Indemnification Coverage. (a) From and after the Closing, the Selling Parties shall indemnify and defend, save and hold Buyer and ENP GP and their Affiliates (other than the Partnership Entities) and each of their respective officers, directors, employees and agents (collectively, the “Buyer Indemnified Parties”) harmless if any such Buyer Indemnified Party shall suffer any damage, judgment, fine, penalty, demand, settlement, liability, loss, cost, Tax, expense (including reasonable attorneys’, consultants’ and experts’ fees), claim or cause of action (each, a “Loss,” and collectively, “Losses”) arising out of, relating to or resulting from: (i) any breach or inaccuracy in any representation or warranty by the Selling Parties contained in this Agreement or any certificates or other documents delivered by any Selling Party pursuant to this Agreement at the Closing; provided, that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if Material Adverse Effect or materiality is not a qualification thereto and provided, further, that a Selling Parties Unknown Matter Breach of Sections 3.15, 3.16 or 3.18 will not result in any Buyer Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX; (ii) any failure by the Selling Parties to perform or observe any term, provision, covenant, or agreement on the part of the Selling Parties to be performed or observed under this Agreement; (iii) Selling Parties’ Taxes; (iv) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of the Selling Parties or any of their Affiliates; and (v) any Plan or Plan Liability. (b) From and after the Closing, Buyer shall indemnify and defend, save and hold the Selling Parties and their Affiliates and their respective officers, directors, employees and agents (collectively, the “Seller Indemnified Parties”) harmless if any such Seller Indemnified Party shall suffer any Loss arising out of, relating to or resulting from: (i) any breach or inaccuracy in any representation or warranty by Buyer contained in this Agreement or any certificates or other documents delivered by Buyer pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto; (ii) any failure by Buyer to perform or observe any term, provision, covenant, or agreement on the part of Buyer to be performed or observed under this Agreement; (iii) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of Buyer, Vanguard or any of their respective Affiliates; (iv) all Taxes (or nonpayment thereof) of ENP GP and the Partnership Entities that are attributable to any taxable period beginning after the Closing Date, or the portion of the Straddle Period beginning after the Closing Date; and (v) any breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement or any certificates or other documents delivered by Vanguard pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto; provided further, that if Buyer elects not to provide an Equity Portion of the Purchase Price in accordance with Section 1.3, a breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement will not result in any Seller Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX. (c) The foregoing indemnification obligations shall be subject to the following limitations: (i) the Selling Parties’ cumulative aggregate liability for Losses under Section 9.2(a)(i) and Buyer’s cumulative aggregate liability under Section 9.2(b)(i) and 9.2(b)(v), in each case, shall not exceed $50 million (the “Cap”); provided, however, that the Cap shall not be applicable with respect to (i) Breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization) or 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement) and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to Taxes, the liability with respect to which shall be as set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v); (ii) Buyer’s cumulative aggregate liability for Losses under Section 9.2(b)(v) shall not exceed thirteen percent of the value of the Equity Portion of the Purchase Price, if any (the “Vanguard Cap”); provided, however, that the Vanguard Cap shall not be applicable with respect to (i) breaches under Sections 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), 5.10 (Tax Matters), and 5.17 (Brokers) hereof or (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation; (iii) no indemnification for any Losses asserted against the Selling Parties under Section 9.2(a)(i) or against Buyer under Section 9.2(b)(i) and Section 9.2(b)(v) shall be required unless and until the cumulative aggregate amount of such Losses, in each case, exceeds $3,800,000 (the “Deductible”), at which point the Selling Parties shall be obligated to indemnify the Buyer Indemnified Parties or Buyer shall be obligated to indemnify the Seller Indemnified Parties, as the case may be, only for the amount of such Losses in excess of the Deductible, provided, however, that the Deductible shall not be applicable with respect to (i) breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization), 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to those Taxes the liability with respect to which are set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v); (iv) the amount of any Losses suffered by a Seller Indemnified Party or a Buyer Indemnified Party, as the case may be (such party seeking indemnification pursuant to this Article IX, the “Indemnified Party,” and the other party, the “Indemnifying Party”), shall be determined without giving effect to any materiality or Material Adverse Effect qualifiers and shall be reduced by any third-party insurance benefits or third party recoveries actually received by the Indemnified Party with respect to such Loss (net of costs incurred to recover such insurance benefits and third party recoveries, deductibles, and retropremiums). To the extent an Indemnified Party suffers Losses for which the Indemnifying Party is liable for indemnification, the Indemnified Party shall submit a claim to collect any amounts available under third-party insurance coverage and from other third parties reasonably liable for any Loss suffered by the Indemnified Party; (v) no claim may be asserted nor may any action be commenced against any Party for breach or inaccuracy of any representation or breach of a warranty, unless written notice of such claim or action is received by the other Party describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on which such claim or action is based ceases to survive as set forth in Section 9.1; (vi) no Indemnified Party shall be entitled under this Agreement to multiple recovery for the same Losses; and (vii) if the Closing occurs, no Indemnified Party is entitled to indemnification or any other recovery under this Agreement with respect to any breach or inaccuracy in any representation or warranty of an Indemnifying Party (A) that would have given the Indemnified Party a right to terminate this Agreement under Section 8.1 of this Agreement, and (B) of which the Indemnified Party had Knowledge before the Closing, whether pursuant to a notice delivered under Section 6.6 or otherwise.
Appears in 2 contracts
Samples: Purchase Agreement (Denbury Resources Inc), Purchase Agreement (Vanguard Natural Resources, LLC)
Indemnification Coverage. (a) From Notwithstanding the Closing or the delivery of the Subject Membership Interest and after the ClosingGolden Unit, and regardless of any investigation at any time made by or on behalf of the Selling Parties shall indemnify Buyer or of any knowledge or information that the Buyer may have the Seller hereby indemnifies and agrees to defend, save and hold Buyer the Buyer, the Company, the Subsidiaries of the Company and ENP GP each of their officers, directors, employees, agents and their Affiliates affiliates (other than the Partnership EntitiesSeller) and each of their respective officers, directors, employees and agents (collectively, the “"Buyer Indemnified Parties”") harmless if any such Buyer Indemnified Party shall suffer for any damage, judgment, fine, penalty, demand, settlement, liability, loss, cost, Tax, expense (including reasonable attorneys’', consultants’ ' and experts’ ' fees), claim or cause of action (each, a “"Loss,” and collectively, “Losses”") suffered by any such Buyer Indemnified Party at any time or from time to time arising out of, relating to or resulting fromfrom any of the following:
(i) any breach or inaccuracy in any representation by the Seller or the breach of any warranty by the Selling Parties Seller contained in this Agreement or any certificates or other documents delivered by any Selling Party pursuant to this Agreement at the on Closing; provided, that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if Material Adverse Effect or materiality is not a qualification thereto and provided, further, that a Selling Parties Unknown Matter Breach of Sections 3.15, 3.16 or 3.18 will not result in any Buyer Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX;
(ii) any failure by the Selling Parties Seller to perform or observe any term, provision, covenant, or agreement on the part of the Selling Parties Seller to be performed or observed under this Agreement;
(iii) Selling Parties’ Taxes;the Reorganization Transactions; or
(iv) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of the Selling Parties Excluded Subsidiaries or any assets or obligations of their Affiliates; and
(v) any Plan or Plan Liabilitysuch entities.
(b) From Notwithstanding the Closing or the delivery of the Subject Membership Interest and after the ClosingGolden Unit and regardless of any investigation at any time made by or on behalf of the Seller or of any knowledge or information that the Seller may have, the Buyer shall indemnify hereby indemnifies and agrees to defend, save and hold the Selling Parties Seller and their Affiliates and their respective officers, directors, employees employees, agents and agents affiliates (collectively, the “"Seller Indemnified Parties”") harmless if for any Loss suffered by any such Seller Indemnified Party shall suffer at any Loss time or from time to time arising out of, relating to or resulting fromfrom any of the following:
(i) any breach or inaccuracy in any representation by the Buyer or the breach of any warranty by the Buyer contained in this Agreement or any certificates or other documents delivered by Buyer pursuant to this Agreement at the on Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto;or
(ii) any failure by the Buyer to perform or observe any term, provision, covenant, or agreement on the part of the Buyer to be performed or observed under this Agreement;
(iii) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of Buyer, Vanguard or any of their respective Affiliates;
(iv) all Taxes (or nonpayment thereof) of ENP GP and the Partnership Entities that are attributable to any taxable period beginning after the Closing Date, or the portion of the Straddle Period beginning after the Closing Date; and
(v) any breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement or any certificates or other documents delivered by Vanguard pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto; provided further, that if Buyer elects not to provide an Equity Portion of the Purchase Price in accordance with Section 1.3, a breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement will not result in any Seller Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX.
(c) The foregoing indemnification obligations shall be subject to the following limitations:
(i) the Selling Parties’ cumulative aggregate liability for Losses under Section 9.2(a)(i) and Buyer’s cumulative Seller's aggregate liability under Section 9.2(b)(i8.2(a)(i), and 8.2(a)(iii) and 9.2(b)(v)the Buyer's aggregate liability under Section 8.2(b)(i) shall not, in each either case, shall not exceed $50 million 30% of the Purchase Price (the “"Cap”"); provided, however, that the Cap shall not be applicable with respect to (i) Breaches breaches by Seller under Sections Section 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization) or 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement) and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to Taxes, the liability with respect to which shall be as set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v)2.9;
(ii) Buyer’s cumulative aggregate liability for Losses under Section 9.2(b)(v) shall not exceed thirteen percent of the value of the Equity Portion of the Purchase Price, if any (the “Vanguard Cap”); provided, however, that the Vanguard Cap shall not be applicable with respect to (i) breaches under Sections 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), 5.10 (Tax Matters), and 5.17 (Brokers) hereof or (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation;
(iii) no indemnification for any Losses asserted against the Selling Parties Buyer or the Seller, as the case may be, under Section 9.2(a)(i8.2(a)(i) or against Buyer under Section 9.2(b)(i) and Section 9.2(b)(v8.2(b)(i) shall be required unless and until the cumulative aggregate amount of such Losses, in each case, Losses exceeds $3,800,000 8,000,000 (the “Deductible”"Threshold"), at which point the Selling Parties shall be obligated to indemnify Seller or the Buyer Indemnified Parties or Buyer shall be obligated to indemnify the Seller Indemnified PartiesBuyer, as the case may be, shall be obligated to indemnify the Indemnified Party (as hereinafter defined) only for as to the amount of such Losses in excess of $1,000,000 (the "Deductible"), subject to the limitation in Section 8.2(c)(i); provided, however, that the Threshold and the Deductible shall not be applicable with respect to (i) breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization), 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement)2.2, and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to those Taxes the liability with respect to which are set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v)2.9;
(iviii) the amount of any Losses suffered by a Seller Indemnified Party or a Buyer Indemnified Party, as the case may be (such party seeking indemnification pursuant to this Article IXbe, the “Indemnified Party,” and the other party, the “Indemnifying Party”), shall be determined without giving effect to any materiality or Material Adverse Effect qualifiers and shall be reduced by any third-party insurance benefits which such party actually receives in respect of or third as a result of such Losses. If any Losses for which indemnification was provided hereunder is subsequently reduced by any third-party recoveries insurance or other indemnification benefit or recovery actually received by the Indemnified Party with respect to such Loss (net of costs incurred to recover such insurance benefits and third party recoveries, deductibles, and retropremiums). To the extent an Indemnified Party suffers Losses for which indemnification was provided, the amount of the reduction shall be remitted to the Indemnifying Party is liable for indemnification, the Indemnified Party shall submit a claim to collect any amounts available under third-party insurance coverage and from other third parties reasonably liable for any Loss suffered by the Indemnified Party(as hereinafter defined);
(viv) no claim may be asserted nor may any action be commenced (A) against any Party the Seller for breach or inaccuracy of any representation or breach of a warranty, unless written notice of such claim or action is received by the other Party Seller describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on which such claim or action is based ceases to survive as set forth in Section 9.1;8.1 (it being agreed and understood that if a claim for a breach of a representation or warranty is timely made, the representation or warranty shall survive until the date on which such claim is finally liquidated or otherwise resolved), or (B) against the Buyer for breach or inaccuracy of any representation or breach of a warranty, unless written notice of such claim or action is received by the Buyer describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on which such claim or action is based ceases to survive as set forth in Section 8.1 (it being agreed and understood that if a claim for a breach of a representation or warranty is timely made, the representation or warranty shall survive until the date on which such claim is finally liquidated or otherwise resolved); and
(viv) no an Indemnified Party shall not be entitled under this Agreement to multiple recovery for the same Losses; and.
(viid) if Notwithstanding anything in this Agreement to the Closing occurscontrary (including, no Indemnified Party is entitled without limitation, the provisions of Section 8.2(c)(i) and (ii)), Seller hereby indemnifies and agrees to indemnification defend, save and hold the Buyer harmless from all Losses suffered by the Buyer resulting from any judgment or order by a Governmental Authority to return or reassign the Subject Membership Interest or the Golden Unit or the underlying assets of the Company and its Subsidiaries to the Seller or any other recovery under this Agreement with respect to any breach or inaccuracy in any representation or warranty affiliate of an Indemnifying Party (A) that would have given the Indemnified Party a right to terminate this Agreement under Section 8.1 of this Agreement, and (B) of which the Indemnified Party had Knowledge before the Closing, whether pursuant to a notice delivered under Section 6.6 or otherwiseSeller.
Appears in 2 contracts
Samples: Purchase Agreement (Enterprise Products Operating L P), Purchase Agreement (Williams Companies Inc)
Indemnification Coverage. (a) From Notwithstanding the Closing or the delivery of the Shares and after regardless of any investigation at any time made by or on behalf of the ClosingBuyer or of any knowledge or information that the Buyer may have, the Selling Parties Sellers shall jointly and severally indemnify and agree to defend, save and hold Buyer the Buyer, NNGC and ENP GP each of their officers, directors, employees, agents and their Affiliates affiliates (other than the Partnership EntitiesSellers) and each of their respective officers, directors, employees and agents (collectively, the “"Buyer Indemnified Parties”") harmless if any such Buyer Indemnified Party shall at any time or from time to time suffer any damage, judgment, fine, penalty, demand, settlement, liability, loss, cost, Tax, expense (including reasonable attorneys’', consultants’ ' and experts’ ' fees), claim or cause of action (each, a “"Loss,” and collectively, “Losses”") arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation by the Sellers or the breach of any warranty by the Sellers contained in this Agreement (other than those contained in Section 3.9) or any certificates or other documents delivered pursuant to this Agreement on Closing;
(ii) any failure by the Sellers to perform or observe any term, provision, covenant, or agreement (other than those contained in Section 5.11) on the part of the Sellers to be performed or observed under this Agreement; and
(iii) any Pre-Closing Taxes or any breach or inaccuracy in any representation or warranty by Sellers in Section 3.9 or any failure by Sellers to perform or observe any term, provision, covenant or agreement on the Selling Parties part of Sellers to be performed or observed under Section 5.11.
(b) Notwithstanding the Closing or the delivery of the Shares and regardless of any investigation at any time made by or on behalf of the Sellers or of any knowledge or information that the Sellers may have, and the Buyer shall indemnify and agree to defend, save and hold the Sellers and its officers, directors, employees, agents and affiliates (collectively, the "Seller Indemnified Parties") harmless if any such Seller Indemnified Party shall at any time or from time to time suffer any Loss arising out of, relating to, or resulting from:
(i) any breach or inaccuracy in any representation by the Buyer or the breach of any warranty by the Buyer contained in this Agreement or any certificates or other documents delivered by any Selling Party pursuant to this Agreement at the on Closing; provided, that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if Material Adverse Effect or materiality is not a qualification thereto and provided, further, that a Selling Parties Unknown Matter Breach of Sections 3.15, 3.16 or 3.18 will not result in any Buyer Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX;and
(ii) any failure by the Selling Parties Buyer to perform or observe any term, provision, covenant, or agreement on the part of the Selling Parties to be performed or observed under this Agreement;
(iii) Selling Parties’ Taxes;
(iv) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of the Selling Parties or any of their Affiliates; and
(v) any Plan or Plan Liability.
(b) From and after the Closing, Buyer shall indemnify and defend, save and hold the Selling Parties and their Affiliates and their respective officers, directors, employees and agents (collectively, the “Seller Indemnified Parties”) harmless if any such Seller Indemnified Party shall suffer any Loss arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation or warranty by Buyer contained in this Agreement or any certificates or other documents delivered by Buyer pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto;
(ii) any failure by Buyer to perform or observe any term, provision, covenant, or agreement on the part of Buyer to be performed or observed under this Agreement;
(iii) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of Buyer, Vanguard or any of their respective Affiliates;
(iv) all Taxes (or nonpayment thereof) of ENP GP and the Partnership Entities that are attributable to any taxable period beginning after the Closing Date, or the portion of the Straddle Period beginning after the Closing Date; and
(v) any breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement or any certificates or other documents delivered by Vanguard pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto; provided further, that if Buyer elects not to provide an Equity Portion of the Purchase Price in accordance with Section 1.3, a breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement will not result in any Seller Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX.
(c) The foregoing indemnification obligations shall be subject to the following limitations:
(i) the Selling Parties’ cumulative aggregate liability for Losses under Section 9.2(a)(i) and Buyer’s cumulative Sellers' aggregate liability under Section 9.2(b)(i8.2(a)(i) and 9.2(b)(v)(ii) and the Buyer's aggregate liability under Section 8.2(b) shall not, in each either case, shall not exceed $50 million 208,800,000 (the “"Cap”"); provided, however, that the Cap shall not be applicable with respect to breaches under Section 2.5 or 3.2; and the Seller's aggregate liability under Section 8.2(iii) shall not exceed $208,800,000 (i) Breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization) or 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement) and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to Taxes, the liability with respect to which shall be as set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v"Tax Cap");
(ii) Buyer’s cumulative aggregate liability for Losses under Section 9.2(b)(v) shall not exceed thirteen percent of the value of the Equity Portion of the Purchase Price, if any (the “Vanguard Cap”); provided, however, that the Vanguard Cap shall not be applicable with respect to (i) breaches under Sections 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), 5.10 (Tax Matters), and 5.17 (Brokers) hereof or (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation;
(iii) no indemnification for any Losses asserted against the Selling Parties Buyer or the Sellers, as the case may be, under Section 9.2(a)(i8.2(a)(i) or against Buyer under (ii) or Section 9.2(b)(i) and Section 9.2(b)(v8.2(b) shall be required unless and until the cumulative aggregate amount of such Losses, in each case, Losses exceeds $3,800,000 (the “Deductible”)5,000,000, at which point the Selling Parties shall be obligated to indemnify Sellers or the Buyer Indemnified Parties or Buyer shall be obligated to indemnify the Seller Indemnified PartiesBuyer, as the case may be, shall be obligated to indemnify the Indemnified Party (as hereinafter defined) only for as to the amount of such Losses in excess of $5,000,000 (the "Deductible, "); provided, however, that the Deductible shall not be applicable with respect to (i) breaches under Sections 2.2 (Validity of AgreementSection 2.5 or 3.2 or Losses asserted against Sellers under Section 8.2(a)(iii), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization), 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, ;
(iii) no indemnification for any Losses with respect asserted against Sellers under Section 8.2(a)(iii) for a breach of any inaccuracy of any representation under Section 3.9 or failure by Sellers to those Taxes the liability with respect to which are set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to perform any Plans or Plan Liability, the liability with respect to which covenant under Section 5.11 shall be as set forth in Section 9.2(a)(v)required unless and until the cumulative aggregate amount of such Losses exceeds $50,000, at which point Sellers shall be obligated to indemnify the Indemnified Party the full amount of such Losses;
(iv) the amount of any Losses suffered by a Seller Indemnified Party or a Buyer Indemnified Party, as the case may be (such party seeking indemnification pursuant to this Article IXbe, the “Indemnified Party,” and the other party, the “Indemnifying Party”), shall be determined without giving effect to any materiality or Material Adverse Effect qualifiers and shall be reduced by any third-party insurance benefits which such party receives in respect of or third party recoveries actually received by the Indemnified Party with respect to as a result of such Loss (net of costs incurred to recover such insurance benefits and third party recoveries, deductibles, and retropremiums)Losses. To the extent an Indemnified Party suffers If any Losses for which the Indemnifying Party indemnification is liable for indemnification, the Indemnified Party shall submit a claim to collect provided hereunder is subsequently reduced by any amounts available under third-party insurance coverage and from or other third parties reasonably liable for any Loss suffered by indemnification benefit or recovery, the Indemnified Partyamount of the reduction shall be remitted to the Indemnifying Party (as hereinafter defined);
(v) no claim may be asserted nor may any action be commenced (A) against any Party the Sellers for breach or inaccuracy of any representation or breach of a warranty, unless written notice of such claim or action is received by the other Party Sellers describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on which such claim or action is based ceases to survive as set forth in Section 9.18.1 (it being agreed and understood that if a claim for a breach of a representation or warranty is timely made, the representa- tion or warranty shall survive until the date on which such claim is finally liquidated or otherwise resolved), or (B) against the Buyer for breach or inaccuracy of any representation or breach of a warranty, unless written notice of such claim or action is received by the Buyer describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on which such claim or action is based ceases to survive as set forth in Section 8.1 (it being agreed and understood that if a claim for a breach of a representation or warranty is timely made, the representation or warranty shall survive until the date on which such claim is finally liquidated or otherwise resolved);
(vi) no an Indemnified Party shall not be entitled under this Agreement to multiple recovery for the same Losses; and
(vii) if the Closing occurs, no Losses shall be recoverable under this Agreement by an Indemnified Party is to the extent that the Losses are capital items that have historically been included in NNGC's rate base.
(d) Notwithstanding anything contained herein, Buyer shall not be entitled to indemnification or any other recovery under this Agreement with respect for any Loss arising out of, relating to any breach or inaccuracy resulting from Legal Proceedings set forth in any representation or warranty Section 8.2 of an Indemnifying Party (A) that would have given the Indemnified Party a right to terminate this Agreement under Section 8.1 of this Agreement, and (B) of which the Indemnified Party had Knowledge before the Closing, whether pursuant to a notice delivered under Section 6.6 or otherwiseDisclosure Letter.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Midamerican Energy Holdings Co /New/)
Indemnification Coverage. (a) From and after the Closing, the Selling Parties shall indemnify and defend, save and hold Buyer and ENP GP Buyer, the Partnership Entities and their Affiliates (other than the Partnership Entities) and each of their respective officers, directors, employees and agents (collectively, the “Buyer Indemnified Parties”"BUYER INDEMNIFIED PARTIES") harmless if any such Buyer Indemnified Party shall suffer any damage, judgment, fine, penalty, demand, settlement, liability, loss, cost, Tax, expense (including reasonable attorneys’', consultants’ ' and experts’ ' fees), claim or cause of action (each, a “Loss"LOSS,” " and collectively, “Losses”"LOSSES") arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation by the Selling Parties or the breach of any warranty by the Selling Parties contained in this Agreement or any certificates or other documents delivered by any Selling Party pursuant to this Agreement at the Closing; provided, that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if Material Adverse Effect or materiality is not a qualification thereto and provided, further, that a Selling Parties Unknown Matter Breach of Sections 3.15, 3.16 or 3.18 will not result in any Buyer Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IXthereto;
(ii) any failure by the Selling Parties to perform or observe any term, provision, covenant, or agreement on the part of the Selling Parties to be performed or observed under this Agreement;
(iii) the failure by the Selling Parties’ TaxesParties to comply with any applicable statutory provisions relating to bulk sales and transfers;
(iv) subject to Section 8.2(c) hereof, any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of the Selling Parties or any of their Affiliatesmatters listed on Schedule 2.21 hereto; and
(v) any Plan fines, penalties, or Plan Liabilityamounts paid to settle or resolve the last matter listed on Schedule 2.7 as of the date of this Agreement. provided, however, that if any Loss for which Buyer would otherwise be entitled to seek indemnity from the Selling Parties under this Section 8.2(a) is included within the matters for which the Partnership Entities or any other Buyer Indemnified Party would be entitled to indemnity under any of Section 3.1 of the Old Omnibus Agreement, Article IV of the New Omnibus Agreement or Section 10.1(b) of the WPL Contribution Agreement (such provisions are collectively referred to herein as the "ADDITIONAL PARTNERSHIP INDEMNITY AGREEMENTS"), even if recovery under the Additional Partnership Indemnity Agreements is not available due to the expiration of any applicable survival period or any applicable deductible, threshold, maximum or "cap" thereon, then none of the Buyer Indemnified Parties shall be entitled to indemnification with respect to such matter or matters under this Section 8.2(a). The foregoing proviso shall not be deemed to amend, supplement or modify in any way the Additional Partnership Indemnity Agreements.
(b) From and after the Closing, Buyer shall indemnify and defend, save and hold the Selling Parties and their Affiliates and their respective officers, directors, employees and agents (collectively, the “Seller Indemnified Parties”"SELLER INDEMNIFIED PARTIES") harmless if any such Seller Indemnified Party shall suffer any Loss arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation by Buyer or the breach of any warranty by Buyer contained in this Agreement or any certificates or other documents delivered by Buyer pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto;
(ii) any failure by Buyer to perform or observe any term, provision, covenant, or agreement on the part of Buyer to be performed or observed under this Agreement;
(iii) with respect to any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution Partnership Entities, whether occurring before or after Closing to the extent such Losses are not covered by Section 8.2(a), except in the case, and only to the extent, of this Losses that arise out of, or relate to or result from matters covered under the Additional Partnership Indemnity Agreements or otherwise covered under the Transaction Documents, the WPL Contribution Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of Buyer, Vanguard or any of their respective Affiliates;Old Omnibus Agreement; and
(iv) all Taxes (or nonpayment thereof) any Losses arising under the second paragraph of ENP GP Section 3.1 and the Partnership Entities that are attributable to any taxable period beginning after the Closing DateSection 3.2, or the portion in each case, of the Straddle Period beginning after the Closing Date; and
Assignment and Assumption Agreement (v) any breach or inaccuracy as defined in any representation or warranty by Vanguard contained in Article V of this Agreement or any certificates or Section 9.16), other documents delivered by Vanguard pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto; provided further, that if Buyer elects not to provide an Equity Portion of the Purchase Price in accordance with Section 1.3, a breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement will not result in any Seller Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IXthan Affiliate intercompany obligations.
(c) The foregoing indemnification obligations shall be subject to Buyer and the following limitationsSelling Parties hereby acknowledge and agree as follows:
(i) Buyer agrees, on the Selling Parties’ cumulative aggregate liability for Losses under terms and subject to the conditions specified in this Section 9.2(a)(i) and Buyer’s cumulative aggregate liability under Section 9.2(b)(i) and 9.2(b)(v8.2(c), to assume at the Closing the obligations of XXX under the Additional Partnership Indemnity Agreements to indemnify the Partnership Entities for the environmental remedial obligations specified in each case, shall not exceed $50 million (the “Cap”); provided, however, that the Cap shall not be applicable with respect to (iSchedule 8.2(c) Breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization) or 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement) and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to Taxes, the liability with respect to which shall be as set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v);hereto.
(ii) Buyer’s cumulative aggregate The Partnership and XXX have (A) identified environmental remedial obligations in Schedule 8.2(c) hereto for which XXX is, subject only to Section 8.2(c)(iii), required to indemnify the Partnership pursuant to the Additional Partnership Indemnity Agreements and (B) prepared estimates of the costs expected to be incurred by the Partnership in connection with remediation activities to be undertaken in connection with such matters, and the Partnership, in accordance with GAAP, has recognized as a liability for Losses under Section 9.2(b)(v) shall not exceed thirteen percent such estimated costs and expenses to be incurred a total of the value $21,870,000 (as of the Equity Portion of the Purchase PriceMarch 31, if any (the “Vanguard Cap”); provided, however, that the Vanguard Cap shall not be applicable with respect to (i) breaches under Sections 5.2(c) (Issuance of Vanguard Common Units2003), 5.3 (Validity consisting of Agreement), 5.10 (Tax Matters), both the current and 5.17 (Brokerslong-term portions of such liability. Included in Schedule 8.2(c) hereof or (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation;hereto is a schedule setting forth in reasonable detail the projected schedule for the incurrence of such costs and expenses.
(iii) no indemnification for any Losses asserted against Buyer hereby covenants and agrees that it will pay on behalf of XXX when due to the Selling Parties Partnership Entities under Section 9.2(a)(i) or against Buyer under Section 9.2(b)(i) and Section 9.2(b)(v) shall the Additional Partnership Indemnity Agreements all amounts that otherwise would be required unless and until the cumulative aggregate amount of such Losses, to be paid by XXX thereunder in each case, exceeds $3,800,000 (the “Deductible”), at which point the Selling Parties shall be obligated to indemnify the Buyer Indemnified Parties or Buyer shall be obligated to indemnify the Seller Indemnified Parties, as the case may be, only for the amount of such Losses in excess respect of the Deductiblematters listed under the column entitled "Site Name" in Schedule 8.2(c) hereto, provided, however, that such payments to be made by Buyer from time to time as and when such amounts otherwise would become due and payable by XXX and whether or not such amounts become due and payable before or after the Deductible shall not be applicable with respect to (itime(s) breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization), 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to those Taxes the liability with respect to which are set forth projected in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v);
(iv) the amount of any Losses suffered by a Seller Indemnified Party or a Buyer Indemnified Party, as the case may be (such party seeking indemnification pursuant to this Article IX, the “Indemnified Party,” and the other party, the “Indemnifying Party”), shall be determined without giving effect to any materiality or Material Adverse Effect qualifiers and shall be reduced by any third-party insurance benefits or third party recoveries actually received by the Indemnified Party with respect to such Loss (net of costs incurred to recover such insurance benefits and third party recoveries, deductibles, and retropremiums). To the extent an Indemnified Party suffers Losses for which the Indemnifying Party is liable for indemnification, the Indemnified Party shall submit a claim to collect any amounts available under third-party insurance coverage and from other third parties reasonably liable for any Loss suffered by the Indemnified Party;
(v) no claim may be asserted nor may any action be commenced against any Party for breach or inaccuracy of any representation or breach of a warranty, unless written notice of such claim or action is received by the other Party describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on which such claim or action is based ceases to survive as set forth in Section 9.1;
(vi) no Indemnified Party shall be entitled under this Agreement to multiple recovery for the same Losses; and
(vii) if the Closing occurs, no Indemnified Party is entitled to indemnification or any other recovery under this Agreement with respect to any breach or inaccuracy in any representation or warranty of an Indemnifying Party (A) that would have given the Indemnified Party a right to terminate this Agreement under Section 8.1 of this Agreement, and (B) of which the Indemnified Party had Knowledge before the Closing, whether pursuant to a notice delivered under Section 6.6 or otherwise.Schedule 8.2
Appears in 1 contract
Indemnification Coverage. (a) From and after the Closing, the Selling Parties Nami Parties, Nami and Vinland, jointly and severally, shall indemnify and defend, save and hold Buyer VNR and ENP GP and their Affiliates (other than the Partnership Entities) VNG and each of their respective officers, directors, employees and agents (collectively, the “Buyer Vanguard Indemnified Parties”) harmless if any such Buyer Vanguard Indemnified Party shall suffer any damage, judgment, fine, penalty, demand, settlement, liability, loss, cost, Tax, expense (including reasonable attorneys’, consultants’ and experts’ fees), claim or cause of action (each, a “Loss,” and collectively, “Losses”) arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation or warranty by the Selling Nami Parties contained in this Agreement or any certificates or other documents delivered by any Selling Nami Party pursuant to this Agreement at the Closing; provided, that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if Material Adverse Effect or materiality is not a qualification thereto and provided, further, that a Selling Parties Unknown Matter Breach of Sections 3.15, 3.16 or 3.18 will not result in any Buyer Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX;
(ii) any failure by the Selling Nami Parties to perform or observe any term, provision, covenant, or agreement on the part of the Selling Nami Parties to be performed or observed under this AgreementAgreement or any other Transaction Documents;
(iii) Selling Parties’ TaxesTaxes of any of the Nami Parties and all Taxes (or nonpayment thereof) of the Operating Entities that are attributable to any period following the Effective Date;
(iv) any claim or demand for reimbursement or an accounting from Vinland against VNR or VNG relating to Vinland’s past operation of the Oil and Gas Properties or its business dealings with VNR, VNG or the Operating Entities;
(v) that certain litigation styled Xxxxx Land and Mineral, Ltd. v. Nami Resources Company, LLC, Commonwealth of Kentucky, Xxxx Circuit Court, Civil Action No. 06-CI-0566 or otherwise in connection with the matters asserted by the plaintiff in such litigation; and
(vi) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of the Selling Nami Parties or any of their Affiliates; and
(v) any Plan or Plan Liability.
(b) From and after the Closing, Buyer VNR and VNG shall jointly and severally indemnify and defend, save and hold the Selling Parties Nami Parties, Nami and their Affiliates and Vinland together with their respective officers, directors, employees and agents agents, including the Operating Entities, (collectively, the “Seller Nami Indemnified Parties”) harmless if any such Seller Nami Indemnified Party shall suffer any Loss arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation or warranty by Buyer VNR or VNG contained in this Agreement or any certificates or other documents delivered by Buyer VNR or VNG pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto;
(ii) any failure by Buyer VNR or VNG to perform or observe any term, provision, covenant, or agreement on the part of Buyer VNR or VNG to be performed or observed under this Agreement;
(iii) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of BuyerVNR, Vanguard VNG or any of their respective Affiliates;
(iv) all Taxes (or nonpayment thereof) of ENP GP and the Partnership Operating Entities that are attributable to any taxable the period beginning after commencing April 18, 2007 and ending on the Closing Date, or the portion of the Straddle Period beginning after the Closing DateEffective Date ; and
(v) any breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement or any certificates or other documents delivered by Vanguard pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto; provided further, that if Buyer elects not to provide an Equity Portion of the Purchase Price in accordance with Section 1.3, a breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement will not result in any Seller Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX.
(c) The foregoing indemnification obligations shall be subject to the following limitations:
(i) the Selling Parties’ cumulative aggregate liability for Losses under Section 9.2(a)(i) and Buyer’s cumulative aggregate liability under Section 9.2(b)(i) and 9.2(b)(v), in each case, shall not exceed $50 million (the “Cap”); provided, however, that the Cap shall not be applicable with respect to (i) Breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization) or 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement) and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to Taxes, the liability with respect to which shall be as set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v);
(ii) Buyer’s cumulative aggregate liability for Losses under Section 9.2(b)(v) shall not exceed thirteen percent of the value of the Equity Portion of the Purchase Price, if any (the “Vanguard Cap”); provided, however, that the Vanguard Cap shall not be applicable with respect to (i) breaches under Sections 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), 5.10 (Tax Matters), and 5.17 (Brokers) hereof or (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation;
(iii) no indemnification for any Losses asserted against the Selling Parties under Section 9.2(a)(i) or against Buyer under Section 9.2(b)(i) and Section 9.2(b)(v) shall be required unless and until the cumulative aggregate amount of such Losses, in each case, exceeds $3,800,000 (the “Deductible”), at which point the Selling Parties shall be obligated to indemnify the Buyer Indemnified Parties or Buyer shall be obligated to indemnify the Seller Indemnified Parties, as the case may be, only for the amount of such Losses in excess of the Deductible, provided, however, that the Deductible shall not be applicable with respect to (i) breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization), 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to those Taxes the liability with respect to which are set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v);
(iv) the amount of any Losses suffered by a Seller Vanguard Indemnified Party or a Buyer Nami Indemnified Party, as the case may be (such party seeking indemnification pursuant to this Article IXArticle, the “Indemnified Party,” and the other party, the “Indemnifying Party”), shall be determined without giving effect to any materiality or Material Adverse Effect qualifiers and shall be reduced by any third-party insurance benefits or third party recoveries actually received by the Indemnified Party with respect to such Loss (net of costs incurred to recover such insurance benefits and third party recoveries, deductibles, and retropremiumsretro premiums). To the extent an Indemnified Party suffers Losses for which the Indemnifying Party is liable for indemnification, the Indemnified Party shall submit a claim to collect any amounts available under third-party insurance coverage and from other third parties reasonably liable for any Loss suffered by the Indemnified Party;.
(vd) The maximum aggregate liability of VNR and VNG for all claims under Section 8.2(b)(i) of this Agreement with respect to the breach of representations or warranties made or described in Article IV of this Agreement shall be no greater than $5,000,000. No party shall be liable for Losses for the breach of its respective representations and warranties under this Agreement unless and until, and then only to the extent that, the aggregate amount of all such Losses shall exceed the sum of $1,000,000.
(e) No claim may be asserted nor may any action be commenced against any Party for breach or inaccuracy of any representation or breach of a warranty, unless written notice of such claim or action is received by the other Party describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on which such claim or action is based ceases to survive as set forth in Section 9.1;Section8.1.
(vif) no No Indemnified Party shall be entitled under this Agreement to multiple recovery recoveries for the same Losses; and.
(viig) if If the Closing occurs, no Indemnified Party is entitled to indemnification or any other recovery under this Agreement with respect to any breach or inaccuracy in any representation or warranty of an Indemnifying Party (A) that would have given the Indemnified Party a right to terminate this Agreement under Section 8.1 of this Agreement, and (B) of which the Indemnified Party had Knowledge before the Closing, whether pursuant to a notice delivered under Section 6.6 or otherwise.
Appears in 1 contract
Samples: Unit Exchange Agreement (Vanguard Natural Resources, LLC)
Indemnification Coverage. (a) From Notwithstanding the Closing or the delivery of the Interests and after regardless of any investigation at any time made by or on behalf of the Closing, Buyers or of any knowledge or information that the Selling Parties Buyers may have the Sellers shall indemnify and agree to defend, save and hold Buyer the Buyers, the Company and ENP GP each of their officers, directors, employees, agents and their Affiliates affiliates (other than the Partnership EntitiesSellers) and each of their respective officers, directors, employees and agents (collectively, the “"Buyer Indemnified Parties”") harmless if any such Buyer Indemnified Party shall at any time or from time to lime suffer any damage, judgment, fine, penalty, demand, settlement, liability, loss, cost, Tax, expense (including reasonable attorneys’', consultants’ ' and experts’ ' fees), claim or cause of action (each, a “"Loss,” and collectively, “Losses”") arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation by the Sellers or the breach of any warranty by the Selling Parties Sellers contained in this Agreement or any certificates or other documents delivered by any Selling Party pursuant to this Agreement at the on Closing; provided, that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if Material Adverse Effect or materiality is not a qualification thereto and provided, further, that a Selling Parties Unknown Matter Breach of Sections 3.15, 3.16 or 3.18 will not result in any Buyer Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX;
(ii) any failure by the Selling Parties Sellers to perform or observe any term, provision, covenant, or agreement on the part of the Selling Parties Sellers to be performed or observed under this Agreement;; and
(iii) Selling Parties’ Taxes;
(iv) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of the Selling Parties or any of their Affiliates; and
(v) any Plan or Plan LiabilityLegal Proceedings set forth on Schedule 8.2.
(b) From Notwithstanding the Closing or the delivery of the Interests and after regardless of any investigation at any time made by or on behalf of the ClosingSellers or of any knowledge or information that the Sellers may have, Buyer the Buyers shall indemnify and agree to defend, save and hold the Selling Parties Sellers and their Affiliates and their respective officers, directors, employees employees, agents and agents affiliates (collectively, the “"Seller Indemnified Parties”") harmless if any such Seller Indemnified Party shall at any time or from time to time suffer any Loss arising out of, relating to to, or resulting from:
(i) any breach or inaccuracy in any representation by the Buyers or the breach of any warranty by Buyer the Buyers contained in this Agreement or any certificates or other documents delivered by Buyer pursuant to this Agreement at the on Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto;and 41
(ii) any failure by Buyer the Buyers to perform or observe any term, provision, covenant, or agreement on the part of Buyer the Buyers to be performed or observed under this Agreement;
(iii) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of Buyer, Vanguard or any of their respective Affiliates;
(iv) all Taxes (or nonpayment thereof) of ENP GP and the Partnership Entities that are attributable to any taxable period beginning after the Closing Date, or the portion of the Straddle Period beginning after the Closing Date; and
(v) any breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement or any certificates or other documents delivered by Vanguard pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto; provided further, that if Buyer elects not to provide an Equity Portion of the Purchase Price in accordance with Section 1.3, a breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement will not result in any Seller Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX.
(c) The foregoing indemnification obligations shall be subject to the following limitations:
(i) the Selling Parties’ cumulative aggregate liability for Losses under Section 9.2(a)(i) and Buyer’s cumulative Sellers' aggregate liability under Section 9.2(b)(i8.2(a) and 9.2(b)(v)the Buyers' aggregate liability under Section 8.2(b) shall not, in each either case, shall not exceed $50 million 75% of the Purchase Price (the “"Cap”"); provided, however, that the Cap shall not be applicable with respect to (i) Breaches breaches under Sections 2.2 (Validity of Agreement)Section 2.2, 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization) 2.9 or 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement) and 5.17 (Brokers) hereof, (ii) 4.11 or Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to Taxes, asserted against the liability with respect to which shall be as set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Sellers under Section 9.2(a)(v8.2(a)(iii);
(ii) Buyer’s no indemnification for any Losses asserted against the Buyers or the Sellers, as the case may be, under Section 8.2(a) or Section 8.2(b) shall be required unless and until the cumulative aggregate liability for amount of such Losses under Section 9.2(b)(v) shall not exceed thirteen percent of the value of the Equity Portion of the Purchase Price, if any exceeds $8,000,000 (the “Vanguard Cap”"Threshold"), at which point the Sellers or the Buyers, as the case may be, shall be obligated to indemnify the indemnified Party (as hereinafter defined) only as to the amount of such Losses in excess of $1,000,000 (the "Deductible"), subject to the limitation in Section 8.2(c)(i); provided, however, that the Vanguard Cap Threshold and the Deductible shall not be applicable with respect to (i) breaches under Sections 5.2(c) (Issuance of Vanguard Common Units1.4, 2.2, 2.9 or 4.11 or Losses asserted against the Sellers under Section 8.2(a)(iii), 5.3 (Validity of Agreement), 5.10 (Tax Matters), and 5.17 (Brokers) hereof or (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation;
(iii) no indemnification for any Losses asserted against the Selling Parties Sellers under Section 9.2(a)(i8.2(a) for a breach or against Buyer inaccuracy of any representation under Section 9.2(b)(i) and 2.9 or failure by The Sellers to perform any covenant under Section 9.2(b)(v) 4.11 shall be required unless and until the cumulative aggregate amount of such Losses, in each case, Losses exceeds $3,800,000 (the “Deductible”)50,000, at which point the Selling Parties Sellers shall be obligated to indemnify the Buyer Indemnified Parties or Buyer shall be obligated to indemnify Party the Seller Indemnified Parties, as the case may be, only for the full amount of such Losses in excess of the Deductible, provided, however, that the Deductible shall not be applicable with respect to (i) breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization), 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to those Taxes the liability with respect to which are set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v)Losses;
(iv) the amount of any Losses suffered by a Seller Indemnified Party or a Buyer Indemnified Party, as the case may be (such party seeking indemnification pursuant to this Article IXbe, the “Indemnified Party,” and the other party, the “Indemnifying Party”), shall be determined without giving effect to any materiality or Material Adverse Effect qualifiers and shall be reduced by any third-party insurance benefits which such party receives in respect of or third party recoveries actually received by the Indemnified Party with respect to as a result of such Loss (net of costs incurred to recover such insurance benefits and third party recoveries, deductibles, and retropremiums)Losses. To the extent an Indemnified Party suffers If any Losses for which the Indemnifying Party indemnification is liable for indemnification, the Indemnified Party shall submit a claim to collect provided hereunder is subsequently reduced by any amounts available under third-party insurance coverage and from or other third parties reasonably liable for any Loss suffered by indemnification benefit or recovery, the Indemnified Partyamount of the reduction shall be remitted to the Indemnifying Party (as hereinafter defined);
(v) no claim may be asserted nor may any action be commenced (A) against any Party the Sellers for breach or inaccuracy of any representation or breach of a warranty, unless written notice of such claim or action is received by the other Party Sellers describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on which such claim or action is based ceases to survive as set forth in Section 9.1;8.1 (it being agreed and understood that if a claim for a breach of a representation or warranty is timely made, the representation or warranty shall survive until the date on which such claim is finally liquidated or otherwise resolved), or (B) against the Buyers for breach or inaccuracy of any representation or breach of a warranty, unless written notice of such claim or action is received by the Buyers describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on which such claim or action is based ceases to 42 survive as set forth in Section 8.1 (it being agreed and understood that if a claim for a breach of a representation or warranty is timely made, the representation or warranty shall survive until the date on which such claim is finally liquidated or otherwise resolved); and
(vi) no an Indemnified Party shall not be entitled under this Agreement to multiple recovery for the same Losses; and
(vii) if the Closing occurs, no Indemnified Party is entitled to indemnification or any other recovery under this Agreement with respect to any breach or inaccuracy in any representation or warranty of an Indemnifying Party (A) that would have given the Indemnified Party a right to terminate this Agreement under Section 8.1 of this Agreement, and (B) of which the Indemnified Party had Knowledge before the Closing, whether pursuant to a notice delivered under Section 6.6 or otherwise.
Appears in 1 contract
Indemnification Coverage. (a) From and after the Closing, the Selling Parties shall indemnify and defend, save and hold Buyer and ENP GP Buyer, the Partnership Entities and their Affiliates (other than the Partnership Entities) and each of their respective officers, directors, employees and agents (collectively, the “Buyer Indemnified Parties”"BUYER INDEMNIFIED PARTIES") harmless if any such Buyer Indemnified Party shall suffer any damage, judgment, fine, penalty, demand, settlement, liability, loss, cost, Tax, expense (including reasonable attorneys’', consultants’ ' and experts’ ' fees), claim or cause of action (each, a “Loss"LOSS,” " and collectively, “"Losses”") arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation by the Selling Parties or the breach of any warranty by the Selling Parties contained in this Agreement or any certificates or other documents delivered by any Selling Party pursuant to this Agreement at the Closing; provided, that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if Material Adverse Effect or materiality is not a qualification thereto and provided, further, that a Selling Parties Unknown Matter Breach of Sections 3.15, 3.16 or 3.18 will not result in any Buyer Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IXthereto;
(ii) any failure by the Selling Parties to perform or observe any term, provision, covenant, or agreement on the part of the Selling Parties to be performed or observed under this Agreement;
(iii) the failure by the Selling Parties’ TaxesParties to comply with any applicable statutory provisions relating to bulk sales and transfers;
(iv) subject to Section 8.2(c) hereof, any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of the Selling Parties or any of their Affiliatesmatters listed on Schedule 2.21 hereto; and
(v) any Plan fines, penalties, or Plan Liabilityamounts paid to settle or resolve the last matter listed on Schedule 2.7 as of the date of this Agreement. provided, however, that if any Loss for which Buyer would otherwise be entitled to seek indemnity from the Selling Parties under this Section 8.2(a) is included within the matters for which the Partnership Entities or any other Buyer Indemnified Party would be entitled to indemnity under any of Section 3.1 of the Old Omnibus Agreement, Article IV of the New -52- Omnibus Agreement or Section 10.1(b) of the WPL Contribution Agreement (such provisions are collectively referred to herein as the "ADDITIONAL PARTNERSHIP INDEMNITY AGREEMENTS"), even if recovery under the Additional Partnership Indemnity Agreements is not available due to the expiration of any applicable survival period or any applicable deductible, threshold, maximum or "cap" thereon, then none of the Buyer Indemnified Parties shall be entitled to indemnification with respect to such matter or matters under this Section 8.2(a). The foregoing proviso shall not be deemed to amend, supplement or modify in any way the Additional Partnership Indemnity Agreements.
(b) From and after the Closing, Buyer shall indemnify and defend, save and hold the Selling Parties and their Affiliates and their respective officers, directors, employees and agents (collectively, the “Seller Indemnified Parties”"SELLER INDEMNIFIED PARTIES") harmless if any such Seller Indemnified Party shall suffer any Loss arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation by Buyer or the breach of any warranty by Buyer contained in this Agreement or any certificates or other documents delivered by Buyer pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto;
(ii) any failure by Buyer to perform or observe any term, provision, covenant, or agreement on the part of Buyer to be performed or observed under this Agreement;
(iii) with respect to any broker of the Partnership Entities, whether occurring before or after Closing to the extent such Losses are not covered by Section 8.2(a), except in the case, and only to the extent, of Losses that arise out of, or relate to or result from matters covered under the Additional Partnership Indemnity Agreements or otherwise covered under the Transaction Documents, the WPL Contribution Agreement or the Old Omnibus Agreement; and
(iv) any Losses arising under the second paragraph of Section 3.1 and Section 3.2, in each case, of the Assignment and Assumption Agreement (as defined in Section 9.16), other Person claiming than Affiliate intercompany obligations.
(c) Buyer and the Selling Parties hereby acknowledge and agree as follows:
(i) Buyer agrees, on the terms and subject to the conditions specified in this Section 8.2(c), to assume at the Closing the obligations of XXX under the Additional Partnership Indemnity Agreements to indemnify the Partnership Entities for the environmental remedial obligations specified in Schedule 8.2(c) hereto.
(ii) The Partnership and XXX have (A) identified environmental remedial obligations in Schedule 8.2(c) hereto for which XXX is, subject only to Section 8.2(c)(iii), required to indemnify the Partnership pursuant to the Additional Partnership Indemnity Agreements and (B) prepared estimates of the costs expected to be entitled incurred by the Partnership in connection with remediation activities to an investment banker’sbe undertaken in connection with such matters, financial advisor’sand the Partnership, broker’sin accordance with GAAP, finder’s or similar fee or commission has recognized as a liability for such estimated costs and expenses to be incurred a total of $21,870,000 (as of March 31, 2003), consisting of both the current and long-term portions of such liability. Included in Schedule 8.2(c) hereto is a schedule setting forth in reasonable detail the projected schedule for the incurrence of such costs and expenses.
(iii) Buyer hereby covenants and agrees that it will pay on behalf of XXX when due to the Partnership Entities under the Additional Partnership Indemnity Agreements all amounts that otherwise would be required to be paid by XXX thereunder in respect of the execution of this Agreement matters listed under the column entitled "Site Name" in Schedule 8.2(c) hereto, such payments to be made by Buyer from time to time as and when such amounts otherwise would become due and payable by XXX and whether or not such amounts become due and payable before or after the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at time(s) projected in Schedule 8.2(c) (and XXX agrees to notify Buyer promptly upon the request of Buyer, Vanguard any Partnership Entity or other Person for any payment subject to this clause (iii) of their respective Affiliates;Section 8.2(c)).
(iv) If (A) the matters specified under the column entitled "Site Name" in Schedule 8.2(c) hereto are determined to have reached closure by the appropriate Governmental Authority or have otherwise been finally resolved and all Taxes payments required to be made under the Additional Partnership Indemnity Agreements with respect thereto have been made by Buyer as provided in clause (or nonpayment thereofiii) of ENP GP this Section 8.2(c), (B) the Maximum Obligation (as defined below) has not been reached and the Partnership Entities that are attributable to any taxable period beginning after the Closing Date, (C) XXX or the portion other Selling Parties have continuing indemnity obligations under the Additional Partnership Indemnity Agreements, Section 8.2(a)(i) hereof (in respect of a breach of a representation in Section 2.21 hereof) or Section 8.2(a)(iv) hereof, then Buyer covenants and agrees that, only to the extent of the Straddle Period beginning after Maximum Obligation, it shall pay any amounts that become payable by XXX or the Closing Date; andother Selling Parties under any of the continuing indemnity obligations referred to in clause (C) of this Section 8.2(c)(iv) from time to time as and when amounts would otherwise be payable by XXX or the other Selling Parties.
(v) any breach or inaccuracy If (A) the conditions referenced in any representation or warranty by Vanguard contained in Article V clauses (iv)(A) and (iv)(B) of this Section 8.2(c) exist and the obligations of XXX and the other Selling Parties under the provisions referenced in clause (iv)(C) of this Section 8.2(c) have expired and no amounts remain payable by XXX or the other Selling Parties thereunder and (B) XXX and the other Selling Parties (or their respective successors) and the Partnership furnish to Buyer a certificate from their respective chief financial officers or chief legal officers to such effect, then promptly upon receipt of such certificates in proper form Buyer shall pay to the Selling Parties the remaining unpaid amount, if any, of the Maximum Obligation.
(vi) Buyer agrees that it shall use commercially reasonable efforts to cause the Partnership Entities to treat any payments made by Buyer under clauses (iii) or (iv) of this Section 8.2(c) as a payment by XXX or the other Selling Parties under the applicable Additional Partnership Indemnity Agreement in respect of which such payment is made, and Buyer shall indemnify and hold harmless XXX and the other Selling Parties from any and all Losses caused by the failure or refusal of the Partnership Entities or any certificates or other documents delivered Person to treat any payment so made by Vanguard pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto; provided further, that if Buyer elects not to provide an Equity Portion of the Purchase Price in accordance with Section 1.3, a breach clause (iii) or inaccuracy in any representation or warranty by Vanguard contained in Article V (iv) of this Agreement will not result in any Seller Indemnified Party suffering Losses for which it is entitled to indemnificationSection 8.2(c) as a payment made by or on behalf of XXX or the other Selling Parties, defense or being saved and held harmless as case may be, pursuant to this Article IXthe referenced indemnity obligation of such Person(s).
(cvii) For purposes of this Section 8.2(c), Buyer shall pay to the Partnership all amounts due under this Section 8.2(c) following receipt of such amounts due from the General Partner on behalf of the Partnership. The determination of amounts and when they are due shall be made in good faith solely by the General Partner; provided, however, that Buyer shall not be required to make any such payments within less than twenty (20) days after receipt of the General Partner's determination; provided, further, Buyer shall indemnify and hold harmless the Selling Parties from any and all Losses caused by any delay by Buyer in making any such payment to the Partnership under this Section 8.2(c)(vii).
(viii) Notwithstanding the foregoing provisions of this Section 8.2(c), in no event shall the aggregate amounts payable by or on behalf of Buyer under this Section 8.2(c) exceed $21,870,000 (the "MAXIMUM OBLIGATION").
(d) The foregoing indemnification obligations shall be subject to the following limitations:
(i) the Selling Parties’ cumulative aggregate liability for Losses under Section 9.2(a)(i) and Buyer’s cumulative ' aggregate liability under Section 9.2(b)(i8.2(a) and 9.2(b)(v), in each case, shall not exceed $50 million 175,000,000 (the “Cap”"CAP"); provided, however, that the Cap shall not be applicable with respect to (iLosses otherwise indemnifiable under Section 8.2(a)(i) Breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization) or 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement) and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud breaches or intentional misrepresentation, (iii) Losses with respect to Taxes, the liability with respect to which shall be as set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), inaccuracies of Section 2.27 or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(vunder 8.2(a)(v);
(ii) Buyer’s cumulative aggregate liability for Losses under Section 9.2(b)(v) shall not exceed thirteen percent of the value of the Equity Portion of the Purchase Price, if any (the “Vanguard Cap”); provided, however, that the Vanguard Cap shall not be applicable with respect to (i) breaches under Sections 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), 5.10 (Tax Matters), and 5.17 (Brokers) hereof or (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation;
(iii) no indemnification for any Losses asserted against the Selling Parties under Section 9.2(a)(i) or against Buyer under Section 9.2(b)(i) and Section 9.2(b)(v8.2(a)(i) shall be required unless and until the cumulative aggregate amount of such Losses, in each case, Losses exceeds $3,800,000 4,000,000 (the “Deductible”"DEDUCTIBLE"), at which point the Selling Parties shall be obligated to indemnify the Buyer Indemnified Parties or Buyer shall be obligated to indemnify the Seller Indemnified Parties, as the case may be, only for the amount of such Losses in excess of the Deductible, provided, subject to the Cap; provided however, that the Deductible shall not be applicable with respect to (i) breaches under Sections 2.2 (Validity of Agreement2.2, 2.3, 2.5, 2.11(b), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units2.18, 2.21 or 2.27 hereof or recovery under Sections 8.2(a)(ii), 2.11 (Brokers8.2(a)(iii), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization), 4.5 (Brokers), 5.2(c8.2(a)(iv) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), and 5.17 (Brokersor 8.2(a)(v) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to those Taxes the liability with respect to which are set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v);
(iviii) the amount of any Losses suffered by a Seller Indemnified Party or a Buyer Indemnified Party, as the case may be (such party seeking indemnification pursuant to this Article IXVIII, the “Indemnified Party"INDEMNIFIED PARTY,” " and the other party, the “Indemnifying Party”"INDEMNIFYING PARTY"), shall be determined without giving effect to any materiality or Material Adverse Effect qualifiers and shall be reduced by any third-party insurance or other indemnification benefits which such party receives in respect of or third as a result of such Losses, less the reasonable costs incurred to recover those insurance or indemnification benefits to the extent such costs are not otherwise recovered. If any Losses for which indemnification is provided hereunder is subsequently reduced by any third-party recoveries actually received insurance or other indemnification benefit or recovery, the amount of the reduction shall be remitted to the Indemnifying Party. In the case of any purchase agreement between a Partnership Entity and a third-party relating to the acquisition of assets, businesses or securities by such Partnership Entity that contains unexpired and otherwise applicable indemnification provisions, if any Loss for which Buyer is entitled to seek indemnity from the Selling Parties under Section 8.2(a) is also included within the matters for which the Partnership Entities are entitled to indemnity under any such third-party agreement, Buyer agrees to use commercially reasonable efforts to cause any such Partnership Entity first to pursue indemnification under such third-party agreement in good faith for a reasonable period of time prior to enforcing any claim against the Selling Parties for indemnification hereunder. Nothing in the foregoing sentence shall (i) prejudice the rights of the Buyer Indemnified Parties to make a claim for indemnification hereunder within the applicable survival period, if any, or (ii) require any Buyer Indemnified Party to file or institute any judicial proceeding or action. In addition, to the extent the Selling Parties make any payments to any Buyer Indemnified Party with respect to any claims covered under the unexpired and otherwise applicable indemnification provisions of such Loss (net of costs incurred to recover such insurance benefits and third party recoveries, deductibles, and retropremiums). To the extent an Indemnified Party suffers Losses for which the Indemnifying Party is liable for indemnification, the Indemnified Party shall submit a claim to collect any amounts available under third-party insurance coverage agreements, Buyer agrees to use commercially reasonable efforts to cause the applicable Partnership Entity or Entities, at the sole cost and from other third parties reasonably liable expense of the Selling Parties, (A) to assign any rights to the Selling Parties under such third-party agreement as may be necessary to allow the Selling Parties to independently pursue a claim for any Loss suffered by indemnification against the Indemnified Partycounterparty or counterparties to such third-party agreement and (B) to be subrogated to the rights of the applicable Partnership Entity or Entities in respect of such indemnification claims;
(viv) no claim may be asserted nor may any action be commenced against any Party party for breach or inaccuracy of any representation or breach of a warranty, unless written notice of such claim or action is received by the other Party party describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on which such claim or action is based ceases to survive as set forth in Section 9.18.1;
(viv) no Indemnified Party shall be entitled under this Agreement to multiple recovery for the same Losses; and
(viivi) if the Closing occurs, no Indemnified Party is entitled to limitations on indemnification or any other recovery under set forth in clauses (i) and (ii) of this Agreement with respect Section 8.2(d) shall not apply to any breach Losses arising from the failure by the Selling Parties or inaccuracy Buyer to pay any Taxes in accordance with Section 4.9 or for any representation or warranty of an Indemnifying Party (A) that would have given the Indemnified Party a right to terminate this Agreement under amounts payable in accordance with Section 8.1 of this Agreement, and (B) of which the Indemnified Party had Knowledge before the Closing, whether pursuant to a notice delivered under Section 6.6 or otherwise9.3 hereof.
Appears in 1 contract
Indemnification Coverage. (a) From Notwithstanding the Closing or the delivery of the Shares and after regardless of any investigation at any time made by or on behalf of the ClosingBuyer or of any knowledge or information that the Buyer may have, the Selling Parties Seller Parent shall indemnify and agree to defend, save and hold Buyer the Buyer, the Company and ENP GP each of their officers, directors, employees, agents and their Affiliates affiliates (other than the Partnership EntitiesSeller Parent and the Seller) and each of their respective officers, directors, employees and agents (collectively, the “Buyer Indemnified Parties”) harmless if any such Buyer Indemnified Party shall at any time or from time to time suffer any damage, judgment, fine, penalty, demand, settlement, liability, loss, cost, Tax, expense (including including, without limitation, reasonable attorneys’, consultants’ and experts’ fees), claim or cause of action (each, a “Loss,” and collectively, “Losses”) arising out of, relating to or resulting from:
(i) any breach or inaccuracy (determined without regard to any qualifier as to “materiality,” “material adverse effect” or any derivative of such terms (except that the word “material” shall not be so disregarded as the same modifies (A) the word “Contracts” or the words “insurance policies,” (B) the word “information” in Section 2.5(c)(i), (C) the word “filings” in Section 2.5(f), and (D)(I) the word “permits” in Section 4.1(b), (II) the word “agreement” in Section 4.1(m), (III) the word “changes” in Section 4.1(p), and (IV) the phrase “actions, suits, arbitrations or proceedings” in Section 4.1(r), in each case as such provisions are referred to in Section 2.6(a)(ii)) in any representation or warranty by the Selling Parties Seller Parent or the Seller contained in this Agreement or any certificates or other documents delivered by any Selling Party of them pursuant to this Agreement at the Closing; provided, that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if Material Adverse Effect or materiality is not a qualification thereto and provided, further, that a Selling Parties Unknown Matter Breach of Sections 3.15, 3.16 or 3.18 will not result in any Buyer Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX;
(ii) any failure by the Selling Parties Seller Parent or the Seller to perform or observe any term, provision, covenant, or agreement on the part of any of them to be performed or observed under this Agreement;
(iii) any liability in respect of any business (whether as a transfer of assets or capital stock) transferred (whether by way of sale, merger, reorganization or consolidation, distribution or otherwise) or discontinued by the Company or any of its present or former Subsidiaries after December 6, 1998 to any Person, but only to the extent such liability is not reflected in the Company’s consolidated balance sheet in the FY 2005 Statements;
(iv) any liability resulting by reason of the several liability of the Company or any of its Subsidiaries pursuant to Treasury Regulations § 1.1502-6 or any analogous state, local or foreign law or regulation or by reason of the Company or any of its Subsidiaries having been a member of any consolidated, combined or unitary group on or prior to the Closing Date, but only to the extent such liability is not reflected in the Company’s consolidated balance sheet in the FY 2005 Statements;
(v) any liability for Taxes resulting by reason of the Company or any of its Subsidiaries ceasing to be a member of any consolidated, combined or unitary group that includes the Seller, but only to the extent such liability is not reflected in the Company’s consolidated balance sheet in the FY 2005 Statements; and
(vi) any liability relating to (x) the Company Employee Retention / Incentive Program (Apollo Transaction), or (y) any amendment, change, increase, addition or grant relating to any Employee Benefit Plan that is listed on Section 4.1(i) of the Seller Parent Disclosure Letter and effected after March 31, 2005 that is not previously approved in writing by the Buyer or required by any applicable collective bargaining agreement.
(b) Notwithstanding the Closing or the delivery of the Shares and regardless of any investigation at any time made by or on behalf of the Seller Parent or the Seller of any knowledge or information that the Seller Parent or the Seller may have, the Buyer shall indemnify and agree to defend, save and hold the Seller Parent and the Seller and their officers, directors, employees, agents and affiliates (other than the Buyer) (collectively, the “Seller Indemnified Parties”) harmless if any such Seller Indemnified Party shall at any time or from time to time suffer any Loss arising out of, relating to, or resulting from:
(i) any breach or inaccuracy (determined without regard to any qualifier as to “materiality” or “material adverse effect” included therein) in any representation or warranty by the Buyer contained in this Agreement or any certificates or other documents delivered by the Buyer pursuant to this Agreement at the Closing; and
(ii) any failure by the Buyer to perform or observe any term, provision, covenant, or agreement on the part of the Selling Parties to be performed or observed under this Agreement;
(iii) Selling Parties’ Taxes;
(iv) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of the Selling Parties or any of their Affiliates; and
(v) any Plan or Plan Liability.
(b) From and after the Closing, Buyer shall indemnify and defend, save and hold the Selling Parties and their Affiliates and their respective officers, directors, employees and agents (collectively, the “Seller Indemnified Parties”) harmless if any such Seller Indemnified Party shall suffer any Loss arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation or warranty by Buyer contained in this Agreement or any certificates or other documents delivered by Buyer pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto;
(ii) any failure by Buyer to perform or observe any term, provision, covenant, or agreement on the part of Buyer to be performed or observed under this Agreement;
(iii) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of Buyer, Vanguard or any of their respective Affiliates;
(iv) all Taxes (or nonpayment thereof) of ENP GP and the Partnership Entities that are attributable to any taxable period beginning after the Closing Date, or the portion of the Straddle Period beginning after the Closing Date; and
(v) any breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement or any certificates or other documents delivered by Vanguard pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto; provided further, that if Buyer elects not to provide an Equity Portion of the Purchase Price in accordance with Section 1.3, a breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement will not result in any Seller Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX.
(c) The foregoing indemnification obligations shall be subject to the following limitations:
(i) the Selling Parties’ cumulative aggregate liability for Losses under Section 9.2(a)(i) and BuyerSeller Parent’s cumulative aggregate liability under Section 9.2(b)(i8.2(a)(i) and 9.2(b)(v)the Buyer’s aggregate liability under Section 8.2(b)(i) shall not, in each either case, shall not exceed $50 million 50% of the Purchase Price (the “Cap”); provided, however, that the Cap shall not be applicable with respect to breaches of the representations and warranties described in clause (ia) Breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization the first proviso to Section 8.1 or of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity the representations and warranties in the first two sentences of Agreement; Authorization) or 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement) and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to Taxes, the liability with respect to which shall be as set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v2.12(c);
(ii) Buyer’s cumulative aggregate liability for Losses under Section 9.2(b)(v) shall not exceed thirteen percent of the value of the Equity Portion of the Purchase Price, if any (the “Vanguard Cap”); provided, however, that the Vanguard Cap shall not be applicable with respect to (i) breaches under Sections 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), 5.10 (Tax Matters), and 5.17 (Brokers) hereof or (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation;
(iii) no indemnification for any Losses asserted against the Selling Parties under Section 9.2(a)(i) or against Buyer under Section 9.2(b)(i) and Section 9.2(b)(v) shall be required unless and until the cumulative aggregate amount of such Losses, in each case, exceeds $3,800,000 (the “Deductible”), at which point the Selling Parties shall be obligated to indemnify the Buyer Indemnified Parties or Buyer shall be obligated to indemnify the Seller Indemnified Parties, as the case may be, only for the amount of such Losses in excess of the Deductible, provided, however, that the Deductible shall not be applicable with respect to (i) breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization), 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to those Taxes the liability with respect to which are set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v);
(iv) the amount of any Losses suffered by a Seller Indemnified Party or a Buyer Indemnified Party, as the case may be (such party seeking indemnification pursuant to this Article IX, the “Indemnified Party,” and the other party, the “Indemnifying Party”), shall be determined without giving effect to any materiality or Material Adverse Effect qualifiers and shall be reduced by any third-party insurance benefits or third party recoveries actually received by the Indemnified Party with respect to such Loss (net of costs incurred to recover such insurance benefits and third party recoveries, deductibles, and retropremiums). To the extent an Indemnified Party suffers Losses for which the Indemnifying Party is liable for indemnification, the Indemnified Party shall submit a claim to collect any amounts available under third-party insurance coverage and from other third parties reasonably liable for any Loss suffered by the Indemnified Party;
(v) no claim may be asserted nor may any action be commenced against any Party for breach or inaccuracy of any representation or breach of a warranty, unless written notice of such claim or action is received by the other Party describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on which such claim or action is based ceases to survive as set forth in Section 9.1;
(vi) no Indemnified Party shall be entitled under this Agreement to multiple recovery for the same Losses; and
(vii) if the Closing occurs, no Indemnified Party is entitled to indemnification or any other recovery under this Agreement with respect to any breach or inaccuracy in any representation or warranty of an Indemnifying Party (A) that would have given the Indemnified Party a right to terminate this Agreement under Section 8.1 of this Agreement, and (B) of which the Indemnified Party had Knowledge before the Closing, whether pursuant to a notice delivered under Section 6.6 or otherwise.against:
Appears in 1 contract
Samples: Stock Purchase Agreement (Midamerican Energy Holdings Co /New/)
Indemnification Coverage. (a) From and after the Closing, the Selling Parties shall indemnify and defend, save and hold Buyer and ENP Buyer, the GP Entities and their Affiliates (other than the Partnership Entities) and each of their respective officers, directors, employees and agents (collectively, the “Buyer Indemnified Parties”) harmless if any such Buyer Indemnified Party shall suffer any damage, judgment, fine, penalty, demand, settlement, liability, loss, cost, Tax, expense (including reasonable attorneys’, consultants’ and experts’ fees), claim or cause of action (each, a “Loss,” and collectively, “Losses”) arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation by the Selling Parties or the breach of any warranty by the Selling Parties contained in this Agreement or any certificates or other documents delivered by any Selling Party pursuant to this Agreement at the Closing; provided, however, that for purposes of this Section 9.2 any reference in determining whether any such representation or warranty has been breached to materiality or is inaccurate, such representation or warranty shall be construed as if Material Adverse Effect or materiality is not a qualification thereto and provided, further, that a Selling Parties Unknown Matter Breach of Sections 3.15, 3.16 or 3.18 will not result in any Buyer Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX;shall be disregarded; and
(ii) any failure by the Selling Parties to perform or observe any term, provision, covenant, or agreement on the part of the Selling Parties to be performed or observed under this Agreement;
(iii) Selling Parties’ Taxes;
(iv) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of the Selling Parties or any of their Affiliates; and
(v) any Plan or Plan Liability.
(b) From and after the Closing, Buyer shall indemnify and defend, save and hold the Selling Parties and their Affiliates and each of their respective officers, directors, employees and agents (collectively, the “Seller Indemnified Parties”) harmless if any such Seller Indemnified Party shall suffer any Loss arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation by Buyer or the breach of any warranty by Buyer contained in this Agreement or any certificates or other documents delivered by Buyer pursuant to this Agreement at the Closing; provided provided, however, that for purposes of this Section 9.2 any reference in determining whether any such representation or warranty has been breached to materiality or is inaccurate, such representation or warranty Material Adverse Effect shall be construed as if material adverse effect or materiality is not a qualification theretodisregarded;
(ii) any failure by Buyer to perform or observe any term, provision, covenant, or agreement on the part of Buyer to be performed or observed under this Agreement;; and
(iii) any broker or other Person claiming Losses arising with respect to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect any of the execution of this Agreement GP Entities whether occurring before or after Closing to the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of Buyer, Vanguard or any of their respective Affiliates;
(iv) all Taxes (or nonpayment thereof) of ENP GP and the Partnership Entities that extent such Losses are attributable to any taxable period beginning after the Closing Date, or the portion of the Straddle Period beginning after the Closing Date; and
(v) any breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement or any certificates or other documents delivered by Vanguard pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto; provided further, that if Buyer elects not to provide an Equity Portion of the Purchase Price in accordance with properly asserted under Section 1.3, a breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement will not result in any Seller Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX9.2(a).
(c) The foregoing indemnification obligations shall be subject to the following limitations:
(i) the Selling Parties’ cumulative Parties aggregate liability for Losses under Section 9.2(a)(i) and Buyer’s cumulative aggregate liability under in respect of a breach or inaccuracy of the representations in Sections 3.8 through Section 9.2(b)(i) and 9.2(b)(v), in each case, 3.11 shall not exceed $50 million 996,682 (the “Cap”); provided, however, that the Cap shall not be applicable with respect to (i) Breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization) or 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement) and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to Taxes, the liability with respect to which shall be as set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v);
(ii) Buyer’s cumulative aggregate liability for Losses under Section 9.2(b)(v) shall not exceed thirteen percent except in respect of a breach or inaccuracy of the value of the Equity Portion of the Purchase Price, if any (the “Vanguard Cap”); provided, however, that the Vanguard Cap shall not be applicable with respect to (i) breaches under Sections 5.2(c) (Issuance of Vanguard Common Unitsrepresentations in Section 3.7 and Section 3.13(c), 5.3 (Validity of Agreement), 5.10 (Tax Matters), and 5.17 (Brokers) hereof or (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation;
(iii) no indemnification for any Losses asserted against the Selling Parties under Section 9.2(a)(i) or against Buyer under Section 9.2(b)(i) and Section 9.2(b)(v) shall be required unless and until the cumulative aggregate amount of such Losses, in each case, Losses exceeds $3,800,000 one percent (1%) of the Purchase Price (the “Deductible”), at which point the Selling Parties shall be obligated to indemnify the Buyer Indemnified Parties or Buyer shall be obligated only as to indemnify the Seller Indemnified Parties, as the case may be, only for the amount of such Losses in excess of the Deductible, provided, however, that the Deductible shall not be applicable with respect to (i) breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization), 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to those Taxes the liability with respect to which are set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v);
(iviii) the amount of any Losses suffered by a Seller Indemnified Party or a Buyer Indemnified Party, as the case may be (such party seeking indemnification pursuant to this Article IX, the “Indemnified Party,” and the other party, the “Indemnifying Party”), shall be determined without giving effect to any materiality or Material Adverse Effect qualifiers and shall be reduced by any third-party insurance benefits or third insurance, third-party recoveries actually and available Tax benefits received or realizable by the Indemnified Party with through its commercially reasonable efforts in respect to of or as a result of such Loss (net of costs incurred to recover such insurance benefits and third party recoveries, deductibles, and retropremiums)Losses. To the extent an Indemnified Party suffers Losses for which the Indemnifying Party is liable for indemnification, the The Indemnified Party shall submit a claim use commercially reasonable efforts to collect any amounts available under third-party such insurance coverage and from such other third parties reasonably liable for third-party alleged to have responsibility and to realize any Loss suffered by the Indemnified Partyavailable Tax benefits;
(viv) no claim may be asserted nor may any action be commenced against any Party party for breach or inaccuracy of any representation or breach of a warranty, unless written notice of such claim or action is received by the other Party party describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on which such claim or action is based ceases to survive as set forth in Section 9.1;; and
(viv) no Indemnified Party shall be entitled under this Agreement to multiple recovery for the same Losses; and
(vii) if the Closing occurs, no Indemnified Party is entitled to indemnification or any other recovery under this Agreement with respect to any breach or inaccuracy in any representation or warranty of an Indemnifying Party (A) that would have given the Indemnified Party a right to terminate this Agreement under Section 8.1 of this Agreement, and (B) of which the Indemnified Party had Knowledge before the Closing, whether pursuant to a notice delivered under Section 6.6 or otherwise.
Appears in 1 contract
Samples: Purchase Agreement (BreitBurn Energy Partners L.P.)
Indemnification Coverage. (a) From and after the ClosingExcept with respect to Taxes, the Selling Parties indemnification for which is dealt with exclusively in Section 11.5, EME shall indemnify and defend, save and hold Buyer the Purchaser Indemnified Parties harmless from and ENP GP against any and their Affiliates all claims, demands, suits, losses (other than the Partnership Entities) including loss of value), liabilities, damages, costs and each expenses, including reasonable attorneys' fees and costs of their respective officersinvestigation, directorslitigation, employees settlement and agents judgment (collectively, the “Buyer Indemnified Parties”"Losses") harmless if any such Buyer Indemnified Party shall which they sustain or suffer any damage, judgment, fine, penalty, demand, settlement, liability, loss, cost, Tax, expense (including reasonable attorneys’, consultants’ and experts’ fees), claim or cause of action (each, to which they become subject as a “Loss,” and collectively, “Losses”) arising out result of, relating to or resulting from:
(i) any inaccuracy in or any breach, as of the Effective Date or the Closing Date, of any representation or warranty of any of the Seller Parties contained in this Agreement, any Related Agreement or any certificates or other documents delivered pursuant to this Agreement (other than a breach of the representation or warranty set forth in Section 4.16 which is indemnified under clause (iii) below) or any Related Agreement; provided, however, that if any such representation or warranty is qualified in any respect by reference to materiality or Material Adverse Effect, for purposes of this clause (i) such qualification shall in all respects be disregarded; provided, further, that if the occurrence of an event disclosed in an update pursuant to Section 6.20 is expressly permitted by Section 6.3, or the Purchaser's condition in Section 8.2(e) was satisfied by waiver, then disclosure of such event shall not be disregarded for purposes of determining whether there was any inaccuracy in, or any breach of, any representation or warranty as of the Closing Date.
(ii) any failure to perform or observe any term, provision, covenant or agreement in this Agreement or any Related Agreements to be performed or observed by the Seller Parties or any of them;
(iii) all Pre-Closing Environmental Liabilities, provided that any and all claims under this provision must be asserted prior to the fourth anniversary of the Closing Date;
(iv) all Pre-Closing Intragroup Liabilities;
(v) any failure by an Acquired Company to obtain from National Power Corporation the Certificate of Completion of Kalayaan II Unit 2 under the BROT Agreement, dated November 6, 1998, stating a date of completion for the Project known as "CBK" of January 22, 2004 or earlier; and
(vi) the ownership or operation of the Excluded Items (including any obligation that may be imposed on the Purchaser or any of its Affiliates under the New Zealand Takeovers Code or otherwise as a result of the Contact Sale Transaction) and any Project or Project-Specific Acquired Company (and any related business) that becomes separated from MEC BV and its Subsidiaries as a result of the exercise of a Preemptive Right or is otherwise not sold or transferred to the Purchaser and its Affiliates pursuant to this Agreement, as well as the ownership or operation prior to the Closing Date of any Acquired Holding Company of any such Project-Specific Acquired Company that is rendered inactive and has no direct or indirect ownership interest in an active Acquired Company as a result of such separation.
(b) Except with respect to Taxes, indemnification for which is dealt with exclusively in Section 11.5, in the case of clause (i) below only, the Purchaser Parties severally and, in the case of the remainder of this Section 11.3(b), the Purchaser, shall indemnify and defend, save and hold the Sellers and their respective Affiliates, successors and permitted assigns (collectively the "EME Indemnified Parties") harmless from and against any and all Losses which they sustain or suffer or to which they become subject as a result of:
(i) any inaccuracy in any representation by any Purchaser Party (or any Purchaser Designee) or the breach of any warranty by the Selling Parties any Purchaser Party (or any Purchaser Designee) contained in this Agreement or any certificates or other documents delivered by any Selling Party pursuant to this Agreement at without regard to any of the Closing; provided, that in determining whether any such representation qualifications as to materiality or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if Material Adverse Effect set forth herein or materiality is not a qualification thereto and provided, further, that a Selling Parties Unknown Matter Breach of Sections 3.15, 3.16 or 3.18 will not result in any Buyer Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IXtherein;
(ii) any failure by the Selling Parties to perform or observe any term, provision, covenant, covenant or agreement on the part of the Selling Parties in this Agreement to be performed or observed under this Agreement;by any Purchaser Party (or any Purchaser Designee); and
(iii) Selling Parties’ Taxes;after the applicable Project Closing, any EME Guarantee or letter of credit in respect of which any of the EME Guarantee Parties or other pertinent EME Subsidiaries was not fully and unconditionally released as contemplated by Section 6.14, to the extent any such EME Guarantee or letter of credit relates to the Project-Specific Acquired Companies that were the subject of such Project Closing; and
(iv) any broker Third Party Claims arising from the ownership or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect operation of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of the Selling Parties or any of their Affiliates; and
(v) any Plan or Plan Liability.
(b) From and after the Closing, Buyer shall indemnify and defend, save and hold the Selling Parties and their Affiliates Acquired Companies and their respective officers, directors, employees and agents (collectively, businesses by the “Seller Indemnified Parties”) harmless if any such Seller Indemnified Party shall suffer any Loss arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation or warranty by Buyer contained in this Agreement or any certificates or other documents delivered by Buyer pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto;
(ii) any failure by Buyer to perform or observe any term, provision, covenant, or agreement on the part of Buyer to be performed or observed under this Agreement;
(iii) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of Buyer, Vanguard or any of their respective Affiliates;
(iv) all Taxes (or nonpayment thereof) of ENP GP and the Partnership Entities that are attributable to any taxable period beginning Purchaser after the Closing Date, or the portion of the Straddle Period beginning after the Closing Date; and
(v) any breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement or any certificates or other documents delivered by Vanguard pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto; provided further, that if Buyer elects not to provide an Equity Portion of the Purchase Price in accordance with Section 1.3, a breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement will not result in any Seller Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX.
(c) The foregoing indemnification obligations in Sections 11.3(a) and 11.3(b) shall be subject to the following limitations:
(i) the Selling Parties’ cumulative The aggregate liability amount of Losses for Losses under Section 9.2(a)(i) and Buyer’s cumulative aggregate which EME has liability under Section 9.2(b)(i11.3(a)(i) and 9.2(b)(v)Section 11.3(a)(iii) and for which the Purchaser Parties have liability under Section 11.3(b)(i) shall not, in each either case, shall not exceed $50 million a dollar amount equal to thirty percent (30%) of the sum of the unadjusted Project Purchase Prices of all Projects acquired by the Purchaser or Purchaser Designees under this Agreement (the “"Cap”"); provided, however, that the Cap shall not be applicable with respect to any untruth or inaccuracy in any representation or the breach of any warranty contained in Sections 4.1 or 5.1 (i) Breaches under Sections 2.2 (Validity of AgreementOrganization and Good Standing), 2.5 Section 4.2 (Capitalization of ENP GP; General Partner Interest; Subject Common UnitsAuthority and Enforceability), 2.11 Section 4.5 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; AuthorizationOwnership Interests) or 4.5 (Brokers), 5.2(cSection 4.4(c) (Issuance of Vanguard Common UnitsConsents), 5.3 (Validity of Agreement) and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to Taxes, the liability with respect to which shall be as set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v);.
(ii) Buyer’s cumulative aggregate liability for Losses under Section 9.2(b)(v) shall not exceed thirteen percent of the value of the Equity Portion of the Purchase Price, if any (the “Vanguard Cap”); provided, however, that the Vanguard Cap shall not be applicable with respect to (i) breaches under Sections 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), 5.10 (Tax Matters), and 5.17 (Brokers) hereof or (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation;
(iii) no No indemnification for any Losses asserted against the Selling Parties EME under Section 9.2(a)(i11.3(a)(i) or Section 11.3(a)(iii) or against Buyer any Purchaser Party under Section 9.2(b)(i) and Section 9.2(b)(v11.3(b)(i) shall be required (x) unless and until the cumulative aggregate amount of all such Losses, in each case, Losses exceeds a dollar amount equal to $3,800,000 20,000,000 (the “Deductible”"Deductible Amount"), at which point EME or the Selling Parties shall be obligated to indemnify the Buyer Indemnified Parties or Buyer shall be obligated to indemnify the Seller Indemnified Purchaser Parties, as the case may be, only for shall be obligated to indemnify the Indemnified Party as to the amount of such Losses in excess of the DeductibleDeductible Amount only, up to the Cap set forth in Section 11.3(c)(i); provided, however, that individual claims of $50,000 or less (or its equivalent in foreign currency) (the Deductible "Individual Claims Limit") shall not be applicable aggregated for purposes of calculating either the Deductible Amount or the excess of Losses over the Deductible Amount; provided, further, that nothing in this Section 11.3(c)(ii) shall apply to indemnification for Losses asserted against an Indemnifying Party arising from any untruth or inaccuracy in any representation or breach of any warranty contained in Sections 4.1 or 5.1 (Organization and Good Standing), Section 4.2 (Authority and Enforceability), Section 4.5 (Ownership Interests), Section 4.10 (Title to Properties) or Section 4.13 (Taxes) or Section 4.18 (Sufficient Assets). For the avoidance of doubt, any Losses incurred in excess of the Project Deductible Amount shall, prior to the exhaustion of the Deductible Amount, be applied towards such Deductible Amount.
(iii) Subject in every case to the Cap set forth in Section 11.3(c)(i) above, the aggregate amount of Losses for which EME has liability under Section 11.3(a)(iii) with respect to any Project shall not, in any case, exceed a dollar amount equal to one hundred percent (100%) of the unadjusted Project Purchase Price for such Project (the "Environmental Sublimit"). No indemnification for any Losses asserted against EME under Section 11.3(a)(iii) with respect to any Project shall be required unless and until (i) breaches under Sections 2.2 (Validity the amount of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization), 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), and 5.17 (Brokers) hereof, (ii) all such Losses with respect to matters that constitute fraud or intentional misrepresentation, such Project exceeds a dollar amount equal to $5,000,000 (iii) Losses with respect to those Taxes the liability with respect to which are set forth in Sections 9.2(a)(iii"Project Deductible Amount") and 9.2(b)(iv), or (ivii) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as Deductible Amount set forth in Section 9.2(a)(v);11.3(c)(ii) has been exhausted, at which point EME shall be obligated to indemnify the Indemnified Party as to the amount of any such Losses in excess of the Project Deductible Amount and the Deductible Amount only up to the Environmental Sublimit for such Project, provided, that individual Losses under Section 11.3(a)(iii) which do not exceed the Individual Claims Limit shall not be aggregated for purposes of calculating the Project Deductible Amount or the Deductible Amount or the excess of Losses over the Project Deductible Amount or the Deductible Amount.
(iv) The aggregate amount of Losses for which EME has liability under Section 11.3(a)(v) shall not exceed a dollar amount equal to $102,700,000.
(v) An Indemnified Party shall not be entitled under this Agreement to multiple recovery for the same Losses. Without limiting the foregoing, the amount of any Losses suffered by a Seller an Indemnified Party or a Buyer Indemnified Party, as the case may be (such party seeking indemnification pursuant to this Article IX, the “Indemnified Party,” and the other party, the “Indemnifying Party”), shall be determined without giving effect to any materiality or Material Adverse Effect qualifiers and shall be reduced by any third-party insurance benefits payments, or other payments from third party recoveries actually received by the parties, which such Indemnified Party with receives in respect to of or as a result of such Loss (net of costs incurred to recover such insurance benefits and third party recoveries, deductibles, and retropremiums)Losses. To the extent an Indemnified Party suffers If any Losses for which the Indemnifying Party indemnification is liable for indemnification, the Indemnified Party shall submit a claim to collect provided and paid hereunder are subsequently reduced by any amounts available under third-party insurance coverage or other payments from third parties, the amount of the reduction shall be remitted to the applicable Indemnifying Party net of Tax and from other third parties reasonably liable for any Loss suffered by the Indemnified Party;costs of recovery.
(vvi) no No claim may be asserted nor may any action Action be commenced against any Party for breach or inaccuracy of any representation or breach of a warrantyindemnity pursuant to Section 11.3(a)(i) under this Article XI, unless written notice of such claim or action is received by the other Party Action, describing in reasonable detail the known facts and circumstances with respect to the subject matter of such claim or action Action, is provided to the applicable Indemnifying Party on or prior to the date on which end of the representation or warranty on which such claim or action is based ceases to survive as set forth in Section 9.1;
(vi) no Indemnified Party shall be entitled under this Agreement to multiple recovery for the same Losses; andSurvival Period.
(vii) if the Closing occurs, In no event shall any Indemnifying Party be liable to any Indemnified Party is entitled pursuant to this Article XI for any Losses in the nature of consequential damages, punitive damages, restitution, lost profits and damage to reputation, in each case except for indemnification for Third Party Claims.
(viii) In determining the amount of indemnification due under Sections 11.3 and 11.5, all payments shall be reduced by, or any other recovery under this Agreement with respect returned to any breach or inaccuracy in any representation or warranty of an the Indemnifying Party (A) that would have given in, the amount of any Tax benefit actually realized by the Indemnified Party a right to terminate this Agreement under Section 8.1 on account of this Agreement, and (B) of which the Indemnified Party had Knowledge before underlying claim promptly after the Closing, whether pursuant to a notice delivered under Section 6.6 or otherwisebenefit is realized.
Appears in 1 contract
Indemnification Coverage. (a) From 1. Notwithstanding the Closing or the delivery of the Shares and after regardless of any investigation at any time made by or on behalf of the ClosingBuyer or of any knowledge or information that the Buyer may have, the Selling Parties Seller Parent shall indemnify and agree to defend, save and hold Buyer the Buyer, the Company and ENP GP each of their officers, directors, employees, agents and their Affiliates affiliates (other than the Partnership EntitiesSeller Parent and the Seller) and each of their respective officers, directors, employees and agents (collectively, the “Buyer Indemnified Parties”) harmless if any such Buyer Indemnified Party shall at any time or from time to time suffer any damage, judgment, fine, penalty, demand, settlement, liability, loss, cost, Tax, expense (including including, without limitation, reasonable attorneys’, consultants’ and experts’ fees), claim or cause of action (each, a “Loss,” and collectively, “Losses”) arising out of, relating to or resulting from:
(i) a. any breach or inaccuracy (determined without regard to any qualifier as to “materiality,” “material adverse effect” or any derivative of such terms (except that the word “material” shall not be so disregarded as the same modifies (A) the word “Contracts” or the words “insurance policies,” (B) the word “information” in Section 2.5(c)(i), (C) the word “filings” in Section 2.5(f), and (D)(I) the word “permits” in Section 4.1(b), (II) the word “agreement” in Section 4.1(m), (III) the word “changes” in Section 4.1(p), and (IV) the phrase “actions, suits, arbitrations or proceedings” in Section 4.1(r), in each case as such provisions are referred to in Section 2.6(a)(ii)) in any representation or warranty by the Selling Parties Seller Parent or the Seller contained in this Agreement or any certificates or other documents delivered by any Selling of them pursuant to this Agreement at the Closing;
b. any failure by the Seller Parent or the Seller to perform or observe any term, provision, covenant, or agreement on the part of any of them to be performed or observed under this Agreement;
c. any liability in respect of any business (whether as a transfer of assets or capital stock) transferred (whether by way of sale, merger, reorganization or consolidation, distribution or otherwise) or discontinued by the Company or any of its present or former Subsidiaries after December 6, 1998 to any Person, but only to the extent such liability is not reflected in the Company’s consolidated balance sheet in the FY 2005 Statements;
d. any liability resulting by reason of the several liability of the Company or any of its Subsidiaries pursuant to Treasury Regulations § 1.1502-6 or any analogous state, local or foreign law or regulation or by reason of the Company or any of its Subsidiaries having been a member of any consolidated, combined or unitary group on or prior to the Closing Date, but only to the extent such liability is not reflected in the Company’s consolidated balance sheet in the FY 2005 Statements;
e. any liability for Taxes resulting by reason of the Company or any of its Subsidiaries ceasing to be a member of any consolidated, combined or unitary group that includes the Seller, but only to the extent such liability is not reflected in the Company’s consolidated balance sheet in the FY 2005 Statements; and
f. any liability relating to (x) the Company Employee Retention / Incentive Program (Apollo Transaction), or (y) any amendment, change, increase, addition or grant relating to any Employee Benefit Plan that is listed on Section 4.1(i) of the Seller Parent Disclosure Letter and effected after March 31, 2005 that is not previously approved in writing by the Buyer or required by any applicable collective bargaining agreement.
2. Notwithstanding the Closing or the delivery of the Shares and regardless of any investigation at any time made by or on behalf of the Seller Parent or the Seller of any knowledge or information that the Seller Parent or the Seller may have, the Buyer shall indemnify and agree to defend, save and hold the Seller Parent and the Seller and their officers, directors, employees, agents and affiliates (other than the Buyer) (collectively, the “Seller Indemnified Parties”) harmless if any such Seller Indemnified Party shall at any time or from time to time suffer any Loss arising out of, relating to, or resulting from:
a. any breach or inaccuracy (determined without regard to any qualifier as to “materiality” or “material adverse effect” included therein) in any representation or warranty by the Buyer contained in this Agreement or any certificates or other documents delivered by the Buyer pursuant to this Agreement at the Closing; provided, that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if Material Adverse Effect or materiality is not a qualification thereto and provided, further, that a Selling Parties Unknown Matter Breach of Sections 3.15, 3.16 or 3.18 will not result in any Buyer Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX;and
(ii) b. any failure by the Selling Parties Buyer to perform or observe any term, provision, covenant, or agreement on the part of the Selling Parties to be performed or observed under this Agreement;
(iii) Selling Parties’ Taxes;
(iv) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of the Selling Parties or any of their Affiliates; and
(v) any Plan or Plan Liability.
(b) From and after the Closing, Buyer shall indemnify and defend, save and hold the Selling Parties and their Affiliates and their respective officers, directors, employees and agents (collectively, the “Seller Indemnified Parties”) harmless if any such Seller Indemnified Party shall suffer any Loss arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation or warranty by Buyer contained in this Agreement or any certificates or other documents delivered by Buyer pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto;
(ii) any failure by Buyer to perform or observe any term, provision, covenant, or agreement on the part of Buyer to be performed or observed under this Agreement;
(iii) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of Buyer, Vanguard or any of their respective Affiliates;
(iv) all Taxes (or nonpayment thereof) of ENP GP and the Partnership Entities that are attributable to any taxable period beginning after the Closing Date, or the portion of the Straddle Period beginning after the Closing Date; and
(v) any breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement or any certificates or other documents delivered by Vanguard pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto; provided further, that if Buyer elects not to provide an Equity Portion of the Purchase Price in accordance with Section 1.3, a breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement will not result in any Seller Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX.
(c) 3. The foregoing indemnification obligations shall be subject to the following limitations:
(i) a. the Selling Parties’ cumulative aggregate liability for Losses under Section 9.2(a)(i) and BuyerSeller Parent’s cumulative aggregate liability under Section 9.2(b)(i8.2(a)(i) and 9.2(b)(v)the Buyer’s aggregate liability under Section 8.2(b)(i) shall not, in each either case, shall not exceed $50 million 50% of the Purchase Price (the “Cap”); provided, however, that the Cap shall not be applicable with respect to breaches of the representations and warranties described in clause (ia) Breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization the first proviso to Section 8.1 or of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity the representations and warranties in the first two sentences of Agreement; Authorization) or 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement) and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to Taxes, the liability with respect to which shall be as set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v2.12(c);
(ii) Buyer’s cumulative aggregate liability for Losses under Section 9.2(b)(v) shall not exceed thirteen percent of the value of the Equity Portion of the Purchase Price, if any (the “Vanguard Cap”); provided, however, that the Vanguard Cap shall not be applicable with respect to (i) breaches under Sections 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), 5.10 (Tax Matters), and 5.17 (Brokers) hereof or (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation;
(iii) b. no indemnification for any Losses asserted against the Selling Parties under Section 9.2(a)(i) or against Buyer under Section 9.2(b)(i) and Section 9.2(b)(v) shall be required unless and until the cumulative aggregate amount of such Losses, in each case, exceeds $3,800,000 (the “Deductible”), at which point the Selling Parties shall be obligated to indemnify the Buyer Indemnified Parties or Buyer shall be obligated to indemnify the Seller Indemnified Parties, as the case may be, only for the amount of such Losses in excess of the Deductible, provided, however, that the Deductible shall not be applicable with respect to (i) breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization), 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to those Taxes the liability with respect to which are set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v);
(iv) the amount of any Losses suffered by a Seller Indemnified Party or a Buyer Indemnified Party, as the case may be (such party seeking indemnification pursuant to this Article IX, the “Indemnified Party,” and the other party, the “Indemnifying Party”), shall be determined without giving effect to any materiality or Material Adverse Effect qualifiers and shall be reduced by any third-party insurance benefits or third party recoveries actually received by the Indemnified Party with respect to such Loss (net of costs incurred to recover such insurance benefits and third party recoveries, deductibles, and retropremiums). To the extent an Indemnified Party suffers Losses for which the Indemnifying Party is liable for indemnification, the Indemnified Party shall submit a claim to collect any amounts available under third-party insurance coverage and from other third parties reasonably liable for any Loss suffered by the Indemnified Party;
(v) no claim may be asserted nor may any action be commenced against any Party for breach or inaccuracy of any representation or breach of a warranty, unless written notice of such claim or action is received by the other Party describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on which such claim or action is based ceases to survive as set forth in Section 9.1;
(vi) no Indemnified Party shall be entitled under this Agreement to multiple recovery for the same Losses; and
(vii) if the Closing occurs, no Indemnified Party is entitled to indemnification or any other recovery under this Agreement with respect to any breach or inaccuracy in any representation or warranty of an Indemnifying Party (A) that would have given the Indemnified Party a right to terminate this Agreement under Section 8.1 of this Agreement, and (B) of which the Indemnified Party had Knowledge before the Closing, whether pursuant to a notice delivered under Section 6.6 or otherwise.against:
Appears in 1 contract
Indemnification Coverage. (a) From Notwithstanding the Closing or the delivery of the Shares and after regardless of any investigation at any time made by or on behalf of the ClosingBuyer or of any knowledge or information that the Buyer may have, the Selling Parties Sellers shall jointly and severally indemnify and agree to defend, save and hold Buyer the Buyer, NNGC and ENP GP each of their officers, directors, employees, agents and their Affiliates affiliates (other than the Partnership EntitiesSellers) and each of their respective officers, directors, employees and agents (collectively, the “"Buyer Indemnified Parties”") harmless if any such Buyer Indemnified Party shall at any time or from time to time suffer any damage, judgment, fine, penalty, demand, settlement, liability, loss, cost, Tax, expense (including reasonable attorneys’', consultants’ ' and experts’ ' fees), claim or cause of action (each, a “"Loss,” and collectively, “Losses”") arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation by the Sellers or the breach of any warranty by the Sellers contained in this Agreement (other than those contained in Section 3.9) or any certificates or other documents delivered pursuant to this Agreement on Closing;
(ii) any failure by the Sellers to perform or observe any term, provision, covenant, or agreement (other than those contained in Section 5.11) on the part of the Sellers to be performed or observed under this Agreement; and
(iii) any Pre-Closing Taxes or any breach or inaccuracy in any representation or warranty by Sellers in Section 3.9 or any failure by Sellers to perform or observe any term, provision, covenant or agreement on the Selling Parties part of Sellers to be performed or observed under Section 5.11.
(b) Notwithstanding the Closing or the delivery of the Shares and regardless of any investigation at any time made by or on behalf of the Sellers or of any knowledge or information that the Sellers may have, and the Buyer shall indemnify and agree to defend, save and hold the Sellers and its officers, directors, employees, agents and affiliates (collectively, the "Seller Indemnified Parties") harmless if any such Seller Indemnified Party shall at any time or from time to time suffer any Loss arising out of, relating to, or resulting from:
(i) any breach or inaccuracy in any representation by the Buyer or the breach of any warranty by the Buyer contained in this Agreement or any certificates or other documents delivered by any Selling Party pursuant to this Agreement at the on Closing; provided, that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if Material Adverse Effect or materiality is not a qualification thereto and provided, further, that a Selling Parties Unknown Matter Breach of Sections 3.15, 3.16 or 3.18 will not result in any Buyer Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX;and
(ii) any failure by the Selling Parties Buyer to perform or observe any term, provision, covenant, or agreement on the part of the Selling Parties to be performed or observed under this Agreement;
(iii) Selling Parties’ Taxes;
(iv) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of the Selling Parties or any of their Affiliates; and
(v) any Plan or Plan Liability.
(b) From and after the Closing, Buyer shall indemnify and defend, save and hold the Selling Parties and their Affiliates and their respective officers, directors, employees and agents (collectively, the “Seller Indemnified Parties”) harmless if any such Seller Indemnified Party shall suffer any Loss arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation or warranty by Buyer contained in this Agreement or any certificates or other documents delivered by Buyer pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto;
(ii) any failure by Buyer to perform or observe any term, provision, covenant, or agreement on the part of Buyer to be performed or observed under this Agreement;
(iii) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of Buyer, Vanguard or any of their respective Affiliates;
(iv) all Taxes (or nonpayment thereof) of ENP GP and the Partnership Entities that are attributable to any taxable period beginning after the Closing Date, or the portion of the Straddle Period beginning after the Closing Date; and
(v) any breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement or any certificates or other documents delivered by Vanguard pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto; provided further, that if Buyer elects not to provide an Equity Portion of the Purchase Price in accordance with Section 1.3, a breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement will not result in any Seller Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX.
(c) The foregoing indemnification obligations shall be subject to the following limitations:
(i) the Selling Parties’ cumulative aggregate liability for Losses under Section 9.2(a)(i) and Buyer’s cumulative Sellers' aggregate liability under Section 9.2(b)(i8.2(a)(i) and 9.2(b)(v)(ii) and the Buyer's aggregate liability under Section 8.2(b) shall not, in each either case, shall not exceed $50 million 208,800,000 (the “"Cap”"); provided, however, that the Cap shall not be applicable with respect to breaches under Section 2.5 or 3.2; and the Seller's aggregate liability under Section 8.2(iii) shall not exceed $208,800,000 (i) Breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization) or 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement) and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to Taxes, the liability with respect to which shall be as set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v"Tax Cap");
(ii) Buyer’s cumulative aggregate liability for Losses under Section 9.2(b)(v) shall not exceed thirteen percent of the value of the Equity Portion of the Purchase Price, if any (the “Vanguard Cap”); provided, however, that the Vanguard Cap shall not be applicable with respect to (i) breaches under Sections 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), 5.10 (Tax Matters), and 5.17 (Brokers) hereof or (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation;
(iii) no indemnification for any Losses asserted against the Selling Parties Buyer or the Sellers, as the case may be, under Section 9.2(a)(i8.2(a)(i) or against Buyer under (ii) or Section 9.2(b)(i) and Section 9.2(b)(v8.2(b) shall be required unless and until the cumulative aggregate amount of such Losses, in each case, Losses exceeds $3,800,000 (the “Deductible”)5,000,000, at which point the Selling Parties shall be obligated to indemnify Sellers or the Buyer Indemnified Parties or Buyer shall be obligated to indemnify the Seller Indemnified PartiesBuyer, as the case may be, shall be obligated to indemnify the Indemnified Party (as hereinafter defined) only for as to the amount of such Losses in excess of $5,000,000 (the "Deductible, "); provided, however, that the Deductible shall not be applicable with respect to (i) breaches under Sections 2.2 (Validity of AgreementSection 2.5 or 3.2 or Losses asserted against Sellers under Section 8.2(a)(iii), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization), 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, ;
(iii) no indemnification for any Losses with respect asserted against Sellers under Section 8.2(a)(iii) for a breach of any inaccuracy of any representation under Section 3.9 or failure by Sellers to those Taxes the liability with respect to which are set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to perform any Plans or Plan Liability, the liability with respect to which covenant under Section 5.11 shall be as set forth in Section 9.2(a)(v)required unless and until the cumulative aggregate amount of such Losses exceeds $50,000, at which point Sellers shall be obligated to indemnify the Indemnified Party the full amount of such Losses;
(iv) the amount of any Losses suffered by a Seller Indemnified Party or a Buyer Indemnified Party, as the case may be (such party seeking indemnification pursuant to this Article IXbe, the “Indemnified Party,” and the other party, the “Indemnifying Party”), shall be determined without giving effect to any materiality or Material Adverse Effect qualifiers and shall be reduced by any third-party insurance benefits which such party receives in respect of or third party recoveries actually received by the Indemnified Party with respect to as a result of such Loss (net of costs incurred to recover such insurance benefits and third party recoveries, deductibles, and retropremiums)Losses. To the extent an Indemnified Party suffers If any Losses for which the Indemnifying Party indemnification is liable for indemnification, the Indemnified Party shall submit a claim to collect provided hereunder is subsequently reduced by any amounts available under third-party insurance coverage and from or other third parties reasonably liable for any Loss suffered by indemnification benefit or recovery, the Indemnified Partyamount of the reduction shall be remitted to the Indemnifying Party (as hereinafter defined);
(v) no claim may be asserted nor may any action be commenced (A) against any Party the Sellers for breach or inaccuracy of any representation or breach of a warranty, unless written notice of such claim or action is received by the other Party Sellers describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on which such claim or action is based ceases to survive as set forth in Section 9.18.1 (it being agreed and understood that if a claim for a breach of a representation or warranty is timely made, the representation or warranty shall survive until the date on which such claim is finally liquidated or otherwise resolved), or (B) against the Buyer for breach or inaccuracy of any representation or breach of a warranty, unless written notice of such claim or action is received by the Buyer describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on which such claim or action is based ceases to survive as set forth in Section 8.1 (it being agreed and understood that if a claim for a breach of a representation or warranty is timely made, the representation or warranty shall survive until the date on which such claim is finally liquidated or otherwise resolved);
(vi) no an Indemnified Party shall not be entitled under this Agreement to multiple recovery for the same Losses; and
(vii) if the Closing occurs, no Losses shall be recoverable under this Agreement by an Indemnified Party is to the extent that the Losses are capital items that have historically been included in NNGC's rate base.
(d) Notwithstanding anything contained herein, Buyer shall not be entitled to indemnification or any other recovery under this Agreement with respect for any Loss arising out of, relating to any breach or inaccuracy resulting from Legal Proceedings set forth in any representation or warranty Section 8.2 of an Indemnifying Party (A) that would have given the Indemnified Party a right to terminate this Agreement under Section 8.1 of this Agreement, and (B) of which the Indemnified Party had Knowledge before the Closing, whether pursuant to a notice delivered under Section 6.6 or otherwiseDisclosure Letter.
Appears in 1 contract
Indemnification Coverage. (a) From and after the ClosingExcept with respect to Taxes, the Selling Parties indemnification for which is dealt with exclusively in Section 11.5, EME shall indemnify and defend, save and hold Buyer the Purchaser Indemnified Parties harmless from and ENP GP against any and their Affiliates all claims, demands, suits, losses (other than the Partnership Entities) including loss of value), liabilities, damages, costs and each expenses, including reasonable attorneys' fees and costs of their respective officersinvestigation, directorslitigation, employees settlement and agents judgment (collectively, the “Buyer Indemnified Parties”"Losses") harmless if any such Buyer Indemnified Party shall which they sustain or suffer any damage, judgment, fine, penalty, demand, settlement, liability, loss, cost, Tax, expense (including reasonable attorneys’, consultants’ and experts’ fees), claim or cause of action (each, to which they become subject as a “Loss,” and collectively, “Losses”) arising out result of, relating to or resulting from:
(i) any inaccuracy in or any breach, as of the Effective Date or the Closing Date, of any representation or warranty of any of the Seller Parties contained in this Agreement, any Related Agreement or any certificates or other documents delivered pursuant to this Agreement (other than a breach of the representation or warranty set forth in Section 4.16 which is indemnified under clause (iii) below) or any Related Agreement; provided, however, that if any such representation or warranty is qualified in any respect by reference to materiality or Material Adverse Effect, for purposes of this clause (i) such qualification shall in all respects be disregarded; provided, further, that if the occurrence of an event disclosed in an update pursuant to Section 6.20 is expressly permitted by Section 6.3, or the Purchaser's condition in Section 8.2(e) was satisfied by waiver, then disclosure of such event shall not be disregarded for purposes of determining whether there was any inaccuracy in, or any breach of, any representation or warranty as of the Closing Date.
(ii) any failure to perform or observe any term, provision, covenant or agreement in this Agreement or any Related Agreements to be performed or observed by the Seller Parties or any of them;
(iii) all Pre-Closing Environmental Liabilities, provided that any and all claims under this provision must be asserted prior to the fourth anniversary of the Closing Date;
(iv) all Pre-Closing Intragroup Liabilities;
(v) any failure by an Acquired Company to obtain from National Power Corporation the Certificate of Completion of Kalayaan II Unit 2 under the BROT Agreement, dated November 6, 1998, stating a date of completion for the Project known as "CBK" of January 22, 2004 or earlier; and
(vi) the ownership or operation of the Excluded Items (including any obligation that may be imposed on the Purchaser or any of its Affiliates under the New Zealand Takeovers Code or otherwise as a result of the Contact Sale Transaction) and any Project or Project-Specific Acquired Company (and any related business) that becomes separated from MEC BV and its Subsidiaries as a result of the exercise of a Preemptive Right or is otherwise not sold or transferred to the Purchaser and its Affiliates pursuant to this Agreement, as well as the ownership or operation prior to the Closing Date of any Acquired Holding Company of any such Project-Specific Acquired Company that is rendered inactive and has no direct or indirect ownership interest in an active Acquired Company as a result of such separation.
(b) Except with respect to Taxes, indemnification for which is dealt with exclusively in Section 11.5, in the case of clause (i) below only, the Purchaser Parties severally and, in the case of the remainder of this Section 11.3(b), the Purchaser, shall indemnify and defend, save and hold the Sellers and their respective Affiliates, successors and permitted assigns (collectively the "EME Indemnified Parties") harmless from and against any and all Losses which they sustain or suffer or to which they become subject as a result of:
(i) any inaccuracy in any representation by any Purchaser Party (or any Purchaser Designee) or the breach of any warranty by the Selling Parties any Purchaser Party (or any Purchaser Designee) contained in this Agreement or any certificates or other documents delivered by any Selling Party pursuant to this Agreement at without regard to any of the Closing; provided, that in determining whether any such representation qualifications as to materiality or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if Material Adverse Effect set forth herein or materiality is not a qualification thereto and provided, further, that a Selling Parties Unknown Matter Breach of Sections 3.15, 3.16 or 3.18 will not result in any Buyer Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IXtherein;
(ii) any failure by the Selling Parties to perform or observe any term, provision, covenant, covenant or agreement on the part of the Selling Parties in this Agreement to be performed or observed under this Agreement;by any Purchaser Party (or any Purchaser Designee); and
(iii) Selling Parties’ Taxes;after the applicable Project Closing, any EME Guarantee or letter of credit in respect of which any of the EME Guarantee Parties or other pertinent EME Subsidiaries was not fully and unconditionally released as contemplated by Section 6.14, to the extent any such EME Guarantee or letter of credit relates to the Project-Specific Acquired Companies that were the subject of such Project Closing; and
(iv) any broker Third Party Claims arising from the ownership or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect operation of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of the Selling Parties or any of their Affiliates; and
(v) any Plan or Plan Liability.
(b) From and after the Closing, Buyer shall indemnify and defend, save and hold the Selling Parties and their Affiliates Acquired Companies and their respective officers, directors, employees and agents (collectively, businesses by the “Seller Indemnified Parties”) harmless if any such Seller Indemnified Party shall suffer any Loss arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation or warranty by Buyer contained in this Agreement or any certificates or other documents delivered by Buyer pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto;
(ii) any failure by Buyer to perform or observe any term, provision, covenant, or agreement on the part of Buyer to be performed or observed under this Agreement;
(iii) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of Buyer, Vanguard or any of their respective Affiliates;
(iv) all Taxes (or nonpayment thereof) of ENP GP and the Partnership Entities that are attributable to any taxable period beginning Purchaser after the Closing Date, or the portion of the Straddle Period beginning after the Closing Date; and
(v) any breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement or any certificates or other documents delivered by Vanguard pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto; provided further, that if Buyer elects not to provide an Equity Portion of the Purchase Price in accordance with Section 1.3, a breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement will not result in any Seller Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX.
(c) The foregoing indemnification obligations in Sections 11.3(a) and 11.3(b) shall be subject to the following limitations:
(i) the Selling Parties’ cumulative The aggregate liability amount of Losses for Losses under Section 9.2(a)(i) and Buyer’s cumulative aggregate which EME has liability under Section 9.2(b)(i11.3(a)(i) and 9.2(b)(v)Section 11.3(a)(iii) and for which the Purchaser Parties have liability under Section 11.3(b)(i) shall not, in each either case, shall not exceed $50 million a dollar amount equal to thirty percent (30%) of the sum of the unadjusted Project Purchase Prices of all Projects acquired by the Purchaser or Purchaser Designees under this Agreement (the “"Cap”"); provided, however, that the Cap shall not be applicable with respect to any untruth or inaccuracy in any representation or the breach of any warranty contained in Sections 4.1 or 5.1 (i) Breaches under Sections 2.2 (Validity of AgreementOrganization and Good Standing), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common UnitsSection 4.2(Authority and Enforceability), 2.11 Section 4.5 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; AuthorizationOwnership Interests) or 4.5 (Brokers), 5.2(cSection 4.4(c) (Issuance of Vanguard Common UnitsConsents), 5.3 (Validity of Agreement) and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to Taxes, the liability with respect to which shall be as set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v);.
(ii) Buyer’s cumulative aggregate liability for Losses under Section 9.2(b)(v) shall not exceed thirteen percent of the value of the Equity Portion of the Purchase Price, if any (the “Vanguard Cap”); provided, however, that the Vanguard Cap shall not be applicable with respect to (i) breaches under Sections 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), 5.10 (Tax Matters), and 5.17 (Brokers) hereof or (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation;
(iii) no No indemnification for any Losses asserted against the Selling Parties EME under Section 9.2(a)(i11.3(a)(i) or Section 11.3(a)(iii) or against Buyer any Purchaser Party under Section 9.2(b)(i) and Section 9.2(b)(v11.3(b)(i) shall be required (x) unless and until the cumulative aggregate amount of all such Losses, in each case, Losses exceeds a dollar amount equal to $3,800,000 20,000,000 (the “Deductible”"Deductible Amount"), at which point EME or the Selling Parties shall be obligated to indemnify the Buyer Indemnified Parties or Buyer shall be obligated to indemnify the Seller Indemnified Purchaser Parties, as the case may be, only for shall be obligated to indemnify the Indemnified Party as to the amount of such Losses in excess of the DeductibleDeductible Amount only, up to the Cap set forth in Section 11.3(c)(i); provided, however, that individual claims of $50,000 or less (or its equivalent in foreign currency) (the Deductible "Individual Claims Limit") shall not be applicable aggregated for purposes of calculating either the Deductible Amount or the excess of Losses over the Deductible Amount; provided, further, that nothing in this Section 11.3(c)(ii) shall apply to indemnification for Losses asserted against an Indemnifying Party arising from any untruth or inaccuracy in any representation or breach of any warranty contained in Sections 4.1 or 5.1 (Organization and Good Standing), Section 4.2 (Authority and Enforceability), Section 4.5 (Ownership Interests), Section 4.10 (Title to Properties) or Section 4.13 (Taxes) or Section 4.18 (Sufficient Assets). For the avoidance of doubt, any Losses incurred in excess of the Project Deductible Amount shall, prior to the exhaustion of the Deductible Amount, be applied towards such Deductible Amount.
(iii) Subject in every case to the Cap set forth in Section 11.3(c)(i) above, the aggregate amount of Losses for which EME has liability under Section 11.3(a)(iii) with respect to any Project shall not, in any case, exceed a dollar amount equal to one hundred percent (100%) of the unadjusted Project Purchase Price for such Project (the "Environmental Sublimit"). No indemnification for any Losses asserted against EME under Section 11.3(a)(iii) with respect to any Project shall be required unless and until (i) breaches under Sections 2.2 (Validity the amount of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization), 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), and 5.17 (Brokers) hereof, (ii) all such Losses with respect to matters that constitute fraud or intentional misrepresentation, such Project exceeds a dollar amount equal to $5,000,000 (iii) Losses with respect to those Taxes the liability with respect to which are set forth in Sections 9.2(a)(iii"Project Deductible Amount") and 9.2(b)(iv), or (ivii) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as Deductible Amount set forth in Section 9.2(a)(v);11.3(c)(ii) has been exhausted, at which point EME shall be obligated to indemnify the Indemnified Party as to the amount of any such Losses in excess of the Project Deductible Amount and the Deductible Amount only up to the Environmental Sublimit for such Project, provided, that individual Losses under Section 11.3(a)(iii) which do not exceed the Individual Claims Limit shall not be aggregated for purposes of calculating the Project Deductible Amount or the Deductible Amount or the excess of Losses over the Project Deductible Amount or the Deductible Amount.
(iv) The aggregate amount of Losses for which EME has liability under Section 11.3(a)(v) shall not exceed a dollar amount equal to $102,700,000.
(v) An Indemnified Party shall not be entitled under this Agreement to multiple recovery for the same Losses. Without limiting the foregoing, the amount of any Losses suffered by a Seller an Indemnified Party or a Buyer Indemnified Party, as the case may be (such party seeking indemnification pursuant to this Article IX, the “Indemnified Party,” and the other party, the “Indemnifying Party”), shall be determined without giving effect to any materiality or Material Adverse Effect qualifiers and shall be reduced by any third-party insurance benefits payments, or other payments from third party recoveries actually received by the parties, which such Indemnified Party with receives in respect to of or as a result of such Loss (net of costs incurred to recover such insurance benefits and third party recoveries, deductibles, and retropremiums)Losses. To the extent an Indemnified Party suffers If any Losses for which the Indemnifying Party indemnification is liable for indemnification, the Indemnified Party shall submit a claim to collect provided and paid hereunder are subsequently reduced by any amounts available under third-party insurance coverage or other payments from third parties, the amount of the reduction shall be remitted to the applicable Indemnifying Party net of Tax and from other third parties reasonably liable for any Loss suffered by the Indemnified Party;costs of recovery.
(vvi) no No claim may be asserted nor may any action Action be commenced against any Party for breach or inaccuracy of any representation or breach of a warrantyindemnity pursuant to Section 11.3(a)(i) under this Article XI, unless written notice of such claim or action is received by the other Party Action, describing in reasonable detail the known facts and circumstances with respect to the subject matter of such claim or action Action, is provided to the applicable Indemnifying Party on or prior to the date on which end of the representation or warranty on which such claim or action is based ceases to survive as set forth in Section 9.1;
(vi) no Indemnified Party shall be entitled under this Agreement to multiple recovery for the same Losses; andSurvival Period.
(vii) if the Closing occurs, In no event shall any Indemnifying Party be liable to any Indemnified Party is entitled pursuant to this Article XI for any Losses in the nature of consequential damages, punitive damages, restitution, lost profits and damage to reputation, in each case except for indemnification for Third Party Claims.
(viii) In determining the amount of indemnification due under Sections 11.3 and 11.5, all payments shall be reduced by, or any other recovery under this Agreement with respect returned to any breach or inaccuracy in any representation or warranty of an the Indemnifying Party (A) that would have given in, the amount of any Tax benefit actually realized by the Indemnified Party a right to terminate this Agreement under Section 8.1 on account of this Agreement, and (B) of which the Indemnified Party had Knowledge before underlying claim promptly after the Closing, whether pursuant to a notice delivered under Section 6.6 or otherwisebenefit is realized.
Appears in 1 contract
Indemnification Coverage. (a) From and after the Closing, the Selling Parties shall indemnify and defend, save and hold Buyer and ENP GP Buyer, the Partnership Entities and their Affiliates (other than the Partnership Entities) and each of their respective officers, directors, employees and agents (collectively, the “Buyer Indemnified Parties”) harmless if any such Buyer Indemnified Party shall suffer any damage, judgment, fine, penalty, demand, settlement, liability, loss, cost, Taxtax, expense (including reasonable attorneys’, consultants’ and experts’ fees), claim or cause of action (each, a “Loss,” and collectively, “Losses”) arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation by the Selling Parties or the breach of any warranty by the Selling Parties contained in this Agreement or any certificates or other documents delivered by any Selling Party pursuant to this Agreement at the Closing; provided, that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if Material Adverse Effect or materiality is not a qualification thereto and provided, further, that a Selling Parties Unknown Matter Breach of Sections 3.15, 3.16 or 3.18 will not result in any Buyer Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX;and
(ii) any failure by the Selling Parties to perform or observe any term, provision, covenant, or agreement on the part of the Selling Parties to be performed or observed under this Agreement;
(iii) Selling Parties’ Taxes;
(iv) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of the Selling Parties or any of their Affiliates; and
(v) any Plan or Plan Liability.
(b) From and after the Closing, Buyer shall indemnify and defend, save and hold the Selling Parties and their Affiliates and each of their respective officers, directors, employees and agents (collectively, the “Seller Indemnified Parties”) harmless if any such Seller Indemnified Party shall suffer any Loss arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation by Buyer or the breach of any warranty by Buyer contained in this Agreement or any certificates or other documents delivered by Buyer pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto;and
(ii) any failure by Buyer to perform or observe any term, provision, covenant, or agreement on the part of Buyer to be performed or observed under this Agreement;
(iii) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of Buyer, Vanguard or any of their respective Affiliates;
(iv) all Taxes (or nonpayment thereof) of ENP GP and the Partnership Entities that are attributable to any taxable period beginning after the Closing Date, or the portion of the Straddle Period beginning after the Closing Date; and
(v) any breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement or any certificates or other documents delivered by Vanguard pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto; provided further, that if Buyer elects not to provide an Equity Portion of the Purchase Price in accordance with Section 1.3, a breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement will not result in any Seller Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX.
(c) The foregoing indemnification obligations shall be subject to the following limitations:
(i) the Selling Parties’ cumulative aggregate liability for Losses under Section 9.2(a)(i) and Buyer’s cumulative aggregate liability under Section 9.2(b)(i) and 9.2(b)(v), in each case, shall not exceed $50 million (the “Cap”); provided, however, that the Cap shall not be applicable with respect to (i) Breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization) or 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement) and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to Taxes, the liability with respect to which shall be as set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v);
(ii) Buyer’s cumulative aggregate liability for Losses under Section 9.2(b)(v) shall not exceed thirteen percent of the value of the Equity Portion of the Purchase Price, if any (the “Vanguard Cap”); provided, however, that the Vanguard Cap shall not be applicable with respect to (i) breaches under Sections 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), 5.10 (Tax Matters), and 5.17 (Brokers) hereof or (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation;
(iii) no indemnification for any Losses asserted against the Selling Parties under Section 9.2(a)(i) or against Buyer under Section 9.2(b)(i) and Section 9.2(b)(v) shall be required unless and until the cumulative aggregate amount of such Losses, in each case, exceeds $3,800,000 (the “Deductible”), at which point the Selling Parties shall be obligated to indemnify the Buyer Indemnified Parties or Buyer shall be obligated to indemnify the Seller Indemnified Parties, as the case may be, only for the amount of such Losses in excess of the Deductible, provided, however, that the Deductible shall not be applicable with respect to (i) breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization), 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to those Taxes the liability with respect to which are set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v);
(iv) the amount of any Losses suffered by a Seller Indemnified Party or a Buyer Indemnified Party, as the case may be (such party seeking indemnification pursuant to this Article IX, the “Indemnified Party,” and the other party, the “Indemnifying Party”), shall be determined without giving effect to any materiality or Material Adverse Effect qualifiers and shall be reduced by any third-party insurance benefits or third insurance, third-party recoveries actually and available tax benefits received or realizable by the Indemnified Party with through its commercially reasonable efforts in respect to of or as a result of such Loss (net of costs incurred to recover such insurance benefits and third party recoveries, deductibles, and retropremiums)Losses. To the extent an Indemnified Party suffers Losses for which the Indemnifying Party is liable for indemnification, the The Indemnified Party shall submit a claim use commercially reasonable efforts to collect any amounts available under third-party such insurance coverage and from such other third parties reasonably liable for third-party alleged to have responsibility and to realize any Loss suffered by the Indemnified Partyavailable tax benefits;
(vii) no claim may be asserted nor may any action be commenced against any Party party for breach or inaccuracy of any representation or breach of a warranty, unless written notice of such claim or action is received by the other Party party describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on which such claim or action is based ceases to survive as set forth in Section 9.1;; and
(viiii) no Indemnified Party shall be entitled under this Agreement to multiple recovery for the same Losses; and
(vii) if the Closing occurs, no Indemnified Party is entitled to indemnification or any other recovery under this Agreement with respect to any breach or inaccuracy in any representation or warranty of an Indemnifying Party (A) that would have given the Indemnified Party a right to terminate this Agreement under Section 8.1 of this Agreement, and (B) of which the Indemnified Party had Knowledge before the Closing, whether pursuant to a notice delivered under Section 6.6 or otherwise.
Appears in 1 contract
Samples: Purchase Agreement (BreitBurn Energy Partners L.P.)
Indemnification Coverage. (a) From Notwithstanding the Closing or the delivery of the Interests and after regardless of any investigation at any time made by or on behalf of the Closing, Buyers or of any knowledge or information that the Selling Parties Buyers may have the Sellers shall indemnify and agree to defend, save and hold Buyer the Buyers, the Company and ENP GP each of their officers, directors, employees, agents and their Affiliates affiliates (other than the Partnership EntitiesSellers) and each of their respective officers, directors, employees and agents (collectively, the “"Buyer Indemnified Parties”") harmless if any such Buyer Indemnified Party shall at any time or from time to time suffer any damage, judgment, fine, penalty, demand, settlement, liability, loss, cost, Tax, expense (including reasonable attorneys’', consultants’ ' and experts’ ' fees), claim or cause of action (each, a “"Loss,” and collectively, “Losses”") arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation by the Sellers or the breach of any warranty by the Selling Parties Sellers contained in this Agreement or any certificates or other documents delivered by any Selling Party pursuant to this Agreement at the on Closing; provided, that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if Material Adverse Effect or materiality is not a qualification thereto and provided, further, that a Selling Parties Unknown Matter Breach of Sections 3.15, 3.16 or 3.18 will not result in any Buyer Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX;
(ii) any failure by the Selling Parties Sellers to perform or observe any term, provision, covenant, or agreement on the part of the Selling Parties Sellers to be performed or observed under this Agreement;; and
(iii) Selling Parties’ Taxes;
(iv) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of the Selling Parties or any of their Affiliates; and
(v) any Plan or Plan LiabilityLegal Proceedings set forth on Schedule 8.2.
(b) From Notwithstanding the Closing or the delivery of the Interests and after regardless of any investigation at any time made by or on behalf of the ClosingSellers or of any knowledge or information that the Sellers may have, Buyer the Buyers shall indemnify and agree to defend, save and hold the Selling Parties Sellers and their Affiliates and their respective officers, directors, employees employees, agents and agents affiliates (collectively, the “"Seller Indemnified Parties”") harmless if any such Seller Indemnified Party shall at any time or from time to time suffer any Loss arising out of, relating to to, or resulting from:
(i) any breach or inaccuracy in any representation by the Buyers or the breach of any warranty by Buyer the Buyers contained in this Agreement or any certificates or other documents delivered by Buyer pursuant to this Agreement at the on Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto;and
(ii) any failure by Buyer the Buyers to perform or observe any term, provision, covenant, or agreement on the part of Buyer the Buyers to be performed or observed under this Agreement;
(iii) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of Buyer, Vanguard or any of their respective Affiliates;
(iv) all Taxes (or nonpayment thereof) of ENP GP and the Partnership Entities that are attributable to any taxable period beginning after the Closing Date, or the portion of the Straddle Period beginning after the Closing Date; and
(v) any breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement or any certificates or other documents delivered by Vanguard pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto; provided further, that if Buyer elects not to provide an Equity Portion of the Purchase Price in accordance with Section 1.3, a breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement will not result in any Seller Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX.
(c) The foregoing indemnification obligations shall be subject to the following limitations:
(i) the Selling Parties’ cumulative aggregate liability for Losses under Section 9.2(a)(i) and Buyer’s cumulative Sellers' aggregate liability under Section 9.2(b)(i8.2(a) and 9.2(b)(v)the Buyers' aggregate liability under Section 8.2(b) shall not, in each either case, shall not exceed $50 million 75% of the Purchase Price (the “"Cap”"); provided, however, that the Cap shall not be applicable with respect to (i) Breaches breaches under Sections 2.2 (Validity of Agreement)Section 2.2, 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization) 2.9 or 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement) and 5.17 (Brokers) hereof, (ii) 4.11 or Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to Taxes, asserted against the liability with respect to which shall be as set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Sellers under Section 9.2(a)(v8.2(a)(iii);
(ii) Buyer’s no indemnification for any Losses asserted against the Buyers or the Sellers, as the case may be, under Section 8.2(a) or Section 8.2(b) shall be required unless and until the cumulative aggregate liability for amount of such Losses under Section 9.2(b)(v) shall not exceed thirteen percent of the value of the Equity Portion of the Purchase Price, if any exceeds $8,000,000 (the “Vanguard Cap”"Threshold"), at which point the Sellers or the Buyers, as the case may be, shall be obligated to indemnify the Indemnified Party (as hereinafter defined) only as to the amount of such Losses in excess of $1,000,000 (the "Deductible"), subject to the limitation in Section 8.2(c)(i); provided, however, that the Vanguard Cap Threshold and the Deductible shall not be applicable with respect to (i) breaches under Sections 5.2(c) (Issuance of Vanguard Common Units1.4, 2.2, 2.9 or 4.11 or Losses asserted against the Sellers under Section 8.2(a)(iii), 5.3 (Validity of Agreement), 5.10 (Tax Matters), and 5.17 (Brokers) hereof or (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation;
(iii) no indemnification for any Losses asserted against the Selling Parties Sellers under Section 9.2(a)(i8.2(a) for a breach or against Buyer inaccuracy of any representation under Section 9.2(b)(i) and 2.9 or failure by the Sellers to perform any covenant under Section 9.2(b)(v) 4.11 shall be required unless and until the cumulative aggregate amount of such Losses, in each case, Losses exceeds $3,800,000 (the “Deductible”)50,000, at which point the Selling Parties Sellers shall be obligated to indemnify the Buyer Indemnified Parties or Buyer shall be obligated to indemnify Party the Seller Indemnified Parties, as the case may be, only for the full amount of such Losses in excess of the Deductible, provided, however, that the Deductible shall not be applicable with respect to (i) breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization), 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to those Taxes the liability with respect to which are set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v)Losses;
(iv) the amount of any Losses suffered by a Seller Indemnified Party or a Buyer Indemnified Party, as the case may be (such party seeking indemnification pursuant to this Article IXbe, the “Indemnified Party,” and the other party, the “Indemnifying Party”), shall be determined without giving effect to any materiality or Material Adverse Effect qualifiers and shall be reduced by any third-party insurance benefits which such party receives in respect of or third party recoveries actually received by the Indemnified Party with respect to as a result of such Loss (net of costs incurred to recover such insurance benefits and third party recoveries, deductibles, and retropremiums)Losses. To the extent an Indemnified Party suffers If any Losses for which the Indemnifying Party indemnification is liable for indemnification, the Indemnified Party shall submit a claim to collect provided hereunder is subsequently reduced by any amounts available under third-party insurance coverage and from or other third parties reasonably liable for any Loss suffered by indemnification benefit or recovery, the Indemnified Partyamount of the reduction shall be remitted to the Indemnifying Party (as hereinafter defined);
(v) no claim may be asserted nor may any action be commenced (A) against any Party the Sellers for breach or inaccuracy of any representation or breach of a warranty, unless written notice of such claim or action is received by the other Party Sellers describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on which such claim or action is based ceases to survive as set forth in Section 9.1;8.1 (it being agreed and understood that if a claim for a breach of a representation or warranty is timely made, the representation or warranty shall survive until the date on which such claim is finally liquidated or otherwise resolved), or (B) against the Buyers for breach or inaccuracy of any representation or breach of a warranty, unless written notice of such claim or action is received by the Buyers describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on which such claim or action is based ceases to survive as set forth in Section 8.1 (it being agreed and understood that if a claim for a breach of a representation or warranty is timely made, the representation or warranty shall survive until the date on which such claim is finally liquidated or otherwise resolved); and
(vi) no an Indemnified Party shall not be entitled under this Agreement to multiple recovery for the same Losses; and
(vii) if the Closing occurs, no Indemnified Party is entitled to indemnification or any other recovery under this Agreement with respect to any breach or inaccuracy in any representation or warranty of an Indemnifying Party (A) that would have given the Indemnified Party a right to terminate this Agreement under Section 8.1 of this Agreement, and (B) of which the Indemnified Party had Knowledge before the Closing, whether pursuant to a notice delivered under Section 6.6 or otherwise.
Appears in 1 contract
Samples: Purchase Agreement (Midamerican Energy Holdings Co /New/)
Indemnification Coverage. (a) From and after the Closing, the Selling Parties Seller shall indemnify and defend, save and hold Buyer and ENP GP and their Affiliates (other than the Partnership Entities) and each of their its respective officers, directors, employees and agents (collectively, the “Buyer Indemnified Parties”) harmless if any such Buyer Indemnified Party shall suffer any damage, judgment, fine, penalty, demand, settlement, liability, loss, cost, Tax, expense (including reasonable attorneys’, consultants’ and experts’ fees), claim or cause of action (each, a “Loss,” and collectively, “Losses”) arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation or warranty by the Selling Parties Seller contained in this Agreement or any certificates or other documents delivered by any Selling Party Seller pursuant to this Agreement at the Closing; provided, that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if Material Adverse Effect or materiality is not a qualification thereto and provided, further, that a Selling Parties Unknown Matter Breach of Sections 3.15, 3.16 or 3.18 will not result in any Buyer Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX;
(ii) any failure by the Selling Parties Seller to perform or observe any term, provision, covenant, or agreement on the part of the Selling Parties Seller to be performed or observed under this Agreement;
(iii) Selling Parties’ Seller’s Taxes;
(iv) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of the Selling Parties Seller or any of their its Affiliates; and
(v) any Plan or Plan Liability.
(b) From and after the Closing, Buyer shall indemnify and defend, save and hold the Selling Parties Seller and their Affiliates and their its respective officers, directors, employees and agents (collectively, the “Seller Indemnified Parties”) harmless if any such Seller Indemnified Party shall suffer any Loss arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation or warranty by Buyer contained in this Agreement or any certificates or other documents delivered by Buyer pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto;
(ii) any failure by Buyer to perform or observe any term, provision, covenant, or agreement on the part of Buyer to be performed or observed under this Agreement;
(iii) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of Buyer, Vanguard Alamo or any of their its respective Affiliates;
(iv) all Taxes (or nonpayment thereof) of ENP GP and the Partnership Operating Entities that are attributable to any taxable period beginning after the Closing Date, or the portion of the Straddle Period beginning after the Closing Date; and
(v) any breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement or any certificates or other documents delivered by Vanguard pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto; provided further, that if Buyer elects not to provide an Equity Portion of the Purchase Price in accordance with Section 1.3, a breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement will not result in any Seller Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX.
(c) The foregoing indemnification obligations shall be subject to the following limitations:
(i) the Selling Parties’ cumulative aggregate liability for Losses under Section 9.2(a)(i) and Buyer’s cumulative aggregate liability under Section 9.2(b)(i) and 9.2(b)(v), in each case, shall not exceed $50 million (the “Cap”); provided, however, that the Cap shall not be applicable with respect to (i) Breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization) or 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement) and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to Taxes, the liability with respect to which shall be as set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v);
(ii) The Buyer’s cumulative aggregate liability for Losses under Section 9.2(b)(v) shall not exceed thirteen percent of the value of the Equity Portion of the Purchase Price, if any $2,000,000.00 (the “Vanguard Alamo Cap”); provided, however, that the Vanguard Cap shall not be applicable with respect to (i) breaches under Sections 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), 5.10 (Tax Matters), and 5.17 (Brokers) hereof or (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation;
(iii) no indemnification for any Losses asserted against the Selling Parties under Section 9.2(a)(i) or against Buyer under Section 9.2(b)(i) and Section 9.2(b)(v) shall be required unless and until the cumulative aggregate amount of such Losses, in each case, exceeds $3,800,000 (the “Deductible”), at which point the Selling Parties shall be obligated to indemnify the Buyer Indemnified Parties or Buyer shall be obligated to indemnify the Seller Indemnified Parties, as the case may be, only for the amount of such Losses in excess of the Deductible, provided, however, that the Deductible shall not be applicable with respect to (i) breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization), 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to those Taxes the liability with respect to which are set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v);
(ivii) Seller’s cumulative aggregate liability for Losses shall not exceed 50% of the market value of 8,500,000 shares of Alamo Stock based on the average sales price of Alamo Stock during the twenty (20) days prior to payment (the “Valuation”). At Range’s option, any amounts payable under this Section 8.2(c)(ii) may be paid in Alamo Stock based on the Valuation.
(iii) the amount of any Losses suffered by a Seller Indemnified Party or a Buyer Indemnified Party, as the case may be (such party seeking indemnification pursuant to this Article IX, the “Indemnified Party,” and the other party, the “Indemnifying Party”), shall be determined without giving effect to any materiality or Material Adverse Effect qualifiers and shall be reduced by any third-party insurance benefits or third party recoveries actually received by the Indemnified Party with respect to such Loss (net of costs incurred to recover such insurance benefits and third party recoveries, deductibles, and retropremiums). To the extent an Indemnified Party suffers Losses for which the Indemnifying Party is liable for indemnification, the Indemnified Party shall submit a claim to collect any amounts available under third-party insurance coverage and from other third parties reasonably liable for any Loss suffered by the Indemnified Partyqualifiers;
(viv) no claim may be asserted nor may any action be commenced against any Party for breach or inaccuracy of any representation or breach of a warranty, unless written notice of such claim or action is received by the other Party describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on which such claim or action is based ceases to survive as set forth in Section 9.18.1;
(viv) no Indemnified Party shall be entitled under this Agreement to multiple recovery for the same Losses; and
(viivi) if the Closing occurs, no Indemnified Party is entitled to indemnification or any other recovery under this Agreement with respect to any breach or inaccuracy in any representation or warranty of an Indemnifying Party (A) that would have given the Indemnified Party a right to terminate this Agreement under Section 8.1 of this Agreement, and (B) of which the Indemnified Party had Knowledge before the Closing, whether pursuant to a notice delivered under Section 6.6 5.7 or otherwise.
Appears in 1 contract
Samples: Membership Interest Purchase and Sale Agreement (Alamo Energy Corp.)
Indemnification Coverage. (a) From and after the ClosingExcept with respect to Taxes, the Selling Parties indemnification for which is dealt with exclusively in Section 11.5, EME shall indemnify and defend, save and hold Buyer and ENP GP the Purchaser Parties and their Affiliates (other than the Partnership Entities) respective Affiliates, successors and each of their respective officers, directors, employees and agents permitted assigns (collectively, the “Buyer Purchaser Indemnified Parties”) harmless if from and against any such Buyer Indemnified Party shall suffer any damageand all claims, judgmentdemands, finesuits, penaltylosses, demandliabilities, settlementdamages and expenses, liability, loss, cost, Tax, expense (including reasonable attorneys’’ fees and costs of investigation, consultants’ litigation, settlement and experts’ fees), claim or cause of action judgment (each, a “Loss,” and collectively, “Losses”) arising out which they sustain or suffer or to which they become subject as a result of, relating to or resulting from:
(i) any breach or inaccuracy in any representation of EME or the breach of any warranty by the Selling Parties EME contained in this Agreement or any certificates or other documents delivered by any Selling Party pursuant to this Agreement at the Closing; provided, that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if Material Adverse Effect or materiality is not a qualification thereto and provided, further, that a Selling Parties Unknown Matter Breach of Sections 3.15, 3.16 or 3.18 will not result in any Buyer Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IXAgreement;
(ii) any failure by the Selling Parties to perform or observe any term, provision, covenant, covenant or agreement on the part of the Selling Parties in this Agreement to be performed or observed under this Agreementby EME;
(iii) Selling Parties’ Taxes;the ownership or operation of the Excluded Items; and
(iv) any broker claims by the persons identified on Schedule 3.4(b) against any of the Controlled Acquired Companies, other than claims for indemnity, advancement of expenses or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission rights described in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of the Selling Parties or any of their Affiliates; and
(v) any Plan or Plan LiabilitySection 6.10.
(b) From Except with respect to Taxes, indemnification for which is dealt with exclusively in Section 11.5, the Purchaser Parties, jointly and after the Closingseverally, Buyer shall indemnify and defend, save and hold the Selling Seller Parties and their Affiliates respective Affiliates, successors and their respective officers, directors, employees and agents permitted assigns (collectively, collectively the “Seller EME Indemnified Parties”) harmless if from and against any such Seller Indemnified Party shall and all Losses which they sustain or suffer any Loss arising out or to which they become subject as a result of, relating to or resulting from:
(i) any breach or inaccuracy in any representation by any Purchaser Party or the breach of any warranty by Buyer any Purchaser Party contained in this Agreement or any certificates or other documents delivered by Buyer pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification theretoAgreement;
(ii) any failure by Buyer to perform or observe any term, provision, covenant, covenant or agreement on the part of Buyer in this Agreement to be performed or observed under this Agreement;by any Purchaser Party; and
(iii) any broker the ownership or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect operation after the Project Closing Date of the execution of this Agreement or Acquired Companies and their businesses acquired by the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of Buyer, Vanguard or any of their respective Affiliates;
(iv) all Taxes (or nonpayment thereof) of ENP GP and the Partnership Entities that are attributable to any taxable period beginning after the Closing Date, or the portion of the Straddle Period beginning after the Closing Date; and
(v) any breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement or any certificates or other documents delivered by Vanguard Purchaser pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto; provided further, that if Buyer elects not to provide an Equity Portion of the Purchase Price in accordance with Section 1.3, a breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement will not result in any Seller Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IXAgreement.
(c) The foregoing indemnification obligations in Sections 11.3(a) and 11.3(b) shall be subject to the following limitations:
(i) the Selling Parties’ cumulative The aggregate liability for Losses of EME under Section 9.2(a)(i11.3(a)(i) and Buyer’s cumulative the aggregate liability of the Purchaser Parties under Section 9.2(b)(i11.3(b)(i) and 9.2(b)(v)shall not, in each either case, shall not exceed $50 million a dollar amount equal to fifteen percent (15%) (rounded to the nearest ten thousand US Dollars) of the sum of the Project Purchase Price and the Pacific Holdings Leverage Amount, each in US$ equivalent based on the Currency Exchange Rate as of the Effective Date (the “Cap”); provided, however, that the Cap shall not be applicable with respect to any untruth or inaccuracy in any representation or the breach of any warranty contained in Sections 4.1 or 5.1 (i) Breaches under Sections 2.2 (Validity of AgreementOrganization), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization) or 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement) and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to Taxes, the liability with respect to which shall be as set forth in Sections 9.2(a)(iii) and 9.2(b)(ivOwnership Interests), or 4.12 (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(vTaxes);.
(ii) Buyer’s cumulative aggregate liability for Losses under Section 9.2(b)(v) shall not exceed thirteen percent of the value of the Equity Portion of the Purchase Price, if any (the “Vanguard Cap”); provided, however, that the Vanguard Cap shall not be applicable with respect to (i) breaches under Sections 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), 5.10 (Tax Matters), and 5.17 (Brokers) hereof or (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation;
(iii) no No indemnification for any Losses asserted against EME or the Selling Parties Purchaser Parties, as the case may be, under Section 9.2(a)(i11.3(a)(i) or against Buyer under Section 9.2(b)(i) and Section 9.2(b)(v11.3(b)(i) shall be required (A) unless and until the cumulative aggregate amount of all such LossesLosses exceeds a dollar amount equal to two percent (2%) (rounded to the nearest ten thousand US Dollars) of the sum of the Project Purchase Price and the Pacific Holdings Leverage Amount, each in each case, exceeds $3,800,000 (US$ equivalent based on the “Deductible”)Currency Exchange Rate as of the Effective Date, at which point EME or the Selling Parties shall be obligated to indemnify the Buyer Indemnified Parties or Buyer shall be obligated to indemnify the Seller Indemnified Purchaser Parties, as the case may be, shall be obligated to indemnify the Indemnified Party only for as to the amount of such Losses in excess of such amount (the Deductible“Deductible Amount”), up to the Cap set forth in Section 11.3(c)(i), provided, however, that the Deductible individual claims of US$50,000 or less (or its equivalent in foreign currency) arising shall not be applicable with respect aggregated for purposes of calculating either the Deductible Amount or the excess of Losses over the Deductible Amount; provided, further, that nothing in this Section 11.3(c)(ii) shall apply to indemnification for Losses asserted against an Indemnifying Party arising from any untruth or inaccuracy in any representation or breach of any warranty contained in Sections 4.1 or 5.1 (i) breaches under Sections 2.2 (Validity of AgreementOrganization), 2.5 Section 4.5 (Capitalization of ENP GP; General Partner Interest; Subject Common UnitsOwnership Interests), 2.11 or Section 4.12 (BrokersTaxes), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization), 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, .
(iii) Losses with respect An Indemnified Party shall not be entitled under this Agreement to those Taxes multiple recovery for the liability with respect to which are set forth in Sections 9.2(a)(iii) and 9.2(b)(iv)same Losses. Without limiting the foregoing, or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v);
(iv) the amount of any Losses suffered by a Seller an Indemnified Party or a Buyer Indemnified Party, as the case may be (such party seeking indemnification pursuant to this Article IX, the “Indemnified Party,” and the other party, the “Indemnifying Party”), shall be determined without giving effect to any materiality or Material Adverse Effect qualifiers and shall be reduced by any third-party insurance benefits insurance, or other payments from third party recoveries actually received by the parties, which such Indemnified Party with receives in respect to of or as a result of such Loss (net of costs incurred to recover such insurance benefits and third party recoveries, deductibles, and retropremiums)Losses. To the extent an Indemnified Party suffers If any Losses for which the Indemnifying Party indemnification is liable for indemnification, the Indemnified Party shall submit a claim to collect provided and paid hereunder are subsequently reduced by any amounts available under third-party insurance coverage and or other payments from other third parties reasonably liable for any Loss suffered by parties, the Indemnified amount of the reduction shall be remitted to the applicable Indemnifying Party;.
(viv) no No claim may be asserted nor may any action Action be commenced against for any Party for breach untruth or inaccuracy of in any representation or breach of a any warranty, unless written notice of such claim or action is received by the other Party Action, describing in reasonable detail the known facts and circumstances with respect to the subject matter of such claim or action Action, is provided to the applicable Indemnifying Party on or prior to the date on which Survival Expiration Date.
(v) In no event shall any Indemnifying Party be liable to any Indemnified Party pursuant to this Article XI for any Losses in the representation nature of consequential damages, punitive damages, restitution, lost profits or warranty on which such claim or action is based ceases damage to survive as set forth in Section 9.1;reputation.
(vi) no Indemnified Party In determining the amount of indemnification due under this Section 11.3, all payments shall be entitled under this Agreement to multiple recovery for the same Losses; and
(vii) if the Closing occurs, no Indemnified Party is entitled to indemnification or reduced by any other recovery under this Agreement with respect to any breach or inaccuracy in any representation or warranty of an Indemnifying Party (A) that would have given Tax benefit actually and currently realized by the Indemnified Party a right to terminate this Agreement under Section 8.1 on account of this Agreement, and (B) of which the Indemnified Party had Knowledge before the Closing, whether pursuant to a notice delivered under Section 6.6 or otherwiseunderlying claim.
Appears in 1 contract
Indemnification Coverage. (a) From and after the Closing, the Selling Parties shall indemnify and defend, save and hold Buyer and ENP GP and their Affiliates (other than the Partnership Entities) and each of their respective officers, directors, employees and agents (collectively, the “Buyer Indemnified Parties”) harmless if any such Buyer Indemnified Party shall suffer any damage, judgment, fine, penalty, demand, settlement, liability, loss, cost, Tax, expense (including reasonable attorneys’, consultants’ and experts’ fees), claim or cause of action (each, a “Loss,” and collectively, “LossesR 20;Losses”) arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation or warranty by the Selling Parties contained in this Agreement or any certificates or other documents delivered by any Selling Party pursuant to this Agreement at the Closing; provided, that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if Material Adverse Effect or materiality is not a qualification thereto and provided, further, that a Selling Parties Unknown Matter Breach of Sections 3.15, 3.16 or 3.18 will not result in any Buyer Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX;
(ii) any failure by the Selling Parties to perform or observe any term, provision, covenant, or agreement on the part of the Selling Parties to be performed or observed under this Agreement;
(iii) Selling Parties’ Taxes;
(iv) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of the Selling Parties or any of their Affiliates; and
(v) any Plan or Plan Liability.
(b) From and after the Closing, Buyer shall indemnify and defend, save and hold the Selling Parties and their Affiliates and their respective officers, directors, employees and agents (collectively, the “Seller Indemnified Parties”) harmless if any such Seller Indemnified Party shall suffer any Loss arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation or warranty by Buyer contained in this Agreement or any certificates or other documents delivered by Buyer pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto;
(ii) any failure by Buyer to perform or observe any term, provision, covenant, or agreement on the part of Buyer to be performed or observed under this Agreement;
(iii) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of Buyer, Vanguard or any of their respective Affiliates;
(iv) all Taxes (or nonpayment thereof) of ENP GP and the Partnership Entities that are attributable to any taxable period beginning after the Closing Date, or the portion of the Straddle Period beginning after the Closing Date; and
(v) any breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement or any certificates or other documents delivered by Vanguard pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto; provided further, that if Buyer elects not to provide an Equity Portion of the Purchase Price in accordance with Section 1.3, a breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement will not result in any Seller Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX.
(c) The foregoing indemnification obligations shall be subject to the following limitations:
(i) the Selling Parties’ cumulative aggregate liability for Losses under Section 9.2(a)(i) and Buyer’s cumulative aggregate liability under Section 9.2(b)(i) and 9.2(b)(v), in each case, shall not exceed $50 million (the “Cap”); provided, however, that the Cap shall not be applicable with respect to (i) Breaches under Sections 2.2 (Validity of o f Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization) or 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement) and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to Taxes, the liability with respect to which shall shal l be as set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v);
(ii) Buyer’s cumulative aggregate liability for Losses under Section 9.2(b)(v) shall not exceed thirteen percent of the value of the Equity Portion of the Purchase Price, if any (the “Vanguard Cap”); provided, however, that the Vanguard Cap shall not be applicable with respect to (i) breaches under Sections 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), 5.10 (Tax Matters), and 5.17 (Brokers) hereof or (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation;
(iii) no indemnification for any Losses asserted against the Selling Parties under Section 9.2(a)(i) or against Buyer under Section 9.2(b)(i) and Section 9.2(b)(v) shall be required unless and until the cumulative aggregate amount of such Losses, in each case, exceeds $3,800,000 (the “Deductible”), at which point the Selling Parties shall be obligated to indemnify the Buyer Indemnified Parties or Buyer shall be obligated to indemnify the Seller Indemnified Parties, as the case may be, only for the amount of such Losses in excess of the Deductible, provided, however, that the Deductible shall not be applicable with respect to (i) breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization), 4.5 (Brokers), 5.2(c) (Issuance Issuan ce of Vanguard Common Units), 5.3 (Validity of Agreement), and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to those Taxes the liability with respect to which are set forth in Sections 9.2(a)(iii) and 9.2(b)(iv9.2(b) (iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v);
(iv) the amount of any Losses suffered by a Seller Indemnified Party or a Buyer Indemnified Party, as the case may be (such party seeking indemnification pursuant to this Article IX, the “Indemnified Party,” and the other party, the “Indemnifying Party”), shall be determined without giving effect to any materiality or Material Adverse Effect qualifiers and shall be reduced by any third-party insurance benefits or third party recoveries actually received by the Indemnified Party with respect to such Loss (net of costs incurred to recover such insurance benefits and third party recoveries, deductibles, and retropremiums). To the extent an Indemnified Party suffers Losses for which the Indemnifying Party is liable for indemnification, the Indemnified Party shall submit a claim to collect any amounts available under third-party insurance coverage and from other third parties reasonably liable for any Loss suffered by the Indemnified Party;
(v) no claim may be asserted nor may any action be commenced against any Party for breach or inaccuracy of any representation or breach of a warranty, unless written notice of such claim or action is received by the other Party describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on which such claim or action is based ceases to survive as set forth in Section 9.1;
(vi) no Indemnified Party shall be entitled under this Agreement to multiple recovery for the same Losses; and
(vii) if the Closing occurs, no Indemnified Party is entitled to indemnification or any other recovery under this Agreement with respect to any breach or inaccuracy in any representation or warranty of an Indemnifying Party (A) that would have given the Indemnified Party a right to terminate this Agreement under Section 8.1 of this Agreement, and (B) of which the Indemnified Party had Knowledge before the Closing, whether pursuant to a notice delivered under Section 6.6 or otherwise.
Appears in 1 contract
Samples: Purchase Agreement
Indemnification Coverage. (a) From and after the ClosingClosing and subject to the terms and conditions contained herein, the Selling Parties shall indemnify and Seller agrees to indemnify, defend, save and hold Buyer and ENP GP and their Affiliates (other than the Partnership Entities) Buyer, the Company and each of their respective officers, directors, employees employees, agents and agents affiliates (other than the Seller and any of its affiliates) (collectively, the “Buyer Indemnified Parties”) harmless if any such Buyer Indemnified Party shall at any time or from time to time suffer any damage, judgment, fine, penalty, demand, settlement, liabilityLiability, loss, claim or cause of action, cost, Tax, expense (including reasonable attorneys’, consultants’ and experts’ feesfees but excluding any and all Taxes (which matters are covered under Section 5.4 (g), claim or cause of action ) (each, a “Loss,” and collectively, “Losses”) arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation or warranty by (other than Section 3.7) of the Selling Parties Seller contained in this Agreement or any certificates or other documents delivered by any Selling Party pursuant to this Agreement at the Closing; provided(it being understood that, that for purposes of this Section 8.2(a)(i) only, any “Material Adverse Effect” or similar materiality qualifier shall not be taken into account in determining whether any such representation there was a breach of inaccuracy in the representations and warranties contained in Sections 3.5(c) or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if Material Adverse Effect or materiality is not a qualification thereto and provided, further, that a Selling Parties Unknown Matter Breach of Sections 3.15, 3.16 or 3.18 will not result in any Buyer Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX;3.6); or
(ii) any failure by the Selling Parties Seller to perform or observe any term, provision, covenant, covenant or agreement on by the part of the Selling Parties Seller (other than Section 5.4) to be performed or observed under this Agreement;
(iii) Selling Parties’ Taxes;
(iv) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of the Selling Parties or any of their Affiliates; and
(v) any Plan or Plan Liability.
(b) From and after the Closing, Closing and subject to the terms and conditions contained herein the Buyer shall indemnify and agree to defend, save and hold the Selling Parties Seller and their Affiliates and their its respective officers, directors, employees employees, agents and agents affiliates (collectively, the “Seller Indemnified Parties”) harmless if any such Seller Indemnified Party shall at any time or from time to time suffer any Loss arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation or warranty by of the Buyer contained in this Agreement or any certificates or other documents delivered by Buyer pursuant to this Agreement at the Closing; provided that (it being understood that, for purposes of this Section 8.2(b)(i) only, any “Material Adverse Effect” or similar materiality qualifier shall not be taken into account in determining whether any such representation there was a breach of inaccuracy in the representations and warranties contained in Sections 4.3(c) or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto;4.4); or
(ii) any failure by the Buyer to perform or observe any term, provision, covenant, covenant or agreement (other than Section 5.4) on the part of the Buyer to be performed or observed by the Buyer under this Agreement;
(iii) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of Buyer, Vanguard or any of their respective Affiliates;
(iv) all Taxes (or nonpayment thereof) of ENP GP and the Partnership Entities that are attributable to any taxable period beginning after the Closing Date, or the portion of the Straddle Period beginning after the Closing Date; and
(v) any breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement or any certificates or other documents delivered by Vanguard pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto; provided further, that if Buyer elects not to provide an Equity Portion of the Purchase Price in accordance with Section 1.3, a breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement will not result in any Seller Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX.
(c) The foregoing indemnification obligations shall be subject to the following limitations:
(i) the Selling Parties’ cumulative aggregate liability for Losses under Section 9.2(a)(i) and Buyer’s cumulative aggregate liability under Section 9.2(b)(i) and 9.2(b)(v), in each case, shall not exceed $50 million (the “Cap”); provided, however, that the Cap shall not be applicable with respect to (i) Breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization) or 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement) and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to Taxes, the liability with respect to which shall be as set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v);
(ii) Buyer’s cumulative aggregate liability for Losses under Section 9.2(b)(v) shall not exceed thirteen percent of the value of the Equity Portion of the Purchase Price, if any (the “Vanguard Cap”); provided, however, that the Vanguard Cap shall not be applicable with respect to (i) breaches under Sections 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), 5.10 (Tax Matters), and 5.17 (Brokers) hereof or (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation;
(iii) no indemnification for any Losses asserted against the Selling Parties under Section 9.2(a)(i) or against Buyer under Section 9.2(b)(i) and Section 9.2(b)(v) shall be required unless and until the cumulative aggregate amount of such Losses, in each case, exceeds $3,800,000 (the “Deductible”), at which point the Selling Parties shall be obligated to indemnify the Buyer Indemnified Parties or Buyer shall be obligated to indemnify the Seller Indemnified Parties, as the case may be, only for the amount of such Losses in excess of the Deductible, provided, however, that the Deductible shall not be applicable with respect to (i) breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization), 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to those Taxes the liability with respect to which are set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v);
(iv) the amount of any Losses suffered by a Seller Indemnified Party or a Buyer Indemnified Party, as the case may be (such party seeking indemnification pursuant to this Article IXbe, the “Indemnified Party,” and the other party, the “Indemnifying Party”), shall be determined without giving effect to any materiality or Material Adverse Effect qualifiers and shall be reduced by any third-party insurance benefits which such party receives in respect of or third as a result of such Losses. If any Losses for which indemnification is provided hereunder is subsequently reduced by any third-party recoveries actually received by insurance or other indemnification benefit or recovery, the Indemnified amount of the reduction shall be remitted to the Indemnifying Party (as hereinafter defined);
(ii) (A) the Seller’s aggregate Liability under Section 8.2(a)(i) shall neither (1) with respect to such Loss Liabilities other than Liabilities relating to a breach of the representation set forth in Section 3.8 on account of facts or circumstances occurring after August 15, 2002 (net collectively, “Recent Liabilities”), exceed $30 million, nor (2) exceed $50 million (it being understood that, for the avoidance of costs incurred doubt, in no event shall the Seller’s aggregate Liability under Section 8.2(a)(i) exceed $50 million) and (B) the Buyer’s aggregate Liability under Section 8.2(b)(i) shall not exceed $30 million;
(iii) no indemnification for any Losses asserted against the Buyer or the Seller, as the case may be, under Section 8.2(a)(i)(other than with respect to recover Recent Liabilities) or Section 8.2(b)(i) shall be required unless and until the cumulative aggregate amount of such insurance benefits and third party recoveriesLosses exceeds $300,000 (the “Threshold”), deductiblesat which point the Seller or the Buyer, and retropremiums). To as the extent an Indemnified Party suffers Losses for which the Indemnifying Party is liable for indemnificationcase may be, shall be obligated to indemnify the Indemnified Party (as hereinafter defined) for the entire amount of such Losses, subject to the limitations in Section 8.2(c)(i), (ii) and (v)(it being understood that, for the avoidance of doubt, the Seller’s indemnification for Recent Liabilities shall submit a claim not be subject to collect any amounts available under third-party insurance coverage and from other third parties reasonably liable for any Loss suffered by the Indemnified PartyThreshold);
(viv) no claim may be asserted nor may any action be commenced against any a Party for breach or inaccuracy of any representation or breach of a warranty, unless written notice of such claim or action is received by the other such Party describing in reasonable detail the facts and circumstances known at such time with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on which such claim or action is based ceases to survive as set forth in Section 9.1;8.1 (it being agreed and understood that if a claim for a breach of a representation or warranty is timely made, the claim shall survive until the date on which such claim is finally liquidated or otherwise resolved); and
(viv) no an Indemnified Party shall not be entitled under this Agreement to multiple recovery for the same Losses; and
(vii) if the Closing occurs, no Indemnified Party is entitled to indemnification or any other recovery under this Agreement with respect to any breach or inaccuracy in any representation or warranty of an Indemnifying Party (A) that would have given the Indemnified Party a right to terminate this Agreement under Section 8.1 of this Agreement, and (B) of which the Indemnified Party had Knowledge before the Closing, whether pursuant to a notice delivered under Section 6.6 or otherwise.
Appears in 1 contract
Indemnification Coverage. (a) From and after the Closing, each Selling Party (the Selling Parties “Indemnifying Parties”) shall severally but not jointly indemnify and defend, save and hold Buyer and ENP GP and their Affiliates (other than the Partnership Entities) and each of their respective officers, directors, employees and agents (collectively, the “Buyer Indemnified Parties”) harmless if any such Buyer Indemnified Party shall suffer actually incur any damage, judgment, fine, penalty, demand, settlement, liability, loss, cost, Tax, expense (including reasonable attorneys’, consultants’ and experts’ fees), claim or cause of action (each, a “Loss,” and collectively, “Losses”) arising out of, relating to or resulting from:
from (i) any breach or inaccuracy in any representation by the General Partner or the breach of any warranty by the Selling Parties General Partner contained in Section 2.2 of this Agreement Agreement; (ii) any breach or inaccuracy in any certificates or other documents delivered representation by any such Selling Party pursuant to contained in Section 2.1 of this Agreement at Agreement; or (iii) any breach of the Closingcovenants and agreements by such Selling Party under this Agreement; provided, that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if Material Adverse Effect or materiality is not a qualification thereto and provided, further, that a Selling Parties Unknown Matter Breach of Sections 3.15, 3.16 or 3.18 will not result in any Buyer Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX;
(ii) any failure by the Selling Parties to perform or observe any term, provision, covenant, or agreement on the part of the Selling Parties to be performed or observed under this Agreement;
(iii) Selling Parties’ Taxes;
(iv) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of the Selling Parties or any of their Affiliates; and
(v) any Plan or Plan Liabilitythereto.
(b) From and after the Closing, Buyer shall indemnify and defend, save and hold the Selling Parties and their Affiliates and their respective officers, directors, employees and agents (collectively, the “Seller Indemnified Parties”) harmless if any such Seller Indemnified Party shall suffer any Loss arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation or warranty by Buyer contained in this Agreement or any certificates or other documents delivered by Buyer pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto;
(ii) any failure by Buyer to perform or observe any term, provision, covenant, or agreement on the part of Buyer to be performed or observed under this Agreement;
(iii) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of Buyer, Vanguard or any of their respective Affiliates;
(iv) all Taxes (or nonpayment thereof) of ENP GP and the Partnership Entities that are attributable to any taxable period beginning after the Closing Date, or the portion of the Straddle Period beginning after the Closing Date; and
(v) any breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement or any certificates or other documents delivered by Vanguard pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto; provided further, that if Buyer elects not to provide an Equity Portion of the Purchase Price in accordance with Section 1.3, a breach or inaccuracy in any representation or warranty by Vanguard contained in Article V of this Agreement will not result in any Seller Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IX.
(c) The foregoing indemnification obligations shall be subject to the following limitations:
(i) the Selling Parties’ cumulative each Indemnifying Party’s aggregate liability for Losses (A) under Section 9.2(a)(i) and Buyer’s cumulative aggregate liability under Section 9.2(b)(i) and 9.2(b)(v8.2(a)(i), in each caseexcept with respect to a breach of Section 2.2(d)(iii), shall not exceed such Indemnifying Party’s allocated portion of $50 million 12,338,597 set forth on Schedule 1.3 to such Indemnifying Party’s sale of a GP Interest and (the “Cap”); provided, however, that the Cap shall not be applicable B) under Section 8.2(a)(i) (with respect to (ia breach of Section 2.2(d)(iii) Breaches under Sections 2.2 (Validity of Agreementonly), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; AuthorizationSection 8.2(a)(ii) or 4.5 (Brokers), 5.2(c8.2(a)(iii) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement) and 5.17 (Brokers) hereof, (ii) Losses with respect shall not exceed the total Purchase Price allocated on Schedule 1.3 to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect be paid to Taxes, the liability with respect to which shall be as set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v)such Indemnifying Party;
(ii) Buyer’s cumulative aggregate liability for Losses under any claims made pursuant to (A) Section 9.2(b)(v) shall not exceed thirteen percent of the value of the Equity Portion of the Purchase Price8.2(a)(i), if any (the “Vanguard Cap”); provided, however, that the Vanguard Cap shall not be applicable except with respect to a breach of Section 2.2(d), must be made by Buyer within six months from the date of this Agreement and (iB) breaches under Sections 5.2(cpursuant to Section 8.2(a)(i) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), 5.10 (Tax Matters), and 5.17 (Brokers) hereof or (ii) Losses with respect to matters that constitute fraud a breach of Section 2.2(d) only), Section 8.2(a)(ii) or intentional misrepresentation8.2(a)(iii) must be made by Buyer within the survival period specified in
Section 8.1 for the representation or other provision which the Buyer is alleging has been breached;
(iii) no indemnification for any Losses asserted against the Selling Parties under Section 9.2(a)(i) or against Buyer under Section 9.2(b)(i) and Section 9.2(b)(v) shall be required unless and until the cumulative aggregate amount of such Losses, in each case, exceeds $3,800,000 (the “Deductible”), at which point the Selling Parties shall be obligated to indemnify the Buyer Indemnified Parties or Buyer shall be obligated to indemnify the Seller Indemnified Parties, as the case may be, only for the amount of such Losses in excess of the Deductible, provided, however, that the Deductible shall not be applicable with respect to (i) breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization), 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to those Taxes the liability with respect to which are set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v);
(iv) the amount of any Losses suffered by a Seller Indemnified Party or a Buyer Indemnified Party, as the case may be (such party seeking indemnification pursuant to this Article IX, the “Indemnified Party,” and the other party, the “Indemnifying Party”), shall be determined without giving effect to any materiality or Material Adverse Effect qualifiers and shall be reduced by any third-party insurance benefits or third other indemnification payments which such party recoveries actually received by receives in respect of or as a result of such Losses, less the Indemnified Party with respect to such Loss (net of reasonable costs incurred to recover such those insurance benefits and third party recoveries, deductibles, and retropremiums). To or indemnification payments to the extent an Indemnified Party suffers such costs are not otherwise recovered. If any Losses for which the Indemnifying Party indemnification is liable for indemnification, the Indemnified Party shall submit a claim to collect provided hereunder is subsequently reduced by any amounts available under third-party insurance coverage and from or other third parties reasonably liable for any Loss suffered indemnification payments received by the Indemnified PartyBuyer less the reasonable costs incurred to obtain payment, the amount of the reduction shall be remitted pro rata to the Selling Parties who have made payment hereunder;
(viv) no claim may be asserted nor may any action be commenced against any Party party for breach or inaccuracy of any representation or breach of a warranty, unless written notice of such claim or action is received by the other Party party describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on which such claim or action is based ceases to survive as set forth in Section 9.18.1;
(viv) no Indemnified Party Buyer shall not be entitled under this Agreement to multiple recovery for the same Losses; and
(vii) if the Closing occurs, no Indemnified Party is entitled to indemnification or any other recovery under this Agreement with respect to any breach or inaccuracy in any representation or warranty of an Indemnifying Party (A) that would have given the Indemnified Party a right to terminate this Agreement under Section 8.1 of this Agreement, and (B) of which the Indemnified Party had Knowledge before the Closing, whether pursuant to a notice delivered under Section 6.6 or otherwise.
Appears in 1 contract
Samples: Securities Purchase Agreement (Enterprise GP Holdings L.P.)
Indemnification Coverage. (a) From and after the Closing, the Selling Parties shall indemnify and defend, save and hold Buyer and ENP GP Buyer, the Partnership Entities and their Affiliates (other than the Partnership Entities) and each of their respective officers, directors, employees and agents (collectively, the “Buyer Indemnified Parties”) harmless if any such Buyer Indemnified Party shall suffer any damage, judgment, fine, penalty, demand, settlement, liability, loss, cost, Tax, expense (including reasonable attorneys’, consultants’ and experts’ fees), claim or cause of action (each, a “Loss,” and collectively, “Losses”) arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation by the Selling Parties or the breach of any warranty by the Selling Parties contained in this Agreement or any certificates or other documents delivered by any Selling Party pursuant to this Agreement at the Closing; provided, that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if Material Adverse Effect or materiality is not a qualification thereto and provided, further, that a Selling Parties Unknown Matter Breach of Sections 3.15, 3.16 or 3.18 will not result in any Buyer Indemnified Party suffering Losses for which it is entitled to indemnification, defense or being saved and held harmless pursuant to this Article IXthereto;
(ii) any failure by the Selling Parties to perform or observe any term, provision, covenant, or agreement on the part of the Selling Parties to be performed or observed under this Agreement;
(iii) the failure by the Selling Parties’ TaxesParties to comply with any applicable statutory provisions relating to bulk sales and transfers;
(iv) subject to Section 8.2(c) hereof, any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of the Selling Parties or any of their Affiliatesmatters listed on Schedule 2.21 hereto; and
(v) any Plan fines, penalties, or Plan Liabilityamounts paid to settle or resolve the last matter listed on Schedule 2.7 as of the date of this Agreement. provided, however, that if any Loss for which Buyer would otherwise be entitled to seek indemnity from the Selling Parties under this Section 8.2(a) is included within the matters for which the Partnership Entities or any other Buyer Indemnified Party would be entitled to indemnity under any of Section 3.1 of the Old Omnibus Agreement, Article IV of the New Omnibus Agreement or Section 10.1(b) of the WPL Contribution Agreement (such provisions are collectively referred to herein as the “Additional Partnership Indemnity Agreements”), even if recovery under the Additional Partnership Indemnity Agreements is not available due to the expiration of any applicable survival period or any applicable deductible, threshold, maximum or “cap” thereon, then none of the Buyer Indemnified Parties shall be entitled to indemnification with respect to such matter or matters under this Section 8.2(a). The foregoing proviso shall not be deemed to amend, supplement or modify in any way the Additional Partnership Indemnity Agreements.
(b) From and after the Closing, Buyer shall indemnify and defend, save and hold the Selling Parties and their Affiliates and their respective officers, directors, employees and agents (collectively, the “Seller Indemnified Parties”) harmless if any such Seller Indemnified Party shall suffer any Loss arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation by Buyer or the breach of any warranty by Buyer contained in this Agreement or any certificates or other documents delivered by Buyer pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto;
(ii) any failure by Buyer to perform or observe any term, provision, covenant, or agreement on the part of Buyer to be performed or observed under this Agreement;
(iii) with respect to any broker of the Partnership Entities, whether occurring before or after Closing to the extent such Losses are not covered by Section 8.2(a), except in the case, and only to the extent, of Losses that arise out of, or relate to or result from matters covered under the Additional Partnership Indemnity Agreements or otherwise covered under the Transaction Documents, the WPL Contribution Agreement or the Old Omnibus Agreement; and
(iv) any Losses arising under the second paragraph of Section 3.1 and Section 3.2, in each case, of the Assignment and Assumption Agreement (as defined in Section 9.16), other Person claiming than Affiliate intercompany obligations.
(c) Buyer and the Selling Parties hereby acknowledge and agree as follows:
(i) Buyer agrees, on the terms and subject to the conditions specified in this Section 8.2(c), to assume at the Closing the obligations of XXX under the Additional Partnership Indemnity Agreements to indemnify the Partnership Entities for the environmental remedial obligations specified in Schedule 8.2(c) hereto.
(ii) The Partnership and XXX have (A) identified environmental remedial obligations in Schedule 8.2(c) hereto for which XXX is, subject only to Section 8.2(c)(iii), required to indemnify the Partnership pursuant to the Additional Partnership Indemnity Agreements and (B) prepared estimates of the costs expected to be entitled incurred by the Partnership in connection with remediation activities to an investment banker’sbe undertaken in connection with such matters, financial advisor’sand the Partnership, broker’sin accordance with GAAP, finder’s or similar fee or commission has recognized as a liability for such estimated costs and expenses to be incurred a total of $21,870,000 (as of March 31, 2003), consisting of both the current and long-term portions of such liability. Included in Schedule 8.2(c) hereto is a schedule setting forth in reasonable detail the projected schedule for the incurrence of such costs and expenses.
(iii) Buyer hereby covenants and agrees that it will pay on behalf of XXX when due to the Partnership Entities under the Additional Partnership Indemnity Agreements all amounts that otherwise would be required to be paid by XXX thereunder in respect of the execution of this Agreement matters listed under the column entitled “Site Name” in Schedule 8.2(c) hereto, such payments to be made by Buyer from time to time as and when such amounts otherwise would become due and payable by XXX and whether or not such amounts become due and payable before or after the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at time(s) projected in Schedule 8.2(c) (and XXX agrees to notify Buyer promptly upon the request of Buyer, Vanguard any Partnership Entity or other Person for any payment subject to this clause (iii) of their respective Affiliates;Section 8.2(c)).
(iv) If (A) the matters specified under the column entitled “Site Name” in Schedule 8.2(c) hereto are determined to have reached closure by the appropriate Governmental Authority or have otherwise been finally resolved and all Taxes payments required to be made under the Additional Partnership Indemnity Agreements with respect thereto have been made by Buyer as provided in clause (or nonpayment thereofiii) of ENP GP this Section 8.2(c), (B) the Maximum Obligation (as defined below) has not been reached and the Partnership Entities that are attributable to any taxable period beginning after the Closing Date, (C) XXX or the portion other Selling Parties have continuing indemnity obligations under the Additional Partnership Indemnity Agreements, Section 8.2(a)(i) hereof (in respect of a breach of a representation in Section 2.21 hereof) or Section 8.2(a)(iv) hereof, then Buyer covenants and agrees that, only to the extent of the Straddle Period beginning after Maximum Obligation, it shall pay any amounts that become payable by XXX or the Closing Date; andother Selling Parties under any of the continuing indemnity obligations referred to in clause (C) of this Section 8.2(c)(iv) from time to time as and when amounts would otherwise be payable by XXX or the other Selling Parties.
(v) any breach or inaccuracy If (A) the conditions referenced in any representation or warranty by Vanguard contained in Article V clauses (iv)(A) and (iv)(B) of this Section 8.2(c) exist and the obligations of XXX and the other Selling Parties under the provisions referenced in clause (iv)(C) of this Section 8.2(c) have expired and no amounts remain payable by XXX or the other Selling Parties thereunder and (B) XXX and the other Selling Parties (or their respective successors) and the Partnership furnish to Buyer a certificate from their respective chief financial officers or chief legal officers to such effect, then promptly upon receipt of such certificates in proper form Buyer shall pay to the Selling Parties the remaining unpaid amount, if any, of the Maximum Obligation.
(vi) Buyer agrees that it shall use commercially reasonable efforts to cause the Partnership Entities to treat any payments made by Buyer under clauses (iii) or (iv) of this Section 8.2(c) as a payment by XXX or the other Selling Parties under the applicable Additional Partnership Indemnity Agreement in respect of which such payment is made, and Buyer shall indemnify and hold harmless XXX and the other Selling Parties from any and all Losses caused by the failure or refusal of the Partnership Entities or any certificates or other documents delivered Person to treat any payment so made by Vanguard pursuant to this Agreement at the Closing; provided that in determining whether any such representation or warranty has been breached or is inaccurate, such representation or warranty shall be construed as if material adverse effect or materiality is not a qualification thereto; provided further, that if Buyer elects not to provide an Equity Portion of the Purchase Price in accordance with Section 1.3, a breach clause (iii) or inaccuracy in any representation or warranty by Vanguard contained in Article V (iv) of this Agreement will not result in any Seller Indemnified Party suffering Losses for which it is entitled to indemnificationSection 8.2(c) as a payment made by or on behalf of XXX or the other Selling Parties, defense or being saved and held harmless as case may be, pursuant to this Article IXthe referenced indemnity obligation of such Person(s).
(cvii) For purposes of this Section 8.2(c), Buyer shall pay to the Partnership all amounts due under this Section 8.2(c) following receipt of such amounts due from the General Partner on behalf of the Partnership. The determination of amounts and when they are due shall be made in good faith solely by the General Partner; provided, however, that Buyer shall not be required to make any such payments within less than twenty (20) days after receipt of the General Partner’s determination; provided, further, Buyer shall indemnify and hold harmless the Selling Parties from any and all Losses caused by any delay by Buyer in making any such payment to the Partnership under this Section 8.2(c)(vii).
(viii) Notwithstanding the foregoing provisions of this Section 8.2(c), in no event shall the aggregate amounts payable by or on behalf of Buyer under this Section 8.2(c) exceed $21,870,000 (the “Maximum Obligation”).
(d) The foregoing indemnification obligations shall be subject to the following limitations:
(i) the Selling Parties’ cumulative aggregate liability for Losses under Section 9.2(a)(i) and Buyer’s cumulative aggregate liability under Section 9.2(b)(i8.2(a) and 9.2(b)(v), in each case, shall not exceed $50 million 175,000,000 (the “Cap”); provided, however, that the Cap shall not be applicable with respect to (iLosses otherwise indemnifiable under Section 8.2(a)(i) Breaches under Sections 2.2 (Validity of Agreement), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units), 2.11 (Brokers), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization) or 4.5 (Brokers), 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement) and 5.17 (Brokers) hereof, (ii) Losses with respect to matters that constitute fraud breaches or intentional misrepresentation, (iii) Losses with respect to Taxes, the liability with respect to which shall be as set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), inaccuracies of Section 2.27 or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(vunder 8.2(a)(v);
(ii) Buyer’s cumulative aggregate liability for Losses under Section 9.2(b)(v) shall not exceed thirteen percent of the value of the Equity Portion of the Purchase Price, if any (the “Vanguard Cap”); provided, however, that the Vanguard Cap shall not be applicable with respect to (i) breaches under Sections 5.2(c) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), 5.10 (Tax Matters), and 5.17 (Brokers) hereof or (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation;
(iii) no indemnification for any Losses asserted against the Selling Parties under Section 9.2(a)(i) or against Buyer under Section 9.2(b)(i) and Section 9.2(b)(v8.2(a)(i) shall be required unless and until the cumulative aggregate amount of such Losses, in each case, Losses exceeds $3,800,000 4,000,000 (the “Deductible”), at which point the Selling Parties shall be obligated to indemnify the Buyer Indemnified Parties or Buyer shall be obligated to indemnify the Seller Indemnified Parties, as the case may be, only for the amount of such Losses in excess of the Deductible, provided, subject to the Cap; provided however, that the Deductible shall not be applicable with respect to (i) breaches under Sections 2.2 (Validity of Agreement2.2, 2.3, 2.5, 2.11(b), 2.5 (Capitalization of ENP GP; General Partner Interest; Subject Common Units2.18, 2.21 or 2.27 hereof or recovery under Sections 8.2(a)(ii), 2.11 (Brokers8.2(a)(iii), 3.4 (Partnership Capitalization, Title to Subject Common Units), 4.2 (Validity of Agreement; Authorization), 4.5 (Brokers), 5.2(c8.2(a)(iv) (Issuance of Vanguard Common Units), 5.3 (Validity of Agreement), and 5.17 (Brokersor 8.2(a)(v) hereof, (ii) Losses with respect to matters that constitute fraud or intentional misrepresentation, (iii) Losses with respect to those Taxes the liability with respect to which are set forth in Sections 9.2(a)(iii) and 9.2(b)(iv), or (iv) Losses with respect to any Plans or Plan Liability, the liability with respect to which shall be as set forth in Section 9.2(a)(v);
(iviii) the amount of any Losses suffered by a Seller Indemnified Party or a Buyer Indemnified Party, as the case may be (such party seeking indemnification pursuant to this Article IXVIII, the “Indemnified Party,” and the other party, the “Indemnifying Party”), shall be determined without giving effect to any materiality or Material Adverse Effect qualifiers and shall be reduced by any third-party insurance or other indemnification benefits which such party receives in respect of or third as a result of such Losses, less the reasonable costs incurred to recover those insurance or indemnification benefits to the extent such costs are not otherwise recovered. If any Losses for which indemnification is provided hereunder is subsequently reduced by any third-party recoveries actually received insurance or other indemnification benefit or recovery, the amount of the reduction shall be remitted to the Indemnifying Party. In the case of any purchase agreement between a Partnership Entity and a third-party relating to the acquisition of assets, businesses or securities by such Partnership Entity that contains unexpired and otherwise applicable indemnification provisions, if any Loss for which Buyer is entitled to seek indemnity from the Selling Parties under Section 8.2(a) is also included within the matters for which the Partnership Entities are entitled to indemnity under any such third-party agreement, Buyer agrees to use commercially reasonable efforts to cause any such Partnership Entity first to pursue indemnification under such third-party agreement in good faith for a reasonable period of time prior to enforcing any claim against the Selling Parties for indemnification hereunder. Nothing in the foregoing sentence shall (i) prejudice the rights of the Buyer Indemnified Parties to make a claim for indemnification hereunder within the applicable survival period, if any, or (ii) require any Buyer Indemnified Party to file or institute any judicial proceeding or action. In addition, to the extent the Selling Parties make any payments to any Buyer Indemnified Party with respect to any claims covered under the unexpired and otherwise applicable indemnification provisions of such Loss (net of costs incurred to recover such insurance benefits and third party recoveries, deductibles, and retropremiums). To the extent an Indemnified Party suffers Losses for which the Indemnifying Party is liable for indemnification, the Indemnified Party shall submit a claim to collect any amounts available under third-party insurance coverage agreements, Buyer agrees to use commercially reasonable efforts to cause the applicable Partnership Entity or Entities, at the sole cost and from other third parties reasonably liable expense of the Selling Parties, (A) to assign any rights to the Selling Parties under such third-party agreement as may be necessary to allow the Selling Parties to independently pursue a claim for any Loss suffered by indemnification against the Indemnified Partycounterparty or counterparties to such third-party agreement and (B) to be subrogated to the rights of the applicable Partnership Entity or Entities in respect of such indemnification claims;
(viv) no claim may be asserted nor may any action be commenced against any Party party for breach or inaccuracy of any representation or breach of a warranty, unless written notice of such claim or action is received by the other Party party describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on which such claim or action is based ceases to survive as set forth in Section 9.18.1;
(viv) no Indemnified Party shall be entitled under this Agreement to multiple recovery for the same Losses; and
(viivi) if the Closing occurs, no Indemnified Party is entitled to limitations on indemnification or any other recovery under set forth in clauses (i) and (ii) of this Agreement with respect Section 8.2(d) shall not apply to any breach Losses arising from the failure by the Selling Parties or inaccuracy Buyer to pay any Taxes in accordance with Section 4.9 or for any representation or warranty of an Indemnifying Party (A) that would have given the Indemnified Party a right to terminate this Agreement under amounts payable in accordance with Section 8.1 of this Agreement, and (B) of which the Indemnified Party had Knowledge before the Closing, whether pursuant to a notice delivered under Section 6.6 or otherwise9.3 hereof.
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Samples: Purchase Agreement (Magellan Midstream Holdings Lp)