Indemnification by the Parties. (a) From and after the Closing Date (but subject to Section 10.1(a) and the limitations set forth in Section 10.3 below), each Cypress Indemnitee shall be held harmless and shall be indemnified from and against, and shall be compensated, reimbursed and paid for, any Damages which are directly or indirectly suffered or incurred by any Cypress Indemnitee or to which any Cypress Indemnitee may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim) and which arise from or as a result of, or are directly or indirectly connected with: (i) any inaccuracy in or breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any representation or warranty of Cellatope set forth in this Agreement, in the Cellatope Compliance Certificate, or in the certificate provided pursuant to Section 7.5(vi) (without giving effect, in each case, to any information provided by Cellatope pursuant to Section 62); (ii) any breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any covenant or obligation of Cellatope set forth in this Agreement (including the covenants set forth in Sections 5 and 6) to be performed on or prior to Closing (without giving effect, in each case, to any information provided by Cellatope pursuant to Section 6.2), (iii) any Excluded Liability, (iv) any Liability incurred pursuant to any applicable bulk sale law or based on noncompliance therewith or (v) any Legal Proceeding relating to any inaccuracy or breach of the type referred to in clauses (i) or (ii) or relating to clauses (iii) or (iv) above (including any Legal Proceeding commenced by any Cypress Indemnitee for the purpose of enforcing any of its rights under this Section 10 if a Cypress Indemnitee is the prevailing party therein). (b) In the event any Cypress Indemnitee shall suffer any Damages for which such Cypress Indemnitee is entitled to indemnification under this Section 10 (as determined pursuant to Section 10.5), such Cypress Indemnitee shall be entitled to recover such Damages by, first, obtaining the amount of Escrow Funds, if any, equal in value to the aggregate amount of such Damages, and, second, once no Escrow Funds remain in the Escrow Fund pursuant to depletion of the Escrow Funds or expiration of the Escrow Claim Period, and only in the case of inaccuracies in or breaches or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breaches of any of the representations and warranties in Section 3.5 (Intellectual Property), by setting off the amount of such Damages (or the remaining amount of such Damages, after giving effect to any amounts obtained for such Damages from the Escrow Fund) up to a maximum of $300,000 payable pursuant to all set-offs (the “Set-Off Funds”) first against the next Annual Payment to come due, if applicable and second against any Milestone Consideration remaining to be paid, in accordance with Section 10.6. Any such set off against an Annual Payment or against Milestone Consideration shall be paid in cash. Claims for Set-off Funds made by the Cypress Indemnitees relating to any alleged breach of any of the representations and warranties in Section 3.5 (Intellectual Property) of this Agreement may be made until the earlier of the payment of the Milestone Consideration or the Holdback Payment Date. If at any time prior to the earlier of the payment of the Milestone Consideration or the Holdback Payment Date, any Cypress Indemnitee delivers to Cellatope a written notice alleging the existence of an inaccuracy in or a breach of any of the representations and warranties made by Cellatope in Section 3.5 (Intellectual Property) (and setting forth in reasonable detail the basis for such Cypress Indemnitee’s belief that such an inaccuracy or breach may exist) and asserting a claim for recovery based on such alleged inaccuracy or breach, then the representation or warranty underlying the claim asserted in such notice shall survive the earlier of the payment of the Milestone Consideration or the Holdback Payment Date until such time as such claim is fully and finally resolved, for the sole purpose of remaining in effect in order to permit such claim to be fully and finally resolved. In addition to the foregoing, in the case of fraud or intentional misrepresentation, the Cypress Indemnitees shall be entitled to bring suit for and recover Damages without any limitation against Cellatope and against any other Person who committed or participated in such fraud or intentional misrepresentation. (c) From and after the Closing Date (but subject to Section 10.1(a) and the limitations set forth in Section 10.3 below), each Cellatope Indemnitee shall be held harmless and shall be indemnified by Cypress from and against, and shall be compensated, reimbursed and paid for, any Damages which are directly or indirectly suffered or incurred by any Cellatope Indemnitee or to which any Cellatope Indemnitee may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim) and which arise from or as a result of, or are directly or indirectly connected with: (i) any inaccuracy in or breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any representation or warranty of Cypress set forth in this Agreement, in the Cypress Compliance Certificate, or in the certificate provided pursuant to Section 8.3 (without giving effect, in each case, to any information provided by Cypress pursuant to Section 6.2); (ii) any breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any covenant or obligation of Cypress set forth in this Agreement (including the covenants set forth in Section 6) to be performed on or prior to Closing (without giving effect, in each case, to any information provided by Cypress pursuant to Section 6.2), (iii) any Assumed Liability or (iv) any Legal Proceeding relating to any inaccuracy or breach of the type referred to in clauses (i) or (ii) or relating to clause (iii) above (including any Legal Proceeding commenced by any Cellatope Indemnitee for the purpose of enforcing any of its rights under this Section 10 if a Cellatope Indemnitee is the prevailing party therein).
Appears in 4 contracts
Samples: Asset Purchase Agreement (Exagen Inc.), Asset Purchase Agreement (Exagen Inc.), Asset Purchase Agreement (Exagen Diagnostics Inc)
Indemnification by the Parties. (i) Each of the parties hereto agrees to indemnify (the “Indemnifying Party”) and hold the other and each of its respective partners, officers, directors, members, managers, employees, counsel, accountants, agents, successors and assigns (collectively, an “Indemnified Party”) harmless from any and all damages, liabilities, losses, costs or expenses (including, without limitation, reasonable counsel fees and expenses) suffered or paid, directly or indirectly, solely as a result of or arising out of the failure of any respective representation or warranty made by the Indemnifying Party in this Agreement or in any Exhibit or Schedule attached hereto to be true, complete and correct in all material respects as of the date of this Agreement and as of the Closing Date.
(ii) If any action, suit, proceeding or investigation is commenced, as to which an Indemnified Party proposes to demand indemnification pursuant to Section 6.2(i) hereof, it shall notify the Indemnifying Party with reasonable promptness; provided, however, that any failure by an Indemnified Party to notify the Indemnifying Party shall not relieve the Indemnifying Party from its obligations hereunder, except to the extent that the Indemnifying Party shall have been materially prejudiced in its ability to defend the action, suit, proceedings or investigation for which such indemnification is sought by reason of such failure. Except as set forth below, an Indemnifying Party shall have the right to retain counsel of its own choice, and the Indemnifying Party shall pay the reasonable fees, expenses and disbursements of counsel selected by the Indemnifying Party; and such counsel shall to the extent consistent with its professional responsibilities, cooperate with the Indemnified Party and any counsel designated by the Indemnified Party, which counsel designated by the Indemnified Party shall be the expense of the Indemnified Party. In the event the Indemnifying Party does not assume or fails to conduct in a diligent manner the defense of any claim or litigation resulting therefrom, (a) From and after the Closing Date (Indemnified Party may defend, using its own counsel, against such claim or litigation, in such manner as it deems appropriate, including, but not limited to, settling such claim or litigation, on such terms as the Indemnified Party may deem appropriate, subject to Section 10.1(a) and first obtaining the limitations set forth in Section 10.3 below)prior written consent of the Indemnifying Party, each Cypress Indemnitee which consent shall not be held harmless and shall be indemnified from and againstunreasonably withheld or delayed or conditioned, and shall be compensated, reimbursed and paid for, any Damages which are directly or indirectly suffered or incurred by any Cypress Indemnitee or to which any Cypress Indemnitee may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim) and which arise from or as a result of, or are directly or indirectly connected with: (i) any inaccuracy in or breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any representation or warranty of Cellatope set forth in this Agreement, in the Cellatope Compliance Certificate, or in the certificate provided pursuant to Section 7.5(vi) (without giving effect, in each case, to any information provided by Cellatope pursuant to Section 62); (ii) any breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any covenant or obligation of Cellatope set forth in this Agreement (including the covenants set forth in Sections 5 and 6) to be performed on or prior to Closing (without giving effect, in each case, to any information provided by Cellatope pursuant to Section 6.2), (iii) any Excluded Liability, (iv) any Liability incurred pursuant to any applicable bulk sale law or based on noncompliance therewith or (v) any Legal Proceeding relating to any inaccuracy or breach of the type referred to in clauses (i) or (ii) or relating to clauses (iii) or (iv) above (including any Legal Proceeding commenced by any Cypress Indemnitee for the purpose of enforcing any of its rights under this Section 10 if a Cypress Indemnitee is the prevailing party therein).
(b) In the event any Cypress Indemnitee shall suffer any Damages for which such Cypress Indemnitee is entitled to indemnification under this Section 10 (as determined pursuant to Section 10.5), such Cypress Indemnitee Indemnifying Party shall be entitled to recover participate in (but not control) the defense of such Damages byaction, firstwith its counsel and at its own expense. The Indemnifying Party shall pay the reasonable fees, obtaining reasonable expenses and reasonable disbursements of counsel selected by an Indemnified Party in the circumstances described in the previous sentence. If the Indemnifying Party thereafter seeks to question the manner in which the Indemnified Party defended such third party claim or the amount or nature of Escrow Fundsany such settlement, the Indemnifying Party shall have the burden to prove that the Indemnified Party did not defend or settle such third party claim in a reasonably prudent manner. The Indemnifying Party shall be liable for any settlement of any claim against an Indemnified Party made with the Indemnifying Party’s written consent or made in connection with the circumstances described in the first sentence of the previous paragraph. The Indemnifying Party shall not, without prior written consent of an Indemnified Party, which consent shall not be unreasonably withheld or delayed or conditioned, settle or compromise any claim, or permit a default or consent to the entry of any judgment in respect thereof; provided, however, that notwithstanding the foregoing, the Indemnifying Party shall have the right to settle or compromise any claim provided that (i) the Indemnifying Party pays all sums, costs and expenses incident thereto, and (ii) Indemnifying Party obtains for the Indemnified Party a full, non-conditional absolute release. Each party agrees to cooperate fully with the other, such cooperation to include, without limitation, attendance at depositions and the production of relevant documents as may be reasonably requested by the other parties, provided that the Indemnifying Party will reimburse the Indemnified Party for all of its reasonable, actual out-of-pocket expenses incurred in connection with such cooperation by the Indemnified Party.
(iii) In order to provide for just and equitable contribution, if anya claim for indemnification pursuant to these indemnification provisions is made but it is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) that such indemnification may not be enforced in such case, equal even though the express provisions hereof provide for indemnification in value such case, then the Indemnifying Party (as applicable), on the one hand, and an Indemnified Party, on the other, shall contribute to the aggregate amount of such Damageslosses, andclaims, seconddamages, once no Escrow Funds remain in obligations, penalties, judgments, awards, liabilities, costs and expenses to which the Escrow Fund pursuant to depletion of the Escrow Funds or expiration of the Escrow Claim Period, and only in the case of inaccuracies in or breaches or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breaches of any of the representations and warranties in Section 3.5 (Intellectual Property), by setting off the amount of such Damages (or the remaining amount of such Damages, after giving effect to any amounts obtained for such Damages from the Escrow Fund) up to a maximum of $300,000 payable pursuant to all set-offs (the “Set-Off Funds”) first against the next Annual Payment to come due, if applicable and second against any Milestone Consideration remaining to indemnified persons may be paid, subject in accordance with Section 10.6. Any such set off against an Annual Payment or against Milestone Consideration shall be paid in cash. Claims for Set-off Funds made the relative benefits received by the Cypress Indemnitees relating to any alleged breach of any of Indemnifying Party (as the representations case may be), on the one hand, and warranties in Section 3.5 (Intellectual Property) of this Agreement may be made until an Indemnified Party, on the earlier of the payment of the Milestone Consideration or the Holdback Payment Date. If at any time prior to the earlier of the payment of the Milestone Consideration or the Holdback Payment Date, any Cypress Indemnitee delivers to Cellatope a written notice alleging the existence of an inaccuracy in or a breach of any of the representations and warranties made by Cellatope in Section 3.5 (Intellectual Property) (and setting forth in reasonable detail the basis for such Cypress Indemnitee’s belief that such an inaccuracy or breach may exist) and asserting a claim for recovery based on such alleged inaccuracy or breach, then the representation or warranty underlying the claim asserted in such notice shall survive the earlier of the payment of the Milestone Consideration or the Holdback Payment Date until such time as such claim is fully and finally resolved, for the sole purpose of remaining in effect in order to permit such claim to be fully and finally resolved. In addition to the foregoingother hand, in connection with the case of fraud statements, acts or intentional misrepresentation, omissions which resulted in expenses and the Cypress Indemnitees relevant equitable considerations shall also be considered. No person found liable for a fraudulent misrepresentation shall be entitled to bring suit contribution from any person who is not also found liable for and recover Damages without any limitation against Cellatope and against any other Person who committed or participated in such fraud or intentional fraudulent misrepresentation.
(c) From and after the Closing Date (but subject to Section 10.1(a) and the limitations set forth in Section 10.3 below), each Cellatope Indemnitee shall be held harmless and shall be indemnified by Cypress from and against, and shall be compensated, reimbursed and paid for, any Damages which are directly or indirectly suffered or incurred by any Cellatope Indemnitee or to which any Cellatope Indemnitee may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim) and which arise from or as a result of, or are directly or indirectly connected with: (i) any inaccuracy in or breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any representation or warranty of Cypress set forth in this Agreement, in the Cypress Compliance Certificate, or in the certificate provided pursuant to Section 8.3 (without giving effect, in each case, to any information provided by Cypress pursuant to Section 6.2); (ii) any breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any covenant or obligation of Cypress set forth in this Agreement (including the covenants set forth in Section 6) to be performed on or prior to Closing (without giving effect, in each case, to any information provided by Cypress pursuant to Section 6.2), (iii) any Assumed Liability or (iv) any Legal Proceeding relating to any inaccuracy or breach of the type referred to in clauses (i) or (ii) or relating to clause (iii) above (including any Legal Proceeding commenced by any Cellatope Indemnitee for the purpose of enforcing any of its rights under this Section 10 if a Cellatope Indemnitee is the prevailing party therein).
Appears in 2 contracts
Samples: Series a 1 Preferred Stock Exchange Agreement (Grubb & Ellis Co), Series a 1 Preferred Stock Exchange Agreement (Grubb & Ellis Co)
Indemnification by the Parties. (a) From In order to induce each of the parties to enter into this Agreement and after to consummate the Closing Date transactions contemplated hereby, each of NSAC and the Purchaser (but each, in its capacity as indemnitor hereunder, the "Indemnifying Party") shall, subject to Section 10.1(athe further provisions of this Article VI, indemnify the other party and, without duplication, its stockholders, directors, officers and employees (collectively, the "Indemnified Parties") and shall hold the limitations set forth in Section 10.3 below)Indemnified Parties harmless against and with respect to any "Loss" which for purposes of this Agreement shall include any and all actual liabilities, each Cypress Indemnitee shall be held harmless costs, losses, damages and shall be indemnified from and against, and shall be compensated, reimbursed and paid for, any Damages which are directly or indirectly suffered or incurred by any Cypress Indemnitee or to which any Cypress Indemnitee may otherwise become subject expenses (regardless of whether or not such Damages relate arising out of third party claims), including without limitation reasonable attorneys' fees (after giving effect to any third-party claim) offsetting benefit actually received or receivable), incurred by the Indemnified Parties and which arise from arising out of or as a result of, or are directly or indirectly connected with: resulting from:
(i) any inaccuracy in misrepresentation or breach or (in of warranty by the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach Indemnifying Party of any representation of its representations or warranty of Cellatope warranties set forth in this Agreement, in the Cellatope Compliance Certificate, Agreements or in the certificate provided pursuant to Section 7.5(vi) (without giving effect, in each case, to any information provided by Cellatope pursuant to Section 62)Exhibit thereto; and
(ii) any breach or (in nonfulfillment by the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach Indemnifying Party of any covenant of its covenants, agreements or obligation of Cellatope other obligations set forth in this Agreement (including the covenants set forth in Sections 5 and 6) to be performed on Agreements or prior to Closing (without giving effectany Annex, in each case, to any information provided by Cellatope pursuant to Section 6.2), (iii) any Excluded Liability, (iv) any Liability incurred pursuant to any applicable bulk sale law Schedule or based on noncompliance therewith or (v) any Legal Proceeding relating to any inaccuracy or breach of the type referred to in clauses (i) or (ii) or relating to clauses (iii) or (iv) above (including any Legal Proceeding commenced by any Cypress Indemnitee for the purpose of enforcing any of its rights under this Section 10 if a Cypress Indemnitee is the prevailing party therein)Exhibit thereto.
(b) In the event any Cypress Indemnitee shall suffer any Damages for which such Cypress Indemnitee is entitled Entitlement to indemnification under pursuant to this Section 10 (as determined pursuant to Section 10.5), such Cypress Indemnitee 6.1 shall be entitled to recover such Damages by, first, obtaining conditioned upon claims in respect thereof being submitted in writing with detailed specification showing the amount of Escrow Funds, if any, equal in value to the aggregate amount basis of such Damagesclaim, and, second, once no Escrow Funds remain in including the Escrow Fund pursuant to depletion provision of the Escrow Funds or expiration of the Escrow Claim Periodthis Agreement breached, and only in the case a reasonably detailed calculation of inaccuracies in or breaches or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breaches of any of the representations and warranties in Section 3.5 (Intellectual Property), by setting off the amount of such Damages (or the remaining amount of such Damages, after giving effect to any amounts obtained for such Damages from the Escrow Fund) up to a maximum of $300,000 payable pursuant to all set-offs (the “Set-Off Funds”) first against the next Annual Payment to come dueclaim, if applicable and second against any Milestone Consideration remaining to be paidat all, in accordance with Section 10.6. Any such set off against an Annual Payment or against Milestone Consideration shall be paid in cash. Claims for Set-off Funds made by the Cypress Indemnitees relating to any alleged breach of any of the representations and warranties in Section 3.5 (Intellectual Property) of this Agreement may be made until the earlier of the payment of the Milestone Consideration or the Holdback Payment Date. If at any time prior relevant Indemnified Parties to the earlier of relevant Indemnifying Party no later than twelve (12) months after the payment of the Milestone Consideration or the Holdback Payment Closing Date, any Cypress Indemnitee delivers to Cellatope a written notice alleging the existence of an inaccuracy in or a breach of any of the representations and warranties made by Cellatope in Section 3.5 (Intellectual Property) (and setting forth in reasonable detail the basis for such Cypress Indemnitee’s belief that such an inaccuracy or breach may exist) and asserting a claim for recovery based on such alleged inaccuracy or breach, then the representation or warranty underlying the claim asserted in such notice shall survive the earlier of the payment of the Milestone Consideration or the Holdback Payment Date until such time as such claim is fully and finally resolved, for the sole purpose of remaining in effect in order to permit such claim to be fully and finally resolved. In addition to the foregoing, in the case of fraud or intentional misrepresentation, the Cypress Indemnitees shall be entitled to bring suit for and recover Damages without any limitation against Cellatope and against any other Person who committed or participated in such fraud or intentional misrepresentation.
(c) From and after Notwithstanding anything to the Closing Date contrary in this Section 6.1, the right to indemnity in respect of matters provided for in paragraphs (but subject to Section 10.1(aa)(i) and (ii) of this Section 6.1 shall not be barred on the limitations set forth basis that the amount of the claim has not been ascertained, liquidated or reduced to final judgment on or before the expiration of the aforesaid period, provided that such claim is identified in writing with detailed specification showing the basis of such claim, including the provision of this Agreement breached, and a reasonable estimate of the amount of such claim.
(d) The remedies provided in this Article VI and in Section 10.3 below), each Cellatope Indemnitee 7.12 shall be held harmless and shall be indemnified by Cypress from and againstthe relevant Indemnified Parties' sole remedies hereunder for breach of this Agreement, and shall be compensated, reimbursed and paid for, any Damages which are directly or indirectly suffered or incurred by any Cellatope Indemnitee or to which any Cellatope Indemnitee may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim) and which arise from or as a result of, or are directly or indirectly connected with: (i) any inaccuracy in or breach or (except in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any representation or warranty of Cypress set forth in this Agreement, in the Cypress Compliance Certificate, or in the certificate provided pursuant to Section 8.3 (without giving effect, in each case, to any information provided by Cypress pursuant to Section 6.2); (ii) any breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any covenant or obligation of Cypress set forth in this Agreement (including the covenants set forth in Section 6) to be performed on or prior to Closing (without giving effect, in each case, to any information provided by Cypress pursuant to Section 6.2), (iii) any Assumed Liability or (iv) any Legal Proceeding relating to any inaccuracy or breach of the type referred to in clauses (i) or (ii) or relating to clause (iii) above (including any Legal Proceeding commenced by any Cellatope Indemnitee for the purpose of enforcing any of its rights under this Section 10 if a Cellatope Indemnitee is the prevailing party therein)fraud.
Appears in 2 contracts
Samples: Interests Purchase Agreement (Nextel Communications Inc), Interest Purchase Agreement (Nextlink Communications Inc / De)
Indemnification by the Parties. (a) From and after Each of the Closing Date parties hereto agrees to indemnify (but subject to Section 10.1(athe "Indemnifying Party") and hold the limitations set forth in Section 10.3 below)other and each of its respective partners, each Cypress Indemnitee shall be held officers, directors, members, employees, counsel, accountants, agents, successors and assigns (collectively, an "Indemnified Party") harmless from any and shall be indemnified from all damages, liabilities, losses, costs or expenses (including, without limitation, reasonable counsel fees and againstexpenses) suffered or paid, and shall be compensated, reimbursed and paid for, any Damages which are directly or indirectly suffered or incurred by any Cypress Indemnitee or to which any Cypress Indemnitee may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim) and which arise from or indirectly, as a result of, of or are directly or indirectly connected with: (i) any inaccuracy in or breach or (in the case of a third-party claim that, if determined in favor arising out of the applicable third party, would result in a breach) alleged breach failure of any respective representation or warranty of Cellatope set forth in this Agreement, in made by the Cellatope Compliance Certificate, or in the certificate provided pursuant to Section 7.5(vi) (without giving effect, in each case, to any information provided by Cellatope pursuant to Section 62); (ii) any breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any covenant or obligation of Cellatope set forth Indemnifying Party in this Agreement (including the covenants set forth or in Sections 5 and 6) any Schedule or Exhibit attached hereto to be performed on or prior to Closing (without giving effecttrue, complete and correct in each case, to any information provided by Cellatope pursuant to Section 6.2), (iii) any Excluded Liability, (iv) any Liability incurred pursuant to any applicable bulk sale law or based on noncompliance therewith or (v) any Legal Proceeding relating to any inaccuracy or breach all material respects as of the type referred to in clauses (i) or (ii) or relating to clauses (iii) or (iv) above (including any Legal Proceeding commenced by any Cypress Indemnitee for date of this Agreement and as of the purpose of enforcing any of its rights under this Section 10 if a Cypress Indemnitee is the prevailing party therein)Closing Date.
(b) If any action, suit, proceeding or investigation is commenced, as to which an Indemnified Party proposes to demand indemnification, it shall notify the Indemnifying Party with reasonable promptness; PROVIDED, HOWEVER, that any failure by an Indemnified Party to notify the Indemnifying Party shall not relieve the Indemnifying Party from its obligations hereunder, except to the extent that the Indemnifying Party shall have been materially prejudiced in its ability to defend the action, suit, proceedings or investigation for which such indemnification is sought by reason of such failure. Except as set forth below, an Indemnifying Party shall have the right to retain counsel of its own choice, and the Indemnifying Party shall pay the reasonable fees, reasonable expenses and reasonable disbursements of counsel selected by the Indemnifying Party; and such counsel shall to the extent consistent with its professional responsibilities, cooperate with the Indemnified Party and any counsel designated by the Indemnified Party, which counsel shall be the expense of the Indemnified Party. In the event the Indemnifying Party does not assume or fails to conduct in a diligent manner the defense of any Cypress Indemnitee claim or litigation resulting therefrom, (a) the Indemnified Party may defend, using its own counsel, against such claim or litigation, in such manner as it deems appropriate, including, but not limited to, settling such claim or litigation, on such terms as the Indemnified Party may deem appropriate, subject to first obtaining the prior written consent of the Indemnifying Party, which consent shall suffer any Damages for which such Cypress Indemnitee is entitled to indemnification under this Section 10 not be unreasonably withheld or delayed, and (as determined pursuant to Section 10.5), such Cypress Indemnitee b) the Indemnifying Party shall be entitled to recover participate in (but not control) the defense of such Damages byaction, firstwith its counsel and at its own expense. The Indemnifying Party shall pay the reasonable fees, obtaining reasonable expenses and reasonable disbursements of counsel selected by an Indemnified Party in the circumstances described in the previous sentence. If the Indemnifying Party thereafter seeks to question the manner in which the Indemnified Party defended such third party claim or the amount or nature of Escrow Fundsany such settlement, if anythe Indemnifying Party shall have the burden to prove that the Indemnified Party did not defend or settle such third party claim in a reasonably prudent manner. The Indemnifying Party shall be liable for any settlement of any claim against an Indemnified Party made with the Indemnifying Party's written consent or made in connection with the circumstances described in the first sentence of the previous paragraph. The Indemnifying Party shall not, equal in value without prior written consent of an Indemnified Party, which consent shall not be unreasonably withheld or delayed, settle or compromise any claim, or permit a default or consent to the aggregate amount of such Damages, and, second, once no Escrow Funds remain in the Escrow Fund pursuant to depletion of the Escrow Funds or expiration of the Escrow Claim Period, and only in the case of inaccuracies in or breaches or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breaches entry of any of the representations and warranties judgment in Section 3.5 (Intellectual Property)respect thereof; PROVIDED, by setting off the amount of such Damages (or the remaining amount of such DamagesHOWEVER, after giving effect to any amounts obtained for such Damages from the Escrow Fund) up to a maximum of $300,000 payable pursuant to all set-offs (the “Set-Off Funds”) first against the next Annual Payment to come due, if applicable and second against any Milestone Consideration remaining to be paid, in accordance with Section 10.6. Any such set off against an Annual Payment or against Milestone Consideration shall be paid in cash. Claims for Set-off Funds made by the Cypress Indemnitees relating to any alleged breach of any of the representations and warranties in Section 3.5 (Intellectual Property) of this Agreement may be made until the earlier of the payment of the Milestone Consideration or the Holdback Payment Date. If at any time prior to the earlier of the payment of the Milestone Consideration or the Holdback Payment Date, any Cypress Indemnitee delivers to Cellatope a written notice alleging the existence of an inaccuracy in or a breach of any of the representations and warranties made by Cellatope in Section 3.5 (Intellectual Property) (and setting forth in reasonable detail the basis for such Cypress Indemnitee’s belief that such an inaccuracy or breach may exist) and asserting a claim for recovery based on such alleged inaccuracy or breach, then the representation or warranty underlying the claim asserted in such notice shall survive the earlier of the payment of the Milestone Consideration or the Holdback Payment Date until such time as such claim is fully and finally resolved, for the sole purpose of remaining in effect in order to permit such claim to be fully and finally resolved. In addition to notwithstanding the foregoing, the Indemnifying Party shall have the right to settle or compromise any claim provided that (i) the Indemnifying Party pays all sums, costs and expenses incident thereto, and (ii) Indemnifying Party obtains for the Indemnified Party a full, non-conditional absolute release. Each party agrees to cooperate fully with the other, such cooperation to include, without limitation, attendance at depositions and the production of relevant documents as may be reasonably requested by the other parties, provided that the Indemnifying Party will reimburse the Indemnified Party for all of its out-of-pocket expenses incurred in connection with such cooperation by the case of fraud or intentional misrepresentation, the Cypress Indemnitees shall be entitled to bring suit for and recover Damages without any limitation against Cellatope and against any other Person who committed or participated in such fraud or intentional misrepresentationIndemnified Party.
(c) From In order to provide for just and after the Closing Date equitable contribution, if a claim for indemnification pursuant to these indemnification provisions is made but it is found in a final judgment by a court of competent jurisdiction (but not subject to Section 10.1(afurther appeal) that such indemnification may not be enforced in such case, even though the express provisions hereof provide for indemnification in such case, then the Indemnifying Party (as applicable), on the one hand, and an Indemnified Party, on the other, shall contribute to the losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs and expenses to which the indemnified persons may be subject in accordance with the relative benefits received by the Indemnifying Party (as the case may be), on the one hand, and an Indemnified Party, on the other hand, in connection with the statements, acts or omissions which resulted in expenses and the limitations set forth in Section 10.3 below), each Cellatope Indemnitee relevant equitable considerations shall also be considered. No person found liable for a fraudulent misrepresentation shall be held harmless and shall be indemnified by Cypress entitled to contribution from and against, and shall be compensated, reimbursed and paid for, any Damages which are directly or indirectly suffered or incurred by any Cellatope Indemnitee or to which any Cellatope Indemnitee may otherwise become subject (regardless of whether or person who is not also found liable for such Damages relate to any third-party claim) and which arise from or as a result of, or are directly or indirectly connected with: (i) any inaccuracy in or breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any representation or warranty of Cypress set forth in this Agreement, in the Cypress Compliance Certificate, or in the certificate provided pursuant to Section 8.3 (without giving effect, in each case, to any information provided by Cypress pursuant to Section 6.2); (ii) any breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any covenant or obligation of Cypress set forth in this Agreement (including the covenants set forth in Section 6) to be performed on or prior to Closing (without giving effect, in each case, to any information provided by Cypress pursuant to Section 6.2), (iii) any Assumed Liability or (iv) any Legal Proceeding relating to any inaccuracy or breach of the type referred to in clauses (i) or (ii) or relating to clause (iii) above (including any Legal Proceeding commenced by any Cellatope Indemnitee for the purpose of enforcing any of its rights under this Section 10 if a Cellatope Indemnitee is the prevailing party therein)fraudulent misrepresentation.
Appears in 1 contract
Indemnification by the Parties. (a) From Subject to the terms and conditions of this Article VIII, Seller hereby agrees, from and after the Closing Date (but subject Closing, to Section 10.1(a) indemnify, defend and the limitations set forth in Section 10.3 below)hold harmless Purchaser, Parent, each Cypress Indemnitee shall be held harmless of Purchaser’s and shall be indemnified Parent’s Affiliates and each of the officers, directors, managers, members, partners, equityholders, employees, representatives, agents, successors and assigns of Purchaser, Parent and such Affiliates (collectively, the “Purchaser Indemnified Parties”) from and against, and shall be compensated, reimbursed pay on behalf of and paid forreimburse each Purchaser Indemnified Party in respect of, any Damages which are and all Losses incurred, suffered, sustained or required to be paid, directly or indirectly suffered or incurred indirectly, by any Cypress Indemnitee or to which any Cypress Indemnitee may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim) and which arise Purchaser Indemnified Party arising out of, resulting from or as a result of, or are directly or indirectly connected with: relating to (i) any breach of or inaccuracy in any representation and warranty made by the Company or breach Seller in Article II or by Seller in Article III, (in the case of a thirdii) any non-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged fulfillment or breach of any representation covenant or warranty of Cellatope agreement made by or to be performed by Seller set forth in this Agreement, in the Cellatope Compliance Certificate, or in the certificate provided pursuant to Section 7.5(vi) (without giving effect, in each case, to any information provided by Cellatope pursuant to Section 62); (iiiii) any breach non-fulfillment or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any covenant or obligation of Cellatope set forth in this Agreement (including the covenants set forth in Sections 5 and 6) agreement made by or to be performed on by the Company at or prior to Closing (without giving effect, in each case, to any information provided by Cellatope pursuant to Section 6.2), (iii) any Excluded Liabilitythe Closing, (iv) any Liability incurred pursuant to any applicable bulk sale law or based on noncompliance therewith or Indemnified Taxes, (v) any Legal Proceeding Liability of the Company arising or relating to any inaccuracy or breach the Pre-Closing Period that is not primarily related to the conduct of the type Acquired Business, (vi) any Liabilities that are “Assumed Liabilities” as that term is defined in the Contribution Agreement or (vii) any Liability of the Company arising out of or relating to the claims referred to in clauses (i) or (ii) or relating to clauses (iii) or (iv) above (including any Legal Proceeding commenced by any Cypress Indemnitee Section 2.13 of the Seller Disclosure Schedule under the heading “Open Litigation” and identified as “Enqwest, LLC” in the column titled “Name”. Notwithstanding the foregoing, and for the purpose avoidance of enforcing any doubt, no Seller Indemnified Party will be a Purchaser Indemnified Party by reason of its rights under this Section 10 if a Cypress Indemnitee is such Seller Indemnified Party’s position with the prevailing party therein)Company or otherwise.
(b) In the event any Cypress Indemnitee shall suffer any Damages for which such Cypress Indemnitee is entitled to indemnification under this Section 10 (as determined pursuant to Section 10.5), such Cypress Indemnitee shall be entitled to recover such Damages by, first, obtaining the amount of Escrow Funds, if any, equal in value Subject to the aggregate amount of such Damages, and, second, once no Escrow Funds remain in the Escrow Fund pursuant to depletion of the Escrow Funds or expiration of the Escrow Claim Period, terms and only in the case of inaccuracies in or breaches or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breaches of any of the representations and warranties in Section 3.5 (Intellectual Property), by setting off the amount of such Damages (or the remaining amount of such Damages, after giving effect to any amounts obtained for such Damages from the Escrow Fund) up to a maximum of $300,000 payable pursuant to all set-offs (the “Set-Off Funds”) first against the next Annual Payment to come due, if applicable and second against any Milestone Consideration remaining to be paid, in accordance with Section 10.6. Any such set off against an Annual Payment or against Milestone Consideration shall be paid in cash. Claims for Set-off Funds made by the Cypress Indemnitees relating to any alleged breach of any of the representations and warranties in Section 3.5 (Intellectual Property) conditions of this Agreement may be made until the earlier of the payment of the Milestone Consideration or the Holdback Payment Date. If at any time prior to the earlier of the payment of the Milestone Consideration or the Holdback Payment DateArticle VIII, any Cypress Indemnitee delivers to Cellatope a written notice alleging the existence of an inaccuracy in or a breach of any of the representations Parent and warranties made by Cellatope in Section 3.5 (Intellectual Property) (and setting forth in reasonable detail the basis for such Cypress Indemnitee’s belief that such an inaccuracy or breach may exist) and asserting a claim for recovery based on such alleged inaccuracy or breachPurchaser hereby agree, then the representation or warranty underlying the claim asserted in such notice shall survive the earlier of the payment of the Milestone Consideration or the Holdback Payment Date until such time as such claim is fully and finally resolved, for the sole purpose of remaining in effect in order to permit such claim to be fully and finally resolved. In addition to the foregoing, in the case of fraud or intentional misrepresentation, the Cypress Indemnitees shall be entitled to bring suit for and recover Damages without any limitation against Cellatope and against any other Person who committed or participated in such fraud or intentional misrepresentation.
(c) From from and after the Closing Date (but subject Closing, to Section 10.1(a) jointly and the limitations set forth in Section 10.3 below)severally indemnify, defend and hold harmless Seller, each Cellatope Indemnitee shall be held harmless of Seller’s Affiliates and shall be indemnified by Cypress each of its and their respective officers, directors, managers, members, partners, equityholders, employees, representatives, agents, successors and assigns (collectively, the “Seller Indemnified Parties”) from and against, and shall be compensated, reimbursed pay on behalf of and paid forreimburse each Seller Indemnified Party in respect of, any Damages which are and all Losses incurred, suffered, sustained or required to be paid, directly or indirectly suffered or incurred indirectly, by any Cellatope Indemnitee or to which any Cellatope Indemnitee may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim) and which arise Seller Indemnified Party arising out of, resulting from or as a result of, or are directly or indirectly connected with: relating to (i) any breach of or inaccuracy in any representation and warranty made by Parent or breach Purchaser in Article IV or (in the case of a thirdii) any non-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged fulfillment or breach of any representation covenant or warranty of Cypress agreement made by or to be performed by Parent or Purchaser set forth in this Agreement, in the Cypress Compliance Certificate, or in the certificate provided pursuant to Section 8.3 (without giving effect, in each case, to any information provided by Cypress pursuant to Section 6.2); (ii) any breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any covenant or obligation of Cypress set forth in this Agreement (including the covenants set forth in Section 6) to be performed on or prior to Closing (without giving effect, in each case, to any information provided by Cypress pursuant to Section 6.2), (iii) any Assumed Liability or (iv) any Legal Proceeding relating to any inaccuracy or breach of the type referred to in clauses (i) or (ii) or relating to clause (iii) above (including any Legal Proceeding commenced by any Cellatope Indemnitee for the purpose of enforcing any of its rights under this Section 10 if a Cellatope Indemnitee is the prevailing party therein).
Appears in 1 contract
Samples: Stock Purchase Agreement (GTT Communications, Inc.)
Indemnification by the Parties. (ai) From Subject to Section 9.04(c), Seller shall indemnify, defend and hold Buyer, its directors, officers, employees and agents (collectively, the "Acquiring Parties") harmless, from and against the entirety of any Adverse Consequences any of the Acquiring Parties may suffer, sustain or become subject to, through and after the Closing Date (but subject to Section 10.1(a) and date of the limitations set forth claim for indemnification, including any Adverse Consequences any of the Acquiring Parties may suffer after the end of any applicable Survival Period, resulting from, arising out of, relating to, in Section 10.3 below), each Cypress Indemnitee shall be held harmless and shall be indemnified from and against, and shall be compensated, reimbursed and paid for, any Damages which are directly or indirectly suffered or incurred by any Cypress Indemnitee or to which any Cypress Indemnitee may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim) and which arise from or as a result the nature of, or are directly or indirectly connected withcaused by: (iA) any inaccuracy in or breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach inaccuracy of any representation or warranty of Cellatope the Seller in this Agreement or in the schedules or certificates delivered by them in connection herewith, (B) any nonfulfillment or breach of any covenant or agreement on the part of the Seller set forth in this Agreement, in the Cellatope Compliance Certificate, or in the certificate provided pursuant to Section 7.5(vi) (without giving effect, in each case, to any information provided by Cellatope pursuant to Section 62); (ii) any breach or (in C) the case costs and expense of a defending any action, demand or claim by any third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any covenant against or obligation of Cellatope set forth in this Agreement (including the covenants set forth in Sections 5 and 6) to be performed on or prior to Closing (without giving effect, in each case, to any information provided by Cellatope pursuant to Section 6.2), (iii) any Excluded Liability, (iv) any Liability incurred pursuant to any applicable bulk sale law or based on noncompliance therewith or (v) any Legal Proceeding relating to any inaccuracy or breach of the type referred to in clauses (i) or (ii) or relating to clauses (iii) or (iv) above (including any Legal Proceeding commenced by any Cypress Indemnitee for the purpose of enforcing any of its rights under this Section 10 if a Cypress Indemnitee is the prevailing party therein).
(b) In the event any Cypress Indemnitee shall suffer any Damages for which such Cypress Indemnitee is entitled to indemnification under this Section 10 (as determined pursuant to Section 10.5), such Cypress Indemnitee shall be entitled to recover such Damages by, first, obtaining the amount of Escrow Funds, if any, equal in value to the aggregate amount of such Damages, and, second, once no Escrow Funds remain in the Escrow Fund pursuant to depletion of the Escrow Funds or expiration of the Escrow Claim Period, and only in the case of inaccuracies in or breaches or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breaches of affecting any of the representations and warranties in Section 3.5 (Intellectual Property), by setting off the amount of such Damages (or the remaining amount of such Damages, after giving effect to any amounts obtained for such Damages from the Escrow Fund) up to a maximum of $300,000 payable pursuant to all set-offs (the “Set-Off Funds”) first against the next Annual Payment to come dueAcquiring Parties which, if applicable and second against any Milestone Consideration remaining true or successful, would give rise to be paid, in accordance with Section 10.6. Any such set off against an Annual Payment or against Milestone Consideration shall be paid in cash. Claims for Set-off Funds made by the Cypress Indemnitees relating to any alleged breach of any of the representations and warranties in Section 3.5 (Intellectual Property) of this Agreement may be made until the earlier of the payment of the Milestone Consideration or the Holdback Payment Date. If at any time prior to the earlier of the payment of the Milestone Consideration or the Holdback Payment Date, any Cypress Indemnitee delivers to Cellatope a written notice alleging the existence of an inaccuracy in or a breach of any of the representations representations, warranties or covenants of the Seller. All Adverse Consequences for which the Acquiring Parties are entitled to seek indemnification under this Agreement are referred to herein as "Buyer Indemnifiable Losses."
(ii) Buyer shall indemnify, defend and warranties made by Cellatope in Section 3.5 (Intellectual Property) (hold Seller harmless, from and setting forth in reasonable detail against the basis for such Cypress Indemnitee’s belief that such an inaccuracy entirety of any Adverse Consequences Seller may suffer, sustain or breach may exist) become subject to, through and asserting a after the date of the claim for recovery based on such alleged inaccuracy or breachindemnification, then including any Adverse Consequences Seller may suffer after the representation or warranty underlying the claim asserted in such notice shall survive the earlier end of the payment of the Milestone Consideration or the Holdback Payment Date until such time as such claim is fully and finally resolvedany applicable Survival Period, for the sole purpose of remaining in effect in order to permit such claim to be fully and finally resolved. In addition to the foregoingresulting from, arising out of, relating to, in the case of fraud or intentional misrepresentation, the Cypress Indemnitees shall be entitled to bring suit for and recover Damages without any limitation against Cellatope and against any other Person who committed or participated in such fraud or intentional misrepresentation.
(c) From and after the Closing Date (but subject to Section 10.1(a) and the limitations set forth in Section 10.3 below), each Cellatope Indemnitee shall be held harmless and shall be indemnified by Cypress from and against, and shall be compensated, reimbursed and paid for, any Damages which are directly or indirectly suffered or incurred by any Cellatope Indemnitee or to which any Cellatope Indemnitee may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim) and which arise from or as a result nature of, or are directly or indirectly connected withcaused by: (i) any inaccuracy in or breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach inaccuracy of any representation or warranty of Cypress Buyer in this Agreement or in the schedules or certificates delivered by them in connection herewith, and (ii) any nonfulfillment or breach of any covenant or agreement on the part of Buyer set forth in this Agreement, in the Cypress Compliance Certificate, or in the certificate provided pursuant . All Adverse Consequences for which Seller is entitled to Section 8.3 (without giving effect, in each case, to any information provided by Cypress pursuant to Section 6.2); (ii) any breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any covenant or obligation of Cypress set forth in seek indemnification under this Agreement (including the covenants set forth in Section 6) to be performed on or prior to Closing (without giving effect, in each case, to any information provided by Cypress pursuant to Section 6.2), (iii) any Assumed Liability or (iv) any Legal Proceeding relating to any inaccuracy or breach of the type are referred to in clauses (i) or (ii) or relating to clause (iii) above (including any Legal Proceeding commenced by any Cellatope Indemnitee for the purpose of enforcing any of its rights under this Section 10 if a Cellatope Indemnitee is the prevailing party therein)herein as "Seller Indemnifiable Losses."
Appears in 1 contract
Samples: Asset Purchase Agreement (Lahaina Acquisitions Inc)
Indemnification by the Parties. (a) From and after the Closing Date (but subject 10.2.1 Subject to Section 10.1(a) and the limitations set forth in Section 10.3 below)10.1 and Section 10.2.4, each Cypress Indemnitee shall be of the Shareholders severally, with, responsibility proportionate to such Shareholder's percentage interest in the common stock, no par value of LCCR relative to that held harmless by all the Shareholders in the aggregate immediately prior to the Closing Date and shall be indemnified from and againstwith, and shall be compensated, reimbursed and paid for, any Damages which are directly or indirectly suffered or incurred by any Cypress Indemnitee or to which any Cypress Indemnitee may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim) and which arise from or as a result of, or are directly or indirectly connected with: (i) any inaccuracy in or breach or (in the case of a third-party claim thatsubparagraphs 10.2.1.A and 10.
2.1. C below, 100% of responsibility, (and, if determined in favor this Agreement is terminated prior to the Closing Date, LCCR) shall indemnify, defend and hold harmless STAR and any of its affiliates and Representatives, and shall reimburse STAR and any of its affiliates and Representatives, on demand, for any claim, demand, loss, liability, damage or expense (including without limitation, any claim for breach of contract or for tort which would be allowable under applicable law if this indemnity provision was not a provision of this Agreement), including without limitation interest, penalties and reasonable attorneys', accountants' and experts' fees and costs of investigation incurred as a result thereof (collectively "Damages"), resulting from any of the applicable third party, would result in a breach) alleged following:
A. Any breach of any representation or warranty of Cellatope set forth in this Agreement, default in the Cellatope Compliance Certificate, or in the certificate provided pursuant to Section 7.5(vi) (without giving effect, in each case, to any information provided performance by Cellatope pursuant to Section 62); (ii) any breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach such Shareholder of any covenant or obligation agreement of Cellatope set forth such Shareholder contained herein;
B. Any breach or default in this Agreement (including the covenants set forth in Sections 5 and 6) performance by LCCR of any covenant or agreement of LCCR to be performed on or prior to Closing (without giving effectthe Closing;
C. Any breach of warranty or inaccurate or erroneous representation made by such Shareholder herein, in each case, to any information provided by Cellatope pursuant to Section 6.2), (iii) any Excluded Liability, (iv) any Liability incurred or pursuant to any applicable bulk sale law certificate delivered or based to be delivered by or on noncompliance therewith behalf of the Shareholders or LCCR pursuant hereto to the extent that such representation relates to such Shareholder individually (v) any Legal Proceeding relating including, without limitation, the representations of each Shareholder contained in Sections 3.3, 3.4, 3.5, 3.7, 3.8, 3.19, 3.20, 3.26, 3.29, 3.30, 3.31, 3.32, 3.33 and 3.34);
D. Any breach of warranty or inaccurate or erroneous representation made by the Shareholders jointly and severally or LCCR herein, or pursuant to any inaccuracy certificate delivered or breach to be delivered by or on behalf of the type referred Shareholders or LCCR pursuant hereto; or -28- 29 E. Any liability arising out of any and all Actions, demands, judgments, costs and expenses incident to in clauses any of the foregoing.
10.2.2 STAR shall indemnify, defend and hold harmless the Shareholders and any of their affiliates and shall reimburse the Shareholders and any of their affiliates on demand, for any Damages resulting from (i) any breach or default in the performance by STAR or Acquisition Corp. of any covenant or agreement of STAR or Acquisition Corp. contained herein or (ii) any breach of warranty or relating inaccurate or erroneous representation made by STAR or Acquisition Corp. herein, or pursuant to clauses (iii) any certificate delivered or (iv) above (including any Legal Proceeding commenced to be delivered by any Cypress Indemnitee for the purpose or on behalf of enforcing any of its rights under this Section 10 if a Cypress Indemnitee is the prevailing party therein)STAR or Acquisition Corp. pursuant hereto.
(b) In the event any Cypress Indemnitee shall suffer any Damages for which such Cypress Indemnitee is 10.2.3 A party entitled to indemnification hereunder ("Indemnitee") shall promptly notify the other party ("Indemnitor") of any such liability, breach of warranty, inaccuracy, misrepresentation or any other claim arising under the foregoing indemnification provision. Indemnitor may contest and defend in good faith any claim of third parties covered by this Section 10 (as determined pursuant to Section 10.5), such Cypress Indemnitee shall be entitled to recover such Damages by, first, obtaining at its or their own expense; provided that within thirty days of the amount Indemnitor's receipt of Escrow Funds, if any, equal in value to the aggregate amount notice of such Damagesclaim, and, second, once no Escrow Funds remain in the Escrow Fund pursuant Indemnitor notify Indemnitee of Indemnitor's desire to depletion of the Escrow Funds or expiration of the Escrow Claim Period, defend and only in the case of inaccuracies in or breaches or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breaches of any of the representations and warranties in Section 3.5 (Intellectual Property), by setting off the amount of contest such Damages (or the remaining amount of such Damages, after giving effect to any amounts obtained for such Damages from the Escrow Fund) up to a maximum of $300,000 payable pursuant to all set-offs (the “Set-Off Funds”) first against the next Annual Payment to come due, if applicable and second against any Milestone Consideration remaining to be paid, in accordance with Section 10.6. Any such set off against an Annual Payment or against Milestone Consideration shall be paid in cash. Claims for Set-off Funds made by the Cypress Indemnitees relating to any alleged breach of any of the representations and warranties in Section 3.5 (Intellectual Property) of this Agreement may be made until the earlier of the payment of the Milestone Consideration or the Holdback Payment Date. If at any time prior to the earlier of the payment of the Milestone Consideration or the Holdback Payment Date, any Cypress Indemnitee delivers to Cellatope a written notice alleging the existence of an inaccuracy in or a breach of any of the representations and warranties made by Cellatope in Section 3.5 (Intellectual Property) (and setting forth in reasonable detail the basis for such Cypress Indemnitee’s belief that such an inaccuracy or breach may exist) and asserting a claim for recovery based on such alleged inaccuracy or breach, then the representation or warranty underlying the claim asserted in such notice shall survive the earlier of the payment of the Milestone Consideration or the Holdback Payment Date until such time as such claim is fully and finally resolved, for the sole purpose of remaining in effect in order to permit such claim to be fully and finally resolved. In addition to claim.
10.2.4 Notwithstanding the foregoing, in the case absence of fraud or intentional misrepresentationwillful misconduct, the Cypress Indemnitees Shareholders shall have no obligation to indemnify, defend, hold harmless or reimburse STAR or any of its affiliates or Representatives with respect to the matters described in Sections 10.2.1.A or 10.2.1.D (or matters described in Section 10.2.1.E that are incident to matters described in Sections 10.2.1.B or 10.2.1.D), unless and until the aggregate amount of all Damages with respect to all such matters exceeds $100,000 (the "Basket"), in which event, such persons or entities shall be entitled to bring suit indemnification for and recover Damages without any limitation against Cellatope and against any other Person who committed or participated all amounts in such fraud or intentional misrepresentation.
(c) From and after the Closing Date (but subject to Section 10.1(a) and the limitations set forth in Section 10.3 below), each Cellatope Indemnitee shall be held harmless and shall be indemnified by Cypress from and against, and shall be compensated, reimbursed and paid for, any Damages which are directly or indirectly suffered or incurred by any Cellatope Indemnitee or to which any Cellatope Indemnitee may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim) and which arise from or as a result of, or are directly or indirectly connected with: (i) any inaccuracy in or breach or (in the case of a third-party claim that, if determined in favor excess of the applicable third party, would result in a breach) alleged breach of any representation or warranty of Cypress set forth in this Agreement, in the Cypress Compliance Certificate, or in the certificate provided pursuant to Section 8.3 (without giving effect, in each case, to any information provided by Cypress pursuant to Section 6.2); (ii) any breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any covenant or obligation of Cypress set forth in this Agreement (including the covenants set forth in Section 6) to be performed on or prior to Closing (without giving effect, in each case, to any information provided by Cypress pursuant to Section 6.2), (iii) any Assumed Liability or (iv) any Legal Proceeding relating to any inaccuracy or breach of the type referred to in clauses (i) or (ii) or relating to clause (iii) above (including any Legal Proceeding commenced by any Cellatope Indemnitee for the purpose of enforcing any of its rights under this Section 10 if a Cellatope Indemnitee is the prevailing party therein)Basket.
Appears in 1 contract
Samples: Stock Acquisition Agreement and Plan of Merger (Star Telecommunications Inc)
Indemnification by the Parties. (a) From and after Each of the Closing Date parties hereto agrees to indemnify (but subject to Section 10.1(athe “Indemnifying Party”) and hold the limitations set forth in Section 10.3 below)other and each of its respective partners, each Cypress Indemnitee shall be held officers, directors, members, employees, counsel, accountants, agents, successors and assigns (collectively, an “Indemnified Party”) harmless from any and shall be indemnified from all damages, liabilities, losses, costs or expenses (including, without limitation, reasonable counsel fees and againstexpenses) suffered or paid, and shall be compensated, reimbursed and paid for, any Damages which are directly or indirectly suffered or incurred by any Cypress Indemnitee or to which any Cypress Indemnitee may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim) and which arise from or indirectly, as a result of, of or are directly or indirectly connected with: (i) any inaccuracy in or breach or (in the case of a third-party claim that, if determined in favor arising out of the applicable third party, would result in a breach) alleged breach failure of any respective representation or warranty of Cellatope set forth in this Agreement, in made by the Cellatope Compliance Certificate, or in the certificate provided pursuant to Section 7.5(vi) (without giving effect, in each case, to any information provided by Cellatope pursuant to Section 62); (ii) any breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any covenant or obligation of Cellatope set forth Indemnifying Party in this Agreement (including the covenants set forth or in Sections 5 and 6) any Exhibit attached hereto to be performed on or prior to Closing (without giving effecttrue, complete and correct in each case, to any information provided by Cellatope pursuant to Section 6.2), (iii) any Excluded Liability, (iv) any Liability incurred pursuant to any applicable bulk sale law or based on noncompliance therewith or (v) any Legal Proceeding relating to any inaccuracy or breach all material respects as of the type referred to in clauses (i) or (ii) or relating to clauses (iii) or (iv) above (including any Legal Proceeding commenced by any Cypress Indemnitee for date of this Agreement and as of the purpose of enforcing any of its rights under this Section 10 if a Cypress Indemnitee is the prevailing party therein)Closing Date.
(b) If any action, suit, proceeding or investigation is commenced, as to which an Indemnified Party proposes to demand indemnification, it shall notify the Indemnifying Party with reasonable promptness; provided, however, that any failure by an Indemnified Party to notify the Indemnifying Party shall not relieve the Indemnifying Party from its obligations hereunder, except to the extent that the Indemnifying Party shall have been materially prejudiced in its ability to defend the action, suit, proceedings or investigation for which such indemnification is sought by reason of such failure. Except as set forth below, an Indemnifying Party shall have the right to retain counsel of its own choice, and the Indemnifying Party shall pay the reasonable fees, reasonable expenses and reasonable disbursements of counsel selected by the Indemnifying Party; and such counsel shall to the extent consistent with its professional responsibilities, cooperate with the Indemnified Party and any counsel designated by the Indemnified Party, which counsel shall be the expense of the Indemnified Party. In the event the Indemnifying Party does not assume or fails to conduct in a diligent manner the defense of any Cypress Indemnitee claim or litigation resulting therefrom, (a) the Indemnified Party may defend, using its own counsel, against such claim or litigation, in such manner as it deems appropriate, including, but not limited to, settling such claim or litigation, on such terms as the Indemnified Party may deem appropriate, subject to first obtaining the prior written consent of the Indemnifying Party, which consent shall suffer any Damages for which such Cypress Indemnitee is entitled to indemnification under this Section 10 not be unreasonably withheld or delayed, and (as determined pursuant to Section 10.5), such Cypress Indemnitee b) the Indemnifying Party shall be entitled to recover participate in (but not control) the defense of such Damages byaction, firstwith its counsel and at its own expense. The Indemnifying Party shall pay the reasonable fees, obtaining reasonable expenses and reasonable disbursements of counsel selected by an Indemnified Party in the circumstances described in the previous sentence. If the Indemnifying Party thereafter seeks to question the manner in which the Indemnified Party defended such third party claim or the amount or nature of Escrow Fundsany such settlement, if any, equal the Indemnifying Party shall have the burden to prove that the Indemnified Party did not defend or settle such third party claim in value to a reasonably prudent manner. The Indemnifying Party shall be liable for any settlement of any claim against an Indemnified Party made with the aggregate amount of such Damages, and, second, once no Escrow Funds remain Indemnifying Party’s written consent or made in connection with the circumstances described in the Escrow Fund pursuant to depletion first sentence of the Escrow Funds or expiration of the Escrow Claim Period, and only in the case of inaccuracies in or breaches or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breaches of any of the representations and warranties in Section 3.5 (Intellectual Property), by setting off the amount of such Damages (or the remaining amount of such Damages, after giving effect to any amounts obtained for such Damages from the Escrow Fund) up to a maximum of $300,000 payable pursuant to all set-offs (the “Set-Off Funds”) first against the next Annual Payment to come due, if applicable and second against any Milestone Consideration remaining to be paid, in accordance with Section 10.6. Any such set off against an Annual Payment or against Milestone Consideration shall be paid in cash. Claims for Set-off Funds made by the Cypress Indemnitees relating to any alleged breach of any of the representations and warranties in Section 3.5 (Intellectual Property) of this Agreement may be made until the earlier of the payment of the Milestone Consideration or the Holdback Payment Date. If at any time prior to the earlier of the payment of the Milestone Consideration or the Holdback Payment Date, any Cypress Indemnitee delivers to Cellatope a written notice alleging the existence of an inaccuracy in or a breach of any of the representations and warranties made by Cellatope in Section 3.5 (Intellectual Property) (and setting forth in reasonable detail the basis for such Cypress Indemnitee’s belief that such an inaccuracy or breach may exist) and asserting a claim for recovery based on such alleged inaccuracy or breach, then the representation or warranty underlying the claim asserted in such notice shall survive the earlier of the payment of the Milestone Consideration or the Holdback Payment Date until such time as such claim is fully and finally resolved, for the sole purpose of remaining in effect in order to permit such claim to be fully and finally resolved. In addition to the foregoing, in the case of fraud or intentional misrepresentation, the Cypress Indemnitees shall be entitled to bring suit for and recover Damages without any limitation against Cellatope and against any other Person who committed or participated in such fraud or intentional misrepresentation.
(c) From and after the Closing Date (but subject to Section 10.1(a) and the limitations set forth in Section 10.3 below), each Cellatope Indemnitee shall be held harmless and shall be indemnified by Cypress from and against, and shall be compensated, reimbursed and paid for, any Damages which are directly or indirectly suffered or incurred by any Cellatope Indemnitee or to which any Cellatope Indemnitee may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim) and which arise from or as a result of, or are directly or indirectly connected with: (i) any inaccuracy in or breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any representation or warranty of Cypress set forth in this Agreement, in the Cypress Compliance Certificate, or in the certificate provided pursuant to Section 8.3 (without giving effect, in each case, to any information provided by Cypress pursuant to Section 6.2); (ii) any breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any covenant or obligation of Cypress set forth in this Agreement (including the covenants set forth in Section 6) to be performed on or prior to Closing (without giving effect, in each case, to any information provided by Cypress pursuant to Section 6.2), (iii) any Assumed Liability or (iv) any Legal Proceeding relating to any inaccuracy or breach of the type referred to in clauses (i) or (ii) or relating to clause (iii) above (including any Legal Proceeding commenced by any Cellatope Indemnitee for the purpose of enforcing any of its rights under this Section 10 if a Cellatope Indemnitee is the prevailing party therein).previous
Appears in 1 contract
Samples: Preferred Stock Exchange Agreement (Grubb & Ellis Co)
Indemnification by the Parties. (a) From and after Each of the Closing Date parties hereto agrees to indemnify (but subject to Section 10.1(athe "Indemnifying Party") and hold the limitations set forth in Section 10.3 below)other and each of its respective partners, each Cypress Indemnitee shall be held officers, directors, members, employees, counsel, accountants, agents, successors and assigns (collectively, an "Indemnified Party") harmless from any and shall be indemnified from all damages, liabilities, losses, costs or expenses (including, without limitation, reasonable counsel fees and againstexpenses) suffered or paid, and shall be compensated, reimbursed and paid for, any Damages which are directly or indirectly suffered or incurred by any Cypress Indemnitee or to which any Cypress Indemnitee may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim) and which arise from or indirectly, as a result of, of or are directly or indirectly connected with: (i) any inaccuracy in or breach or (in the case of a third-party claim that, if determined in favor arising out of the applicable third party, would result in a breach) alleged breach failure of any respective representation or warranty of Cellatope set forth in this Agreement, in made by the Cellatope Compliance Certificate, or in the certificate provided pursuant to Section 7.5(vi) (without giving effect, in each case, to any information provided by Cellatope pursuant to Section 62); (ii) any breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any covenant or obligation of Cellatope set forth Indemnifying Party in this Agreement (including the covenants set forth or in Sections 5 and 6) any Exhibit attached hereto to be performed on or prior to Closing (without giving effecttrue, complete and correct in each case, to any information provided by Cellatope pursuant to Section 6.2), (iii) any Excluded Liability, (iv) any Liability incurred pursuant to any applicable bulk sale law or based on noncompliance therewith or (v) any Legal Proceeding relating to any inaccuracy or breach all material respects as of the type referred to in clauses (i) or (ii) or relating to clauses (iii) or (iv) above (including any Legal Proceeding commenced by any Cypress Indemnitee for date of this Agreement and as of the purpose of enforcing any of its rights under this Section 10 if a Cypress Indemnitee is the prevailing party therein)Closing Date.
(b) If any action, suit, proceeding or investigation is commenced, as to which an Indemnified Party proposes to demand indemnification, it shall notify the Indemnifying Party with reasonable promptness; provided, however, that any failure by an Indemnified Party to notify the Indemnifying Party shall not relieve the Indemnifying Party from its obligations hereunder, except to the extent that the Indemnifying Party shall have been materially prejudiced in its ability to defend the action, suit, proceedings or investigation for which such indemnification is sought by reason of such failure. Except as set forth below, an Indemnifying Party shall have the right to retain counsel of its own choice, and the Indemnifying Party shall pay the reasonable fees, reasonable expenses and reasonable disbursements of counsel selected by the Indemnifying Party; and such counsel shall to the extent consistent with its professional responsibilities, cooperate with the Indemnified Party and any counsel designated by the Indemnified Party, which counsel shall be the expense of the Indemnified Party. In the event the Indemnifying Party does not assume or fails to conduct in a diligent manner the defense of any Cypress Indemnitee claim or litigation resulting therefrom, (a) the Indemnified Party may defend, using its own counsel, against such claim or litigation, in such manner as it deems appropriate, including, but not limited to, settling such claim or litigation, on such terms as the Indemnified Party may deem appropriate, subject to first obtaining the prior written consent of the Indemnifying Party, which consent shall suffer any Damages for which such Cypress Indemnitee is entitled to indemnification under this Section 10 not be unreasonably withheld or delayed, and (as determined pursuant to Section 10.5), such Cypress Indemnitee b) the Indemnifying Party shall be entitled to recover participate in (but not control) the defense of such Damages byaction, firstwith its counsel and at its own expense. The Indemnifying Party shall pay the reasonable fees, obtaining reasonable expenses and reasonable disbursements of counsel selected by an Indemnified Party in the circumstances described in the previous sentence. If the Indemnifying Party thereafter seeks to question the manner in which the Indemnified Party defended such third party claim or the amount or nature of Escrow Fundsany such settlement, if anythe Indemnifying Party shall have the burden to prove that the Indemnified Party did not defend or settle such third party claim in a reasonably prudent manner. The Indemnifying Party shall be liable for any settlement of any claim against an Indemnified Party made with the Indemnifying Party's written consent or made in connection with the circumstances described in the first sentence of the previous 8 paragraph. The Indemnifying Party shall not, equal in value without prior written consent of an Indemnified Party, which consent shall not be unreasonably withheld or delayed, settle or compromise any claim, or permit a default or consent to the aggregate amount of such Damages, and, second, once no Escrow Funds remain in the Escrow Fund pursuant to depletion of the Escrow Funds or expiration of the Escrow Claim Period, and only in the case of inaccuracies in or breaches or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breaches entry of any of the representations and warranties judgment in Section 3.5 (Intellectual Property)respect thereof; provided, by setting off the amount of such Damages (or the remaining amount of such Damageshowever, after giving effect to any amounts obtained for such Damages from the Escrow Fund) up to a maximum of $300,000 payable pursuant to all set-offs (the “Set-Off Funds”) first against the next Annual Payment to come due, if applicable and second against any Milestone Consideration remaining to be paid, in accordance with Section 10.6. Any such set off against an Annual Payment or against Milestone Consideration shall be paid in cash. Claims for Set-off Funds made by the Cypress Indemnitees relating to any alleged breach of any of the representations and warranties in Section 3.5 (Intellectual Property) of this Agreement may be made until the earlier of the payment of the Milestone Consideration or the Holdback Payment Date. If at any time prior to the earlier of the payment of the Milestone Consideration or the Holdback Payment Date, any Cypress Indemnitee delivers to Cellatope a written notice alleging the existence of an inaccuracy in or a breach of any of the representations and warranties made by Cellatope in Section 3.5 (Intellectual Property) (and setting forth in reasonable detail the basis for such Cypress Indemnitee’s belief that such an inaccuracy or breach may exist) and asserting a claim for recovery based on such alleged inaccuracy or breach, then the representation or warranty underlying the claim asserted in such notice shall survive the earlier of the payment of the Milestone Consideration or the Holdback Payment Date until such time as such claim is fully and finally resolved, for the sole purpose of remaining in effect in order to permit such claim to be fully and finally resolved. In addition to notwithstanding the foregoing, the Indemnifying Party shall have the right to settle or compromise any claim provided that (i) the Indemnifying Party pays all sums, costs and expenses incident thereto, and (ii) Indemnifying Party obtains for the Indemnified Party a full, non-conditional absolute release. Each party agrees to cooperate fully with the other, such cooperation to include, without limitation, attendance at depositions and the production of relevant documents as may be reasonably requested by the other parties, provided that the Indemnifying Party will reimburse the Indemnified Party for all of its out-of-pocket expenses incurred in connection with such cooperation by the case of fraud or intentional misrepresentation, the Cypress Indemnitees shall be entitled to bring suit for and recover Damages without any limitation against Cellatope and against any other Person who committed or participated in such fraud or intentional misrepresentationIndemnified Party.
(c) From In order to provide for just and after the Closing Date equitable contribution, if a claim for indemnification pursuant to these indemnification provisions is made but it is found in a final judgment by a court of competent jurisdiction (but not subject to Section 10.1(afurther appeal) that such indemnification may not be enforced in such case, even though the express provisions hereof provide for indemnification in such case, then the Indemnifying Party (as applicable), on the one hand, and an Indemnified Party, on the other, shall contribute to the losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs and expenses to which the indemnified persons may be subject in accordance with the relative benefits received by the Indemnifying Party (as the case may be), on the one hand, and an Indemnified Party, on the other hand, in connection with the statements, acts or omissions which resulted in expenses and the limitations set forth in Section 10.3 below), each Cellatope Indemnitee relevant equitable considerations shall also be considered. No person found liable for a fraudulent misrepresentation shall be held harmless and shall be indemnified by Cypress entitled to contribution from and against, and shall be compensated, reimbursed and paid for, any Damages which are directly or indirectly suffered or incurred by any Cellatope Indemnitee or to which any Cellatope Indemnitee may otherwise become subject (regardless of whether or person who is not also found liable for such Damages relate to any third-party claim) and which arise from or as a result of, or are directly or indirectly connected with: (i) any inaccuracy in or breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any representation or warranty of Cypress set forth in this Agreement, in the Cypress Compliance Certificate, or in the certificate provided pursuant to Section 8.3 (without giving effect, in each case, to any information provided by Cypress pursuant to Section 6.2); (ii) any breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any covenant or obligation of Cypress set forth in this Agreement (including the covenants set forth in Section 6) to be performed on or prior to Closing (without giving effect, in each case, to any information provided by Cypress pursuant to Section 6.2), (iii) any Assumed Liability or (iv) any Legal Proceeding relating to any inaccuracy or breach of the type referred to in clauses (i) or (ii) or relating to clause (iii) above (including any Legal Proceeding commenced by any Cellatope Indemnitee for the purpose of enforcing any of its rights under this Section 10 if a Cellatope Indemnitee is the prevailing party therein)fraudulent misrepresentation.
Appears in 1 contract
Samples: Preferred Stock Exchange Agreement (Grubb & Ellis Co)
Indemnification by the Parties. (a) From and after the Closing Date (but subject to Section 10.1(a) and the limitations set forth in Section 10.3 below)Except as otherwise limited by this Article, each Cypress Indemnitee shall be held harmless of the Partnership and its respective partners, officers, directors, employees, agents, successors and assigns (each an "Indemnified Party") shall be indemnified from and againstheld harmless by DRS/MS, on the one hand, and shall be compensatedeach of USC and the Shareholders on the other hand, reimbursed (each an "Indemnifying Party") for any and paid forall liabilities, any Damages which are directly or indirectly losses, damages, claims, costs and expenses, interest, awards, judgments and penalties (including, without limitation, reasonable legal costs and expenses and environmental engineering consultants' fees) actually suffered or incurred by any Cypress Indemnitee the Indemnified Party (hereinafter a "Loss"), actually arising out of or to which any Cypress Indemnitee may otherwise become subject resulting from:
(regardless of whether or not such Damages relate to any third-party claima) and which arise from or as a result of, or are directly or indirectly connected with: (i) any inaccuracy in or breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any representation or warranty of Cellatope set forth by the Indemnifying Party contained herein or contained in this Agreement, in the Cellatope Compliance Certificate, or in the certificate provided pursuant to Section 7.5(vi) (without giving effect, in each case, to any information provided by Cellatope pursuant to Section 62); (ii) any breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breachTransaction Documents; or
(b) alleged the breach of any covenant or obligation of Cellatope set forth agreement by the Indemnifying Party contained herein or contained in this Agreement (including the covenants set forth in Sections 5 and 6) to be performed on or prior to Closing (without giving effect, in each case, to any information provided by Cellatope pursuant to Section 6.2), (iii) any Excluded Liability, (iv) any Liability incurred pursuant to any applicable bulk sale law or based on noncompliance therewith or (v) any Legal Proceeding relating to any inaccuracy or breach of the type referred to in clauses (i) or (ii) or relating to clauses (iii) or (iv) above (including any Legal Proceeding commenced by any Cypress Indemnitee for the purpose of enforcing any of its rights under this Section 10 if a Cypress Indemnitee is the prevailing party therein).
(b) In the event any Cypress Indemnitee shall suffer any Damages for which such Cypress Indemnitee is entitled to indemnification under this Section 10 (as determined pursuant to Section 10.5), such Cypress Indemnitee shall be entitled to recover such Damages by, first, obtaining the amount of Escrow Funds, if any, equal in value to the aggregate amount of such Damages, and, second, once no Escrow Funds remain in the Escrow Fund pursuant to depletion of the Escrow Funds or expiration of the Escrow Claim Period, and only in the case of inaccuracies in or breaches or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breaches of any of the representations and warranties in Section 3.5 (Intellectual Property)Transaction Documents; provided, by setting off the amount of such Damages (however, that except for any Loss or the remaining amount of such Damages, after giving effect to any amounts obtained for such Damages from the Escrow Fund) up Losses attributable to a maximum of $300,000 payable pursuant to all set-offs (the “Set-Off Funds”) first against the next Annual Payment to come due, if applicable and second against any Milestone Consideration remaining to be paid, in accordance with Section 10.6. Any such set off against an Annual Payment or against Milestone Consideration shall be paid in cash. Claims for Set-off Funds made by the Cypress Indemnitees relating to any alleged breach of any of the representations and warranties in Section 3.5 (Intellectual Property) of this Agreement may be made until the earlier of the payment of the Milestone Consideration or the Holdback Payment Date. If at any time prior to the earlier of the payment of the Milestone Consideration or the Holdback Payment Date, any Cypress Indemnitee delivers to Cellatope a written notice alleging the existence of an inaccuracy in or a breach of any of the representations and warranties made by Cellatope in Section 3.5 (Intellectual Property) (and setting forth in reasonable detail the basis for such Cypress Indemnitee’s belief that such an inaccuracy or breach may exist) and asserting a claim for recovery based on such alleged inaccuracy or breach, then the representation or warranty underlying the claim asserted in such notice shall survive the earlier of the payment of the Milestone Consideration or the Holdback Payment Date until such time as such claim is fully and finally resolved, for the sole purpose of remaining in effect in order to permit such claim to be fully and finally resolved. In addition to the foregoing, in the case of fraud or intentional misrepresentation, the Cypress Indemnitees shall be entitled to bring suit for and recover Damages without any limitation against Cellatope and against any other Person who committed or participated in such fraud or intentional misrepresentation.
(c) From and after the Closing Date (but subject to Section 10.1(a) and the limitations set forth in Section 10.3 below), each Cellatope Indemnitee shall be held harmless and shall be indemnified by Cypress from and against, and shall be compensated, reimbursed and paid for, any Damages which are directly or indirectly suffered or incurred by any Cellatope Indemnitee or to which any Cellatope Indemnitee may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim) and which arise from or as a result of, or are directly or indirectly connected with: (i) any inaccuracy in or breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any representation or warranty under Section 4.04 (as such representations and waranties of Cypress set forth Section 4.04 relate to Transferred Assets but not to Assumed Liabilities) and/or Section 4.14 (the indemnification of which shall be unlimited in this Agreementamount), the aggregate amount of any Loss or Losses recoverable hereunder by an Indemnified Party from USC and/or the Shareholders shall be limited to the total of (i) the $1,200,000.00 in total bonus payments paid or payable to the Shareholders pursuant to the Employment Agreements ("Bonus Payments"), plus (ii) the amount of any Royalties not yet paid at the time the claim for indemnification is made ("Unpaid Royalties"), plus (iii) any interest or interests in the Cypress Compliance CertificatePartnership held by USC, the Shareholders and/or their successors in interest, and provided further that the aggregate amount of any Loss or Losses sought to be recovered hereunder by an Indemnified Party from all Indemnifying Parties must exceed $5,000.00 except for any Loss or Losses attributable to a breach in any representation or warranty contained in Section 4.14 or Section 4.04. In satisfying the certificate provided pursuant indemnification obligations of the Shareholders and/or USC hereunder, the Indemnified Party agrees to Section 8.3 offset any Loss or Losses: (without giving effect, in each case, to any information provided by Cypress pursuant to Section 6.2)i) first against Bonus Payments; (ii) if there are no or insufficient Bonus Payments remaining against which to offset such Loss or Losses, then such Loss or Losses shall be offset against any breach Unpaid Royalties due to be paid within six (6) months of a claim for indemnification; (iii) if there are no or (insufficient Bonus Payments or Unpaid Royalties, then such Loss or Losses shall be satisfied by surrender of an appropriate portion of the Shareholder's and/or USC's interest in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of Partnership (or by offset against any covenant or obligation of Cypress set forth in this Agreement (including the covenants set forth in Section 6) to be performed on or prior to Closing (without giving effect, in each case, to any information provided by Cypress amounts due pursuant to Section 6.27.6 of the Partnership Agreement), (iii) any Assumed Liability or and (iv) any Legal Proceeding relating if the indemnification obligations remain unsatisfied pursuant to any inaccuracy or breach of the type referred to in clauses (i) or (ii) or relating to clause - (iii) above (including above, then USC and/or the Shareholders shall satisfy any Legal Proceeding commenced Loss or Losses by any Cellatope Indemnitee for the purpose payment of enforcing any of its rights under this Section 10 if a Cellatope Indemnitee is the prevailing party therein)cash.
Appears in 1 contract
Samples: Joint Venture Agreement (Diagnostic Retrieval Systems Inc)
Indemnification by the Parties. (a) From Subject to the terms and conditions of this Article VIII, from and after the Closing Date Closing, the Equityholders, severally (but subject to Section 10.1(anot jointly and severally) in accordance with their Allocation Percentages, shall indemnify, defend and hold harmless Purchaser, each of Purchaser’s Affiliates (including each of the Group Companies after the Closing) and each of its and their respective officers, directors, managers, members, partners, equityholders, employees, representatives and agents and each of the limitations set forth in Section 10.3 below)heirs, each Cypress Indemnitee shall be held harmless executors, successors and shall be indemnified assigns of any of the foregoing (collectively, the “Purchaser Indemnified Parties”) from and against, and shall be compensated, reimbursed pay on behalf of and paid forreimburse each Purchaser Indemnified Party in respect of, any Damages which are and all Losses incurred, suffered, sustained or required to be paid, directly or indirectly suffered or incurred indirectly, by any Cypress Indemnitee or to which any Cypress Indemnitee may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim) and which arise Purchaser Indemnified Party arising out of, resulting from or as a result of, or are directly or indirectly connected with: relating to:
(i) any breach of or inaccuracy in any representation and warranty made by the Company in Article II;
(ii) any non-fulfillment or breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any covenant or agreement made by or to be performed by the Company at or prior to the Closing or any covenant or agreement made by or to be performed by the Shareholder Representative (in its capacity as such);
(iii) any Company Transaction Expenses that are outstanding after the Closing;
(iv) any Indebtedness of the Company outstanding immediately prior to the Closing that is (A) Funded Debt but not satisfied in full at the Closing or (B) other Indebtedness that is not reflected in the Merger Consideration at the Closing or the adjustment to the Merger Consideration contemplated by Section 1.11;
(v) any Indemnified Taxes;
(vi) any Proceeding in which any Person asserts an ownership interest in any Group Company that is in breach of the representations and warranties of the Company set forth in Section 2.2 or Section 2.4(a); or
(vii) the exercise of any dissenter’s rights pursuant to Section 10.356 of the TBOC by any holder of Dissenting Shares (in which case the Losses of the Purchaser Indemnified Party relating thereto shall equal the amount by which the “fair value,” as finally determined pursuant to the TBOC, of the Company Common Stock held by each such holder exceeds the Merger Consideration paid or to be paid for such Company Common Stock pursuant to Article I, together with all Losses arising out of the determination, adjudication, or settlement of such dissenting shareholder claims). Notwithstanding the foregoing, and for the avoidance of doubt, no Company Indemnified Party will be a Purchaser Indemnified Party by reason of such Company Indemnified Party’s position with any Group Company or otherwise.
(b) Subject to the terms and conditions of this Article VIII, Purchaser, from and after the Closing, shall indemnify, defend and hold harmless each Equityholder, each of such Equityholder’s Affiliates and each of their respective officers, directors, managers, members, partners, equityholders, employees, representatives and agents and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “Company Indemnified Parties”) from and against, and pay on behalf of and reimburse each Company Indemnified Party in respect of, any and all Losses incurred, suffered, sustained or required to be paid, directly or indirectly, by any Company Indemnified Party arising out of, resulting from or relating to (i) any breach of or inaccuracy in any representation and warranty made by Parent, Purchaser or warranty Merger Sub in Article III or (ii) any non-fulfillment or breach of Cellatope any covenant or agreement made by or to be performed by Parent, Purchaser or Merger Sub set forth in this Agreement, in the Cellatope Compliance Certificate, or in the certificate provided pursuant to Section 7.5(vi) (without giving effect, in each case, to any information provided by Cellatope pursuant to Section 62); (ii) any breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any covenant or obligation of Cellatope set forth in this Agreement (including the covenants set forth in Sections 5 and 6) to be performed on or prior to Closing (without giving effect, in each case, to any information provided by Cellatope pursuant to Section 6.2), (iii) any Excluded Liability, (iv) any Liability incurred pursuant to any applicable bulk sale law or based on noncompliance therewith or (v) any Legal Proceeding relating to any inaccuracy or breach of the type referred to in clauses (i) or (ii) or relating to clauses (iii) or (iv) above (including any Legal Proceeding commenced by any Cypress Indemnitee for the purpose of enforcing any of its rights under this Section 10 if a Cypress Indemnitee is the prevailing party therein).
(b) In the event any Cypress Indemnitee shall suffer any Damages for which such Cypress Indemnitee is entitled to indemnification under this Section 10 (as determined pursuant to Section 10.5), such Cypress Indemnitee shall be entitled to recover such Damages by, first, obtaining the amount of Escrow Funds, if any, equal in value to the aggregate amount of such Damages, and, second, once no Escrow Funds remain in the Escrow Fund pursuant to depletion of the Escrow Funds or expiration of the Escrow Claim Period, and only in the case of inaccuracies in or breaches or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breaches of any of the representations and warranties in Section 3.5 (Intellectual Property), by setting off the amount of such Damages (or the remaining amount of such Damages, after giving effect to any amounts obtained for such Damages from the Escrow Fund) up to a maximum of $300,000 payable pursuant to all set-offs (the “Set-Off Funds”) first against the next Annual Payment to come due, if applicable and second against any Milestone Consideration remaining to be paid, in accordance with Section 10.6. Any such set off against an Annual Payment or against Milestone Consideration shall be paid in cash. Claims for Set-off Funds made by the Cypress Indemnitees relating to any alleged breach of any of the representations and warranties in Section 3.5 (Intellectual Property) of this Agreement may be made until the earlier of the payment of the Milestone Consideration or the Holdback Payment Date. If at any time prior to the earlier of the payment of the Milestone Consideration or the Holdback Payment Date, any Cypress Indemnitee delivers to Cellatope a written notice alleging the existence of an inaccuracy in or a breach of any of the representations and warranties made by Cellatope in Section 3.5 (Intellectual Property) (and setting forth in reasonable detail the basis for such Cypress Indemnitee’s belief that such an inaccuracy or breach may exist) and asserting a claim for recovery based on such alleged inaccuracy or breach, then the representation or warranty underlying the claim asserted in such notice shall survive the earlier of the payment of the Milestone Consideration or the Holdback Payment Date until such time as such claim is fully and finally resolved, for the sole purpose of remaining in effect in order to permit such claim to be fully and finally resolved. In addition to the foregoing, in the case of fraud or intentional misrepresentation, the Cypress Indemnitees shall be entitled to bring suit for and recover Damages without any limitation against Cellatope and against any other Person who committed or participated in such fraud or intentional misrepresentation.
(c) From and after the Closing Date (but subject to Section 10.1(a) and the limitations set forth in Section 10.3 below), each Cellatope Indemnitee shall be held harmless and shall be indemnified by Cypress from and against, and shall be compensated, reimbursed and paid for, any Damages which are directly or indirectly suffered or incurred by any Cellatope Indemnitee or to which any Cellatope Indemnitee may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim) and which arise from or as a result of, or are directly or indirectly connected with: (i) any inaccuracy in or breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any representation or warranty of Cypress set forth in this Agreement, in the Cypress Compliance Certificate, or in the certificate provided pursuant to Section 8.3 (without giving effect, in each case, to any information provided by Cypress pursuant to Section 6.2); (ii) any breach or (in the case of a third-party claim that, if determined in favor of the applicable third party, would result in a breach) alleged breach of any covenant or obligation of Cypress set forth in this Agreement (including the covenants set forth in Section 6) to be performed on or prior to Closing (without giving effect, in each case, to any information provided by Cypress pursuant to Section 6.2), (iii) any Assumed Liability or (iv) any Legal Proceeding relating to any inaccuracy or breach of the type referred to in clauses (i) or (ii) or relating to clause (iii) above (including any Legal Proceeding commenced by any Cellatope Indemnitee for the purpose of enforcing any of its rights under this Section 10 if a Cellatope Indemnitee is the prevailing party therein).
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