resulting from any breach of the representations and warranties set forth in Section 4.06(b) and (c) to the extent based on liabilities or expenses of Prescott LLC not caused by Purchaserrelating to or arising from the business of Ironwood LLC (an “Additional Liability Claim”) or (y) claims in respect of any Specified Representations:
(i) only if, including and then only to the extent that, the aggregate Indemnifiable Losses to all Indemnified Buyer Entities with respect to all such claims exceeds $2,000,000 (the “Deductible”), whereupon (subject to the provisions of clauses (ii) and (iii) below) Parent or Seller shall be obligated to pay in full all such amounts but not limited to, any failure only to satisfy the terms extent such aggregate Indemnifiable Losses are in excess of the Assignment and Assumption Agreementamount of the Deductible;
(ii) only with respect to individual items where the Indemnifiable Losses relating thereto are in excess of $75,000 (any items less than such threshold shall not be aggregated for the purposes of the immediately preceding clause (i)); and
(iii) only with respect to such claims made on or before the expiration of the survival period pursuant to Section 8.01 for the applicable representation, warranty, covenant or agreement.
(c) any Pre-Closing Tax;
(d) any brokerage or finder's fees or commissions or similar payments based upon any agreement or understanding alleged to have been made by any Person with a Company, Seller or Parent or any Related Person (or any Person acting on their behalf) in connection with the transactions contemplated hereby;
(e) the retained liabilities set forth on Annex D;
(f) the Restructuring;
(g) any Indebtedness of any other Person, the payment of which any Company is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, either severally or jointly with any other Person, whether contingent or otherwise; and/or
(h) Environmental Liabilities Notwithstanding anything to the extent (i) related to or arising from operations at (including without limitation off-site disposal from), or conditions at, on, under or proximate to any properties, landfills, or facilities retained by the Seller Indemnifying Parties after Closing (including but not limited to the properties, landfills or facilities to be transferred out of the Companies pursuant to the Restructuring, whether or not transferred prior to Closing), or which are not otherwise conveyed to Purchaser pursuant to contrary contained in this Agreement, including but not limited in no event shall the Indemnified Buyer Entities be entitled to facilities formerly owned by U.S. Pipe (the “Non-Transferred Properties”); or (iiaggregate indemnification with respect to claims pursuant to Sections 9.01(a)(i) any remedial, response, abatement, cleanup, investigative, and monitoring work required by a Governmental Entity (collectively, “Remedial Work”) resulting from a Release of Hazardous Materials from any Non-Transferred Properties, including without limitation a Release of Hazardous Materials which is discovered after Closing but which began before Closing. Notwithstanding the preceding, the Seller Indemnifying Parties shall not be liable under this Agreement to the extent (but only to the extent) of that portion of the costs and liabilities of any Environmental Liability or Remedial Work attributable to (y) an affirmative act of any Purchaser Claimant which causes the material aggravation of a then-existing Release of Hazardous Materials or (z) the introduction and initial Release of Hazardous Material by a Person other than either Company or any Seller Indemnifying Party or any Affiliate of any such party, from any Non-Transferred Property(ies) never owned, operated or leased by either Company or any Seller Indemnifying Party or any Affiliate of any such party.
(i) The Seller Indemnifying Parties shall not be required to indemnify a Purchaser Claimant under clause (a) of this Section 8.2 unless (i) the Damages for an individual claim (or series of related claims so substantially related as to effectively constitute one claim) exceeds $50,000 and (ii) (but only, in the aggregate cumulative sum case of all Damages for which indemnity would otherwise be due under clause Section
9.01 (a) a)(ii), with respect to breaches of this Section 8.2 exceeds $1,000,000 (“Seller Basket”6.02 that are not knowing and willful) in which case the Seller Indemnifying Parties shall be responsible for the full amount excess of such Damages, including the Seller Basket. In addition and subject to Section 8.2(j) below, the maximum aggregate liability 20% of the Seller Indemnifying Parties for which indemnification under clause (a) of this Section 8.2 shall equal $10,000,000 Base Purchase Price (the “Seller Cap”). The limitations ; provided, that the Cap applicable to the aggregate indemnification obligations of Parent and Seller related to (A) the Specified Representations made by Seller, (B) claims pursuant to Section 9.01(a)(ii) (except for claims with respect to Section 6.02 that are subject to the Cap as set forth in the immediately two preceding sentences above) or (C) an Additional Liability Claim shall not apply to claims arising from an inaccuracy or breach of any representations or warranties contained in Sections 3.1, 3.2, 3.3, 3.12 and 3.16 or claims based on fraud. The aggregate liability of the Seller Indemnifying Parties under Section 8.2(a) shall not exceed be the Purchase Price.
(jd) In addition no event shall Parent or Seller be obligated to and without limiting indemnify the obligations Indemnified Buyer Entities with respect to Indemnifiable Losses to the extent arising from any material breach of this Agreement by any of the Seller Indemnifying Parties Indemnified Buyer Entities.
(e) This Section is subject to the limitations set forth in Section 8.03(b).
(f) Notwithstanding anything to the contrary contained in this Section 8.2 and without any application against the Seller CapAgreement, the Purchaser Claimants shall be permitted to claim pursuant to Section 8.2(a), and the Seller Indemnifying Parties shall indemnify and hold harmless Purchaser Claimants against, any Damages, whether or not involving a third party claim, that Purchaser Claimants incurred directly or indirectly by reason of or attributable to the inaccuracy or breach of any representations or warranties limitations contained in Section 3.11 hereof, up to a maximum additional aggregate liability of $5,000,000 (the “Additional Environmental Cap”). At the time Purchaser makes a claim, Purchaser shall notify (which election shall not be reversible9.01(b) the Seller Indemnifying Parties in writing as to whether its claim for Damages pursuant to Section 8.2(a) will be applied against the Seller Cap or against the Additional Environmental Cap, or both (in which case identifying the amount applied against each). In the event claims for Damages are made against the Additional Environmental Cap, Purchaser and the Seller Indemnifying Parties shall each be responsible for 50% of the first $1,000,000 of any Damages claimed against the Additional Environmental Cap. For clarity, (i) the Seller Indemnifying Parties maximum liability under the Additional Environmental Cap, after considering the foregoing sharing of Damages up to $1,000,000, shall be $4,500,000, (ii) Purchase Claimants may choose, at their discretion, to make a claim for Damages either against the Seller Cap, the Additional Environmental Cap, or both, (iii) any claims made against the Additional Environmental Cap shall in no way apply against, reduce or limit in any way the Seller Cap and any claims made against the Seller Cap shall in no way apply against, reduce or limit in any way the Additional Environmental Cap and (iv) the limitation contained in Section 8.2(i)(a)(ic) shall not apply with respect to claims made against indemnification for Excluded Taxes and any breach of any of the Additional Environmental Caprepresentations and warranties contained in Sections 4.13(a)(vii) and 4.13(d) (and related costs and expenses).
Appears in 1 contract
Indemnification by Parent and Seller. From Subject to the limitations of Section 12.3, Seller and after the Closing, Parent and Seller (the “Seller Indemnifying Parties”) shall jointly and severally indemnify and hold Purchaser harmless Buyer and its respective Affiliates (including the Companies after the Closing) Centene and their respective officers, directors, officers, employees, shareholders, members, partners, agents, agents and Affiliates and successors and assigns of any of the foregoing against any and all actual damages resulting from claims, obligations, losses, costs, expenses, fees, liabilities and damages, whenever arising or incurred, including interest, penalties and reasonable attorneys' fees and disbursements (collectively “Purchaser Claimants” including amounts paid in settlement and costs of investigation) (each individually a “Purchaser Claimant”) harmless against any Damages"Loss," and collectively, whether "Losses"), arising out of, in connection with or not involving a third party claim, that Purchaser Claimants incurred directly or indirectly by reason of or attributable otherwise relating to:
(a) the The Excluded Assets;
(b) The Excluded Liabilities;
(c) The breach by Seller or inaccuracy or breach of any representation or warranty of Seller or Parent contained in Article III of this Agreement to the extent not caused by Purchaser;
(b) any failure made by Seller or Parent to perform or comply with any covenant or obligation of Seller or Parent, as applicable, contained in this Agreement to the extent not caused by PurchaserAgreement, including but not limited to, or in any failure to satisfy the terms of the Assignment and Assumption Agreement;
(c) any Pre-Closing Taxother agreement executed in connection herewith;
(d) The breach or non-performance by Seller of any brokerage covenant or finder's fees or commissions or similar payments based upon any agreement or understanding alleged to have been made by Seller in this Agreement, or in any Person with a Company, Seller or Parent or any Related Person (or any Person acting on their behalf) other agreement executed in connection with the transactions contemplated hereby;herewith; and
(e) Any Employee Benefit Plan, program, policy or other arrangement currently or any previously maintained or contributed to by members of the retained liabilities set forth on Annex Dcontrolled group of companies (as defined in Code Section 414) which includes Seller;
(f) Any liabilities arising from, attributable or related to any misstatements or inaccuracies in the Restructuring;IBNR Expense as determined in Section 6.12; and
(g) Any claim, obligation or other liability arising from the Medicaid Business with respect to any Indebtedness of any period prior to the Closing Date other Person, the payment of which any Company is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, either severally or jointly with any other Person, whether contingent or otherwise; and/or
(h) Environmental Liabilities than to the extent such claims, obligations or liabilities constitute part of the Assumed Liabilities. Notwithstanding anything herein to the contrary, any breach of clauses 12.1(c) and (id) related to or arising from operations at (including shall be determined without limitation off-site disposal from), or conditions at, on, under or proximate regard to any properties, landfills, qualifications therein referencing the terms "materiality," "material," "material adverse change," "material adverse effect" or facilities retained by the Seller Indemnifying Parties after Closing (including but not limited to the properties, landfills other terms of similar import or facilities to be transferred out of the Companies pursuant to the Restructuring, whether or not transferred prior to Closing), or which are not otherwise conveyed to Purchaser pursuant to this Agreement, including but not limited to facilities formerly owned by U.S. Pipe (the “Non-Transferred Properties”); or (ii) any remedial, response, abatement, cleanup, investigative, and monitoring work required by a Governmental Entity (collectively, “Remedial Work”) resulting from a Release of Hazardous Materials from any Non-Transferred Properties, including without limitation a Release of Hazardous Materials which is discovered after Closing but which began before Closing. Notwithstanding the preceding, the Seller Indemnifying Parties shall not be liable under this Agreement to the extent (but only to the extent) of that portion of the costs and liabilities of any Environmental Liability or Remedial Work attributable to (y) an affirmative act of any Purchaser Claimant which causes the material aggravation of a then-existing Release of Hazardous Materials or (z) the introduction and initial Release of Hazardous Material by a Person other than either Company or any Seller Indemnifying Party or any Affiliate of any such party, from any Non-Transferred Property(ies) never owned, operated or leased by either Company or any Seller Indemnifying Party or any Affiliate of any such partyeffect.
(i) The Seller Indemnifying Parties shall not be required to indemnify a Purchaser Claimant under clause (a) of this Section 8.2 unless (i) the Damages for an individual claim (or series of related claims so substantially related as to effectively constitute one claim) exceeds $50,000 and (ii) the aggregate cumulative sum of all Damages for which indemnity would otherwise be due under clause (a) of this Section 8.2 exceeds $1,000,000 (“Seller Basket”) in which case the Seller Indemnifying Parties shall be responsible for the full amount of such Damages, including the Seller Basket. In addition and subject to Section 8.2(j) below, the maximum aggregate liability of the Seller Indemnifying Parties for which indemnification under clause (a) of this Section 8.2 shall equal $10,000,000 (the “Seller Cap”). The limitations set forth in the immediately two preceding sentences shall not apply to claims arising from an inaccuracy or breach of any representations or warranties contained in Sections 3.1, 3.2, 3.3, 3.12 and 3.16 or claims based on fraud. The aggregate liability of the Seller Indemnifying Parties under Section 8.2(a) shall not exceed the Purchase Price.
(j) In addition to and without limiting the obligations of the Seller Indemnifying Parties contained in this Section 8.2 and without any application against the Seller Cap, the Purchaser Claimants shall be permitted to claim pursuant to Section 8.2(a), and the Seller Indemnifying Parties shall indemnify and hold harmless Purchaser Claimants against, any Damages, whether or not involving a third party claim, that Purchaser Claimants incurred directly or indirectly by reason of or attributable to the inaccuracy or breach of any representations or warranties contained in Section 3.11 hereof, up to a maximum additional aggregate liability of $5,000,000 (the “Additional Environmental Cap”). At the time Purchaser makes a claim, Purchaser shall notify (which election shall not be reversible) the Seller Indemnifying Parties in writing as to whether its claim for Damages pursuant to Section 8.2(a) will be applied against the Seller Cap or against the Additional Environmental Cap, or both (in which case identifying the amount applied against each). In the event claims for Damages are made against the Additional Environmental Cap, Purchaser and the Seller Indemnifying Parties shall each be responsible for 50% of the first $1,000,000 of any Damages claimed against the Additional Environmental Cap. For clarity, (i) the Seller Indemnifying Parties maximum liability under the Additional Environmental Cap, after considering the foregoing sharing of Damages up to $1,000,000, shall be $4,500,000, (ii) Purchase Claimants may choose, at their discretion, to make a claim for Damages either against the Seller Cap, the Additional Environmental Cap, or both, (iii) any claims made against the Additional Environmental Cap shall in no way apply against, reduce or limit in any way the Seller Cap and any claims made against the Seller Cap shall in no way apply against, reduce or limit in any way the Additional Environmental Cap and (iv) the limitation contained in Section 8.2(i)(a)(i) shall not apply to claims made against the Additional Environmental Cap.
Appears in 1 contract
Indemnification by Parent and Seller. From and after the Closing, subject to the limitations in this Article IX, Parent and Seller (the “Seller Indemnifying Parties”) shall jointly and severally indemnify and hold harmless Purchaser and its respective Affiliates the Company Entities (including collectively, the Companies after the Closing) and their respective directors, officers, employees, shareholders, members, partners, agents, successors and assigns (collectively “Purchaser Claimants” and individually a “Purchaser ClaimantParties”) harmless against for any Damages, whether or not involving a third party claim, that Purchaser Claimants incurred Losses directly or indirectly by reason of resulting from or attributable toarising out of:
(a) the inaccuracy or any breach of or inaccuracy in any representation Specified Representations and Warranties or warranty Tax Representations of Parent and Seller or in any certificate in respect thereof delivered by Seller or Parent contained in Article III of pursuant to this Agreement to the extent not caused by PurchaserAgreement;
(b) any failure breach of or inaccuracy in any representations and warranties made by Seller or Parent to perform in Article III and Article IV (other than the Specified Representations and Warranties or comply with Tax Representations of Parent and Seller), or in any covenant or obligation of certificate delivered by Seller or Parent, as applicable, contained in Parent pursuant to this Agreement to the extent not caused by Purchaser, including but not limited to, any failure to satisfy the terms of the Assignment and Assumption Agreementin respect thereof;
(c) any Pre-Closing Taxbreach or default in the performance of any covenant or agreement contained herein by Parent, Seller or, with respect to covenants and agreements to be performed by AEC prior to the Closing, AEC;
(d) any brokerage Liability imposed on a Company Entity that arises under or finder's fees with respect to any Employee Plan, other than any such Liability (i) that arises under or commissions with respect to any Company Employee Plan, (ii) to be paid and satisfied by Purchaser, a Company Entity or similar payments based upon their Affiliates pursuant to the Transition Services Agreement (Computing) or the Transition Services Agreement (Consumer), (iii) included in the final determination of Closing Net Working Capital, Closing Indebtedness, or Closing Company Transaction Costs or (iv) to the extent that such Liability is also the subject matter of any agreement breach of or understanding alleged to have been inaccuracy in any representations and warranties made by any Person with a Company, Seller or Parent in Article III and Article IV and then only to the extent that monetary remedy is not available from the Escrow Amount or any Related Person (or any Person acting on their behalf) in connection with the transactions contemplated herebyR&W Insurance Policy;
(e) any Closing Company Transaction Costs (but only to the retained liabilities set forth on Annex Dextent not paid at or prior to the Closing or to the extent not included in the calculation of the Closing Net Working Capital, Closing Cash, Closing Indebtedness or Closing Company Transaction Costs as finally determined pursuant to Section 2.03);
(f) any Closing Indebtedness (but only to the Restructuring;extent not paid at or prior to the Closing or to the extent not included in the calculation of the Closing Net Working Capital, Closing Cash, Closing Indebtedness or Closing Company Transaction Costs as finally determined pursuant to Section 2.03); and
(g) any Indebtedness of any other Person, the payment of which any Company is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, either severally or jointly with any other Person, whether contingent or otherwise; and/or
(h) Environmental Liabilities to the extent (i) related to or arising from operations at (including without limitation off-site disposal from), or conditions at, on, under or proximate to any properties, landfills, or facilities retained by the Seller Indemnifying Parties after Closing (including but not limited to the properties, landfills or facilities to be transferred out of the Companies pursuant to the Restructuring, whether or not transferred prior to Closing), or which are not otherwise conveyed to Purchaser pursuant to this Agreement, including but not limited to facilities formerly owned by U.S. Pipe (the “Non-Transferred Properties”); or (ii) any remedial, response, abatement, cleanup, investigative, and monitoring work required by a Governmental Entity (collectively, “Remedial Work”) resulting from a Release of Hazardous Materials from any Non-Transferred Properties, including without limitation a Release of Hazardous Materials which is discovered after Closing but which began before Closing. Notwithstanding the preceding, the Seller Indemnifying Parties shall not be liable under this Agreement to the extent (but only to the extent) of that portion of the costs and liabilities of any Environmental Liability or Remedial Work attributable to (y) an affirmative act of any Purchaser Claimant which causes the material aggravation of a then-existing Release of Hazardous Materials or (z) the introduction and initial Release of Hazardous Material by a Person other than either Company or any Seller Indemnifying Party or any Affiliate of any such party, from any Non-Transferred Property(ies) never owned, operated or leased by either Company or any Seller Indemnifying Party or any Affiliate of any such party.
(i) The Seller Indemnifying Parties shall not be required to indemnify a Purchaser Claimant under clause (a) of this Section 8.2 unless (i) the Damages for an individual claim (or series of related claims so substantially related as to effectively constitute one claim) exceeds $50,000 and (ii) the aggregate cumulative sum of all Damages for which indemnity would otherwise be due under clause (a) of this Section 8.2 exceeds $1,000,000 (“Seller Basket”) in which case the Seller Indemnifying Parties shall be responsible for the full amount of such Damages, including the Seller Basket. In addition and subject to Section 8.2(j) below, the maximum aggregate liability of the Seller Indemnifying Parties for which indemnification under clause (a) of this Section 8.2 shall equal $10,000,000 (the “Seller Cap”). The limitations set forth in the immediately two preceding sentences shall not apply to claims arising from an inaccuracy or breach of any representations or warranties contained in Sections 3.1, 3.2, 3.3, 3.12 and 3.16 or claims based on fraud. The aggregate liability of the Seller Indemnifying Parties under Section 8.2(a) shall not exceed the Purchase Price.
(j) In addition to and without limiting the obligations of the Seller Indemnifying Parties contained in this Section 8.2 and without any application against the Seller Cap, the Purchaser Claimants shall be permitted to claim pursuant to Section 8.2(a), and the Seller Indemnifying Parties shall indemnify and hold harmless Purchaser Claimants against, any Damages, whether or not involving a third party claim, that Purchaser Claimants incurred directly or indirectly by reason of or attributable to the inaccuracy or breach of any representations or warranties contained in Section 3.11 hereof, up to a maximum additional aggregate liability of $5,000,000 (the “Additional Environmental Cap”). At the time Purchaser makes a claim, Purchaser shall notify (which election shall not be reversible) the Seller Indemnifying Parties in writing as to whether its claim for Damages pursuant to Section 8.2(a) will be applied against the Seller Cap or against the Additional Environmental Cap, or both (in which case identifying the amount applied against each). In the event claims for Damages are made against the Additional Environmental Cap, Purchaser and the Seller Indemnifying Parties shall each be responsible for 50% of the first $1,000,000 of any Damages claimed against the Additional Environmental Cap. For clarity, (i) the Seller Indemnifying Parties maximum liability under the Additional Environmental Cap, after considering the foregoing sharing of Damages up to $1,000,000, shall be $4,500,000, (ii) Purchase Claimants may choose, at their discretion, to make a claim for Damages either against the Seller Cap, the Additional Environmental Cap, or both, (iii) any claims made against Purchaser or its Affiliates (including the Additional Environmental Cap shall Company Entities) in no way apply againstrespect of any Liabilities of Parent, reduce Seller or limit in any way of their respective Affiliates (other than the Seller Cap and any claims made against the Seller Cap shall in no way apply against, reduce or limit in any way the Additional Environmental Cap and (iv) the limitation contained in Section 8.2(i)(a)(i) shall not apply to claims made against the Additional Environmental CapCompany Entities).
Appears in 1 contract
Samples: Stock Purchase Agreement (SMART Global Holdings, Inc.)
Indemnification by Parent and Seller. From and after the Closing, (a) Parent and Seller (the “Seller Indemnifying Parties”) shall shall, jointly and severally severally, indemnify and hold Purchaser defend Buyer and its respective Affiliates (including the Companies after the Closing) and their respective directorsstockholders, members, managers, officers, directors, employees, shareholders, members, partners, agents, successors and assigns (collectively the “Purchaser Claimants” and individually a “Purchaser ClaimantBuyer Indemnitees”) against, and shall hold them harmless against from, any Damagesand all Losses resulting from, whether arising out of, or not involving a third party claimincurred by any Buyer Indemnitee in connection with, that Purchaser Claimants incurred directly or indirectly by reason of or attributable otherwise with respect to:
(ai) the inaccuracy or any breach of or any inaccuracy in any representation or warranty of Parent or Seller contained in any Schedule, certificate or other document delivered pursuant to this Agreement or any breach of or any inaccuracy in any representation or warranty of Parent or Seller contained in Article III IV made as of this Agreement to the extent not caused date hereof and as though restated on and as of the Closing Date, as may be qualified by Purchaserthe Schedules thereto and;
(bii) any breach of or failure by Parent or Seller or Parent to perform or comply with any agreement, covenant or obligation of Parent or Seller or Parent, as applicable, contained in this Agreement or any document delivered by Parent or Seller to Buyer at the extent not caused by Purchaser, including but not limited to, any failure to satisfy the terms of the Assignment and Assumption AgreementClosing;
(ciii) any Pre-Closing TaxLiability in any way related to, or arising out of or in connection with, any Subsidiary of Parent or Seller and/or the dissolution thereof;
(div) any brokerage Excluded Liability, regardless of whether or finder's fees not the Seller Disclosure Schedule discloses any such Excluded Liability;
(v) any fees, expenses or commissions other payments incurred or similar payments based upon any agreement or understanding alleged to have been made owed by any Person with a Company, Seller or Parent or Seller to any Related Person (agent, broker, investment banker or any Person acting on their behalf) other firm or person retained or employed by it in connection with the transactions contemplated hereby;by this Agreement and the Ancillary Agreements; and
(evi) fraudulent transfer Laws or the retained liabilities set forth on Annex D;failure to comply with any bulk sales Laws and similar Laws.
(fb) the Restructuring;
(g) any Indebtedness of any other Person, the payment of which any Company is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, either severally or jointly with any other Person, whether contingent or otherwise; and/or
(h) Environmental Liabilities to the extent (i) related to or arising from operations at (including without limitation off-site disposal from), or conditions at, on, under or proximate to any properties, landfills, or facilities retained by the Parent and Seller Indemnifying Parties after Closing (including but not limited to the properties, landfills or facilities to be transferred out of the Companies pursuant to the Restructuring, whether or not transferred prior to Closing), or which are not otherwise conveyed to Purchaser pursuant to this Agreement, including but not limited to facilities formerly owned by U.S. Pipe (the “Non-Transferred Properties”); or (ii) any remedial, response, abatement, cleanup, investigative, and monitoring work required by a Governmental Entity (collectively, “Remedial Work”) resulting from a Release of Hazardous Materials from any Non-Transferred Properties, including without limitation a Release of Hazardous Materials which is discovered after Closing but which began before Closing. Notwithstanding the preceding, the Seller Indemnifying Parties shall not be liable under this Agreement for any Loss or Losses pursuant to the extent Section 10.2(a)(i) (but only to the extent“Buyer Warranty Losses”) of that portion of the costs and liabilities of any Environmental Liability or Remedial Work attributable to (y) an affirmative act of any Purchaser Claimant which causes the material aggravation of a then-existing Release of Hazardous Materials or (z) the introduction and initial Release of Hazardous Material by a Person other than either Company or any Seller Indemnifying Party or any Affiliate of any such party, from any Non-Transferred Property(ies) never owned, operated or leased by either Company or any Seller Indemnifying Party or any Affiliate of any such party.
(i) The Seller Indemnifying Parties shall not be required to indemnify a Purchaser Claimant under clause (a) unless and until the aggregate amount of this Section 8.2 unless (i) all Buyer Warranty Losses incurred by the Damages for an individual claim (or series of related claims so substantially related as to effectively constitute one claim) Buyer Indemnitees exceeds $50,000 [****], in which event Seller shall be liable for all Buyer Warranty Losses from the first dollar, and (ii) to the aggregate cumulative sum of all Damages for which indemnity would otherwise be due under clause (a) of this Section 8.2 exceeds extent that Buyer Warranty Losses exceed $1,000,000 (“Seller Basket”) in which case the Seller Indemnifying Parties shall be responsible for the full amount of such Damages, including the Seller Basket. In addition and subject to Section 8.2(j) below, the maximum aggregate liability of the Seller Indemnifying Parties for which indemnification under clause (a) of this Section 8.2 shall equal $10,000,000 (the “Seller Cap”). The limitations set forth [****] in the immediately two preceding sentences shall not apply to claims arising from an inaccuracy or breach of any representations or warranties contained in Sections 3.1aggregate; provided, 3.2, 3.3, 3.12 and 3.16 or claims based on fraud. The aggregate liability of the Seller Indemnifying Parties under Section 8.2(a) shall not exceed the Purchase Price.
(j) In addition to and without limiting the obligations of the Seller Indemnifying Parties contained in this Section 8.2 and without any application against the Seller Cap, the Purchaser Claimants shall be permitted to claim pursuant to Section 8.2(a), and the Seller Indemnifying Parties shall indemnify and hold harmless Purchaser Claimants against, any Damages, whether or not involving a third party claimhowever, that Purchaser Claimants incurred directly or indirectly by reason of or attributable to the inaccuracy or breach of any representations or warranties contained in Section 3.11 hereof, up to a maximum additional aggregate liability of $5,000,000 (the “Additional Environmental Cap”). At the time Purchaser makes a claim, Purchaser shall notify (which election shall not be reversible) the Seller Indemnifying Parties in writing as to whether its claim for Damages pursuant to Section 8.2(a) will be applied against the Seller Cap or against the Additional Environmental Cap, or both (in which case identifying the amount applied against each). In the event claims for Damages are made against the Additional Environmental Cap, Purchaser and the Seller Indemnifying Parties shall each be responsible for 50% of the first $1,000,000 of any Damages claimed against the Additional Environmental Cap. For clarity, foregoing clauses (i) the Seller Indemnifying Parties maximum liability under the Additional Environmental Cap, after considering the foregoing sharing of Damages up to $1,000,000, shall be $4,500,000, and (ii) Purchase Claimants may choose, at their discretion, to make a claim for Damages either against the Seller Cap, the Additional Environmental Cap, or both, (iii) any claims made against the Additional Environmental Cap shall in no way apply against, reduce or limit in any way the Seller Cap and any claims made against the Seller Cap shall in no way apply against, reduce or limit in any way the Additional Environmental Cap and (iv) the limitation contained in Section 8.2(i)(a)(i) shall not apply to claims any Loss or Losses resulting from, arising out of or incurred by any Buyer Indemnitee in connection with, or otherwise with respect to, any Excluded Liabilities; provided, further, nothing contained in this Section 10.2(b) shall be deemed to limit or restrict in any manner any rights or remedies which Buyer has, or might have, at Law, in equity or otherwise, based on fraud or a willful misrepresentation or willful breach of warranty hereunder.
(c) Parent and Seller hereby expressly acknowledge and agree that (i) in the case that Buyer is required to make an out-of-pocket cash payment with respect to any Buyer Warranty Losses (a “Cash Payment”), Buyer shall have the right to receive payment of any and all amounts owed to any Buyer Indemnity pursuant to this Article X (or any portion thereof) in cash from Parent or (ii) in the case that Buyer is not required to make a Cash Payment, Buyer shall have the right to be fully and completely offset against and recoup from any and all amounts owed to any Buyer Indemnity pursuant to this Article X (or any portion thereof); provided, however, that any such offset or recoupment shall be made against by reducing the Additional Environmental Capprincipal amount of the Note due to Seller; provided, further, that notwithstanding the foregoing, if such Buyer Warranty Losses exceed the principal amount of the Note, Buyer shall have the right to receive payment of the amount of such excess in cash.
Appears in 1 contract
Samples: Asset Purchase Agreement (Broadridge Financial Solutions, Inc.)
