Common use of Indemnification Limitations Clause in Contracts

Indemnification Limitations. (a) In no event shall the Sellers be liable for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 3 contracts

Samples: Asset and Stock Purchase Agreement (Sensata Technologies Holding N.V.), Asset and Stock Purchase Agreement (Sensata Technologies B.V.), Asset and Stock Purchase Agreement (Sensata Technologies Holding N.V.)

AutoNDA by SimpleDocs

Indemnification Limitations. (a) In no event shall the Sellers Seller be liable for indemnification pursuant to Section 10.2(a)(i9.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status9.2(a)(ii), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i9.2(a)(i) and 9.2(a)(ii) that are imposed on or incurred by the Purchaser Indemnified Parties thereunder exceeds $1,400,000 5,000,000 (the "Threshold Amount"), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both in excess of the Threshold Amount and any amounts in excess thereofAmount. Notwithstanding anything herein to the contraryforegoing, the Sellers Seller shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i9.2(a)(i) (other than in respect of the Excluded Representationsand 9.2(a)(iv) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) 85,000,000. In no event shall Seller be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i9.2(a)(iv) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such the aggregate of all Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in with respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products thereto that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out thereunder exceeds $2,000,000, in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all such Losses that are in excess of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses)$2,000,000. Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i9.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) $85,000,000. In calculating amounts payable to an Indemnified Party hereunderParty, the amount of any the indemnified Losses shall not be determined without duplication duplicative of any other Loss for which an indemnification claim has been made or could be made under any other representationmade, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”)Losses, (ii) any prior or subsequent recovery by the Indemnified Party from any Person (other than an Indemnifying Party) with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital Losses and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect benefit that may be available to such Losses in the year of Indemnified Party arising from the indemnity incurrence or payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event the Closing occurs, the indemnification provisions of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under Section 8.4 and this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII 9 shall be the sole and exclusive remedy of Seller (and the parties other Seller Indemnified Parties) and Purchaser (and the other Purchaser Indemnified Parties) and each other party to this Agreement for any breach of any representation, warranty, covenant or agreement made in this Agreement (other than for specific performance or injunctive relief) and each party to this Agreement hereby waives all statutory, common Law and other claims with respect to this Agreement, other than claims for indemnification with respect to this Agreement pursuant to (and in accordance with the terms of) Section 8.4 and this Article 9 and other than claims for specific performance or injunctive relief; provided, however, that nothing contained in this Agreement shall limit any party's remedies for fraud or intentional misrepresentation. Notwithstanding anything herein to the contrary, in no event shall Seller or Purchaser be liable for any special or punitive damages, consequential damages (other than lost profits) or damages measured on the basis of a multiple of earnings or similar financial measure, and Purchaser shall not be entitled to recover or seek any remedy under this Agreement (i) with respect to any and all claims claim or liability to any employee employed by any of the Companies or any of their Subsidiaries arising as a result of the termination of such employee's employment after the Closing Date (whether in contract or in tort) except to the extent arising out of a breach of any representation or warranty of Seller hereunder relating to severance or other payments or obligations in connection with this Agreement, such termination) or (ii) to the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth extent that such amount is included in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8Working Capital Adjustment Amount. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 2 contracts

Samples: Stock Purchase Agreement (Chiquita Brands International Inc), Stock Purchase Agreement (Performance Food Group Co)

Indemnification Limitations. (a) In no event Subject to the other provisions set forth in this Agreement, neither Assignee nor any Assignor Party shall the Sellers be liable for entitled to any indemnification payment under this Agreement pursuant to Section 10.2(a)(i7.1(a) and Section 7.2(a), as applicable, unless and until the aggregate amount of Damages actually incurred by Assignee or (collectively) such Assignor Parties exceeds $200,000 (the “Deductible”), at which time Assignee or such Assignor Party, as applicable, shall only be entitled to recover the amount of the Damages incurred as a direct result of all such breaches in excess of the Deductible; provided, however, that the foregoing limitations shall not apply to breaches of Fundamental Representations. (b) Subject to the other provisions set forth in this Agreement, (i) the aggregate Liability of Assignor to Assignee under Section 7.1(a) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(aFundamental Representations) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount Liability of Assignee to any and all Losses with respect Assignor Parties under Section 7.2(a) shall, in each case, be limited to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 2,000,000 (the “Threshold Cap Amount”), in which case and (ii) the Purchaser Indemnified Parties shall be entitled aggregate Liability of Assignor to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein Assignee under Section 7.1(a) (only to the contraryextent constituting Fundamental Representations) and Section 7.1(b), and the aggregate Liability of Assignee to any and all Assignor Parties under Section 7.2(b) shall, in each case, be limited to $5,000,000 (the “Maximum Cap Amount”). For the avoidance of doubt, any payments made pursuant to Section 5.5 and/or Section 7.6 shall not be applied against the Maximum Cap Amount. (c) For the avoidance of doubt, the Sellers limitations set forth in Section 7.5(a) and Section 7.5(b) shall not apply to any Damages arising (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), from actual and intentional fraud or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of indemnification obligations under Section 7.1(c) and Section 7.2(c), it being understood that the Excluded Representationsaggregate Liability of Assignor to Assignee under Section 7.1(c) and the aggregate Liability of Assignee to the extent such Loss any and all Losses arising out of the same facts and circumstances areAssignor Parties under Section 7.2(c), in the aggregateeach case, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). unlimited. (d) Notwithstanding anything to the contrary hereincontained in this Agreement, Sellers the limitations set forth in Section 7.5(a) shall have ninety (90) days after the receipt of an indemnification claim for not apply to any Loss by the Purchaser Indemnified Parties in respect Damages arising from a breach of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products 3.9 that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification indemnifiable pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap7.1(a). (be) In calculating amounts payable to an Indemnified Notwithstanding anything the contrary contained in this Agreement, neither Assignee nor any Assignor Party hereunder, the amount of any indemnified Losses shall be determined without duplication entitled to recover any Damages or other amounts relating to any matter arising under any one provision of this Agreement to the extent that Assignee or such Assignor Party (or any other Loss for which an indemnification claim Assignor Party), as applicable, has been made already recovered such Damages or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy amounts with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price matter pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event nor shall the Sellers Assignee or Purchaser Assignor be liable entitled to recover any Damages or other amounts for any punitive damagesbreach under Section 7.1(a) or Section 7.2(a) respectively, except if Assignee or Assignor, as applicable, had knowledge of the existence of the facts, events or circumstances giving rise to such breach at the extent time of the Closing. (f) For purposes of this Article VII, “Damages” of a Person shall mean any and all actual out-of-pocket claims, actions, causes of action, judgments, awards, liabilities, losses, costs and damages (including the documented and reasonable fees and expenses of outside counsel, accountants and other professional advisors), actually incurred or suffered by such damages are payable to an unaffiliated third party Person; provided, however, that exemplary, punitive, speculative, treble, remote, indirect, special, incidental and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to including any claim for lost profitsrevenue, income or profits or any claim for diminution in value (including multiple of earnings or similar metrics for measuring damagesvalue), nor loss of business reputation and loss of business opportunity are excluded from this definition of Damages; provided, further, that all exemplary, consequential, punitive and special damages payable actually paid to an unaffiliated a third party shall constitute direct Damages notwithstanding the characterization of such damages vis à vis the third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 2 contracts

Samples: Assignment and Assumption Agreement, Assignment and Assumption Agreement (Sequential Brands Group, Inc.)

Indemnification Limitations. (a) In no event shall the Sellers be liable for indemnification pursuant Subject to Section 10.2(a)(i8.04(b) (other than in respect and without limiting the effect of any of the representations and warranties other limitations set forth in Section 4.1 this Agreement: (Corporate Status), Section 4.2 (Authority), 1) neither the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by Seller Indemnified Parties nor the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the or Purchaser Indemnified Parties shall be entitled to any indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification payment under this Agreement pursuant to Section 10.2(a)(i8.01(a) or Section 8.02 (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”a), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out the amount of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or Damages incurred by the Seller or Purchaser or Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the SellersParties, as the case may be, and resulting from, arising out of, relating to, in the nature of or caused by or as a result of the breach exceeds $750,000 (“Threshold Amount”), at which time the Purchaser or the other Purchaser Indemnified Parties, or Seller, as the case may be, shall be deemed entitled to be adjustments to recover any amounts in excess of $375,000 and (2) in no event shall a Party’s aggregate liability for a breach by such Party of any representation and warranty except (in the Purchase Price. Notwithstanding anything to case of Seller) a Seller Unlimited Representation or (in the contrary herein, nothing in this Article X shall limit any claim by case of Purchaser) a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect Unlimited Representation under this Agreement exceed $6,750,000 (“Liability Cap”). Liability for Seller Unlimited Representations, Purchaser Unlimited Representations, breaches of any express representation or warranty, which claims shall, in any case, covenants and fraud shall not be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8Threshold Amount or limited to the Liability Cap. (eb) The Sellers and Neither the Purchaser acknowledge and agree that Indemnified Parties nor Seller the other parties would Seller Indemnified Parties shall be damaged irreparably in the event entitled to recover any Damages relating to any matter arising under one provision of this Agreement to the extent that such Person has already recovered Damages with respect to such matter pursuant to other provisions of this Agreement (including in respect of any matter that is considered in the calculation of the Post-Closing Adjustment Amount). In addition, to the extent that any liability is not performed otherwise disclosed herein but is included as a liability in accordance the calculation of the Closing Working Capital, the Purchaser Indemnified Parties shall not be entitled to recover any Damages. Without limiting the generality of the foregoing, the operation of Sections 2.03 and 2.04 is an exclusive remedy in respect of the assets and liabilities and related items taken into account in connection with its specific terms or otherwise is breachedthe determination of the Closing Working Capital, so that a party and no Person shall be entitled to injunctive relief any additional recourse in respect thereof, whether arising from a breach of a representation or warranty or otherwise. (c) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT TO THE CONTRARY, NO PARTY SHALL BE REQUIRED TO INDEMNIFY OR HOLD HARMLESS ANY OTHER PARTY OR OTHERWISE COMPENSATE ANY OTHER PARTY FOR DAMAGE WITH RESPECT TO MENTAL OR EMOTIONAL DISTRESS, EXEMPLARY, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES, LOST PROFITS, DAMAGE TO REPUTATION OR THE LIKE (UNLESS A PARTY IS REQUIRED TO PAY SUCH DAMAGES TO A THIRD PARTY AS A RESULT OF A THIRD PARTY CLAIM IN WHICH CASE SUCH DAMAGES SHALL BE CONSIDERED ACTUAL DAMAGES). (d) Notwithstanding Section 8.04(a), Seller shall be liable to prevent breaches indemnify Purchaser without regard to the Threshold Amount or the Liability Cap and from dollar one for any claim brought at any time in regard to (i) Purchaser’s sale of this Agreement and to enforce specifically this Agreement and inventory of the terms and provisions hereof. In particular, Entertainment Media Business in existence on the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so Closing Date for claims that Purchaser shall have had insufficient rights to sell such products branded or utilizing the righttrademark, in addition tradename or other identifying intellectual property of an entity that formerly carried on the business of the Entertainment Media Business or any portion of the Entertainment Media Business, or was a predecessor-in-interest to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefCompanies or (ii) the GHLB Matter.

Appears in 2 contracts

Samples: Membership Interest Purchase Agreement (Cinedigm Corp.), Membership Interest Purchase Agreement (Gaiam, Inc)

Indemnification Limitations. (a) In no event With respect to claims for Losses arising under Section 9.2(a), the Seller shall the Sellers not be liable for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and Losses until the aggregate amount of all such Losses under Section 9.2(a) exceeds One Million Two Hundred Thousand Dollars ($1,200,000) (the “Threshold”), at which point the Seller shall become liable only for aggregate Losses under Section 9.2(a) in excess of the Threshold; provided, that any Losses or series of related Losses with respect to a particular breach or series of related breaches must equal or exceed Fifty Thousand Dollars ($50,000) to count toward the Threshold; and provided, further, that the limitations set forth in this Section 10.2(a)(i9.4(a) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required apply to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect claims based on fraud, intentional misrepresentation or a breach of any of the Excluded Fundamental Representations. (b) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim except for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose claims based on fraud, intentional misrepresentation or a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery breach of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified PartyFundamental Representations, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by i) the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser Seller shall not be required to make payments liable for indemnification pursuant to any Losses under Section 10.2(b)(i9.2(a) in an aggregate amount in excess of the Indemnification Cap. Twenty Five Million Dollars (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”$25,000,000), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be but subject to the provisions of Sections 4.23, 5.7(a)-(dlimitations set forth in Section 9.4(b), 11.7 the aggregate liability of (i) the Seller for all Losses under this Article IX shall not exceed the Purchase Price, and 11.8(ii) the Buyer for all Losses under this Article IX shall not exceed the Purchase Price. (d) The Seller shall not have any right of contribution against the Company with respect to any breach by the Company of any of its representations, warranties, covenants or agreements. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser Each Party shall have the right, in addition to any other rights and remedies existing in its favorfavor hereunder, to enforce its rights and the Sellers’ obligations hereunder of the other Parties hereto, not only by an action or actions for damages Losses but also by an action or actions for specific performance, injunctive, injunctive and/or other equitable relief. (f) An Indemnified Person may not assert multiple claims under Section 9.2 or Section 9.3, as applicable, in order to recover duplicative Losses in respect of a single set of facts or circumstances that give rise to a breach of more than one representation, warranty, covenant or agreement in this Agreement; provided, however, that neither the foregoing limitation nor any other limitation set forth in this Article IX, shall restrict an Indemnified Person’s ability to elect the particular representation, warranty, covenant or agreement, or combination of any one or more of the foregoing, under which it will seek indemnification with respect to a single set of facts or circumstances that has given rise to a breach under more than one representation, warranty, covenant or agreement in this Agreement. (g) The rights to indemnification set forth in this Article IX shall not be affected or limited by (i) any investigation conducted by or on behalf of the Indemnified Person or any knowledge acquired (or capable of being acquired) by the Indemnified Person, whether before or after the date of this Agreement, with respect to the inaccuracy or non-compliance with any representation, warranty, covenant or obligation which is the subject of indemnification hereunder, or (ii) any waiver by the Indemnified Person of any closing condition relating to the accuracy of representations and warranties or the performance of or compliance with agreements and covenants.

Appears in 2 contracts

Samples: Stock Purchase Agreement (Agl Resources Inc), Stock Purchase Agreement (Agl Resources Inc)

Indemnification Limitations. (a) In no event shall The amount of any claim for Losses by Parent or Purchaser and the Sellers be liable other Parent or Purchaser related Indemnitees (collectively, “Purchaser Indemnitees”) for indemnification claims pursuant to Section 10.2(a)(i10.2(a) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and shall not be payable hereunder until such time as the aggregate amount of all Losses with respect to Section 10.2(a)(iof Purchaser Indemnitees under this Agreement exceeds Fifty Thousand Dollars ($50,000) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the ; and thereafter only for Losses of Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount Indemnitees in excess of the Indemnification CapThreshold Amount. In no event shall the aggregate amount of liability of Seller for Losses for indemnification claims pursuant to Section 10.2(a) exceed the sum of (i) an amount equal to fifty percent (50%) of the portion of the Initial Cash Payment actually received by such Seller plus (ii) fifty percent (50%) of the Earnout Payments. The limitations provided in this Section 10.7(a) shall not apply to any indemnification claim pursuant to Section 10.2(b), (c), (d) or (e). (b) In calculating amounts payable to an Indemnified Party hereunder, the The amount of any indemnified claim for Losses shall be determined without duplication of any by Seller and the other Loss Seller related Indemnitees (collectively, “Seller Indemnitees”) for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price claims pursuant to Section 3.4(f), or (iii10.3(a) any Tax Benefit actually received by a Purchased Entity with respect to shall not be payable hereunder until such time as the aggregate amount of all Losses of Seller Indemnitees under this Agreement exceeds the Threshold Amount; and thereafter only for Losses of Seller Indemnitees in the year excess of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such LossThreshold Amount. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or aggregate amount of liability of Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable Losses for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described pursuant to Section 10.3(a) exceed 50% of the Purchase Price. The limitations provided in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xivthis Section 10.7(b) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates indemnification claim pursuant to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the BusinessSection 10.3(b). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. c), (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief).

Appears in 2 contracts

Samples: Asset Purchase Agreement (Genesis Group Holdings Inc), Asset Purchase Agreement (Genesis Group Holdings Inc)

Indemnification Limitations. (a) In no event shall the Sellers Chemtura be liable for indemnification pursuant to Section 10.2(a)(i8.2(a)(i) (other than in with respect of the representations and warranties in to Sellers’ Fundamental Representations) or Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)8.2(a)(vi) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i8.2(a)(i) (other than with respect to Sellers’ Fundamental Representations) or Section 8.2(a)(vi) that are imposed on or incurred by Purchaser exceeds 1.5% of the Purchaser Indemnified Parties exceeds $1,400,000 Aggregate Purchase Price (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification only for all such Losses from the first dollar, including both in excess of the Threshold Amount and any amounts in excess thereofAmount. Notwithstanding anything herein to the contraryforegoing, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) Chemtura shall not be liable for indemnification with respect to any Loss by the Purchaser an Indemnified Parties Party pursuant to Section 10.2(a)(i8.2(a)(i), Section 8.2(a)(iv), Section 8.2(a)(v), or Section 8.2(a)(vi) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 225,000 with respect to a claim (each, a “De Minimis Loss”) (and all such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood and agreed that any in the event that a Loss is greater than the threshold for a De Minimis Loss, no portion of such Loss shall be disregarded pursuant to this clause (i)), (ii) Chemtura shall not be required to make payments for indemnification pursuant to Section 8.2(a)(i) (other than with respect to Sellers’ Fundamental Representations) or Section 8.2(a)(vi) in an aggregate amount in excess of 10% of the Aggregate Purchase Price, (iii) Chemtura shall not be required to make payments for indemnification pursuant to Section 8.2(a)(iv) and Section 8.2(a)(v) in an aggregate amount in excess of 25% of the Aggregate Purchase Price, and (iv) in no event shall the aggregate amount of Chemtura’s liability for Losses under this Agreement exceed the Aggregate Purchase Price. None of the limitations set forth herein shall apply in the case of fraud or intentional misrepresentations. (b) In no event shall Purchaser be liable for indemnification pursuant to Section 8.2(b)(i) (other than with respect to Purchaser’s Fundamental Representations) unless and until the aggregate amount of all costs or Losses with respect to Section 8.2(b)(i) (other Losses than with respect to Purchaser’s Fundamental Representations) that are imposed on or incurred by Sellers exceeds 1.5% of the Stock Consideration (the “Purchaser Threshold Amount”) in which case Sellers shall be entitled to indemnification only for Losses in excess of the Purchaser Threshold Amount. Notwithstanding the foregoing, (i) Purchaser shall not be liable for indemnification with respect to any De Minimis Loss by an Indemnified Parties arising out Party pursuant to Section 8.2(a)(i) and all such Losses shall be disregarded and shall not be aggregated for purposes of such alternative shallthe Purchaser Threshold Amount, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). (ii) Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i8.2(b)(i) (other than with respect to Purchaser’s Fundamental Representations) in an aggregate amount in excess of 10% of the Indemnification CapAggregate Purchase Price, and (iii) in no event shall the aggregate amount of Purchaser’s liability for Losses under this Agreement exceed the Aggregate Purchase Price. None of the limitations set forth herein shall apply in the case of fraud or intentional misrepresentations. (bc) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments any amounts actually recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), net of costs of collection and/or increased premiums, (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity proceeds with respect to such Losses that are transferred to Purchaser pursuant to Section 1.2(a)(xv), and (iii) any related reserves set forth in the year of Business Balance Sheet and which reserves have been take into account and reflected in the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral SourceClosing Working Capital. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. In no event shall Chemtura be obligated to indemnify any Purchaser Indemnified Party with respect to any matter to the extent that such matter was reflected in the calculation of the adjustment to the Purchase Price. (cd) Subject to the other provisions of this Article X, but notwithstanding Notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser an Indemnifying Party be liable for any punitive damagesdamages or any special, except incidental, indirect or consequential damages of any kind or nature, regardless of the form of action through which such damages are sought, unless such damages are recovered by a third party in a Third-Party Claim pursuant to a final, non-appealable order entered against a Purchaser Indemnified Party. Notwithstanding the foregoing, nothing herein shall prevent Purchaser from seeking Losses based on a multiple of earnings to the extent such damages are payable to an unaffiliated third party and Losses directly affect the earnings of the Business (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Businessnot consequential damages). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (de) Notwithstanding Except with respect to fraud or intentional misrepresentation, notwithstanding anything else contained in this Agreement to the contrary, after the Closing, except as provided in Section 9.8, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties from and after the Closing Date with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements Agreement and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby)hereby, including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws . (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. f) All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Aggregate Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8Price for all Tax purposes. (eg) The Sellers For purposes of determining whether a representation or warranty has been breached and Purchaser acknowledge the calculation of Losses pursuant to this Article VIII, the representations and agree that warranties of the parties contained in this Agreement (other parties would be damaged irreparably than (i) the representations and warranties contained in Section 3.5(c) and Section 3.6, and (ii) any representations and warranties contained in the event any provision first sentence of this Agreement is not performed in accordance with its specific terms Section 3.12(a), the first sentence of Section 3.12(b), or otherwise is breachedSection 3.13(a)), so that a party shall be entitled interpreted without giving effect to injunctive relief any limitations or qualifications as to prevent breaches of this Agreement “materiality” (including the words “material” and to enforce specifically this Agreement “materially” and the terms and provisions hereof. In particular, the parties acknowledge that the phrase “Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefMaterial Adverse Effect”).

Appears in 2 contracts

Samples: Stock and Asset Purchase Agreement (Platform Specialty Products Corp), Stock and Asset Purchase Agreement (Chemtura CORP)

Indemnification Limitations. (ai) In no event shall the Sellers be liable for No indemnification pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses payment by Seller with respect to any indemnifiable Damages otherwise payable under Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds 10.2 shall be payable until such time as all such indemnifiable Damages shall aggregate to more than $1,400,000 75,000 (the “Threshold AmountBasket”); provided, that in which case the Purchaser event such indemnifiable Damages exceed the Basket, the Buyer Indemnified Parties shall be entitled to indemnification for the entire amount of all Losses such indemnifiable Damages including the amount of the Basket. This Section 10.2(d)(i) shall not apply to indemnification claims arising out of or resulting from (A) any breach of the Fundamental Representations or (B) any Fraudulent Breach (Damages arising from or related to the foregoing Section 10.2(d)(i)(A) and (B), the “Special Damages”). (ii) From and after the Closing Date until the Release Date, any indemnification claims by the Buyer Indemnified Parties for indemnifiable Damages shall first be satisfied from the first dollarHoldback Fund and, including both to the Threshold Amount and extent the Holdback Fund is insufficient to satisfy the aggregate amount of indemnifiable Damages, the Buyer Indemnified Parties shall have the right to seek indemnification directly from the former members of Seller for any amounts indemnifiable Damages in excess thereofof amounts recovered from the Holdback Fund; provided, however, that the liability of each member or former member of Seller (together with any other liability arising under this Agreement) shall be limited to fifty percent (50%) of the aggregate Transaction Consideration actually received by such member or former member of Seller pursuant to this Agreement. (iii) Subject to Section 10.2(c), from and after the Release Date, Seller shall not be obligated to indemnify the Buyer Indemnified Parties pursuant to Section 10.2, except with respect to Special Damages. The Buyer Indemnified Parties shall have the right to seek indemnification directly from the former members of Seller for any Special Damages; provided, however, that the aggregate liability of each member or former member of Seller for Damages arising out of or resulting from breaches of the Fundamental Representations (together with any other liability arising under this Agreement) shall be limited to fifty percent (50%) of the aggregate Transaction Consideration actually received by such member or former member of Seller pursuant to this Agreement. (iv) Except in the case of fraud, intentional misrepresentation or willful breach in connection with this Agreement, none of Seller or any current or former member of Seller shall collectively be obligated to indemnify the Buyer Indemnified Parties pursuant to this Section 10.2 in the aggregate in excess of fifty percent (50%) of the Transaction Consideration actually received by such Persons pursuant to this Agreement and neither Seller, nor any current or former member of Seller shall be obligated to indemnify the Buyer Indemnified Parties pursuant to this Section 10.2 in excess of fifty percent (50%) of the Transaction Consideration actually received by such Person pursuant to this Agreement. (v) No member or former member of Seller shall be liable to the Buyer Indemnified Parties for an amount of any Damages in excess of his proportionate share of such Damages based upon his percentage ownership of Seller as of the date hereof. (vi) Notwithstanding anything herein to the contrary, the Sellers in no event shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect Seller or any member or former member of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) Seller be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Buyer Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Capgross Transaction Consideration. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (cvii) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies liability limitations set forth in this Section 10.2, the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Buyer Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief set off, and not pay to prevent breaches the former members of this Agreement and Seller, amounts otherwise payable pursuant to enforce specifically this Agreement and Section 3.1(c) or Schedule 3.1(c) hereto against amounts finally determined to be due to the terms and provisions hereof. In particularBuyer Indemnified Parties for Special Damages; provided, the parties acknowledge that the Business is unique and recognize and affirm however, that in the event that Seller is obligated to indemnify the Sellers breach this AgreementBuyer Indemnified Parties for Damages incurred on or prior to the Release Date, money damages would but not paid by Seller to the Buyer Indemnified Parties on or prior to the Release Date, the Buyer Indemnified Parties shall be inadequate entitled to set off, and Purchaser would have no adequate remedy at lawnot pay to the former members of Seller, so that Purchaser shall have amounts otherwise payable pursuant to Section 3.1(c) or Schedule 3.1(c) hereto against such amounts finally determined to be due to the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action Buyer Indemnified Parties for damages but also by action for specific performance, injunctive, and/or other equitable reliefDamages.

Appears in 2 contracts

Samples: Asset Purchase Agreement (Cafepress Inc.), Asset Purchase Agreement (Cafepress Inc.)

Indemnification Limitations. (a) Except for those Losses relating to Section 2.4(a), Section 2.5, Section 2.17(a) or Section 2.20, as to which the limitations of this Section 11.6(a) shall not apply, Buyer's Indemnified Persons may not assert any Claim for Losses under Section 11.1(a) until the aggregate amount of such Claims under this Agreement exceeds Ten Million Dollars ($10,000,000) (as such amount may be reduced pursuant to Section 11.3(e)(v) or Section 11.3(f)(i)A), and then Buyer's Indemnified Persons may only assert such Claims for the excess of such aggregate Claims over such amount. In no event shall the Sellers be liable for indemnification pursuant to Section 10.2(a)(i) (other than in respect aggregate liability of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification Seller for all Claims for Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not under Section 11.1(a) exceed fifty percent (i50%) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect Purchase Price prior to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts closing or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cappost-closing adjustments. (b) In calculating amounts payable The Indemnified Party shall take all reasonable steps to mitigate all indemnifiable Losses upon and after becoming aware of any event which could reasonably be expected to give rise to any Losses that are indemnifiable hereunder. (c) All Losses recoverable by an Indemnified Party hereunderunder Section 11.1 or 11.2 shall be net of insurance proceeds (less the reasonable cost of recovering the amount of coverage from the insurer) and recoveries from third parties actually received by such Indemnified Party. If such Losses are covered by insurance or subject to other third party recoveries, the Indemnified Party shall use all reasonable efforts to recover the amount of coverage or claim from the insurer or such third party. (d) The amount of any indemnification payment related to a Loss arising under Section 11.3 (environmental losses) shall be reduced to take account of any net Tax savings actually realized by the Indemnified Party arising from the incurrence or payment of any such Loss in the taxable year in which such Loss is incurred or in any preceding taxable year as a result of the use of net operating loss carrybacks. In computing the amount of any such Tax benefit, the Indemnified Party shall be deemed to recognize all other items of income, gain, loss, deduction, or credit before recognizing any item arising from the receipt of any indemnity payment hereunder or the incurrence or payment of any indemnified Loss. In the event that the Indemnified Party does not realize any net Tax savings in the taxable year in which such Loss is incurred (or in any preceding taxable year), but does realize a net Tax savings in a subsequent year, the Indemnified Party shall promptly pay over to the Indemnifying Party the amount of such net Tax Savings when actually realized. (e) For the avoidance of doubt in determining any Loss arising from a breach of the representations in Section 2.20, the amount of any indemnified Losses indemnity payable by Seller under this Section 11.6 shall be determined without duplication of calculated after giving effect to any other Loss for indemnity payable by Seller under Section 9.12 which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, same item or transaction as resulted in the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of Loss arising from a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy breach of the parties with respect to any and all claims (whether representations in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8Section 2.20. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 2 contracts

Samples: Agreement for Sale and Purchase of Assets (Goodrich B F Co), Agreement for Sale and Purchase of Assets (Noveon Inc)

Indemnification Limitations. (a) In no event The amount of any claim for Losses by Purchaser shall the Sellers not be liable for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and payable hereunder until such time as the aggregate amount of all Losses with respect to Section 10.2(a)(iof Purchaser under this Agreement exceed Sixty Thousand Dollars ($60,000) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”); and thereafter only for Losses of Purchaser in excess of the Threshold Amount. In no event shall the aggregate amount of liability of Sellers for Losses exceed an amount equal the sum of (x) $700,000 plus (y) the lesser of (A) $300,000 and (B) any amounts actually paid to Sellers after the Closing or due and owing but not actually paid to Sellers after the Closing. (b) If any event shall occur or circumstance shall exist which would otherwise entitle an Indemnitee to indemnification under this Article IX, in which case the Purchaser Indemnified Parties no Losses shall be entitled deemed to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein have been incurred or sustained by such Indemnitee to the contraryextent of: (a) any tax benefit actually received by the Indemnitee or any Affiliate thereof (including the Company, following the Sellers shall not Closing) resulting from matters underlying such breach; or (ib) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than any insurance proceeds actually received by the Indemnitee in respect of the Excluded Representations) Losses (net of any deductible amounts). An Indemnitee shall be required to use commercially reasonable efforts to mitigate, to the fullest extent practicable, the amount of any Losses for which a claim for indemnification is made under this Article IX and, notwithstanding anything to the contrary in an aggregate amount in excess of $18,000,000 (this Article IX, the “Indemnification Cap”), or (ii) Indemnitor shall not be liable for required hereunder to provide indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect Losses resulting from failure of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such paymentdo so. (c) Subject Upon making any payment for Losses of an Indemnitee under this Article IX, the Indemnitor will, to the other provisions extent of this Article Xsuch payment, but notwithstanding be subrogated to all rights of the Indemnitee against any third party with respect to the Losses for which the payment relates. In addition to any other provision of obligation under this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damagesIndemnitee agrees to duly execute and deliver, except upon request of the Indemnitor, all instruments reasonably necessary to evidence and perfect the extent such damages are payable subrogation and subordination rights granted pursuant to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damagesthis Section 9.7(c), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the The sole and exclusive remedy liability and responsibility of the parties with respect to any and all claims (whether in contract or in tort) arising out of or hereunder in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby described herein (including for any breach of or inaccuracy in any representation or warranty or for any breach of any covenant or obligation or for any other than remedies reason), shall be as set forth in the Ancillary Agreements with regard to the transactions contemplated thereby)this Article IX; provided, including however, that nothing in this Section 9.7(d) shall prohibit any party from obtaining specific performance or injunctive relief in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8obligation. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 2 contracts

Samples: Stock Purchase Agreement (Genesis Group Holdings Inc), Stock Purchase Agreement (Genesis Group Holdings Inc)

Indemnification Limitations. (a) In no event 10.3.1 It is the intent of the Parties that Buyer shall be entitled to recover Losses solely from the Sellers Escrow Amount, other than Losses that result from a breach of or inaccuracy in the Fundamental Representations, claims for Covered Liabilities or claims based upon Fraud. 10.3.2 The Buyer Indemnified Parties shall not be liable for indemnification pursuant entitled to recover Losses under Section 10.2(a)(i10.1(a)(i) (other than a breach of or inaccuracy in respect of the representations and warranties in Section 4.1 (Corporate Status)Fundamental Representations, Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)claims based upon Fraud or claims for Covered Liabilities) unless and until the aggregate amount of Losses for all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties such breaches and inaccuracies exceeds $1,400,000 135,000 (the “Threshold AmountDeductible)) (following which, subject to the other limitations set forth in which case this Article 10, the Purchaser Buyer Indemnified Parties shall be entitled to indemnification for from and against all such Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to of the contrary, Deductible); and the Sellers Company Seller Indemnified Parties shall not (i) be required entitled to make payments for indemnification pursuant to recover Losses under Section 10.2(a)(i10.1(b)(i) (other than a breach of or inaccuracy in respect of the Excluded RepresentationsFundamental Representations or claims based upon Fraud) unless the aggregate Losses for all such breaches and inaccuracies exceeds the Deductible (following which, subject to the other limitations set forth in an aggregate amount this Article 10, the Company Seller Indemnified Parties shall be entitled to recover indemnification from and against all such Losses in excess of $18,000,000 (the “Indemnification Cap”Deductible), or (ii) be liable for indemnification with respect to any Loss by the Purchaser . 10.3.3 The Company Seller Indemnified Parties pursuant shall not be entitled to recover Losses under Section 10.2(a)(i10.1(b)(i) or 10.1(b)(ii) (other than a breach of or inaccuracy in respect of the Excluded RepresentationsFundamental Representations or claims based upon Fraud) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and that such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). $1,000,000. 10.3.4 Notwithstanding anything to the contrary hereinin this Agreement, Sellers in no event shall Company Seller’s aggregate Liability under Section 10.1(a) or Buyer’s aggregate Liability under Section 10.1(b)(i) with respect to a breach or inaccuracy of the Fundamental Representations exceed the Company Valuation as of the Closing Date, as finally determined pursuant to this Agreement. 10.3.5 Each of the Company Seller Indemnified Parties and the Buyer Indemnified Parties shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which a duty to propose a use commercially reasonable alternative efforts to satisfy such claim, including the repair, replacement or redelivery mitigate any of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable its indemnifiable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the 10.3.6 The amount of any indemnified Losses for which Company Seller Indemnified Party or Buyer Indemnified Party claims indemnification under this Agreement shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net reduced by the amount of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy proceeds actually received (net of any deductibles) from third party insurers with respect to such Losses (after deduction provided that the amount of such insurance proceeds deemed to have been received will also be net of any increase in premium (and retro-premium adjustments) for any cost such insurance policies to the extent arising out of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”resulting from such Losses), and (ii) any prior recovery by the indemnification, contribution, offset or reimbursement payments actually received from third parties with respect to such Losses. The Indemnified Party shall use its good faith efforts to obtain recoveries from any Person insurers and other third parties in respect of this Section 10.3.6. If an Indemnified Party (A) actually receives insurance proceeds from third party insurers with respect to such Losses or (B) actually receives indemnification, contribution, offset or reimbursement payments from third parties with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment each case, at any time subsequent to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X 10 and subject to the limitations in the preceding sentence, then such Indemnified Party shall promptly reimburse the applicable Indemnifying Party for any payment made or Article VIII had expense incurred by such determination been made at the time of Indemnifying Party in connection with providing such paymentindemnification up to such amount actually received by such Indemnified Party. 10.3.7 Notwithstanding anything provided under applicable Law, no Party shall have any Liability (c) Subject to the other provisions of including under this Article X10) for, but notwithstanding any other provision of this Agreementand Losses shall not include, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent any such damages are payable awarded and paid to a third party with respect to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) 10.3.8 Notwithstanding anything else contained in this Agreement herein to the contrary, after any amount included in or otherwise previously taken into account in the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy determination of the parties with respect to any and all claims Final Company Consideration (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against components thereof), will not be further subject to an Indemnification Claim to the extent actually taken into account in such determination. 10.3.9 The amount of any Seller Losses payable under this Article 10 will be net of the amount of any Tax benefits actually realized by Buyer or any reduction in Taxes otherwise payable by Buyer as a result of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8Loss. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 2 contracts

Samples: Equity Interest Purchase and Reorganization Agreement (Marpai, Inc.), Equity Interest Purchase and Reorganization Agreement (Marpai, Inc.)

Indemnification Limitations. (a) In no event shall the Sellers Honeywell be liable for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)9.2(a)(i) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i9.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 10,000,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both in excess of the Threshold Amount Amount; provided, however, that the limitation set forth in this sentence shall not apply with respect to any claim for indemnification in respect of any breach of a Seller Fundamental Representation and any amounts in excess thereofWarranty. Notwithstanding anything herein to the contraryforegoing, the Sellers Honeywell shall not (ix) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations9.2(a)(i) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), 150,000,000 or (iiy) be liable for indemnification with respect to any Loss by the Purchaser an Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect Party of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 25,000 (each, a “De Minimis Loss”) (and all such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless Amount; provided, however, that the limitations set forth in clauses (x) and until such Losses arising out (y) of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything this sentence shall not apply with respect to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification any claim for any Loss by the Purchaser Indemnified Parties indemnification in respect of Section 4.20(b) (Products Liabilityany Seller Fundamental Representation and Warranty; Warranty) however, in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to no event shall Honeywell be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments liable for indemnification pursuant to Section 10.2(b)(i9.2(a)(i) in an aggregate amount with respect to breaches of Seller Fundamental Representations and Warranties for any Losses in excess of the Indemnification CapCash Consideration. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered amounts recoverable by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy of Honeywell or any Seller relating to the period prior to the Closing with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), and (ii) any actual prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell the Indemnifying Party may, in its sole discretion, require the any Indemnified Party to grant to Honeywell such Indemnifying Party an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII IX is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIIIIX, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII IX had such determination been made at the time of such payment. (c) Subject to the Notwithstanding any other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers Honeywell or Purchaser any Seller be liable for (i) any punitive damages or any special, incidental, indirect or consequential damages of any kind or nature, regardless of the form of action through which such damages are sought, (ii) any diminution in value or lost profits of any Indemnified Party except for lost profits which constitute direct damages; (iii) without limiting the generality of the foregoing, any Loss calculated by using or taking into account any multiples of (A) earnings, (B) book value, (C) cash flow or (D) other measures, unless, in the case of clauses (i), (ii) or (iii), such damages are recovered by a third party in a Third Party Claim pursuant to an order entered against a Purchaser Indemnified Party or in a settlement agreement to which a Purchaser Indemnified Party is a party, (iv) any Losses arising from Purchaser failing to take reasonable steps to mitigate damages, except or (v) any Losses to the extent such damages Liabilities are payable to an unaffiliated third party and (ii) in no event shall reserved on the Financial Statements of the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related are Made Available to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply Purchaser prior to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claimdate hereof. (d) Notwithstanding Purchaser acknowledges that certain consents to the transactions contemplated by this Agreement may be required from parties to Contracts, leases, licenses or other agreements to which Honeywell, any Seller or any Transferred Entity is a party (including the Material Contracts) and such consents have not been obtained and may not be obtained. Purchaser agrees that neither Honeywell nor any Seller shall have any liability (other than, if breached, under Section 3.4 or Section 5.5(b)) whatsoever to Purchaser (and Purchaser shall not be entitled to assert any claims) arising out of or relating to the failure to obtain any consents that may have been or may be required in connection with the transactions contemplated by this Agreement or because of the default, acceleration or termination of or loss of right under any such Contract, lease, license or other agreement as a result thereof. Other than, if breached, Section 3.4 or Section 5.5(b), Purchaser further agrees that no representation, warranty or covenant of the Sellers contained herein shall be breached or deemed breached and no condition of Purchaser shall be deemed not to be satisfied as a result of the failure to obtain any consent or as a result of any such default, acceleration or termination or loss of right or any lawsuit, action, claim, proceeding or investigation commenced or threatened by or on behalf of any Person arising out of or relating to the failure to obtain any consent or any such default, acceleration or termination or loss of right. (e) Except with respect to fraud, notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII IX shall be the sole and exclusive remedy of the parties from and after the Closing Date with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements Agreement and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby)hereby, including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers other parties hereto entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties its Affiliates may have against any Seller the other parties hereto (including rights to indemnification or contribution, or any of its Affiliatesother rights or remedies), including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement, the events giving rise to this Agreement and the transactions provided for hereinherein or contemplated hereby or thereby, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. IX. (f) All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and IX shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 2 contracts

Samples: Stock and Asset Purchase Agreement (Be Aerospace Inc), Stock and Asset Purchase Agreement (Honeywell International Inc)

Indemnification Limitations. (a) In no event Sellers shall the Sellers not be liable for indemnification any Losses (i) unless the Claim for such Losses is brought prior to the Claim Release Date, other than a Claim based on a breach of a Fundamental Representation, which Claim must be brought prior to the applicable Extended Release Date, (ii) unless and until the amount of any individual Loss or group of related Losses with respect to any Claim pursuant to Section 10.2(a)(i9.2(a)(i) exceeds $50,000 (other than in respect of the representations and warranties in Section 4.1 (Corporate Status“Per Claim Threshold”), Section 4.2 it being understood that (Authority), A) any such individual Claim or group of related claims for amounts less than the first two sentences Per Claim Threshold shall be ignored in determining whether the Deductible has been exceeded and (B) the Per Claim Threshold shall not apply to Claims based on a breach of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes)a Fundamental Representation or a Specified Representation, and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)iii) unless and until the aggregate amount of all Losses incurred by any Buyer Indemnitee with respect to any Claim pursuant to Section 10.2(a)(i9.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 840,000 (the “Threshold AmountDeductible”), in which case the Purchaser Indemnified Parties Seller shall be liable only for the amount of such indemnifiable Losses in excess of the Deductible; provided, however, that the Deductible shall not apply to Claims based on a breach of a Fundamental Representation or a Specified Representation. In no event shall Sellers be obligated to indemnify the Buyer Indemnitees under Section 9.2(a)(i) in excess of the Indemnity Escrow Amount (the “Cap”); provided, however, that the Cap shall not apply to Claims based on a breach of a Fundamental Representation. For the avoidance of doubt, in the event any Buyer Indemnitee is entitled to recover an amount of Losses under Section 9.2(a) pursuant to the provisions of this Article IX, such amount shall be recoverable, first, out of the then-outstanding Indemnity Escrow Funds, then, if such funds are insufficient to cover the amount of Losses for which such Buyer Indemnitee is entitled to recover via direct recovery from Sellers. Notwithstanding anything to the contrary herein, in no event shall either Sellers, on the one hand, or US Buyer, on the other hand, be liable for any amount in excess of the Base Purchase Price in connection with Claims under this Article IX. (b) Furthermore, no Claim for indemnification may be made or pursued (and each Party, as applicable, expressly waives any right to indemnification) (i) for all any matters disclosed in the Disclosure Schedule or (ii) by any Buyer or any of its successors or assigns, after the Purchased Shares, Assets or business to which the Claim relates cease to be owned by or controlled by such Buyer. (c) Each Indemnitee must use commercially reasonable efforts to mitigate in accordance with applicable Law any Losses from the first dollarfor which such Indemnitee seeks indemnification hereunder, including both seeking recovery under any available insurance policies (including, if applicable, under the Threshold Amount R&W Insurance Policy). If the Indemnitee mitigates its Losses after the Indemnitor has paid the Indemnitee under any indemnification provision of this Agreement in respect of such same Losses, the Indemnitee must notify the Indemnitor and pay to the Indemnitor to the extent of the value of the benefit to the Indemnitee of that mitigation which would otherwise result in duplicative recovery (less the Indemnitee’s reasonable costs of mitigation) within five Business Days after the benefit is received. Notwithstanding anything contained herein to the contrary, the Cap and the limitations set forth in Section 9.3(a) shall not apply to claims for indemnification brought upon a finding of fraud by the Company, Trillium UK, Trillium Germany or any amounts in excess thereof. Seller by a court of competent jurisdiction. (d) Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses for which indemnification is provided under this Article IX shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments any amounts actually recovered by the Indemnified Party under Indemnitee pursuant to any indemnification agreements by or arrangements indemnification agreement with any third parties or under party, (ii) any insurance policy with respect to such Losses proceeds (after deduction for including, in the case of a Buyer Indemnitee, any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation proceeds under the R&W Insurance Policy) or other cost cash receipts or expense directly related theretosources of reimbursement actually received by the Indemnitee (and no right of subrogation shall accrue to any insurer or third party indemnitor hereunder) (eacheach such Person named in clauses (i) and (ii), a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any an amount equal to the Tax Benefit benefit, if any, actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased realized by the amount of any Tax detriment actually paid by any Indemnified Party Indemnitee as a result of such party’s receipt of Losses in the indemnification payment with respect to taxable year such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral SourceLosses are incurred. If the amount to be netted hereunder from any payment required under this Article X or Article VIII IX is determined after payment by the Indemnitor of any amount otherwise required to be paid to an Indemnified Party under Indemnitee pursuant to this Article X or Article VIIIIX, the Indemnified Party Indemnitee shall repay to the Indemnifying PartyIndemnitor, promptly after such determination, any amount that the Indemnifying Party Indemnitor would not have had to pay pursuant to this Article X or Article VIII Section 9.3(d) and would result in duplicative recovery by the Indemnitee had such determination been made at the time of such payment. (ce) Subject With respect to the Losses for which any Buyer Indemnitee is indemnified under Section 9.2(a)(i) (other provisions than with respect to claims based on a breach of this Article Xa Fundamental Representation), but notwithstanding any other provision of this Agreement, at no time will such Buyer Indemnitee be entitled to recover (i) in no event shall more than the Sellers amount of the Indemnity Escrow Funds then remaining and any amounts recoverable under the R&W Insurance Policy or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for from any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (source other than the Business). Purchaser Indemnity Escrow Funds and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) R&W Insurance Policy. Notwithstanding anything else contained in this Agreement herein to the contrary, after the Closing, on and after the date that the then-remaining Indemnity Escrow Funds are reduced to zero, the Buyer Indemnitees shall have no further rights to indemnification and specific performance pursuant to the provisions of under this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties IX with respect to Losses for which the Buyer Indemnitees are indemnified under Section 9.2(a)(i) (other than with respect to claims based on a breach of a Fundamental Representation and notwithstanding any rights that may be available under the R&W Insurance Policy). In the event any Buyer Indemnitee is entitled to Losses hereunder, such Buyer Indemnitee shall first seek to recover from the Indemnity Escrow Amount prior to seeking direct recovery from Sellers for such Losses. (f) For the purposes of determining the amount of Losses to which such Indemnified Party may be entitled to recover under this Article IX and all claims for purposes of determining whether or not an Indemnitee is entitled to indemnification pursuant to this Article IX, each of the representations and warranties that contains any “Company Material Adverse Effect,” “material” or similar materiality qualifications shall be read as though such qualifications were not contained therein (whether other than with respect to (i) Section 5.5(a), (ii) the first sentence of Section 5.10, and (iii) the use of the term “Material Contract” and any other defined term that includes the word “Material” in contract the title). (g) Neither any Seller nor any Person claiming by or through any Seller shall have any right of contribution, right of indemnity or other right or remedy against any Target Company in tort) arising out of connection with any indemnification obligation or other Liability to which it may be subject under or in connection with this Agreement, the Ancillary Agreements and Agreement or the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8hereby. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 2 contracts

Samples: Stock Purchase Agreement, Stock Purchase Agreement (Harte Hanks Inc)

Indemnification Limitations. (a) In no event shall Subject to the Sellers be liable for indemnification pursuant to limitations set forth in this Section 10.2(a)(i) (other than in respect 7.4, if an Event of the representations and warranties in Breach of Section 4.1 (Corporate Status3.1, Section 3.2, Section 3.5, Section 3.6, Section 3.13(c), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization3.20(l), Section 4.7 (Taxes)4.1, and Section 4.21 (Finder’s Fee) 4.2 or Section 9.4 of this Agreement (collectively, the “Excluded Fundamental Representations”), an Event of Breach of Section 3.7(c) or Section 3.9 of this Agreement, a Buyer Indemnified Event under Section 7.1(b)(ii)-(ix) of this Agreement or a Seller Indemnified Event under Section 7.2(b)(ii)-(iv) of this Agreement occurs, the Indemnifying Party’s payment obligations under this Article VII for Losses incurred by the Indemnified Party relating to such Indemnified Event shall be 100% of any Losses incurred up to the Closing Purchase Price (as adjusted pursuant to Section 2.4). (b) Except for amounts of indemnity payable (A) under Section 7.1(c), (B) with respect to an Event of Breach, Buyer Indemnified Event or Seller Indemnified Event, in each case, covered under Section 7.4(a), or (C) in the event of fraud (the items listed in the foregoing clauses (A), (B) and (C) collectively, the “Excluded Items”) (which shall not be subject to the Deductible, De Minimis Claim and Cap provisions set forth below, provided that any indemnity under Section 4.17 7.1(b)(viii) or Section 7.1(b)(ix) shall be subject only to Section 7.4(b)(iii) below): (Sufficiency i) No amounts of Assets)indemnity shall be payable under this Article VII (other than with respect to the Excluded Items) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Buyer Indemnified Parties exceeds or the Seller Indemnified Parties, as the case may be, have suffered, incurred, sustained or become subject to Losses in excess of $1,400,000 400,000 (the “Threshold AmountDeductible)) in the aggregate, in which case the Purchaser any Buyer Indemnified Parties shall be entitled to indemnification Party or Seller Indemnified Party, as applicable, may bring a claim for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (such amount; provided, that the “Indemnification Cap”)amount of Losses resulting from such claim, or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses aggregated claims arising out of the same facts and circumstances areor similar facts, in the aggregateevents or circumstances, less than exceeds $15,000 50,000 (eachany claim, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be or aggregated for purposes of the Threshold Amount unless and until such Losses claims arising out of the same facts or circumstances exceed the similar facts, events or circumstances, involving Losses equal to or less than such amount being referred to as a “De Minimis Loss amountClaim”). Notwithstanding anything ; (ii) The aggregate amounts of indemnity payable by the Seller to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss Buyer Indemnified Parties or by the Purchaser Buyer and the Company to the Seller Indemnified Parties, as the case may be, under this Article VII (other than with respect to the Excluded Items) for indemnifiable Losses shall not exceed $6,000,000 (the “Cap”); and (iii) No amounts of indemnification shall be payable under Section 7.1(b)(viii) or Section 7.1(b)(ix) unless and until the Buyer Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claimhave suffered, including the repairincurred, replacement sustained or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is become subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of $25,000 in any 12-month period (each such period measured from the Indemnification Cap. (bClosing Date until the one-year anniversary of the Closing Date, and so forth) In calculating amounts payable to an in the aggregate, in which case any Buyer Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss may bring a claim for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such all Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result excess of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such paymentamount. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers Once it has been determined that a representation or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision warranty contained in this Agreement or in any certificate delivered on the Closing Date pursuant heretoto this Agreement has been breached (after taking into account materiality, Business Material Adverse Effect or similar qualifications contained in such representation or warranty), when determining the amount of Losses in respect of such breach of any representation or warranty, any materiality, Business Material Adverse Effect or similar qualifications contained in such representation or warranty shall be disregarded. (d) Notwithstanding anything contained in this Agreement to the contrary, no Indemnified Party shall be entitled to recovery under this Article VII with respect to consequential, special, punitive, incidental, exemplary, special damages or any damages based on diminution of value, lost profits, loss of business reputation or business opportunity related to the breach or alleged breach of this Agreement, except to the extent that such damages are (i) reasonably foreseeable and (ii) awarded by a court or other authority of competent jurisdiction in connection with a Third Party Claim. (e) The recovery by any Indemnified Party pursuant to this Article VII shall be net of any reimbursement actually received from any insurance carrier in connection with the Losses that form the basis of the Indemnified Party’s claim for indemnification hereunder. Without limiting If any such proceeds or recoveries are received by an Indemnified Party with respect to any Losses after an Indemnifying Party has made a payment to the generality Indemnified Party with respect thereto, the Indemnified Party shall promptly pay to the Indemnifying Party the amount of such proceeds or effect recoveries (up to the amount of the Indemnifying Party’s payment). (f) The Parties agree that any indemnification payments made pursuant to this Agreement shall be treated for Tax purposes as an adjustment to the Closing Purchase Price, unless otherwise required by applicable law. (g) This Article VII shall be the exclusive remedy of the Indemnified Parties following the Closing for any breach of or inaccuracy in any representation or warranty or any breach, nonfulfillment or default in the performance of any of the covenants or agreements contained in this Agreement, other than any remedies for fraud or any remedies available under Section 9.8. The Buyer and the Seller, as the case may be, shall provide any information in connection with the matters covered by this Article VII as the Seller or the Buyer, respectively, may reasonably request and to the extent permitted by applicable law. In furtherance of the foregoing, as a material inducement except for indemnification claims asserted pursuant to this Article VII and except for fraud claims and except for any remedies available under Section 9.8, the Sellers entering into this Agreement, Purchaser Buyer and the Seller hereby waiveswaive, from and after the Closing, to the fullest extent permitted under applicable law, any claim or cause and all rights, claims and causes of action, known and unknown, foreseen and unforeseen, which action it or any of the other Purchaser Indemnified Parties may have against any the Seller Indemnified Parties or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the SellersBuyer Indemnified Parties, as the case may be, and shall be deemed to be adjustments relating to the Purchase Pricesubject matter of this Agreement arising under or based upon any applicable laws, regulations, orders or otherwise. Notwithstanding anything to The Buyer and the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser Seller acknowledge and agree that the other parties would be damaged irreparably in Seller Indemnified Parties and Buyer Indemnified Parties, as the event any provision case may be, may not avoid the limitation on liability provided by this Section 7.4(g) by (x) seeking damages for breach of this Agreement is not performed in accordance with its specific terms contract, tort or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition pursuant to any other rights theory of liability, all of which are hereby waived or (y) asserting or threatening any claim against any Person that is not a party hereto (or a successor to a party hereto) for breaches of the representations, warranties and remedies existing covenants contained in its favorthis Agreement. THE BUYER AND THE SELLER (FOR THEMSELVES AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS) EXPRESSLY WAIVE ALL RIGHTS AFFORDED BY ANY STATUTE WHICH LIMITS THE EFFECT OF A RELEASE WITH RESPECT TO UNKNOWN CLAIMS. THE BUYER AND THE SELLER (FOR THEMSELVES AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS) UNDERSTAND THE SIGNIFICANCE OF THIS RELEASE OF UNKNOWN CLAIMS AND WAIVER OF STATUTORY PROTECTION AGAINST A RELEASE OF UNKNOWN CLAIMS. THE BUYER AND THE SELLER (FOR THEMSELVES AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS) ACKNOWLEDGE AND AGREE THAT THIS WAIVER IS AN ESSENTIAL AND MATERIAL TERM OF THIS AGREEMENT. (h) THE INDEMNIFICATION PROVIDED IN THIS ARTICLE VII CONTAINS THE SOLE AND EXCLUSIVE REMEDY, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performanceWHETHER UNDER THIS AGREEMENT OR OTHERWISE, injunctiveFOR BUYER INDEMNIFIED PARTIES AGAINST SELLER OR ANY AFFILIATE OF SELLER WITH RESPECT TO ANY AND ALL LOSSES INCURRED REGARDING, and/or other equitable relief.OR CLAIMS RELATING TO OR ARISING FROM ENVIRONMENTAL MATTERS OR ENVIRONMENTAL LAW (INCLUDING, WITHOUT LIMITATION, THOSE RELATED TO (A) ENVIRONMENTAL CLAIMS, (B) THE CONDITION OF THE COMPANY OR ANY OF ITS ASSETS, AND (C) THE PRESENCE OR RELEASE OF HAZARDOUS SUBSTANCES OR VIOLATIONS OF ENVIRONMENTAL LAW), AND THE BUYER INDEMNIFIED PARTIES HEREBY

Appears in 2 contracts

Samples: Stock Purchase Agreement (Commercial Metals Co), Stock Purchase Agreement (Mueller Industries Inc)

Indemnification Limitations. (a) In no event shall the Sellers be liable No Claim for indemnification pursuant to Section 10.2(a)(i) (other than in respect under this Article 7 shall be asserted by any Indemnified Party after the expiration and termination of the representations and warranties in Section 4.1 (Corporate Status)periods of limitation described in, or otherwise contemplated by, Section 4.2 7.8. (Authority)b) No Indemnifying Party shall have any Liability hereunder to indemnify the Indemnified Party for Buyer Losses or Seller Losses, the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization)as applicable, Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Buyer Losses with respect to Section 10.2(a)(ior Seller Losses, as applicable, exceed Ten Thousand US Dollars (USD10,000) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case event the Purchaser Indemnified Parties Party shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to The aggregate indemnification obligation of the Shareholders or the Buyer hereunder for Buyer Losses (other provisions of this Article Xthan Buyer Losses described in the following subsection (d)) or Seller Losses, but notwithstanding any other provision of this Agreementrespectively, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value exceed fifty percent (including multiple 50%) of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000the Total Purchase Price; provided that the foregoing limitation on consequential damages aggregate indemnification obligation of the Shareholders for any breach of Section 2.1 (Title), Section 3.2 (Capitalization of the Company), Section 7.2(a)(iv) (Covered Third Party Claims), Section 7.3(a)(iii) (Post-Effective Date Liabilities) or the Repurchase shall not apply to exceed one hundred percent (100%) of the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities ClaimTotal Purchase Price. (d) Notwithstanding anything else contained The limitations set forth herein in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII 7.5 or in Section 7.8 shall be the sole and exclusive remedy of the parties with respect not apply to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or indemnification for a breach of any warranty, covenant Sections 5.2 (Liability for Taxes) or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws Section 7.2(a)(v) (including any relating to Intellectual Property, products liability (including Products Liability ClaimsFraud), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 2 contracts

Samples: Share Purchase Agreement, Share Purchase Agreement (Adept Technology Inc)

Indemnification Limitations. Notwithstanding any provision to the contrary contained in this Agreement, NFHI shall be under no liability to indemnify a Buyer Indemnified Party under Section 7.2(a) and no claim under Section 7.2(a) shall be made: (ai) In no event unless notice thereof shall have been given by or on behalf of a Buyer Indemnified Party to NFHI in the manner provided in Section 7.4, unless failure to provide such notice in a timely manner does not materially impair NFHI’s or Individual Stockholders ability to defend their rights, mitigate damages, seek indemnification from a third party or otherwise protect their interests; (ii) to the extent related to a claim under Section 7.2(a)(i) for any of the Sellers’ breach of any Fundamental Representation under this Agreement, unless the liability of Sellers be liable for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties any single claim or multiple claims in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(iexceeds Five Hundred Thousand Dollars ($500,000) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold AmountBasket”), in which case event the Purchaser Buyer Indemnified Parties Party shall be entitled to seek indemnification for all Losses from the first dollar, including both the Threshold Amount and total amount of any amounts Damages suffered by such Buyer Indemnified Party in excess thereof. Notwithstanding anything herein of the Basket; (iii) to the contrary, extent related to a claim under Section 7.2(a)(i) for any of the Sellers shall not (i) be required to make payments for indemnification Sellers’ breach of any representation or warranty under this Agreement or any documents delivered pursuant to Section 10.2(a)(i) hereto (other than a Fundamental Representation), unless the liability of Sellers in respect of single claim or multiple claims in the Excluded Representationsaggregate exceeds Five Hundred Thousand Dollars ($500,000) in an aggregate amount in excess of $18,000,000 (the a Indemnification CapRelevant Claim”), or (ii) in which event the Buyer Indemnified Party shall be liable entitled to seek indemnification for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect total amount of the Excluded RepresentationsRelevant Claim(s); (iv) to the extent such Loss and all Losses arising out of claim relates to an obligation or liability for which the same facts and circumstances are, in Buyer has agreed to indemnify the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i7.3; or (v) in an aggregate amount in excess to the extent that Buyer had actual written knowledge at or prior to the Closing Date of (A) the respective breach of a representation or warranty by any of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), Sellers or (iiiB) any Tax Benefit actually received by the breach of a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise covenant required to be paid to an Indemnified Party under this Article X performed or Article VIII, the Indemnified Party shall repay satisfied at or prior to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such paymentClosing Date. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 2 contracts

Samples: Stock Purchase Agreement (Jupiter Wellness, Inc.), Stock Purchase Agreement (Jupiter Wellness, Inc.)

Indemnification Limitations. (a) In no event shall The amount of any claim for Losses by Purchaser and the Sellers be liable other Indemnitees associated with Purchaser (“Purchaser Indemnitees”) for indemnification claims pursuant to Section 10.2(a)(i11.2(a) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(aor 11.2(c) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and shall not be payable hereunder until such time as the aggregate amount of all Losses with respect to Section 10.2(a)(iof Purchaser Indemnitees under this Agreement exceeds Fifty Thousand Dollars ($50,000) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the ; and thereafter only for Losses of Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount Indemnitees in excess of the Indemnification CapThreshold Amount. In no event shall the aggregate amount of liability of Sellers for Losses for indemnification claims pursuant to Section 11.2(a) or 11.2(c) exceed the sum of an amount equal to fifty percent (50%) of the portion of the Purchase Price actually received by Sellers. The limitations provided in this Section 11.7(a) shall not apply to any indemnification claim pursuant to Section 11.2(b), (d) or (e). (b) In calculating amounts payable to an Indemnified Party hereunder, the The amount of any indemnified claim for Losses by any Seller and the other Indemnitees associated with the Sellers (“Seller Indemnitees”) shall not be determined without duplication payable hereunder until such time as the aggregate amount of any other Loss all Losses of Seller Indemnitees under this Agreement exceeds the Threshold Amount; and thereafter only for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and Losses of Seller Indemnitees in excess of the Threshold Amount. In no event shall be computed net the aggregate amount of liability of Purchaser for Losses exceed seventy-five percent (i75%) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such paymentPrice. (c) Subject If any event shall occur or circumstance shall exist which would otherwise entitle an Indemnitee to the other provisions of indemnification under this Article XXI, but notwithstanding any other provision of this Agreement, (i) in no event Losses shall the Sellers be deemed to have been incurred or Purchaser be liable for any punitive damages, except sustained by such Indemnitee to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for of any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct insurance proceeds actually received by the Sellers Indemnitee or any to which they are entitled in respect of their Affiliates the Losses (net of any business (other than the Businessdeductible amounts). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in Upon making any payment for Losses of an Indemnitee under this Agreement Article XI, the Indemnitor will, to the contraryextent of such payment, after the Closing, indemnification and specific performance pursuant be subrogated to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy all rights of the parties Indemnitee against any third party with respect to the Losses for which the payment relates. In addition to any and all claims (whether in contract or in tort) arising out of or in connection with other obligation under this Agreement, the Ancillary Agreements Indemnitee agrees to duly execute and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby)deliver, including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect upon request of the foregoingIndemnitor, as a material inducement all instruments reasonably necessary to evidence and perfect the Sellers entering into this Agreement, Purchaser hereby waives, from subrogation and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made subordination rights granted pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(dSection 11.7(d), 11.7 and 11.8. (e) The Sellers sole and Purchaser acknowledge exclusive liability and agree that responsibility of the parties hereunder in connection with the transactions described herein (including for any breach of or inaccuracy in any representation or warranty or for any breach of any covenant or obligation or for any other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breachedreason), so that a party shall be entitled to as set forth in this Article XI; provided, however, that nothing in this Section 11.7(e) shall prohibit any party from obtaining specific performance or injunctive relief to prevent breaches in respect of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefcovenant or obligation.

Appears in 2 contracts

Samples: Equity Purchase Agreement (Genesis Group Holdings Inc), Equity Purchase Agreement (Genesis Group Holdings Inc)

Indemnification Limitations. The indemnification obligations of the Parties under Section 8.2 and Section 8.3 are subject to each of the following limitations (in addition to such other limitations as are contained in this ARTICLE 8): (a) In no event shall the Sellers be liable for indemnification pursuant Except with respect to any Multi-Section 10.2(a)(iLoss, or Loss arising from or as a result of Fraud, breach of any Fundamental Representation, or any representation or warranty listed on Schedule 8.4(a) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authoritya “Dollar One Loss”), the first two sentences of each of Sellers shall not be liable to the Purchaser Indemnified Parties for indemnification under Section 4.4(a8.2(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses in respect of indemnification under Section 8.2(a) exceeds $250,000 (the “Basket”), after which point the Purchaser Indemnified Parties will be entitled to recover only Losses in excess of the amount of the Basket in accordance with Section 8.7. (b) Except with respect to any Loss arising from or as a result of Fraud or breach of any Fundamental Representation, the Sellers’ gross aggregate liability under Section 10.2(a)(i8.2(a) is limited to and shall not under any circumstances exceed an amount equal to (i) the Indemnification Escrow Amount for a Multi-Section Losses or Dollar One Losses or (ii) $250,000 (the “Cap”) for all other Losses; and in either case, Purchaser’s sole source of recovery from the Sellers in respect of such Losses will be from the Indemnification Escrow Fund up to the Indemnification Escrow Amount or Cap, respectively. For the avoidance of doubt and subject to compliance with Section 8.7(b), the limitations in this Section 8.4(b) apply only when a claim is brought pursuant to Section 8.2(a) and not when a claim is brought pursuant to any other section of Section 8.2. (c) Except with respect to any Loss arising from or as a result of Fraud, the total amount in respect of which a Seller will be liable for indemnification under any provision of Section 8.2 is limited to and shall not under any circumstances exceed the portion of the Purchase Price actually received by such Seller, as the same may be adjusted pursuant to this Agreement. (d) In the event of Fraud, there shall be no limitation on the Losses that are imposed on or incurred may be recovered from any Seller by the Purchaser Indemnified Parties exceeds $1,400,000 under Section 8.2; provided that no Seller will be liable for any Fraud by another Seller in the making of such Seller’s representations and warranties in ARTICLE 5. (e) Except with respect to any Loss arising from or as a result of Fraud, the “Threshold Amount”), in which case aggregate amount that the Purchaser Seller Indemnified Parties shall be entitled to indemnification for all Losses recover from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein Purchaser under Section 8.3 is limited to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or under any circumstances exceed the De Minimis Loss amount). Purchase Price, as the same may be adjusted pursuant to this Agreement. (f) Notwithstanding the limitations set forth in this Section 8.4, or anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties contained in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used nothing herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a or impair Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in Parties’ recourse under the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8R&W Insurance Policy. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Stock Purchase Agreement (Simulations Plus, Inc.)

Indemnification Limitations. (a) In no event shall the Sellers be liable for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary: (i) no indemnification shall be available under Section 9.2(a) or Section 9.3(a) unless and until all Damages exceed $300,000 (the “Deductible”), after which time the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII Indemnified Persons shall be the sole entitled to be indemnified against and exclusive remedy compensated and reimbursed for only those Damages in excess of the parties with respect Deductible; provided, however, that the Deductible shall not apply to any and all claims Damages arising under or resulting from (whether in contract x) breaches of Fundamental Representations or in tort(y) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby Fraud. (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. b) Notwithstanding anything to the contrary herein, nothing in this Article X Agreement: (i) subject to clause (ii) of this Section 9.4(b), each Escrow Participant shall limit be liable for any claim claims for Damages made under Section 9.2 based on such Escrow Participant’s Pro Rata Portion thereof up to (and not to exceed) such Escrow Participant’s Pro Rata Portion of the Merger Consideration actually received by such Escrow Participant (except with respect to Fraud committed by an Escrow Participant, in which case, such limitation shall not apply with respect to such Escrow Participant); (ii) the aggregate liability of each Escrow Participant under Section 9.2(a) (other than with respect to a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting breach of the Fundamental Representations or misstating any disclosure in the Disclosure Schedule where case of Fraud) shall not exceed, and shall be limited to, their Pro Rata Portion of the General Indemnification Cap; and (iii) no Company Securityholder shall be liable for Fraud committed by any other Company Securityholder except on the following conditions: (A) the claim for Fraud relates to a representation or warranty made in this Agreement by the Company; (B) the Acquiror Indemnified Persons shall have first recovered or cancelled up to all of the Merger Consideration received by or issuable to the Company Securityholder that committed the Fraud; (C) the Damages arising out of or relating to such omission or misstatement constitutes a breach Fraud that remain unsatisfied after the Acquiror Indemnified Persons have complied with subsection (B) exceed the Additional Company Investment (such excess, the “Profit Damages”); (D) in any material respect no event will the liability of any express representation Company Securityholder for Fraud committed by any other Company Securityholder (1) exceed his, her, or warrantyits Pro Rata Portion of the Profit Damages, or (2) exceed the Merger Consideration he, she, or it actually received; and (E) any Profit Damages to which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement an Acquiror Indemnified Person is not performed in accordance with its specific terms or otherwise is breached, so that a party entitled hereunder shall be entitled payable pursuant to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions as described in Section 9.7(c). For purposes hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.:

Appears in 1 contract

Samples: Merger Agreement (Cure Pharmaceutical Holding Corp.)

Indemnification Limitations. (a) In no event shall the Sellers be liable for indemnification pursuant to Section 10.2(a)(i) (other Other than claims arising out of, or in respect of the representations connection with fraud and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority)willful misrepresentation, the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, Indemnifying Parties shall not be obligated to indemnify the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to of their Pro Rata Portion of the contrary, the Sellers shall not (i) be required to make payments Escrow Amount for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”)claims arising out of, or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority Section 8.2(a). Other than claims arising out of, or in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained fraud and willful misrepresentation, if the Merger is consummated, the indemnification provisions set forth in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of under this Agreement for the parties with respect to any and all matters set forth therein. (b) Other than claims (whether in contract or in tort) arising out of of, or in connection with this Agreementfraud or willful misrepresentation, if the Merger is consummated, the Ancillary Agreements Escrow Fund shall be the Indemnified Parties’ sole and exclusive security for indemnification claims under Section 8.2 and recovery against the transactions contemplated hereby Escrow Fund shall be the Indemnified Parties’ sole and thereby exclusive remedy under this Agreement for indemnification claims under this Article VIII. (other c) Other than remedies claims arising out of, or in connection with fraud or willful misrepresentation, no Indemnifying Party shall be required to indemnify any Indemnified Parties for claims arising out of, or in connection with Section 8.2(a)(i) hereunder until such time as the aggregate amount of Losses for which the Indemnified Parties are entitled to indemnification pursuant to this Agreement exceeds $750,000, at which time the Indemnifying Party shall be obligated to indemnify the Indemnified Parties for the full amount of all such Losses (including the $750,000 referred to in this section), subject to the limitations set forth in this Article VIII; provided, however that, in no event shall an Indemnifying Party be required to indemnify any Indemnified Parties for any claim arising out of, or in connection with Section 8.2(a)(i) hereunder for which the Ancillary Agreements amount of Losses for which the Indemnified Parties are entitled to indemnification pursuant to such claim is less than $25,000. (d) Other than claims arising out of, or in connection with regard fraud or willful misrepresentation, the Indemnified Parties may not recover pursuant to Section 8.2(a)(vi) hereof until the end of the Escrow Period. At the end of the Escrow Period, the Stockholder Representative shall be subrogated to the transactions contemplated thereby)rights of the Final Surviving Entity to collect any accounts receivable for which a claim is made hereunder. (e) Other than claims arising out of, including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality connection with fraud or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waiveswillful misrepresentation, from and after the ClosingEffective Time, the Indemnifying Parties shall not be obligated to indemnify the Indemnified Parties pursuant to clause (i) of Section 8.2(a) (but specifically excluding clause (ii) through clause (viii), inclusive, of Section 8.2(a)) for any indemnification claim or cause of action, known and unknown, foreseen and unforeseen, which it or any that is made after the Applicable Expiration Date of the other Purchaser representation and warranty that forms the basis for such indemnification claim; provided, however, that such indemnification obligations shall not terminate with respect to any item or Loss as to which any Indemnified Parties may have against any Seller or any of its Affiliatesshall have, including without limitation under before the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions Applicable Expiration Date of the provisions contained in this Article X representation and Article VIII. All payments warranty that forms the basis for such indemnification claim, previously made a bona fide claim by validly delivering a Claim Certificate of such indemnification claim pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8VIII. (ef) The Sellers Other than claims arising out of, or in connection with fraud or willful misrepresentation (including clause (iii) of Section 8.2(a)), from and Purchaser acknowledge and agree that after the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particularEffective Time, the parties acknowledge Indemnifying Parties shall not be obligated to indemnify the Indemnified Parties pursuant to clause (iv) through clause (viii), inclusive, of Section 8.2(a)) for any indemnification claim that is made after the Business is unique and recognize and affirm Escrow Period; provided, however, that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser such indemnification obligations shall have the right, in addition not terminate with respect to any other rights and remedies existing in its favoritem or Loss as to which any Indemnified Parties shall have, before the end of the Escrow Period previously made a bona fide claim by validly delivering a Claim Certificate of such indemnification claim pursuant to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefthis Article VIII.

Appears in 1 contract

Samples: Merger Agreement (Limelight Networks, Inc.)

Indemnification Limitations. (a) In Seller will have no event shall the Sellers be liable for indemnification Liability pursuant to Section 10.2(a)(i8.2(a) (other than in with respect of to Losses for which indemnification is provided thereunder, except to the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until extent the aggregate amount of all such Losses exceeds an amount equal to Fifty Thousand Dollars ($50,000) (the “Basket”), and then only in respect of such excess; provided, however, such Basket shall not apply to Seller’s indemnification obligations under Section 8.2(a) to the extent related to breaches of any of the Fundamental Representations or in the case of fraud. (b) Seller will have no Liability pursuant to Section 8.2(a) with respect to Section 10.2(a)(i) Losses for which indemnification is provided thereunder to the extent that are imposed on or incurred indemnification payments made in respect of any and all such Losses exceed, in the aggregate, an amount equal to the Purchase Price paid by the Purchaser Indemnified Parties exceeds $1,400,000 to Seller, disregarding for these purposes any Retention Reduction to Purchase Price (the “Threshold AmountCap”), in which case Seller will not be liable for the Purchaser Indemnified Parties shall be entitled to indemnification for all portion of any such Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contraryof such Cap; provided, the Sellers however, such Cap shall not apply in the case of fraud. (ic) be required to make payments for indemnification Purchaser will have no Liability pursuant to Section 10.2(a)(i8.3(a) (other than with respect to Losses for which indemnification is provided thereunder, except to the extent the aggregate amount of such Losses exceeds an amount equal to the Basket, and then only in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”)such excess; provided, or (ii) be liable for however, such Basket shall not apply to Purchaser’s indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to obligations under Section 10.2(a)(i) (other than in respect of the Excluded Representations8.3(a) to the extent such Loss related to breaches of any of the Fundamental Representations or in the case of fraud. (d) Purchaser will have no Liability pursuant to Section 8.3(a) with respect to Losses for which indemnification is provided thereunder to the extent that indemnification payments made in respect of any and all such Losses arising out of the same facts and circumstances areexceed, in the aggregate, less than $15,000 (eachan amount equal to the Cap, a “De Minimis Loss”) (and in which case Purchaser will not be liable for the portion of any such Losses shall be disregarded and in excess of such Cap; provided, however, such Cap shall not be aggregated apply in the case of fraud. (e) Notwithstanding the fact that any indemnified Party may have the right to assert claims for purposes of the Threshold Amount unless and until such Losses arising out of the same facts indemnification under or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) more than one provision of this Agreement in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery respect of any products that are the subject of such claimfact, which such commercially reasonable alternative is subject event, condition or circumstance, no indemnified Party shall be entitled to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, recover the amount of any Loss suffered by such indemnified Losses party more than once, regardless of whether such Loss may be as a result of a breach of more than one representation, warranty, obligation or covenant or otherwise. In addition, any liability for indemnification hereunder shall be determined without duplication of any other Loss for which an indemnification claim has been made recovery by reason of the state of facts giving rise to such liability, or could be made under any other a breach of more than one representation, warranty, covenantcovenant or agreement, or agreement and as applicable. (f) For all purposes of this Article 8, Losses shall be computed net of (i) payments recovered by the Indemnified any amounts paid or payable to an indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment deemed payable pursuant to the Purchase Price pursuant last sentence of this Section) in connection with the facts giving rise to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified indemnification hereunder, and each indemnified Party shall use its reasonable commercial efforts (provided that the foregoing shall not be construed to require any Party to assert a claim against initiate any Collateral Source. legal action in order to meet such obligation) to recover all amounts payable from an insurer under any such insurance policy prior to seeking indemnification hereunder; provided, however, that the amount deemed to be paid under such insurance policies shall be net of the deductible for such policies; and, provided, further, that Seller shall be subrogated (and Purchaser shall and shall cause Purchaser Indemnified Parties to cause Seller to be subrogated) to the rights of the Purchaser Indemnified Parties under applicable insurance policies. (g) If the amount to be netted hereunder from any indemnification payment required under this Article X or Article VIII hereunder is determined after payment by an indemnifying Party to an indemnified Party of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIIIas indemnification pursuant hereto, the Indemnified indemnified Party shall repay to the Indemnifying Partyrepay, promptly after such determination, any amount that the Indemnifying indemnifying Party would not have had to pay pursuant to this Article X or Article VIII hereto had such determination been made at the time of such payment. (ch) Subject Each indemnified Party shall use its commercially reasonable efforts to mitigate any indemnifiable Loss, provided, however, that the other provisions foregoing shall not be construed to require any Party to initiate any legal action in order to meet such mitigation obligation. (i) The amount of this Article X, but notwithstanding any other provision Loss subject to indemnification under Sections 8.2 or 8.3 shall be calculated net of any Tax Benefit actually realized by the indemnified Party in the taxable period in which the Loss occurred or in the taxable period immediately thereafter. For purposes of this Agreement, a “Tax Benefit” means the actual reduction of Tax Liabilities (icalculated on the basis of the actual reduction in cash payments for Taxes) from an increase in no event shall deductions, losses or tax credits or decrease in the Sellers income, gain or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed recapture of tax credits that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings indemnified Party or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any one of its Affiliates, including without limitation under the common law affiliates actually reported or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Pricetook into account. Notwithstanding anything to the contrary hereincontrary, nothing if the Tax Return for the taxable period in which the Losses occurred has yet to be filed at the time that an indemnity payment is to be made, the amount of the Loss recoverable by an indemnified Party pursuant to this Article X 8 with respect to an indemnity claim shall limit any claim not be reduced by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect amount of any express representation or warrantyTax Benefit; and, which claims shallinstead, in any case, be subject the indemnified Party shall pay to the provisions indemnifying Party the amount of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8such Tax Benefit within five (5) Business Days after the filing of the Tax Return for the taxable period in which the Tax Benefit is actually realized. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Purchase and Assumption Agreement (HomeStreet, Inc.)

Indemnification Limitations. (a) In no event The Company Securityholder Indemnifying Parties shall the Sellers not be liable to any of the Parent Indemnified Parties in respect of any claim for indemnification pursuant to Section 10.2(a)(i8.3(a)(i) or Section 8.3(a)(ii) (the “General Claims”) (other than in claims (x) of fraud or intentional misrepresentation or (y) with respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(ato Fundamental Representations) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses for which all Parent Indemnified Parties otherwise would be entitled to indemnification with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties General Claims exceeds $1,400,000 82,500, in the aggregate (the “Threshold Deductible Amount”), after which the Parent Indemnified Parties shall be entitled to recover solely those Losses in excess of the Deductible Amount. The Company Securityholder Indemnifying Parties’ maximum liability to the Parent Indemnified Parties in respect of General Claims (other than with respect to claims (x) of fraud or intentional misrepresentation or (y) with respect to Company Fundamental Representations) shall not exceed $18,000,000 in the aggregate (the “Cap”). The Company Securityholder Indemnifying Parties’ indemnification obligations to the Parent Indemnified Parties in respect of General Claims shall be satisfied solely and exclusively from the Escrow Fund and no Parent Indemnified Party shall have any recourse directly against any Company Securityholder Indemnifying Party in respect of General Claims (other than with respect to claims (x) of fraud or intentional misrepresentation or (y) with respect to Company Fundamental Representations). (b) The Parent Indemnifying Parties shall not be liable to any of the Company Securityholder Indemnified Parties in respect of any claim for indemnification pursuant to Section 8.3(b)(i) (i) until the aggregate amount of all Losses for which all Company Securityholder Indemnified Parties otherwise would be entitled to indemnification with respect to such claims exceeds the Deductible Amount, in the aggregate, after which the Company Securityholder Indemnified Parties shall be entitled to recover solely those Losses in excess of the Deductible Amount, and (ii) to the extent that the aggregate amount of such claims for indemnification pursuant to Sections 8.3(b)(i) exceeds the Cap. (c) Notwithstanding anything contained herein to the contrary, neither the Deductible Amount nor the Cap shall apply to or limit the obligations of the Company Securityholder Indemnifying Parties in connection with any claim for indemnification by the Parent Indemnified Parties (i) pursuant to Section 8.3(a)(i) in respect of any Company Fundamental Representation; (ii) pursuant to Sections 8.3(a)(iii)-(vi); or (iii) with respect to claims of fraud or intentional misrepresentation. Notwithstanding anything contained herein to the contrary, each Company Securityholder Indemnifying Party’s maximum aggregate liability to the Parent Indemnified Parties under this Agreement shall not exceed an amount equal to the aggregate Merger Consideration actually received by such Company Securityholder Indemnifying Party. (d) Notwithstanding anything contained herein to the contrary, neither the Deductible Amount nor the Cap shall apply to or limit the obligations of the Parent Indemnifying Parties in connection with any claim for indemnification by the Company Securityholder Indemnified Parties (i) pursuant to Section 8.3(b)(i) in respect of any Parent Fundamental Representation; (ii) pursuant to Section 8.3(b)(ii); or (iii) with respect to claims of fraud or intentional misrepresentation. Notwithstanding anything contained herein to the contrary, the aggregate maximum liability of the Parent Indemnifying Parties to any of the Company Securityholder Indemnified Parties under this Agreement shall not exceed an amount equal to the Merger Consideration payable hereunder. (e) Notwithstanding anything to the contrary contained herein, for all purposes under this Article VIII, each representation or warranty contained in this Agreement or any certificate delivered by the Company, Parent or Merger Sub pursuant to this Agreement (other than the representation set forth in Section 2.7(a) (Absence of Certain Changes or Events)) shall be read without regard and without giving effect to any knowledge, material, materiality or Company Material Adverse Effect standard or other similar qualification contained in such representation or warranty, including for purposes of determining the amount of Losses indemnifiable hereunder and whether a representation or warranty has been breached or is inaccurate. (f) Notwithstanding anything to the contrary contained herein, with respect to the indemnification obligations of the Company Securityholder Indemnifying Parties to the Parent Indemnified Parties: (i) no claim, offset, retention or withholding may be made for any Loss related to or arising from the amount, value or condition of any net operating loss carry-forward or tax credit carry-forward of the Company or Company Subsidiary or the ability of Parent, the Surviving Corporation or their Affiliates to utilize such net operating loss carry-forward or tax credit carry-forward; (ii) any Losses of the Parent Indemnified Parties and the Company Securityholder Indemnified Parties shall be reduced in amount by any (A) Tax Benefits actually realized by any Parent Indemnified Party or Company Securityholder Indemnified Party, as applicable, in the Tax year in which case such Losses are reported as determined in good faith by the Purchaser Parent Indemnified Party or Company Securityholder Indemnified Party, as applicable, and (B) insurance proceeds actually realized by any Parent Indemnified Party (including, for the avoidance of doubt, the Surviving Corporation and Company Subsidiary) or any Company Securityholder Indemnified Party, as applicable, and Parent and the Parent Indemnified Parties or the Company Securityholder Indemnified Parties, as applicable, shall use reasonable best efforts to realize any such Tax Benefits or insurance proceeds (for purposes of this Agreement, a “Tax Benefit” shall mean a reduction in Tax liability in the year the Loss was incurred as a result of incurring the Loss attributable thereto), (iii) neither the Parent Indemnified Parties nor the Company Securityholder Indemnified Parties shall be entitled to indemnification hereunder for all Losses from the first dollarthat constitute punitive, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contraryconsequential or multiple damages, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim except for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(bsuch damages actually paid to a third party; and (iv) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Parent Indemnified Party as a result of such party’s receipt of the indemnification payment with respect Parties subject to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required recovery under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy calculated net of the parties with respect to any and all claims (whether in contract amounts specifically accrued or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth reserved for in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8Company Balance Sheet. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Merger Agreement (Quality Systems, Inc)

Indemnification Limitations. Notwithstanding any other provision contained in this Agreement, the indemnity obligations of the Selling Securityholders pursuant to Section 11.2 or otherwise, will be limited in the following respects: (a) In no event shall the Sellers Selling Securityholders will only be liable for indemnification pursuant to Damages arising under Section 10.2(a)(i11.2(a) (other than in respect of if a claim for indemnity is made by the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed Indemnitee on or incurred by before the Purchaser Indemnified Parties exceeds $1,400,000 First Expiry Date; (b) the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) Selling Securityholders will only be liable for indemnification with respect to any Loss Damages arising under Section 11.2(b) if a claim for indemnity is made by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed Indemnitee on or incurred by before the Purchaser Indemnified Parties arising out of such alternative shall, subject to Second Expiry Date; (c) the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser Selling Securityholders shall not be required to make payments for any indemnification payment pursuant to Section 10.2(b)(i11.2 unless the Damages exceeds $50,000 in the aggregate; (d) in an aggregate amount the Selling Securityholders shall not be required to make any indemnification payment pursuant to Section 11.2(a) in excess of the Indemnification CapSecond Escrow Amount in accordance with the Escrow Agreement shall be the only and sole source of payment for the indemnification rights of the Indemnitees under Section 11.2(a); (e) VWP and DEI shall not be required to make any indemnification payment pursuant to Section 11.2(a) or 11.2(b) in excess of their respective Pro Rata interest in the Second Escrow Amount as set out in this Section 11.3 in excess of their respective Pro Rata interests and such Pro Rata payment out of the Second Escrow Amount in accordance with the Escrow Agreement shall be the only and sole source of payment for the indemnification rights of the Indemnitees under Section 11.2 in the case of VWP and DEI; (f) the aggregate amount of Damages for which a Selling Securityholder may be liable to the Indemnitees under Section 11.2(b) or otherwise will first be satisfied out of the balance of the Second Escrow Amount, if any, after all indemnification claims under Section 11.2(a) have been paid and any Damages in excess of the balance of the Second Escrow Amount, if any, will be limited solely to the amount set opposite the Selling Securityholder's name in Schedule 11.3, provided that neither VWP nor DEI shall be responsible or liable for any such additional amounts; and (g) the liability of VWP and DEI for any and all indemnification claims under Section 11.2 or any other claims which may have been made against either of VWP or DEI under this Agreement is limited to their Pro-Rata interests in the Second Escrow Amount as set out in Schedule 11.3. (bh) In calculating amounts payable to an Indemnified Party hereunder, For the amount purposes of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by determining the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year liability of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party Elliotts in their capacity as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay Selling Shareholders pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to11, in good faithaddition to any Securities owned or held directly by each Xxxxxxx as set out in Part 3.3 of the Disclosure Schedule, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII each Xxxxxxx shall be the sole and exclusive remedy of the parties with respect deemed to any and all claims (whether hold BEA Shares equal to his or her proportionate interest in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, BEA and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing own any Securities sold by Protec Management Ltd. as set out in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in Part 4 of the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject pursuant to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably this Agreement in the event any provision of this Agreement is not performed in accordance with its specific terms same proportion, and his or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefher liability adjusted upwards accordingly.

Appears in 1 contract

Samples: Stock Purchase Agreement (Cayenta Inc)

Indemnification Limitations. (a) In no event shall the Sellers be liable for Except in case of (A) fraud, intentional misconduct or misrepresentation, (B) indemnification pursuant to a breach of Fundamental Reps or indemnification pursuant to Section 10.2(a)(i10.2(i)(a) (other than in respect of the representations and warranties in through Section 4.1 (Corporate Status10.2(i)(c), or Section 4.2 (Authority10.2(ii)(b) through Section 10.2(ii)(e), the first two sentences any right of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and an Indemnified Party to indemnification under this Agreement shall not apply to any claim until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds such claims which have become final totals at least $1,400,000 [*****] (the “Threshold AmountIndemnity Basket”), in which case event such indemnity shall apply to all such claims which become final, but only to the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from extent of the first dollar, including both the Threshold Amount and any amounts amount in excess thereof. of the Indemnity Basket. (b) Notwithstanding anything herein to the contrarycontrary herein, the maximum liability of the Sellers shall not (i) be required to make payments for indemnification (A) pursuant to Section 10.2(a)(i10.2(ii)(a) (other than in with respect of the Excluded Representationsto Fundamental Reps), shall not exceed US$[*****], (B) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”pursuant to Fundamental Reps or Section 10.2(ii)(b) through Section 10.2(ii)(e), or (ii) be liable for indemnification with respect to any Loss by in the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect case of fraud, intentional misconduct or misrepresentation, shall not exceed the Upfront Payment, the value of the Excluded RepresentationsUpfront Shares (at the Closing Date) to the extent such Loss and all Losses arising out of the same facts and circumstances areany Contingent Payment, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount)collectively. Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt maximum liability of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments each Seller for indemnification pursuant to Section 10.2(b)(i10.2(i)(a) through Section 10.2(i)(c), shall not exceed such Seller’s portion in an aggregate amount in excess the Upfront Payment, the value of the Indemnification Cap. Upfront Shares (b) In calculating amounts payable to an Indemnified Party hereunder, at the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”Closing Date), (ii) as applicable and any prior recovery by the Indemnified Party from any Person with respect to such LossesContingent Payment, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such paymentcollectively. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing to the fullest extent permitted by applicable law, except in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting instances of fraud or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shallintentional misrepresentation, in any case, be subject to the provisions connection with Buyer’s breach of Sections 4.23, 5.7(a)-(dits representations under Section 3.2(f), 11.7 (g), (h), (i), (j) and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision l), Buyer’s aggregate liability arising out of this Agreement is not performed in accordance with its specific terms whether based upon warranty, contract, tort or otherwise is breachedotherwise, so that a party shall will be entitled limited to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief$[*****].

Appears in 1 contract

Samples: Share Purchase Agreement (Purple Biotech Ltd.)

Indemnification Limitations. (a) In no event shall Except in the Sellers be liable for indemnification pursuant to Section 10.2(a)(i) (other than in respect case of the representations and warranties in Section 4.1 (Corporate Status)fraud, Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers Seller shall not (i) be required obligated to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by indemnify the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than for any indemnification claim that is made after the Expiration Date; provided, however, that the indemnification obligations of Seller in respect of the Excluded Representations) a particular indemnification claim shall not terminate with respect to such indemnification claim if and to the extent that a Purchaser Indemnified Party shall have made such Loss and all Losses arising out of indemnification claim prior to the same facts and circumstances are, Expiration Date. Except in the aggregatecase of fraud, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required obligated to make payments for indemnification indemnify the Seller Indemnified Parties pursuant to Section 10.2(b)(i) for any indemnification claim that is made after the Expiration Date; provided, however, that the indemnification obligations of Purchaser in an aggregate amount in excess respect of a particular indemnification claim shall not terminate with respect to such indemnification claim if and to the Indemnification Capextent that a Purchaser Indemnified Party shall have made such indemnification claim prior to the Expiration Date. (b) In calculating amounts payable Except in the case of fraud, Seller shall not be obligated to an indemnify the Purchaser Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price Parties pursuant to Section 3.4(f), or 10.2(a)(i) for any amounts in excess of Two Million Dollars (iii$2,000,000) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior yearaggregate; provided, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount however that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions limitations of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein sentence shall not include damages related apply to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third partyindemnification claims under Section 10.2(a)(i) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), the representations and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess warranties of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies Seller set forth in Section 4.2 or Section 4.6. Except in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect case of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waivesfraud, from and after the Closing, Purchaser shall not be obligated to indemnify the Seller Indemnified Parties pursuant to Section 10.2(b)(i) for any claim or cause amounts in excess of actionTwo Million Dollars ($2,000,000) in the aggregate; provided, known and unknown, foreseen and unforeseen, which it or any however that the limitations of this sentence shall not apply to indemnification claims under Section 10.2(b)(i) arising out of the other representations and warranties of Purchaser set forth in Section 5.2 and Section 5.9. (c) Except in the case of fraud, Seller shall not be obligated to indemnify the Purchaser Indemnified Parties may pursuant to Section 10.2(a)(i) for any Losses unless and until the Purchaser Indemnified Parties have against any Seller paid or any incurred Losses that exceed Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate, whereupon the Purchaser Indemnified Parties shall only be entitled to recover the Losses in excess of its Affiliatessuch amount, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms other limitations on indemnification set forth in this Agreement. Except in the case of fraud, Purchaser shall not be obligated to indemnify the Seller Indemnified Parties pursuant to Section 10.2(b)(i) for any Losses unless and conditions until the Seller Indemnified Parties have paid or incurred Losses that exceed Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate, whereupon the Seller Indemnified Parties shall only be entitled to recover the Losses in excess of such amount, subject to the other limitations on indemnification set forth in this Agreement. (d) Seller shall not be obligated to indemnify the Purchaser Indemnified Parties for claims arising out of a breach of the provisions contained covenants set forth in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII Section 6.8 for any amounts in excess of Twenty-Five Million Dollars ($25,000,000) in the aggregate. (e) Except in the case of fraud or actions brought by third parties, neither Seller nor Purchaser shall be made by obligated to indemnify the Sellers to Purchaser Indemnified Parties or by Purchaser to the SellersSeller Indemnified Parties, as the case may be, from and against any consequential (including lost profits or diminution in value), incidental, punitive, exemplary or other damages; provided, however, that the limitations of this Section 10.3(e) shall be deemed not apply to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting claims for consequential or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes incidental damages arising out of a breach of the covenants set forth in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8Section 6.8. (ef) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably Nothing in the event any provision of this Agreement is not performed in accordance with its specific terms shall limit, restrict or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and impair the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and of the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefParties arising out of fraud.

Appears in 1 contract

Samples: Asset Purchase Agreement (Blue Coat Systems Inc)

Indemnification Limitations. (ai) In no event The Sellers shall the Sellers not be liable to the Buyer Indemnified Parties for indemnification pursuant to under Section 10.2(a)(i11.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with in respect to of indemnification under Section 10.2(a)(i11.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 560,000 (the “Threshold AmountBasket”), in which case event the Purchaser Indemnified Parties Sellers shall only be entitled required to indemnification pay or be liable for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereofof the Basket. Notwithstanding anything herein to the contrary, the aggregate amount of all Losses for which the Sellers shall not (i) be required to make payments for indemnification liable pursuant to Section 10.2(a)(i11.2(a)(i) shall not exceed $5,600,000. Notwithstanding the foregoing, the limitations set forth in this Section 11.2(c)(i) shall not apply to Losses based upon, arising out of, with respect to, or by reason of any inaccuracy in or breach of any representation or warranty in Section 3.1, Section 3.2(a), Section 3.3, Section 3.25, or Section 3.26(b). (other than ii) In addition to the limitations set forth in Section 11.2(c)(i), payments of the Sellers pursuant to Section 11.2(a) in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything further limited to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of liability or damage to the Buyer Indemnified Party that remains after deducing therefrom any other Loss for which an indemnification claim has been made or could be made under any other representationinsurance proceeds, warrantyindemnity, covenantcontribution, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit similar payment actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Buyer Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation such claim, less any related costs and expenses, including the aggregate cost of pursuing any related insurance claims and any related increases in insurance premiums or breach other chargebacks (it being agreed that the Buyer Indemnified Party shall not have any obligation to seek to recover any insurance proceeds in connection with making a claim under this Article 11 and that, promptly after the realization of any warrantyinsurance proceeds, covenant indemnity contribution, or other provision contained similar payment, the Buyer Indemnified Party shall reimburse the Indemnifying Party for such reduction in this Agreement or in any certificate delivered pursuant hereto. Without limiting Losses for which the generality or effect of the foregoing, as a material inducement Buyer Indemnified Party was indemnified prior to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause realization of action, known and unknown, foreseen and unforeseen, which it or any reduction of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claimssuch Losses), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Stock Purchase Agreement (LIVE VENTURES Inc)

Indemnification Limitations. (a) In no event Neither Seller, on the one hand, nor Purchaser, on the other hand, shall be obligated to indemnify the Sellers be liable for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) hereunder unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(iliabilities, losses, claims, damages, costs or expenses (including, but not limited to, reasonable attorneys' fees) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds aggrieved party reaches One Hundred Thousand Dollars ($1,400,000 (the “100,000)(the "Threshold Amount"), in which case the Purchaser Indemnified Parties offending party shall be entitled obligated to indemnification indemnify only for the excess of the aggregate amount of all such liabilities, losses, claims, damages, costs or expenses over the Threshold Amount. Notwithstanding the foregoing, the limitations of this Section 17 shall not apply to the Excluded Damages and Seller shall be liable to Purchaser for all Losses Excluded Damages from the first dollardollar of Excluded Damages. For purposes of this Section 17, including both the Threshold Amount and "Excluded Damages" shall mean any amounts in excess thereof. Notwithstanding anything herein to the contraryliabilities, the Sellers shall losses, claims, damages, costs or expenses (including, but not limited to, reasonable attorneys' fees) (i) be required incurred by Purchaser arising from (A) matters pertaining to make payments taxes, title to the Assets, or any claim under or for indemnification pursuant to Section 10.2(a)(i) (other than in respect violation of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”)any Environmental Law, or (B) any liabilities or obligations of Seller that are retained or assumed by Seller under this Agreement, including without limitation, the Excluded Liabilities, and (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Seller arising from any liabilities expressly assumed by Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Capunder this Agreement. (b) In calculating amounts payable to an Indemnified Party hereunder, No party's liability under the indemnification provisions of this Agreement shall exceed the aggregate amount of Eight Million Dollars ($8,000,000), except, no such limitation shall apply to Seller's indemnification of Purchaser for any indemnified Losses shall be determined without duplication liabilities, losses, claims, damages, costs or expenses (including, but not limited to, reasonable attorneys' fees) arising from any claim under or for violation of any other Loss for which an indemnification claim has been made or could be made under Environmental Law, and any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with amounts paid in respect to such Losses (after deduction for any cost of collectionliabilities, deductiblelosses, retroactive premium adjustmentclaims, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein costs or expenses shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each be counted toward such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claimlimitation. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Asset Purchase Agreement (Raven Industries Inc)

Indemnification Limitations. (a) In Notwithstanding anything to the contrary contained in this Agreement, in no event shall the Sellers Seller be liable for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)7.2(a)(i) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i7.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 the amount set forth on Part I of Schedule 7.4 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both in excess of the Threshold Amount and any amounts Amount; provided, however, that the limitation set forth in excess thereof. Notwithstanding anything herein to the contrary, the Sellers this sentence shall not (i) be required apply with respect to make payments any claim for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representationsany breach of Sections 4.1 (Corporate Status), 4.2 (Authority), 4.7 (Personal Properties) in an aggregate amount in excess of $18,000,000 and 4.8 (the No Brokers) (each, a Indemnification CapSeller Fundamental Representation and Warranty”). Notwithstanding the foregoing, or (ii) Seller shall not be liable for indemnification with respect to any Loss from a claim by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect hereunder of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 the amount set forth on Part II of Schedule 7.4 (each, a “De Minimis Loss”) (and all such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless Amount; provided, however, that the limitations set forth in this sentence shall not apply with respect to any claim for indemnification in respect of any Seller Fundamental Representation and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Warranty. (b) Notwithstanding anything to the contrary hereincontained in this Agreement, Sellers in no event shall have ninety (90Purchaser be liable for indemnification pursuant to Section 7.2(b)(i) days after unless and until the receipt aggregate amount of an indemnification claim for any Loss by the Purchaser Indemnified Parties in all Losses with respect of to Section 4.20(b7.2(b)(i) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Seller Indemnified Parties arising out exceeds the Threshold Amount, in which case the Seller Indemnified Parties shall be entitled to indemnification for all Losses in excess of such alternative shallthe Threshold Amount; provided, subject however, that the limitation set forth in this sentence shall not apply with respect to the termsany claim for indemnification in respect of any breach of Sections 5.1 (Corporate Status) and 5.2 (Authority) (each, conditions a “Purchaser Fundamental Representation and limitations contained herein, be considered indemnifable LossesWarranty”). Notwithstanding the foregoing, Purchaser shall not be liable for indemnification under Section 7.2(b)(i) with respect to any Loss from a claim by the Seller Indemnified Parties hereunder of less than the De Minimis Loss and all such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount; provided, however, that the limitations set forth in this sentence shall not apply with respect to any claim for indemnification in respect of any Purchaser Fundamental Representation and Warranty, payment shortfalls, or audit findings. (c) Notwithstanding anything to the contrary contained in this Agreement, in no event shall Seller be required to make payments for indemnification with respect to any breaches of any representations and warranties or have any other Liability or obligation pursuant to Section 10.2(b)(i) this Agreement in an aggregate amount in excess of the Indemnification Capamount set forth on Part III of Schedule 7.4; provided, however, that the limitations set forth in this sentence shall not apply with respect to any claim in respect of any Seller Fundamental Representation and Warranty, which shall not exceed an aggregate amount in excess of the Purchase Price of this Agreement. (bd) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered amounts recoverable by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy of Seller relating to the period prior to the date hereof with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), and (ii) any actual prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell Seller may, in its sole discretion, require the any Indemnified Party to grant to Honeywell Seller an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII 8 is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, 8 the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the such Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII 7 had such determination been made at the time of such payment. (ce) Subject to the other provisions of this Article XSection 7.4, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser Seller be liable for any punitive damages or any special, incidental, indirect or consequential damages of any kind or nature (including lost profits, damages resulting from business interruption or any damages, except losses that are imposed on or incurred by any customers of Purchaser or any other third party that does business with Purchaser, or losses arising out of the operation or use of the Licensed Intellectual Property, including the infringement of third party Intellectual Property rights by the Licensed Products or the use or inability to use any Licensed Intellectual Property), or any diminution in value or losses based upon any multiplier of earnings or any other valuation metric, regardless of the extent form of action through which such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claimsought. (df) Notwithstanding anything else contained in this Agreement to the contrary, after the Closingexcept with respect to any equitable remedies, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII 7 shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements Agreement and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby)hereby, including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers other parties hereto entering into this Agreement, Purchaser hereby waives, from and after the Closing, waives any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties its Affiliates may have against any Seller or any of its Affiliatesthe other parties hereto, including without limitation under the common law or federal or state securities Lawslaws, trade regulation Laws laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters)laws, by reason of this Agreement, the events giving rise to this Agreement and the transactions provided for hereinherein or contemplated hereby or thereby, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII8. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and 7 shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything . (g) An Indemnifying Party shall not be liable under this Article 7 for any Losses relating to any matter to the contrary herein, nothing extent that the amount of such matter is reflected in the inventory adjustment under Section 1.5. (h) The obligations of the Indemnifying Party to provide indemnification under this Article X 7 shall limit any claim be terminated, modified or abated as appropriate to the extent that the underlying Loss, cause of action or other claim: (i) would not have arisen but for a knowing voluntary act or knowing failure to act that is carried out by a Purchaser or at the express written request of, or with the express written approval or concurrence of, or with the knowing assistance of, the Indemnified Party, (ii) is based, in whole or in part, on the fraud, bad faith or willful misconduct of the Indemnified Party alleging or any of its Affiliates, (iii) is a Loss, cause of action or claim with respect to which the Indemnified Party or any of its Affiliates has taken action (or caused action to be taken) to accelerate the time period in which such matter is asserted or payable or (iv) is primarily a possible or potential Loss, cause of action or claim that Sellers defrauded the Indemnified Party believes may be asserted rather than a Loss, cause of action or claim that has, in fact, been filed of record against such Person Indemnified Party or paid or incurred by intentionally omitting or misstating any disclosure such Indemnified Party. (i) No Indemnified Party shall have a right to recover Losses hereunder in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation claim if such claim would not have arisen but for a change after the Effective Date in legislation or warranty, which claims shall, accounting policies or a change after the Effective Date in any case, be subject interpretation of applicable Law as determined by a court or pursuant to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8an administration rule making decision. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Asset Purchase and License Agreement (Innovative Solutions & Support Inc)

Indemnification Limitations. Subject to Section 8.4(b): (a) In no event shall the Sellers be liable for indemnification pursuant With respect to Section 10.2(a)(i8.2(a), (i) (other than x) in respect the case of any indemnification claim resulting from, arising out of or in connection with any inaccuracies or misrepresentations in, or breaches of, any of the representations Specified Representations, from and warranties after the Effective Time, (y) in the case of any indemnification claim resulting from, arising out of or in connection with Section 4.1 8.2(a)(ii) based on a willful or Knowing failure by the Company, or (Corporate Statusz) in the case of any indemnification claim resulting from, arising out of or in connection with clause (iii) through clause (v), inclusive, of Section 4.2 (Authority8.2(a), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, Indemnifying Parties shall not be obligated to indemnify the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”)Merger Consideration actually paid by Parent to such Indemnifying Party, or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregatecase of indemnification for all other claims under Section 8.2(a), less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and the Indemnifying Parties shall not be aggregated for purposes of obligated to indemnify the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery excess of any products that are amounts then held in the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification CapEscrow Fund. (b) In calculating amounts payable With respect to an Section 8.2(a)(i) (other than the Specified Representations) or Section 8.2(a)(ii) (other than a claim based on a willful or Knowing failure by the Company), no Indemnifying Party shall be required to indemnify any Indemnified Party hereunder, Parties hereunder until such time as the aggregate amount of any indemnified Losses for which the Indemnified Parties are entitled to indemnification pursuant to this Agreement exceeds $1,000,000, at which time the Indemnifying Parties shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by obligated to indemnify the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to Parties for the full amount of all such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”including the $1,000,000 referred to in this section), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment subject to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses limitations set forth in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject The Indemnifying Parties shall not be obligated to indemnify the other provisions Indemnified Parties pursuant to clause (i) of Section 8.2(a) (but specifically excluding clause (ii) through clause (v), inclusive, of Section 8.2(a)) for any indemnification claim that is made after the Applicable Expiration Date of the representation and warranty that forms the basis for such indemnification claim; provided, however, that such indemnification obligations shall not terminate with respect to any item as to which any Indemnified Parties shall have, before the Applicable Expiration Date of the representation and warranty that forms the basis for such indemnification claim, previously made a bona fide claim by validly delivering a Claim Certificate of such indemnification claim pursuant to this Article XVIII. (d) Each of Parent and Merger Sub acknowledges and agrees that, but from and after the Effective Time, notwithstanding any other provision of this AgreementAgreement to the contrary (but subject to Section 8.2(c) and Section 8.4(b)), (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties Indemnified Parties with respect to claims for Losses or otherwise in connection with, arising out of or resulting from the matters set forth in Section 8.2(a) will be in accordance with, and limited solely to indemnification under, the provisions of this Article VIII, and (ii) Parent and Merger Sub each hereby release, acquit and discharge forever any and all claims and remedies that the Indemnified Parties may have against the Company and the Company Securityholders under applicable Laws, including Environmental Laws, and agrees to rely solely and exclusively on this Article VIII to remedy any Losses incurred pursuant to any of the matters set forth in Section 8.2(a). (whether in contract or in torte) From and after the Effective Time, except for any indemnification claims resulting from, arising out of or in connection with this Agreementthe matters described in clauses (x) through (z), inclusive, of Section 8.3(a)(i), each of Parent and Merger Sub further acknowledges and agrees that the Ancillary Agreements Escrow Fund shall be the sole and exclusive source of funds for satisfaction of all claims by Indemnified Parties for Losses or otherwise in connection with, arising out of or resulting from the transactions contemplated hereby and thereby (other than remedies matters set forth in the Ancillary Agreements with regard to the transactions contemplated therebySection 8.2(a), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Merger Agreement (Logitech International Sa)

Indemnification Limitations. (a) In no event No amount shall the Sellers be liable payable to an Indemnified Party in satisfaction of any claim for indemnification pursuant to Section 10.2(a)(i9.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) above unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on paid, incurred, sustained or incurred by the Purchaser Indemnified Parties exceeds accrued equal or exceed $1,400,000 894,375 (the “Threshold AmountThreshold”), at which time the Indemnifying Party shall indemnify the Indemnified Party for Losses in which case excess of the Purchaser Threshold; it being understood that the Threshold shall not be applicable with respect to, and each Indemnified Parties Party shall be entitled to indemnification be indemnified, for all Losses arising out of or resulting from the first dollar, including both the Threshold Amount and indemnification obligation with respect to any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable claim for indemnification with respect to an Excluded Matter (including, for the avoidance of doubt any Loss claim for Fraud by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amountSellers). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the The maximum aggregate amount of any indemnified indemnifiable Losses shall that may be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party Parties against the Indemnifying Parties (i) under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related theretoSection 9.2(a)(i) (eachexcluding for the avoidance of doubt those arising out of, a “Collateral Source”)or in connection with Fundamental Representations) shall be the General Indemnity Escrow Amount, (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital the Scheduled Indemnities shall be the applicable caps set forth on Schedule 9.2(a)(vi) and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in all indemnifiable matters under Section 9.2(a) (including, for the year avoidance of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIIIdoubt, the Indemnified Party Excluded Matters and the foregoing clauses (i) and (ii)) shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such paymentbe $211,000,000. (c) Subject Each party hereto (on behalf of itself and the Indemnified Parties) acknowledges the applicability of the common law duty to mitigate damages. (d) An Indemnified Party shall not be entitled to recover any Loss arising pursuant to one provision of this Agreement to the other provisions of this Article X, but notwithstanding extent that the Indemnified Parties have already recovered the same Losses pursuant to any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers Agreement or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after extent that Losses in connection with an indemnifiable matter reduced the Closing, any claim or cause Adjusted Share Purchase Price by virtue of action, known and unknown, foreseen and unforeseen, which it or any being specifically included in the calculation of the other Purchaser Indemnified Parties adjustments set forth in Section 2.5 hereof, the same amount of such Losses may have against any Seller or any of its Affiliates, including without limitation not be recovered again under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8IX. (e) The Sellers amount of any Losses otherwise eligible for indemnification under this Article IX will be reduced by the amount of any insurance proceeds (net of any reasonable out of pocket expenses in investigating, prosecuting and Purchaser acknowledge collecting such amounts and agree that net of any increase to the other parties would be damaged irreparably applicable insurance premiums) actually recovered by an Indemnified Party in respect thereof. If an Indemnified Party actually received insurance proceeds with respect to such Losses at any time subsequent to any indemnification payment actually made by the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled Share Seller pursuant to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would then Buyers will reimburse the General Indemnity Escrow Fund (or if applicable, the Share Seller) the amount of the Losses for which the Share Seller indemnified such Buyer Indemnified Party, net of any costs incurred by such Buyer Indemnified Party in investigating, prosecuting and collection of such amounts and net of any increase to the applicable insurance premiums, within thirty (30) Business Days of receipt of such insurance proceeds. It is hereby clarified that Buyer Indemnified Parties shall be inadequate under no obligation to seek recourse from any insurance policy, except for the obligations to seek recourse from the R&W Insurance Policy as set forth in this Article IX and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition subject to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefterms.

Appears in 1 contract

Samples: Draft Agreement (Tremor International Ltd.)

Indemnification Limitations. Notwithstanding anything to the contrary in this Agreement: (a) In no event shall the Sellers be liable for indemnification pursuant Other than (i) with respect to Section 10.2(a)(i) (other than in respect Losses attributable to breaches of the representations and warranties set forth in the Fundamental Representations, (ii) with respect to Losses attributable to breaches or nonfulfillment of any covenant or agreement to be performed after the Closing, (iii) with respect to Losses attributable to breaches or nonfulfillment of any covenant, agreement or other obligation set forth in Section 4.1 6.15, (Corporate Status)iv) with respect to Losses arising under Section 9.01(d) or (v) with respect to circumstances in which Seller is finally determined by a court of competent jurisdiction to have willfully and knowingly committed fraud against Purchaser with specific intent to deceive and mislead Purchaser regarding the representations and warranties expressly set forth in Article II and Article III of this Agreement: (w) neither Purchaser’s Indemnified Persons nor Seller’s Indemnified Persons may assert any claim for Losses under Section 9.01 or Section 9.02, Section 4.2 as applicable, (Authority), A) except to the first two sentences extent that any such claim is in an amount in excess of each of Section 4.4(a) and 4.4(b) $100,000 (Capitalization), Section 4.7 (Taxesthe “Claim Threshold”), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)B) unless and until the aggregate amount of all Losses such claims by such Purchaser’s Indemnified Persons or Seller’s Indemnified Persons, as applicable, under this Agreement exceeds $15,000,000 (Fifteen Million Dollars) (the “Deductible”), and then Purchaser’s Indemnified Persons or Seller’s Indemnified Persons, as applicable, may assert claims only for the excess of such aggregate claims over the Deductible; provided, however, neither the Claim Threshold nor the Deductible shall apply to claims for indemnification arising under Section 9.01(b) (with respect to Losses attributable to breaches of the representations and warranties set forth in Section 10.2(a)(i3.09), and (x) that are imposed on or incurred by in no event shall the aggregate liability of Seller for all claims of Losses under Section 9.01 exceed $25,000,000 (Twenty-Five Million Dollars). The aggregate amount of Losses for which the Purchaser Indemnified Parties exceeds $1,400,000 Persons shall be indemnified by Seller for any claim for indemnification under Section 9.01 shall not exceed the Purchase Price. (the “Threshold Amount”)b) The Indemnified Persons shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Persons are entitled or may be entitled to indemnification under this Article IX, in which case the Purchaser and no Indemnified Parties Person shall be entitled to indemnification for all any Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers extent arising from such Indemnified Person’s failure to mitigate such Losses. The amount of any Losses for which indemnification is provided for under this Article IX shall not be (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to offset by any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under Persons as a result of any indemnification agreements or arrangements with by any third parties or under party and any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation proceeds or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery amounts received by the Indemnified Party Persons from any Person third parties with respect to such Losses, (ii) reduced to take account of any tax benefit realized by the Indemnified Party arising from the incurrence or payment of any such Loss, in each case on a “with and without” basis and (iii) reduced by any amounts recovered, to be recovered or recoverable over time through any rate order issued by the Alabama Public Service Commission (including pursuant to general provisions of any rate order, tariff or mechanism applicable to the Company). Purchaser and Seller agree to (and agree to cause the other Indemnified Persons to) use commercially reasonable efforts to make any claims for insurance and/or indemnification available from any third party and/or pursue and comply with any rate order or any general rate order, tariff or mechanism with respect to Losses for which any Indemnified Person will or may seek indemnification hereunder and to diligently pursue such claims in good faith. If any such insurance proceeds and/or other amounts are received and/or authorized for deferred accounting by any Purchaser’s Indemnified Person after receipt of any indemnification payment pursuant to this Article IX, Purchaser shall promptly repay to Seller such Loss being included portion of such indemnification payment equal to the amounts so recovered or realized. (c) Any indemnification payments made pursuant to Section 9.01 or Section 9.02 shall be treated as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f)for all tax purposes, or (iii) any Tax Benefit actually received unless otherwise required by a Purchased Entity with respect to such Losses in final determination (which shall include the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement execution of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities ClaimForm 870-AD or successor form). (d) The amount of the Loss arising out of any item included as a liability in calculating Working Capital shall be calculated net of the amount so included. The amount of the Loss arising out of any reduction in value of any Current Asset acquired at the Closing shall be calculated net of the reported value of such Current Asset used in calculating Working Capital. Notwithstanding anything else contained in any other provision of this Agreement to the contrary, after the Closing, no Purchaser’s Indemnified Person shall be entitled to indemnification and specific performance pursuant under this Article IX for any Losses to the provisions of extent such Losses are reflected in Closing Indebtedness or in Closing Working Capital. (e) Notwithstanding anything to the contrary in this Agreement, neither the Purchaser’s Indemnified Persons nor the Seller’s Indemnified Person shall be entitled to indemnification under this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties IX with respect to any losses, liabilities, damages or expenses that are in the nature of punitive, consequential, special, treble or indirect damages or damages based on any multiple, including business interruption, loss of future revenue, profits or income, or loss of business reputation or opportunity (in each case, except to the extent payable to third parties), in each case of any kind or nature, regardless of the form of action through which any of the foregoing are sought. (f) Purchaser acknowledges and all claims (whether in contract or in tort) arising out covenants to, and agrees with, Seller, that Purchaser, as of or in connection with the date of this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect has no Knowledge of any misrepresentation facts or circumstances that would serve as the basis for a claim by any Purchaser Indemnified Person against Seller based upon a breach of any warrantyof the representations and warranties of Seller or the Company contained in this Agreement. Purchaser shall be deemed to have waived, covenant and hereby does waive, in full any breach of representations and warranties of Seller or other provision the Company of which Purchaser has Knowledge as of the date of this Agreement. (g) Notwithstanding anything to the contrary in this Agreement, no Purchaser’s Indemnified Person shall be entitled to indemnification under this Article IX with respect to any breach or inaccuracy of any representation or warranty of Seller or the Company attributable to an event occurring or a matter arising after the date of this Agreement (or, in the case of events or matters that are based on Seller’s or the Company’s Knowledge, such events or matters that first come to Seller’s or the Company’s Knowledge after the date hereof), only if all of the following occur: (i) Seller provides written notice to Purchaser prior to the Closing, describing such breach or inaccuracy, (ii) as a result of such breach or inaccuracy, a condition contained in Section 7.02(a), Section 7.02(b) or Section 7.02(e), would not be satisfied, (iii) Seller simultaneously and irrevocably informs Purchaser in writing that Purchaser is not required to consummate the Transactions and (iv) the Closing occurs. Notwithstanding the foregoing provisions of this Section 9.06(g), if the Closing would otherwise occur at a time within three (3) Business Days of the last notice provided by Seller under sub-clause (i) above, Purchaser shall have the unilateral right to extend the Closing by not more than three (3) Business Days after the date on which Purchaser last receives any such notice, and, if such extension would cause the Closing to occur after the Outside Date, to extend the Outside Date by an equal amount of time. (h) For purposes of determining the Loss attributable to a breach of any representation or warranty set forth in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, the terms “Company Material Adverse Effect,” “Seller Material Adverse Effect,” “Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws Material Adverse Effect,” “material adverse effect,” “material” or other Laws (including any relating to Intellectual Propertyterms of a similar nature, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions extent contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement given no effect and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that shall be disregarded in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relieftheir entirety.

Appears in 1 contract

Samples: Stock Purchase Agreement (Alabama Gas Corp)

Indemnification Limitations. (a) In Notwithstanding the provisions of Section 10.2, no event Seller or Warrant Holder shall the Sellers be liable for required to indemnify any Person entitled to indemnification pursuant to Section thereunder, and shall not have any liability: (i) under Sections 10.2(a)(i) or (other than in respect of the representations and warranties in Section 4.1 (Corporate Statusb)(i), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect subject to Section indemnification under Sections 10.2(a)(i) or (b)(i) exceeds, on a cumulative basis and excluding any individual claim for Losses that are imposed on or incurred by does not exceed the Purchaser Indemnified Parties exceeds Minimum Amount (as defined below), an amount equal to $1,400,000 2,160,000 (the “Threshold AmountBasket”), in which case the Purchaser Indemnified Parties such Seller or Warrant Holder, as applicable, shall be entitled liable for the full amount of such Losses to indemnification be paid by such Seller or Warrant Holder, as applicable, as provided for all Losses herein from the first dollar, including both dollar thereof; provided that claims for indemnification arising out of a breach of any of the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein Fundamental Reps or the Tax Reps shall not be subject to the contrary, the Sellers Basket but instead shall not be recoverable on a dollar-for-dollar basis; and (iii) be required to make payments for indemnification pursuant to Section under Sections 10.2(a)(i) (other than in respect of the Excluded Representationsor 10.2(b)(i) in an aggregate amount in excess of $18,000,000 45,000,000; provided, that claims arising out of a breach of any of the Fundamental Reps or the Tax Reps shall not be subject to such cap. (b) Notwithstanding anything to the contrary in this Agreement: (i) no indemnity shall be payable by any Seller or Warrant Holder under Sections 10.2(a)(i) or (b)(i) with respect to any individual claim for Losses that does not exceed $10,000 (the “Indemnification CapMinimum Amount”), or ; (ii) except in cases involving fraud or intentional misrepresentation, the total aggregate amount in respect of which the Sellers and Warrant Holders shall be liable for indemnification with respect to under any provision of Section 10.2 and Section 8.4 shall not exceed the aggregate cash consideration actually received by the Sellers and Warrant Holders under Article II; (iii) under no circumstances will any Seller or Warrant Holder be liable for indemnification under any provision(s) of this Agreement in excess of the aggregate cash consideration actually received by such Seller or Warrant Holder under Article II, except in the case involving fraud or intentional misrepresentation committed by such Seller or Warrant Holder; (iv) no Seller or Warrant Holder shall be liable for indemnification under any provision of Section 10.2 for any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out was taken into account in the calculation of the same facts and circumstances are, Closing Non-Cash Working Capital or taken into account in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes calculation of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers Purchase Price; and (v) no party shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which liability to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made party under this Agreement or could be made under any other representation, warranty, covenant, the Ancillary Agreements or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and or thereby for any punitive damages (other than remedies set forth in the Ancillary Agreements with regard any such punitive damages payable to the transactions contemplated therebya third Person under a Third Party Claim), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Securities Purchase Agreement (Neustar Inc)

Indemnification Limitations. (a) In Notwithstanding anything to the contrary contained in this Agreement, in no event shall the Sellers Seller be liable for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)7.2(a)(i) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i7.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds One Hundred Fifty Thousand Dollars ($1,400,000 150,000.00) (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both in excess of the Threshold Amount and any amounts Amount; provided, however, that the limitation set forth in excess thereof. Notwithstanding anything herein to the contrary, the Sellers this sentence shall not (i) be required apply with respect to make payments any claim for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representationsany breach of Sections 4.1 (Corporate Status) in an aggregate amount in excess of $18,000,000 and 4.2 (the Authority) (each, a Indemnification CapSeller Fundamental Representation and Warranty”). Notwithstanding the foregoing, or (ii) Seller shall not be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect hereunder of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than Two Thousand Five Hundred Dollars ($15,000 2,500.00) (each, a “De Minimis Loss”) (and all such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless Amount; provided, however, that the limitations set forth in this sentence shall not apply with respect to any claim for indemnification in respect of any Seller Fundamental Representation and until such Losses Warranty, Liabilities arising out of the same facts or circumstances exceed the De Minimis Loss amountrelating to warranty or product recall claims covered under 7.2(a)(iii). , or Permitted Encumbrances. (b) Notwithstanding anything to the contrary hereincontained in this Agreement, Sellers in no event shall have ninety (90Purchaser be liable for indemnification pursuant to Section 7.2(b)(i) days after unless and until the receipt aggregate amount of an indemnification claim for any Loss by the Purchaser Indemnified Parties in all Losses with respect of to Section 4.20(b7.2(b)(i) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Seller Indemnified Parties arising out exceeds Threshold Amount, in which case the Seller Indemnified Parties shall be entitled to indemnification for all Losses in excess of such alternative shallthe Threshold Amount; provided, subject however, that the limitation set forth in this sentence shall not apply with respect to the termsany claim for indemnification in respect of any breach of Sections 5.1 (Corporate Status) and 5.2 (Authority) (each, conditions a “Purchaser Fundamental Representation and limitations contained herein, be considered indemnifable LossesWarranty”). Notwithstanding the foregoing, Purchaser shall not be liable for indemnification under Section 7.2(b)(i) with respect to any Loss by the Seller Indemnified Parties hereunder of less than the De Minimis Loss and all such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount; provided, however, that the limitations set forth in this sentence shall not apply with respect to any claim for indemnification in respect of any Purchaser Fundamental Representation and Warranty, royalty payment shortfalls or audit findings. (c) Notwithstanding anything to the contrary contained in this Agreement, in no event shall Seller be required to make payments for indemnification or have any other Liability or obligation pursuant to Section 10.2(b)(i) this Agreement in an aggregate amount in excess of One Million Five Hundred Thousand US Dollars ($1,500,000); provided, however, that the Indemnification Caplimitations set forth in this sentence shall not apply with respect to any claim in respect of any Seller Fundamental Representation and Warranty or matters relating to fraud by Seller. (bd) Notwithstanding anything to the contrary contained in this Agreement, in no event shall Purchaser be required to make payments for indemnification or have any other Liability or obligation pursuant to this Agreement in an aggregate amount in excess of Five Million US Dollars ($5,000,000); provided, however, that the limitations set forth in this sentence shall not apply with respect to any claim in respect of any Purchaser Fundamental Representation and Warranty, matters relating to fraud by Purchaser, Purchaser’s failure to fulfill its payment obligations under this Agreement or the Transition Services Agreement, Purchaser’s obligations of indemnity under 7.2 for Assumed Contracts and Retained Interests, or Purchaser’s material breach of the Transition Services Agreement. (e) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered amounts recoverable by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy of Seller relating to the period prior to the date hereof with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), and (ii) any actual prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell Seller may, in its sole discretion, require the any Indemnified Party to grant to Honeywell Seller an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII 7 is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, 7 the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the such Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII 7 had such determination been made at the time of such payment. (cf) Subject Except for (i) claims arising under an allegation of breach by Purchaser of the license provisions set forth in Section 2.1, (ii) claims arising under an allegation of breach of the obligations by Purchaser or Seller regarding Confidential Information set forth in Section 2.2, or (iii) claims relating to Purchaser’s obligations of indemnity under 7.2 for Assumed Contracts and Retained Interests and subject to the other provisions of this Article XSection 7.4, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers Seller or Purchaser be liable for any punitive damages or any special, incidental, indirect or consequential damages of any kind or nature (including lost profits, damages resulting from business interruption or any damages, except losses that are imposed on or incurred by any customers of Purchaser or any other third party that does business with Purchaser, or losses arising out of the operation or use of the Licensed Intellectual Property, including the infringement of third party Intellectual Property rights by the Licensed Products or the use or inability to use any Licensed Intellectual Property), or any diminution in value or losses based upon any multiplier of earnings or any other valuation metric, regardless of the extent form of action through which such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claimsought. (dg) Notwithstanding anything else contained in this Agreement to the contrary, after except in the Closingcase of fraud or with respect to any equitable remedies, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII 7 shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements Agreement and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby)hereby, including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and 7 shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything . (h) An Indemnifying Party shall not be liable under this Article 7 for any Losses relating to any matter to the contrary herein, nothing extent that the amount of such matter is reflected in the inventory adjustment under Section 1.5. (i) The obligations of the Indemnifying Party to provide indemnification under this Article X 7 shall limit any claim be terminated, modified or abated as appropriate to the extent that the underlying Loss, cause of action or other claim: (i) would not have arisen but for a voluntary act or failure to act that is carried out by a Purchaser or at the express written request of, or with the express written approval or concurrence of, or with the knowing assistance of, the Indemnified Party, (ii) is based, in whole or in part, on the fraud, bad faith or willful misconduct of the Indemnified Party alleging or any of its Affiliates, (iii) is a Loss, cause of action or claim with respect to which the Indemnified Party or any of its Affiliates has taken action (or caused action to be taken) to accelerate the time period in which such matter is asserted or payable or (iv) is primarily a possible or potential Loss, cause of action or claim that Sellers defrauded the Indemnified Party believes may be asserted rather than a Loss, cause of action or claim that has, in fact, been filed of record against such Person Indemnified Party or paid or incurred by intentionally omitting or misstating any disclosure such Indemnified Party. (j) No Indemnified Party shall have a right to recover Losses hereunder in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation claim if such claim would not have arisen but for a change after the Effective Date in legislation or warranty, which claims shall, accounting policies or a change after the Effective Date in any case, be subject interpretation of applicable Law as determined by a court or pursuant to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8an administration rule making decision. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Asset Purchase and License Agreement (AstroNova, Inc.)

Indemnification Limitations. 7.6.1 The Sellers shall have no indemnification obligation under this Article 7 unless the amount of such Losses incurred by Purchaser with respect to an individual claim exceeds €100,000 (athe “Minimum Threshold”) In no event shall at which point the Sellers be liable shall indemnify Purchaser for indemnification pursuant to Section 10.2(a)(i) (other than in respect the amount of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until such Losses exceeding € 100,000. The Minimum Threshold shall not apply if the aggregate amount of all Losses with respect for which Purchaser is entitled to Section 10.2(a)(ibe indemnified under this Article 7 equals or exceeds €175,000 the “Secondary Threshold”) that are imposed at which point the Sellers shall indemnify Purchaser for the amount of such Losses exceeding € 175,000. For the calculation of the Secondary Threshold only individual Losses exceeding € 25,000 shall be taken into account. 7.6.2 The aggregate amount of all the Sellers’ liability under this Article 7 shall not exceed the Purchase Price (being the Cash Purchase Price plus the value of the Purchaser Shares calculated by reference to the closing price on the date on which the Registration Statement referred to in the Registration Rights Agreement mentioned in Schedule 6 becomes effective) and the maximum liability under this Article 7 for any particular Seller shall be such Seller’s Allocable Portion of the Purchase Price as set out in Schedule 13 (being the Seller’s Allocable Portion of the Cash Purchase Price plus the value of the Purchaser Shares calculated by reference to the closing price on the date on which the Registration Statement referred to in the Registration Rights Agreement mentioned in Schedule 6 becomes effective). 7.6.3 Notwithstanding the Purchaser’s rights under the Comfort Letter, no other representations and warranties other than the representations and warranties set forth herein may form the basis of, or incurred be pleaded in connection with, any claim by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement. 7.6.4 If the same action, fact or event can lead to indemnification under several paragraphs of the representations and warranties provided by Sellers, the Ancillary Agreements and Purchaser can only be indemnified once. 7.6.5 In asserting a claim hereunder the transactions contemplated hereby and thereby (other than remedies set forth in Purchaser shall use its commercially reasonable efforts to mitigate any Losses upon which the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of claim is based. 7.6.6 Notwithstanding the foregoing, the Sellers have no liability for Losses under this Article 7 if and to the extent: (a) the matter giving rise to the claim arises (in whole or in part) from an event, circumstance, act, transaction, arrangement or omission occurring after the Closing Date; (b) the claim is attributable (in whole or in part) to, or is increased as a material inducement to result of (i) the Sellers entering passing or coming into this Agreementforce of, Purchaser hereby waivesor any change in, from and after the ClosingClosing Date, any claim or cause of action, known and unknown, foreseen and unforeseen, which it law or any administrative practice of the other Purchaser Indemnified Parties may have against any Seller public authority or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure increase in the Disclosure Schedule where such omission rates of tax or misstatement constitutes a breach in any material respect impositions of any express representation or warranty, which claims shalltax, in any casesuch case not actually in force on the Closing Date or (ii) any change after the Closing Date of any generally accepted interpretation of any legislation or regulation; (c) the claim is attributable (in whole or in part) to, be subject or is increased as a result of a change made after the Closing Date in the accounting policies or accounting or commercial practices or any tax reporting practice or the length of any accounting period for tax purposes of the Purchaser or the Company; or (d) the fact, matter or circumstance giving rise to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. claim (ein whole or in part) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably has been disclosed (or deemed disclosed) in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have or the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefSchedules.

Appears in 1 contract

Samples: Sale and Purchase Agreement (Terremark Worldwide Inc)

Indemnification Limitations. (a) In no event shall the Sellers be liable Except as provided in Section 8.2(b), any and all claims for indemnification hereunder shall be made by Buyers in writing as soon as practicable after Buyers become aware of such claim, and shall describe in reasonable detail the nature of the claim and provide a good faith estimate of the amount claimed; PROVIDED that the failure to provide such notice shall not prejudice Buyers' rights hereunder except to the extent that such failure prejudices Sellers with respect to the Losses. Sellers' obligation to indemnify Buyers pursuant to this Section 8 shall terminate twelve (12) months following the Closing Date; PROVIDED, however, that all claims for which a claim has been submitted to Sellers within such twelve (12) month period shall terminate only upon resolution of Sellers' obligation to indemnify Buyers' for such claims in accordance with this Section 8; and PROVIDED further that Sellers' obligation to indemnify Buyers with respect to liabilities for Taxes and environmental matters shall terminate pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a8.2(b) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to liabilities for a breach of Section 10.2(a)(i4.3 shall not terminate. (b) Any and all claims for indemnification hereunder with respect to liabilities for Taxes shall be made by Buyers in writing as soon as possible after such liability has been established by any competent Governmental Authority; PROVIDED that are imposed the failure to provide such notice shall not prejudice Buyers' right hereunder except to the extent that such failure prejudices Sellers with respect to the Losses. Sellers' obligation to indemnify Buyers with respect to such liability shall survive as long as applicable statute of limitations has not expired and for three (3) months thereafter. Sellers' obligation to indemnify Buyers with respect to a claim for breach of Section 4.18 (environmental matters) shall terminate on or incurred by January 1, 2000. (c) Notwithstanding the Purchaser Indemnified Parties exceeds $1,400,000 above, Sellers shall not be obligated to indemnify Buyers for the first USD 200,000 in Losses under this Section 8 (the “Threshold Amount”"Deductible"), except for losses under Sections 8.2(b) and 4.3 as to which, in which case each case, the Purchaser Indemnified Parties Deductible shall not apply. Sellers shall be entitled obligated to indemnification indemnify Buyers pursuant to Section 8.1 hereof only when such Losses, except for all losses under Section 8.2(b), exceed, in the aggregate, the amount of the Deductible and with respect to Losses from the first dollar, including both the Threshold Amount under Sections 8.2(b) and 4.3 upon any amounts in excess thereof. occurrence thereof ("Qualified Losses"). (d) Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) Losses for which Sellers may be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay indemnify Buyers pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein Agreement shall not include damages related to lost profits, diminution in value exceed Three Million US dollars (including multiple of earnings or similar metrics for measuring damagesUSD 3,000,000), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each ; PROVIDED that such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser losses demanded under Section 8.2(b) and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim4.3. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Share Purchase Agreement (Waterlink Inc)

Indemnification Limitations. (a) In no event shall the Sellers Honeywell be liable for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)9.2(a)(i) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i9.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds Eight Million Dollars ($1,400,000 8,000,000) (the “Threshold Amount”"DEDUCTIBLE AMOUNT"), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses in excess of the Deductible Amount; PROVIDED, HOWEVER, that any Losses in respect of breaches of the representations and warranties contained in Sections 3.4, 3.7 and 3.11 (the "EXCLUDED REPRESENTATIONS") shall be recoverable from the first dollardollar of Loss and shall not be subject to the Deductible Amount (and, including both as such, shall not reduce the Threshold Deductible Amount and any amounts in excess thereofotherwise available). Notwithstanding anything herein to the contraryforegoing, the Sellers Honeywell shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations9.2(a)(i) in an aggregate amount in excess of One Hundred Sixty Million Dollars ($18,000,000 (the “Indemnification Cap”160,000,000), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect connection with breaches of any of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i9.2(b)(i) in an aggregate amount in excess of the Indemnification CapOne Hundred Sixty Million Dollars ($160,000,000). (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made is actually recovered pursuant to Article VII or could be made under any other representation, warranty, covenant, or agreement this Article IX and shall be computed net of (i) payments actually recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that, without affecting the Indemnified Party's right to indemnification hereunder (unless proceeds are recovered), the Indemnified Party shall, where appropriate and commercially reasonable, make claims under applicable insurance policies, other than self-insurance or retrospective policies but that the term “consequential damages” used herein Indemnified Party shall not include damages related have no obligation to lost profitsengage in any litigation in connection therewith); PROVIDED, diminution in value (including multiple of earnings or similar metrics for measuring damages)HOWEVER, nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, shall have no obligation to make any claim under any insurance policy in good faith, (x) agree upon what portion respect of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Losses related to any Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts Liability or Indebtedness for which Honeywell is obligated to cause the applicable Governmental Authority indemnify pursuant to determine what portion of damages (if any) constitute consequential damages as part Section 9.2(a). Any indemnification payment payable under this Agreement shall be net of any Governmental Order that is entered Tax Benefit actually realized by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including Indemnified Party in respect of any misrepresentation indemnified Loss. For purposes hereof, "TAX BENEFIT" means any refund of Taxes paid or breach reduction in the amount of Taxes which otherwise would have been paid as result of such indemnified Loss (with the timing of the receipt or realization of such refund or reduction to be estimated in good faith by the Indemnified Party), net of any warranty, covenant or other provision contained increase in this Agreement or in any certificate delivered pursuant hereto. Without limiting Taxes paid by the generality or effect Indemnified Party on account of receipt of the foregoingindemnification payment. Purchaser shall cause its independent auditor to certify in writing to Honeywell if and when Purchaser receives or realizes such refund or reduction, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any such certification shall be conclusive evidence of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement fact and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8amount thereof. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Stock Purchase Agreement (M & F Worldwide Corp)

Indemnification Limitations. (a) In Notwithstanding anything to the contrary contained in this Agreement, (i) no event indemnification shall the Sellers be liable for indemnification pursuant to Section 10.2(a)(i) (other than available in respect of Section 9.2(i) unless (A) other than with respect to the representations Specified Representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authoritythe matters set forth on Schedule 9.1(a)(iii), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount (without duplication) of all Losses of the Indemnified Parties with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties thereto exceeds $1,400,000 1,000,000 (the “Threshold Basket Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification be indemnified only for all those Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein of the Basket Amount, and (B) other than with respect to the contrarymatters set forth on Schedule 9.1(a)(iii), the Sellers shall not Losses relating to any individual claim, or series of related claims that are based primarily on a similar set of operative facts, is greater than $50,000; (iii) be required to make payments the aggregate maximum liability for indemnification pursuant to Section 10.2(a)(i9.2 including the matters specifically set forth on Schedule 9.1(a)(iii) shall be the Escrow Amount and recourse therefor shall be solely against the Escrow Fund, provided that, the Buyer may recover for any breaches of the representations and warranties of the Company and/or the Sellers set forth in (x) Section 3.9 (Tax Matters) and (y) Article IV ((x) and (y), the “Specified Representations”) in accordance with Section 9.3(a)(iii), (iii) upon and after the Escrow Release Date any indemnification pursuant to Section 9.2(i) for (A) any breaches of the representations and warranties of the Sellers set forth in Article IV or pursuant to Section 9.2(iv) shall be solely against the breaching Seller, severally and not jointly, and no other Seller shall have any liability whatsoever with respect thereto and any such indemnification from any Seller shall be limited in the aggregate to that portion of the Purchase Price actually received by such Seller and (B) any breaches of the representations and warranties set forth in Section 3.9 (Tax Matters), except for the matters specifically set forth on Schedule 9.1(a)(iii), shall be against the Sellers, severally and not jointly, and any such indemnification from any Seller pursuant to this Section 9.3(a)(iii)(B) shall be limited in the aggregate to an amount equal to such Seller’s Pro Rata Portion of the Remaining Escrow Amount, (iv) the amount of any and all Losses under this Article IX shall be determined net of (a) any Tax benefits actually recognized in the year of payment of such Loss or any of the two years thereafter by any party seeking indemnification hereunder by a reduction in cash Taxes payable in such year by such party arising from the deductibility of any such Losses (and if any such Tax benefit is realized after the Indemnified Party collected indemnification amounts hereunder, the amount of such Tax benefits shall be refunded to the Escrow Fund or, after the Escrow Fund has terminated, the Sellers’ Representative on behalf of the Sellers), and (b) any amounts actually recovered under or pursuant to any insurance policy, title insurance policy, indemnity, reimbursement arrangement or contract pursuant to which or under which such Indemnified Party or such Indemnified Party’s Affiliates is a party or has rights (collectively, “Alternative Arrangements”), in each case net of collection costs, and (v) in no event shall any Indemnified Party be entitled to recover or make a claim for any amounts in respect of, and in no event shall “Losses” be deemed to include, (a) punitive, special or exemplary damages (other than any such Losses incurred by an Indemnified Party as a result of any final and non-appealable judgment granted to a third party) and, in respect particular, no “multiple of profits” or “multiple of cash flow” or similar valuation methodology shall be used in calculating the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”)any Losses, or (iib) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) loss, liability, damage or expense to the extent such Loss specifically accrued or reserved for as a liability on the Company Balance Sheet in accordance with IFRS applied on a basis consistent with past practices. (b) Nothing in this Article IX or otherwise set forth in this Agreement shall limit or preclude any claim against any Party for fraud or for any willful and all Losses arising out knowing breach of the same facts and circumstances are, in the aggregate, less than $15,000 any of clauses (each, a “De Minimis Loss”a) through (and such Losses shall be disregarded and shall not be aggregated for purposes v) of the Threshold Amount unless and until such Losses arising out Section 6.1 of the same facts or circumstances exceed the De Minimis Loss amount). this Agreement. (c) Notwithstanding anything to the contrary herein, Sellers shall have ninety the parties hereto agree and acknowledge that any Indemnified Party may bring a claim for indemnification for any Loss under this Article IX notwithstanding the fact that such Indemnified Party had knowledge of the breach, event or circumstance giving rise to such Loss prior to Closing or waived any condition to the Closing related thereto. (90d) days after In the receipt event that an Indemnified Party suffers, sustains or becomes subject to any Loss which is subject to indemnification under Section 9.2(v), as a result of, in connection with or relating to an event or series of events, which, in the reasonable opinion of the Sellers’ Representative, would entitle the Company to make an indemnification claim for under the 2005 Share Purchase Agreement, then the Sellers’ Representative shall be entitled to instruct the Company to take (at the expense of the Sellers), all such actions as the Seller may reasonably require to make and/or enforce such claim against the relevant parties to the 2005 Share Purchase Agreement. In the event that the Company recovers any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which amount pursuant to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery then such amount (net of any products that are unpaid expenses of the subject of such claim, which such commercially reasonable alternative is subject Company and any Tax consequences to the prior written approval Company or any of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party its Affiliates as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right recovery or as a result of such Indemnified Party to assert a claim against any Collateral Source. If recovery being for the amount to be netted hereunder from any payment required under this Article X account of or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except returned to the extent Escrow Account) shall be for the account of the Sellers, provided that, in the event such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply recovery occurs prior to the extent any Escrow Release Date, than the amount of such Excluded Liability relates recovery shall be returned to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or Escrow Account. The Parties agree to cooperate to ensure that any of their Affiliates of any business (other than the Business). Purchaser recovery and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All subsequent payments made pursuant to this Article X and Article VIII Section 9.3(d) shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8most tax efficient manner possible. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Share Purchase Agreement (McAfee, Inc.)

Indemnification Limitations. The Party against whom such claims are asserted under this ARTICLE X is referred to as the “Indemnifying Party”. The rights of the Buyer Indemnified Parties and Seller Indemnified Parties (each, an “Indemnified Party”) to indemnification pursuant to this ARTICLE X are subject to the following limitations: (a) In no The Indemnifying Party shall not be liable to an Indemnified Party for any claim (or group of related claims that result from substantially the same or substantially related facts and circumstances) for indemnification pursuant to Section 10.02(a) or Section 10.03(a), as the case may be, until the aggregate amount of such Damages in respect of indemnification under Section 10.02(a) or Section 10.03(a) exceeds $1,230,000 (the “Basket”), in which event the Indemnifying Party shall be required to pay and will be liable for all such Damages without regard to the Sellers Basket; provided, that the Basket shall not apply to Damages arising out of, resulting from, or incurred in connection with (i) any breach of or inaccuracy in any of the Fundamental Representations or the representations and warranties set forth in Section 4.12 (Tax Matters), or (ii) Fraud. With respect to any claim as to which the Indemnified Party may be entitled to indemnification under Section 10.02(a) or Section 10.03(a), as the case may be, the Indemnifying Party shall not be liable for any individual or series of related Damages which do not exceed $25,000 (which Damages shall not be counted toward the Basket). (b) The aggregate amount of all Damages (including, for the avoidance of doubt, damages of the type described in Section 10.04(d)(ii) below) for which an Indemnifying Party shall be liable for indemnification pursuant to Section 10.2(a)(i10.02(a) or Section 10.03(a), as the case may be, shall not exceed $12,300,000 (the “Cap”); provided, that for the avoidance of doubt, the Cap and the other than limitations in respect this Section 10.04 shall not apply in the context of Damages arising out of, resulting from, or incurred in connection with (i) any breach of or inaccuracy in any of the Fundamental Representations or the representations and warranties set forth in Section 4.1 4.12 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”Tax Matters), or (ii) Fraud. (c) The aggregate amount of all Damages for which an Indemnifying Party shall be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) 10.02 or Section 10.03, as the case may be, shall not exceed the Aggregate Final Purchase Price, except in an aggregate amount in excess the case of the Indemnification CapFraud. (bd) In calculating amounts payable no event shall any Indemnifying Party be liable to an any Indemnified Party hereunder, the amount of for any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by punitive, exemplary, special or indirect damages, except to the Indemnified extent actually awarded in a Third Party under indemnification agreements Claim (or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost punitive and exemplary damages only, in the case of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(fFraud), or (iiiii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year consequential, loss of the indemnity payment profits or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive incidental damages, except to the extent such damages are payable to an unaffiliated third party were reasonably foreseeable and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct proximately caused by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8Indemnifying Party’s breach. (e) The Sellers Each Indemnified Party shall take, and Purchaser acknowledge and agree cause its Affiliates to take, commercially reasonable steps to mitigate any Damage upon becoming aware of any event or circumstance that the other parties would be damaged irreparably reasonably expected to, or does, give rise thereto. (f) For the purposes of this ARTICLE X and for purposes of determining the amount of Damages that are the subject matter of a claim for indemnification hereunder, each representation and warranty in this Agreement shall be read without regard and without giving effect to the terms “material”, “in all material respects”, “Material Adverse Effect” or similar words or phrases contained in such representation or warranty (other than references to the word Material as used in the event any provision of this Agreement is not performed in accordance with its specific defined terms or otherwise is breachedMaterial Customer, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement Material Supplier and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefMaterial Contract).

Appears in 1 contract

Samples: Asset Purchase Agreement (3d Systems Corp)

Indemnification Limitations. (a) In no event shall the Sellers be liable for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of set forth in this Agreement, no Seller Party shall be entitled to any indemnification payment under this Agreement pursuant to Section 10.02(a) for any individual item or group of items arising out of the same or related events, sets of facts or circumstances, where the amount of Damages relating thereto is less than $50,000 (the “Sub-Basket”) and in respect of each individual item, or group of items arising out of the same or related events, sets of facts or circumstances, where the Damages relating thereto is equal to or greater than the Sub-Basket, unless and until the amount of Damages actually incurred by such Seller Parties as a result thereof exceeds $1,000,000 (the “Basket Amount”), at which time the Indemnified Party shall be entitled to recover the amount of the Damages incurred as a direct result of all such breaches of such representations and warranties that exceeds the Basket Amount. (b) Subject to the other provisions set forth in this Agreement, the aggregate Liability of Seller to any and all Purchaser Parties under this Agreement and the aggregate Liability of Purchaser to any and all Seller Parties under this Agreement shall, in each case, be limited to $11,690,000 (the “Cap Amount”). (c) Except as set forth in Section 10.01(e)(iv), the Purchaser Parties’ sole recourse in respect of (i) any breach or inaccuracy by Seller of the representations and warranties contained in Article IV and Article V and (ii) indemnification claims made by a Purchaser Party pursuant to Section 10.01(f) shall be against the Representation and Warranty Policy Insurer pursuant to the terms of the Representation and Warranty Policy and no event Seller Party shall the Sellers or Purchaser be liable for any punitive damages, except Damages with respect to (A) any breach or inaccuracy by Seller of the extent such damages are payable to an unaffiliated third party representations and warranties contained in Article IV and Article V and (iiB) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related indemnification claim made by a Purchaser Party pursuant to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damagesSection 10.01(f), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else Neither the Sub-Basket nor the Basket Amount set forth in Section 10.04(a) shall apply to (i) any breach of any Fundamental Representations made by Purchaser; (ii) any indemnification claim made by a Purchaser Party pursuant to Sections 10.01(a) through 10.01(h); (iii) any indemnification claim made by a Seller Party pursuant to Section 10.02(b); or (iv) fraud in connection with any breach of a representation or warranty set forth in this Agreement. (e) From and after the date that is the 12-month anniversary of the Closing Date, no Purchaser Party or Seller Party shall be entitled to indemnification, to xxx for Damages or to assert any other right or remedy under this Agreement (whether under this Article X or otherwise) against any Seller Party or Purchaser Party, as applicable, with respect to any Damages, cause of action or other claim (other than, for the avoidance of doubt, Damages incurred pursuant to Section 10.01(f) or, except as set forth in Section10.01(e)(iv), as a result of any breach or inaccuracy by Seller of the representations and warranties contained in Article IV and Article V, for which the Purchaser Party’s sole recourse shall be against the Representation and Warranty Policy Insurer pursuant to the terms of the Representation and Warranty Policy in accordance with Section 10.04(c)), to the extent the Purchaser Party or Seller Party, as applicable, failed to give written notice of such Damages, cause of action or claim within ninety (90) days following the date on which such Purchaser Party or Seller Party, as applicable, learned of such Damages, cause of action or claim. (f) The Cap Amount set forth in Section 10.04(b) shall not apply to (i) any indemnification claim made by a Purchaser Party pursuant to Section 10.01(d), Section 10.01(e), Section 10.01(g) and Section 10.01(h), (ii) fraud in connection with any breach of a representation or warranty set forth in this Agreement and (iii) any indemnification claim made by a Seller Party pursuant to Section 10.02(c). (g) No Purchaser Party or Seller Party shall be entitled to recover any Damages or other amounts relating to any matter arising under one provision of this Agreement to the contraryextent that such Purchaser Party or Seller Party (or other Purchaser Parties in the event of a Purchaser Party, after or other Seller Parties in the Closingevent of a Seller Party), indemnification and specific performance as applicable, has already recovered such Damages or amounts with respect to such matter pursuant to the other provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement the operation of Section 2.05 and Section 2.06 is an exclusive remedy in respect of the assets and liabilities and related items taken into account in connection with the determination of Final Net Closing Cash Consideration, and to the Sellers entering extent any breach of a representation or warranty and the Damages resulting therefrom were specifically taken into this Agreementaccount in such determination, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of any additional recourse in respect thereof under this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.Article X.

Appears in 1 contract

Samples: Membership Interest Purchase Agreement (Gaiam, Inc)

Indemnification Limitations. (a) In no event Any right of an Indemnified Party to indemnification under this Agreement shall the Sellers be liable for indemnification pursuant not apply to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and any claim until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds such claims which have become final totals at least $1,400,000 100,000 (the “Threshold AmountIndemnity Basket”), in which case the Purchaser Indemnified Parties event such indemnity shall be entitled apply to indemnification for all Losses from the first dollarsuch claims which become final, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein but only to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect extent of the Excluded Representations) in an aggregate amount in excess of $18,000,000 the Indemnity Basket. (the “Indemnification Cap”), or (iib) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety except in instances of fraud or intentional misconduct (90i) days after the receipt of an indemnification claim Company’s and Buyer Indemnified Parties’ sole recourse for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs Damages or other Losses imposed on claims (excluding any actions for specific performance) relating to or incurred by the Purchaser Indemnified Parties arising out of such alternative shallfrom this Agreement, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess any of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunderagreements, documents and instruments executed and delivered in connection herewith or the amount transactions contemplated by any of any indemnified Losses the foregoing, shall be determined without duplication the forfeiture of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement the relevant portion of the Escrow Fund and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery and to the extent permitted by applicable law, the maximum liability of the Sellers for such claims shall not exceed the dollar amount equal to the Escrow Consideration Shares multiplied by the Indemnified Party from any Person with respect to such LossesPer Share Purchase Price. In instances of fraud or intentional misconduct, including Seller’s liability hereunder shall not exceed the value at Closing of the Consideration Shares received by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such paymentSeller. (c) Subject Notwithstanding anything to the other provisions contrary herein, to the fullest extent permitted by applicable law, and except in instances of fraud or intentional misconduct, Buyer’s aggregate liability arising out of this Article Xagreement whether based upon warranty, but notwithstanding any other provision of this Agreementcontract, (i) in no event shall the Sellers tort or Purchaser otherwise, will be liable for any punitive damageslimited to $1,000,000, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein instances of fraud or intentional misconduct, Buyer’s aggregate liability hereunder to all Seller Indemnified Parties shall not include damages related to lost profitsexceed the value at Closing of the Consideration Shares received in aggregate by the Sellers. Notwithstanding the foregoing, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages of liability shall not apply to damages of the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any Investors on account of their Affiliates investment of any business (other than the Business)Subscription Amount. Purchaser and To the Sellers shallfullest extent permitted by applicable law, and Purchaser shall cause except in the Purchaser Indemnified Parties case of a party’s indemnification obligations hereunder, as well as its intentional misconduct or fraud, in no event will a Party hereto party be liable for special, incidental, consequential or punitive damages or losses, including, but not limited to, in good faithany lost profits or opportunities, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of of, relating to, or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect even if such Party has been advised of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim possibility of such damages or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8losses. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Stock Purchase Agreement (Kitov Pharma Ltd.)

Indemnification Limitations. (a) In no event shall Notwithstanding the foregoing, the obligation of Sellers be liable for to provide indemnification pursuant to this Section 10.2(a)(i9.2 will be subject to the following limitations (provided that the following limitations shall not apply to any claim involving fraud): (1) With respect to claims for indemnification by Buyer Parties under Section 9.2(a)(1) (other than in respect of the representations and warranties in Section 4.1 (Corporate StatusFundamental Representations), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) Sellers will have no obligation to provide indemnification unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Buyer Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to under Section 10.2(a)(i9.2(a)(1) (other than in respect of the Excluded Fundamental Representations) in an aggregate amount exceeds 0.5% of the Base Purchase Price (the “Threshold”), and then only for Losses in excess of $18,000,000 the Threshold. (2) To the “Indemnification Cap”), extent that Sellers have any obligation or (ii) be liable for indemnification with respect liability to any Loss by the Purchaser Indemnified Parties a Buyer Party pursuant to Section 10.2(a)(i9.2(a)(1) (other than in respect of the Fundamental Representations and Excluded Representations), Sellers’ total obligation or liability therefor will not exceed 1.0% of the Base Purchase Price. (3) (A) Sellers’ total liability pursuant to (i) Section 9.2(a)(1) for Losses in respect of Excluded Representations, (ii) Section 9.2(a)(7), and (iii) Section 9.2(a)(9) will not exceed 7.5% of the Base Purchase Price in the aggregate. (B) Sellers’ total liability with respect to claims made pursuant to Section 9.2(a)(7) on or before the fourth anniversary of the Closing (“First Period Claims”) will not exceed 6.0% of the Base Purchase Price in the aggregate. (C) Sellers’ total liability with respect to claims made pursuant to Section 9.2(a)(7) after the fourth anniversary of the Closing and on or before the seventh anniversary of the Closing will not exceed 3.5% of the Base Purchase Price in the aggregate (the “Second Period Cap”); provided that any final liability of Sellers in respect of First Period Claims will reduce the Second Period Cap dollar-for-dollar. (D) Sellers’ total liability with respect to claims made pursuant to Section 9.2(a)(8) will not exceed $25 million in the aggregate. (E) Once (x) a Title Policy is issued to the Company pursuant to Section 6.18(a) in respect of the Main Facility and (y) Sellers have been liable for at least $10 million with respect to claims made pursuant to Section 9.2(a)(8) relating to the Main Facility, Sellers shall thereafter only be liable for 50% of the amount of any Losses subject to indemnity pursuant to Section 9.2(a)(8) relating to the Main Facility. (F) With respect to each Real Property other than the Main Facility, once a Title Policy is issued to the Company pursuant to Section 6.18(a) in respect of such Real Property, Sellers shall thereafter only be liable for 50% of the amount of any Losses subject to indemnity pursuant to Section 9.2(a)(8) relating to such Real Property, except that Sellers shall instead be liable for 100% of the amount of such Losses to the extent such Loss Losses result from or relate to any action by or on behalf of any Cobalt Company or any of their owners prior to the Closing (including, for example, but without limitation, any breach of Contract or violation of Law by any of them prior to Closing). (4) Without limiting the other limitations of this Section 9.2(b), each Seller’s total liability pursuant to Section 9.2(a)(1), Section 9.2(a)(3), Section 9.2(a)(4), and all Losses arising out Section 9.2(a)(5) will not exceed in the aggregate the final Purchase Price actually received by such Seller. (5) Without limiting the other limitations of this Section 9.2(b), to the extent that coverage is available under the R&W Insurance Policy, no Seller will have any liability pursuant to Section 9.2(a)(1) (other than in respect of Excluded Representations) or pursuant to Section 9.2(a)(3), in any case, other than for the then remaining portion of the same facts and circumstances are, Retention (as such term is defined in the aggregateR&W Insurance Policy), less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until the Limit of Liability (as such Losses arising out of term is defined in the same facts R&W Insurance Policy) is met or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Capexceeded. (6) The amount of Losses for which indemnification is provided under this Section 9.2 will be offset by (a) amounts that are reimbursable by and actually recovered from insurance (net of any deductible or co-payment and all out of pocket costs related to such recovery) and (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered Tax benefits actually realized by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost by reason of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of in which the corresponding indemnity payment is made or a any prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Unit Purchase Agreement (Malibu Boats, Inc.)

Indemnification Limitations. Notwithstanding any contrary provision of this Section 8: (a) In The Sellers shall have no event shall the Sellers be liable obligation to provide indemnification for indemnification Buyer Losses pursuant to this Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) 8 unless and until the aggregate amount of all Buyer Losses with respect for which the Sellers would otherwise be obligated to provide reimbursement or indemnity pursuant to this Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds 8 shall exceed an amount equal to Five Hundred Thousand Dollars ($1,400,000 500,000), (the “Threshold "Basket Amount”), ") in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, event the Sellers shall be jointly and severally liable for all Buyer Losses for which they would otherwise be liable pursuant to this Section 8; provided that the foregoing limitation shall not apply to Buyer Losses resulting from (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) any breach of a representation or warranty contained in any of Sections 6.1, 6.2, 6.7, 6.10, 6.13, 6.18, 6.19 or 6.21 (other than in respect of the "Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”"), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price claim for indemnification pursuant to Section 3.4(fSections 8.1(c), (d), (e), (f), (g), (h), (i) (j) or (k); or (iii) the breach of any Tax Benefit actually received by a Purchased Entity with respect covenant or agreement of the Sellers included in this Agreement or any Related Writing (collectively, the "Seller Basket Exclusions"). Once Buyer Losses have exceeded the Basket Amount, the Sellers shall be jointly and severally obligated to such pay all Buyer Losses in the year excess of the indemnity payment Basket Amount. The Sellers shall be obligated to pay all Buyer Losses based on the Seller Basket Exclusions without regard to the individual or a prior yearaggregate amounts thereof and without regard to whether the aggregate of all Buyer Losses shall have exceeded, but increased by in the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt aggregate, the Basket Amount. The maximum obligation of the Sellers to provide indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at Section 8 shall be limited to $6,000,000 in the time of such payment. aggregate (c) Subject the "Cap"); provided, however, that the foregoing limitation shall not apply to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, Buyer Losses arising from (i) in no event shall the Sellers Seller Basket Exclusions or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of the actual fraud of the Sellers. (b) The Buyer shall have no obligation to provide indemnification claims for Excluded Liabilities described Seller Losses pursuant to this Section 8 unless and until the aggregate amount of all Seller Losses pursuant to this Section 8 shall exceed the Basket Amount in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and which case Buyer shall be liable for all Seller Losses for which it would otherwise be liable pursuant to this Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,0008; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, Seller Losses resulting from (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement any breach of a Business Related Excluded Liabilities Claim and representation or warranty contained in any of Sections 7.1 or 7.2, (y) use their respective commercially reasonable efforts any claim for indemnification pursuant to cause Sections 8.2(c), (e), (f), (g) or (h), or (z) the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part breach of any Governmental Order covenant or agreement of the Buyer included in this Agreement or any Related Writing (collectively, the "Buyer Basket Exclusions"). Once Seller Losses have exceeded the Basket Amount, the Buyer shall be obligated to pay all Seller Losses in excess of the Basket Amount. The Buyer shall be obligated to pay all Seller Losses based on the Buyer Basket Exclusions without regard to the individual or aggregate amounts thereof and without regard to whether the aggregate of all Seller Losses shall have exceeded, in the aggregate, the Basket Amount. The maximum obligation of the Buyer to provide indemnification pursuant to this Section 8 shall be limited to the Cap in the aggregate; provided, however, that is entered by the foregoing limitation shall not apply to any Seller Losses arising from (i) the Buyer Basket Exclusions or (ii) the actual fraud of the Buyer. (c) For purposes of determining whether the Sellers shall be required to indemnify Buyer under this Section 8, each representation, warranty and agreement contained in this Agreement shall be read (including for purposes of determining whether a breach of such Governmental Authority representation, warranty or agreement has occurred) without regard and without giving effect to, Knowledge or materiality (including Material Adverse Effect) qualifications that may be contained in connection with a Business Related Excluded Liabilities Claimsuch representation, warranty and agreement. (d) Notwithstanding anything else contained For purposes of determining whether the Basket Amount has been reached, (i) all Shareholder Losses (as defined in this the Stock Purchase Agreement (the "Stock Purchase Agreement"), dated as of the date hereof, among the Sellers, NPC International (Barbados) Holdings Limited and ACS Business Process Solutions, Inc.) and all Seller Losses (as defined in the U. S. Asset Purchase Agreement (the "U.S. Asset Purchase Agreement"), dated as of the date hereof, among the Parent, NPC LLC and ACS Data Entry, Inc.) shall be aggregated with all Seller Losses, and (ii) all Buyer Losses, as defined herein, in the Stock Purchase Agreement and in the U.S. Asset Purchase Agreement, shall be aggregated. With respect to the contraryCap, after the Closingmaximum obligation of the Sellers and NPC Internacional S.A. de C.V., on the one hand, and the Buyer, ACS Data Entry, Inc. and ACS Business Process Solutions, Inc., on the other hand, to provide indemnification pursuant this Section 8 and specific performance pursuant to the applicable indemnification provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Stock Purchase Agreement and the transactions provided for hereinU.S. Asset Purchase Agreement shall be limited to $6,000,000 in the aggregate, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary exceptions set forth herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Stock Purchase Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this U.S. Asset Purchase Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Asset Purchase Agreement (National Processing Inc)

Indemnification Limitations. (a) In no event Except in the case of Fraud, Sellers shall the Sellers not be liable for indemnification of the Purchaser Parties pursuant to Section 10.2(a)(i10.01(a) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with Damages in respect to of indemnification under Section 10.2(a)(i10.01(a) that are imposed on or incurred by exceeds the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”)Deductible, in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the event Sellers shall not (i) only be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), pay or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount Damages in excess of the Indemnification CapDeductible. (b) In calculating amounts payable to an Indemnified Party hereunderExcept in the case of Fraud, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction Sellers’ aggregate Liability for any cost of collectionclaims for indemnification under Section 10.01(a) shall not exceed the Cap, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), and (ii) Sellers’ aggregate liability for any prior recovery by claims for indemnification under Section 10.01(b), Section 10.01(c), Section 10.01(d) and Section 10.01(e) shall not exceed the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such paymentPrice. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim[Reserved]. (d) Notwithstanding anything else contained in Purchaser shall not be entitled to recover any Damages relating to any matter arising under one provision of this Agreement to the contrary, after the Closing, indemnification and specific performance extent that Purchaser has already recovered Damages with respect to such matter pursuant to the other provisions of this Article X, Section 6.14 Agreement (with the intent of this provision to merely be to avoid “double counting” and Article VIII shall be the sole and exclusive remedy of the parties with respect not to limit any and all claims (whether in contract or in tort) right to recover for Damages arising out of or resulting from any breach in connection with this Agreement, excess of the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated therebyamount of such Damages that was actually recovered), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from operation of Sections 2.05 and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any 2.06 is an exclusive remedy in respect of the other items taken into account in connection with the determination of the Estimated Working Capital Amount and the Final Working Capital Amount, and Purchaser Indemnified Parties may have against shall not be entitled to any Seller or any of its Affiliates, including without limitation under additional recourse in respect thereof (with the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason intent of this Agreement provision to merely be to avoid “double counting” and the transactions provided not to limit any right to recover for herein, except for claims Damages arising out of or causes of action brought under and subject to the terms and conditions resulting from any breach in excess of the provisions contained amount of such Damages that was actually taken into account in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(dcalculation), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably Notwithstanding anything in the event any provision of this Agreement is not performed (i) nothing in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement will limit any rights or remedies in respect of Fraud and (ii) nothing shall limit in any way any claim or recovery available to enforce specifically this Agreement and the terms and provisions hereof. In particularPurchaser or any of its Affiliates or Representatives, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreementas applicable, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to under any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefR&W Insurance Policy.

Appears in 1 contract

Samples: Membership Interest Purchase Agreement (ProFrac Holding Corp.)

Indemnification Limitations. (a) In Notwithstanding any other provision of this Agreement to the contrary, except as otherwise set forth in this Section 10.3(a), no event Micron Indemnitee shall the Sellers be liable entitled to indemnification for indemnification pursuant to any Losses covered by Section 10.2(a)(i) (other than in respect of the representations and warranties in or Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)10.2(b)(i) unless and until the aggregate amount (without duplication) of all Losses with respect to of the Micron Indemnitees covered by Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties and Section 10.2(b)(i) exceeds $1,400,000 10,000,000 (the “Threshold Seller Basket Amount”), in which case the Purchaser Indemnified Parties Micron Indemnitees shall be entitled to be indemnified for the amount by which such Losses exceed the Seller Basket Amount. The Seller Basket Amount shall not apply to Losses resulting from (A) any fraud or intentional misrepresentation, (B) any inaccuracy or breach of Section 3.1 (Organization of the Company), Section 3.2 (Company Capital Structure), Section 3.3 (Subsidiaries), Section 3.4 (Authority and Enforceability), Section 3.11 (Taxes), the last sentence of Section 3.19 (Interested Party Transactions), Section 3.32 (Governmental Incentives), Section 4.1 (Organization and Good Standing), Section 4.2 (Authority and Enforceability), Section 4.5 (Legal Ownership of Shares) or Section 4.11 (Governmental Incentives) (collectively, the “Special Seller Representations”) or (C) any inaccuracy or breach of Section 3.23 (Environmental Matters), Section 3.24(e) (Pension Plan Liability) or Section 4.12 (Environmental Matters). (b) Notwithstanding any other provision of this Agreement to the contrary, except as otherwise set forth in this Section 10.3(b), no Seller Indemnitee shall be entitled to indemnification for any Losses covered by Section 10.2(c)(i) unless and until the aggregate amount (without duplication) of all Losses of the Seller Indemnitees covered by Section 10.2(c)(i) exceeds $10,000,000 (the “Micron Basket Amount”), in which case the Seller Indemnitees shall be entitled to be indemnified for the amount by which such Losses exceed the Micron Basket Amount. The Micron Basket Amount shall not apply to Losses resulting from (A) any fraud or intentional misrepresentation or (ii) any inaccuracy or breach of Section 5.1 (Organization and Good Standing), Section 5.2 (Authority and Enforceability), Section 5.5 (Capitalization) and Section 5.6 (Micron Shares) (collectively, the first dollar, including both the Threshold Amount and “Special Micron Representations”). 4917039.19 (c) Notwithstanding any amounts in excess thereof. Notwithstanding anything herein other provision of this Agreement (other than Section 7.23) or any other agreement or instrument to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss hereto acknowledge and all Losses arising out of the same facts agree that from and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to except as set forth in the provisions next sentence of this Section 10.3(c), the indemnification provisions in Section 7.9 and Section 7.22 and this Article X, Section 6.14 and Article VIII X shall be the sole and exclusive remedy of the parties Indemnitees with respect to any and all claims (whether in contract Losses incurred directly or in tort) arising out of or indirectly in connection with, arising from or based upon this Agreement or any of the transactions contemplated hereby, whether arising under this Agreement or under any other legal or equitable theory whatsoever; it being understood that the foregoing clause of this sentence shall not be deemed a waiver by any Party of any right to specific performance or injunctive relief (except insofar as such a right requires the performance of any Remedial Activities on any Real Property by any Seller, in which case the terms and conditions of Section 10.8 shall apply). The immediately preceding sentence does not limit or otherwise affect the rights or remedies of any of the Parties vis-á-vis any other Party with this respect to (i) fraud or intentional misrepresentation, (ii) any of the Ancillary Agreements or (iii) pre-existing rights or obligations with respect to indemnification or any other form of recourse by any one Party of any of the other Parties under any other Contracts (including the Master Agreement, the Ancillary Agreements Intel ATA and the transactions contemplated hereby and thereby ST ACA). (d) Notwithstanding any other than remedies provision of this Agreement to the contrary, except as otherwise set forth in the Ancillary Agreements with regard to the transactions contemplated therebythis Section 10.3(d), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim (i) absent fraud or cause of actionintentional misrepresentation, known and unknown, foreseen and unforeseen, which it or any the maximum aggregate liability of the Sellers to the Micron Indemnitees for all Indemnifiable Losses of the Micron Indemnitees other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under than Special Micron Losses (the common law or federal or state securities Laws, trade regulation Laws or other Laws “Capped Micron Losses”) shall be $150,000,000 (including any relating to Intellectual Property, products liability (including Products Liability Claimsthe “Micron Cap”), Taxand (ii) absent fraud or intentional misrepresentation by a Seller, environmentalthe maximum aggregate liability of such Seller for Capped Micron Losses shall be equal to such Seller’s Indemnification Percentage of the Micron Cap. Notwithstanding the foregoing, real estate in the event one or employee matters)more Seller Indemnitors assumes the defense of a Third Party Claim made against a Micron Indemnitee in accordance with Section 10.7, by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject foregoing limitations with respect to the terms and conditions maximum aggregate liability of the provisions contained such Seller Indemnitors for such Capped Micron Losses shall not apply with respect to such Third Party Claim; provided, however, that any amounts that constitute Indemnifiable Losses in this Article X and Article VIII. All payments made connection with such Third Party Claim (other than any Special Micron Losses) which are paid by a Seller Indemnitor pursuant to this Article X shall, following such payment, be credited against the Micron Cap by the amount so paid. For the avoidance of doubt, the Micron Cap shall not apply in respect of Formation Agreement Losses, which are governed by the terms of the Master Agreement, the Intel ATA or the ST ACA, as applicable. (e) Notwithstanding any other provision of this Agreement, except as otherwise set forth in this Section 10.3(e), from and Article VIII after the Closing, absent fraud or intentional misrepresentation, the maximum aggregate liability of Micron to the Seller Indemnitees for all Indemnifiable Losses of the Seller Indemnitees other than Special Seller Losses (“Capped Sellers Losses”) shall be $150,000,000 (the “Seller Cap”). Notwithstanding the foregoing, in the event Micron assumes the defense of a Third Party Claim made against a Seller Indemnitee in accordance with Section 10.7, the foregoing limitations with respect to the maximum aggregate liability of Micron for such Capped Seller Losses shall not apply with respect to such 4917039.19 Third Party Claim; provided, however, that any amounts that constitute Indemnifiable Losses in connection with such Third Party Claim (other than any Special Seller Losses) which are paid by Micron pursuant to this Article X shall, following such payment, be credited against the Seller Cap by the amount so paid. For the avoidance of doubt, Micron does not have any indemnification obligations under the Formation Agreements and, accordingly, the Seller Cap shall not apply in respect of Formation Agreement Losses. (f) Notwithstanding any other provision of this Agreement to the contrary, absent fraud or intentional misrepresentation: (i) the maximum aggregate liability of the Sellers to Purchaser or by Purchaser the Micron Indemnitees for Indemnifiable Losses (including Capped Micron Losses and Special Micron Losses) shall be an amount equal to the Sellersproduct obtained by multiplying (A) the number of Micron Shares by (B) the Micron Stock Price (such product, as the case may be, “Purchase Price Cap”); (ii) the maximum aggregate liability of each Seller to the Micron Indemnitees for Indemnifiable Losses (including Capped Micron Losses and Special Micron Losses) shall be deemed equal to such Seller’s Indemnification Percentage of the Purchase Price Cap; and (iii) the maximum aggregate liability of Micron to the Seller Indemnitees for Indemnifiable Losses (including Capped Seller Losses and Special Seller Losses) shall be adjustments an amount equal to the Purchase PricePrice Cap. Notwithstanding anything For the avoidance of doubt, the Purchase Price Cap shall not apply in respect of any Formation Agreement Losses, which are governed by the terms of the Master Agreement, the Intel ATA and the ST ACA, as applicable. (g) The obligations of the Sellers to indemnify and hold harmless the Micron Indemnitees under Section 7.9 and Section 7.22 and this Article X shall be several (in proportion to their respective Indemnification Percentages, with respect to Section 10.2(a)) and not joint; provided, however, that each FP Seller shall be jointly liable for the obligations of each other FP Seller to indemnify and hold harmless the Micron Indemnitees under Section 7.9 and Section 7.22 and this Article X, and each Intel Seller shall be jointly liable for the obligations of the other Intel Seller to indemnify and hold harmless the Micron Indemnitees under Section 7.9 and Section 7.22 and this Article X. Without prejudice to Section 10.2(b), in the event any Indemnifiable Losses arise out of (i) any inaccuracy or breach of any representation or warranty of a particular Seller under Article IV, (ii) any inaccuracy or breach contained in any certificate or other instrument delivered pursuant hereto by a particular Seller, or (iii) any breach of or failure to perform or comply with any covenant, undertaking or other agreement herein by a particular Seller, other than any such breach or failure described in Section 10.2(a)(ii) (such Indemnifiable Losses pursuant to clauses (i), (ii) or (iii), “Individual Seller Losses”), the Micron Indemnitees shall be entitled to recover such Individual Seller Losses directly from the Seller responsible for such inaccuracy, breach or failure to perform or comply but not from the other Sellers; provided, however, that the Micron Indemnitees shall be entitled to recover from each 4917039.19 FP Seller the Individual Seller Losses of any other FP Seller and the Micron Indemnitees shall be entitled to recover from each Intel Seller the Individual Seller Losses of the other Intel Seller. For all other Indemnifiable Losses, the Micron Indemnitees shall be able to recover from each Seller such Seller’s Indemnification Percentage of such Indemnifiable Losses (plus, in the case of any FP Seller, the Indemnification Percentage of any other FP Seller and, in the case of any Intel Seller, the Indemnification Percentage of any other Intel Seller), subject to the contrary hereinother limitations set forth in this Agreement, nothing including the caps on Capped Micron Losses in Section 10.3(d) and the Purchase Price Cap provisions in Section 10.3(f). (h) Nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect liability of any express party hereto for any breach or inaccuracy of any representation or warranty or any breach of, or failure to perform or comply with, any covenant, undertaking or other agreement contained in this Agreement or any certificate or instrument delivered pursuant hereto if the Share Purchase does not close. (i) The waiver of any closing condition based on the accuracy of any representation or warranty, which claims shallor on the performance of or compliance with any covenant or agreement, in any caseshall not affect the right to indemnification or other remedy based on such representations, be subject to the provisions of Sections 4.23warranties, 5.7(a)-(d)covenants, 11.7 and 11.8obligations. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Share Purchase Agreement (Micron Technology Inc)

Indemnification Limitations. (a) In no event From and after the Effective Time, except in the case of fraud or any willful or intentional breach of any representation or warranty set forth in this Agreement, in any Related Agreement or in any certificate or other instrument delivered pursuant to this Agreement by or on behalf of the Company, and except with respect to the Fundamental Representations, the Effective Time Stockholders shall not be obligated to indemnify the Sellers be liable for indemnification Indemnified Parties pursuant to Section 10.2(a)(i8.2(a)(i)(A),Section 8.2(a)(i)(B) (other than in respect of the representations and warranties in or Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a8.2(a)(i)(D) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to claimed in Section 10.2(a)(i8.2(a)(i)(A), Section 8.2(a)(i)(B) that are imposed on or incurred by the Purchaser Indemnified Parties Section 8.2(a)(i)(D) exceeds $1,400,000 100,000 (the “Threshold Basket Amount”) after which all Losses (including the Basket Amount) shall be recoverable pursuant to the terms of, and subject to the limitations in, this Article VIII. (b) Notwithstanding anything to the contrary set forth in this Agreement, if the Merger is consummated, the Indemnifying Parties shall not be liable for any Losses indemnifiable pursuant to Section 8.2(a)(i)(A) in excess of the Escrow Amount; provided, however, that notwithstanding the foregoing or anything to the contrary set forth in this Agreement, the preceding restrictions set forth in this Section 8.3(b) shall not in any way limit or otherwise restrict any right in respect of any indemnification claims under any other provision of Section 8.2 or any other claims or causes of action under applicable law arising out of fraud or willful or intentional breach by the Company (or any of its agents) in connection with this Agreement or the transactions contemplated hereby (other than indemnification claims solely pursuant to Section 8.2(a)(v), which are addressed by Section 8.3(d)). (c) Notwithstanding anything to the contrary set forth in which case this Agreement, if the Purchaser Merger is consummated, the Indemnified Parties shall not be entitled to indemnification for all recover any Losses from the first dollar, including both the Threshold Amount and any amounts Indemnifying Party in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for respect of any indemnification claims under or pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”8.2(a)(i)(B), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes in excess of an amount equal to 30% of the Threshold Amount unless and until amount of Merger Consideration payable to such Losses arising out of Indemnifying Party (including the same facts amount payable from the Escrow Amount); provided, however, that notwithstanding the foregoing or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary hereinset forth in this Agreement, Sellers the preceding restrictions set forth in this Section 8.3(c) shall have ninety (90) days after the receipt of an indemnification claim for not in any Loss by the Purchaser Indemnified Parties way limit or otherwise restrict any right in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required claims under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers 8.2 or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to applicable law arising out of fraud or willful or intentional breach by the terms and conditions Company (or any of its agents) in connection with this Agreement or the provisions contained in this Article X and Article VIII. All payments made transactions contemplated hereby (other than indemnification claims solely pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warrantySection 8.2(a)(v), which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(dare addressed by Section 8.3(d), 11.7 and 11.8). (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Agreement and Plan of Reorganization (Fusion-Io, Inc.)

Indemnification Limitations. (a) In no event shall the Sellers be liable for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, but excluding Section 9.3.2 hereof: (i) no indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be available under Section 9.2(a) or Section 9.3.1(a) unless and until all Damages exceed $200,000 (the sole “Deductible”), after which time the Indemnified Persons shall be entitled to be indemnified against and exclusive remedy compensated and reimbursed for all Damages from the first dollar; provided, however, that the Deductible shall not apply to Damages arising under or resulting from (w) breaches of Fundamental Representations, (x) any matters set forth on Schedule 9.2(g), (y) any “excess parachute payment” within the meaning of Section 280G of the parties with respect to any and all claims Code, or (whether in contract or in tortz) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby Fraud. (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. b) Notwithstanding anything to the contrary herein, nothing in this Article X Agreement: (i) subject to clause (ii) of this Section 9.4(b), the Xxxxxx Trust only, and no other Escrow Participant, shall limit be liable for any claim by claims for Damages made under Section 9.2; (ii) the liability of the Xxxxxx Trust under Section 9.2(a) (other than with respect to a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting breach of the Fundamental Representations or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes case of Fraud) shall not exceed, and shall be limited to the General Indemnification Cap; and (iii) the Xxxxxx Trust shall not be liable for Fraud committed by any other Company Securityholder except on the following conditions: (A) the claim for Fraud relates to a breach in any material respect of any express representation or warranty, which claims shall, warranty made in any case, be subject this Agreement by the Company; (B) the Acquiror Indemnified Persons shall have first recovered or cancelled up to all of the Clawback Shares received by or issuable to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 Xxxxxx Trust; and 11.8. (eC) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement Damages to which an Acquiror Indemnified Person is not performed in accordance with its specific terms or otherwise is breached, so that a party entitled hereunder shall be entitled payable pursuant to injunctive relief to prevent breaches and as described in Section 9.7(c). For purposes hereof the “General Indemnification Cap” means 419,161 Clawback Shares constituting a portion of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particularXxxxxx Trust’s Pro Rata Portion of the Clawback Shares, valued at the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefClawback Share Price.

Appears in 1 contract

Samples: Merger Agreement (Cure Pharmaceutical Holding Corp.)

Indemnification Limitations. (a) In no event Notwithstanding Section 9.2, if the Closing occurs: (i) an Indemnifying Party shall the Sellers be liable for indemnification not have any obligation to indemnify an Indemnified Party with respect to a Facility whatsoever from and against any Loss pursuant to Section 10.2(a)(i9.2(a) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)or 9.3(a) unless and until the aggregate amount of all claims for such Losses with respect to Section 10.2(a)(i) that are imposed on or incurred such Facility (and with respect to any Purchaser Indemnified Party, combined with claims for Losses by the Purchaser Indemnified Parties exceeds applicable OTA Transferee for breaches of Seller’s representations and warranties under the applicable OTA with respect to such Facility) exceed Fifty Thousand Dollars ($1,400,000 50,000.00) (the “Threshold AmountIndemnification Threshold”), in at which case the Purchaser time Indemnified Parties shall be entitled to indemnification for recover all such Losses from greater than the first dollarIndemnification Threshold, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein subject to the contrary, the Sellers Indemnification Cap; and (ii) Indemnified Parties shall not (i) be required entitled to make payments for indemnification recover Losses pursuant to Section 10.2(a)(i9.2(a) (other than in respect of the Excluded Representationsor Section 9.3(a) in for an aggregate amount (and with respect to the Purchaser Indemnified Parties, combined with the aggregate amount of Losses recovered by the OTA Transferees for breaches of Seller’s representations and warranties under the OTAs in excess of $18,000,000 Twelve-and-One Half Percent (12.5%) of the Transfer Value of Facilities that become Transferred Facilities (the “Indemnification Cap”); provided, or however, that claims for breach of any of the Fundamental Representations shall not be subject to the limits set forth in Section 9.4(a)(i) and this Section 9.4(a)(ii) and shall not be included in the determination of whether the limit in clause (ii) has been reached. The Indemnification Cap shall be liable for allocated among the Facilities as set forth on Schedule 9.4(a)(ii). Notwithstanding the limitations on indemnification with respect set forth in Section 9.1 and this Section 9.4, such limitations shall not apply to any Loss by claim against Seller for fraud. For all purposes of this Article IX, when determining the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect amount of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances areor resulting from a breach of a representation or warranty of Seller or Purchaser, any material adverse effect or other materiality qualifier contained in the aggregate, less than $15,000 any such representation or warranty will be disregarded. (each, a “De Minimis Loss”b) (and such Any Losses for which any Indemnified Party would be entitled to indemnification under this Article IX shall be disregarded reduced by the amount of insurance proceeds actually received or recovered under any insurance policies for the benefit of such Indemnified Party (including any title policies) and any cash payments, setoffs or recoupment of any payments actually recovered by such Indemnified Party in respect of such Losses. Each Indemnified Party shall not be aggregated use commercially reasonable efforts to mitigate losses for purposes of the Threshold Amount unless and until which such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount)Indemnified Party is subject to indemnification under this Article IX. Notwithstanding anything to the contrary hereinin the previous Section, Sellers if an Indemnified Party believes that coverage for Losses is likely to be available under title policies, such Indemnified Party shall have ninety (90) days use commercially reasonable efforts to pursue any insurance proceeds available to such Indemnified Party pursuant to any title policies. If, after the receipt of Indemnifying Party has made an indemnification claim for payment to an Indemnified Party with respect to Losses in satisfaction of its obligations under this Article IX, Indemnified Party actually recovers from any Loss by the Purchaser Indemnified Parties third parties amounts in respect of Section 4.20(b) (Products Liability; Warranty) such Losses, Indemnified Party shall as promptly as practicable forward to Indemnifying Party such amounts, but not in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval excess of the Purchaser indemnification payment received by Indemnified Party. Seller shall have no obligation to indemnify (whether under this Article or otherwise) both (i) Purchaser, not or a Purchaser Party or an assignee of Purchaser, and (ii) an OTA Transferee, with respect to be unreasonably withheld, conditioned or delayed (it being understood that any single Loss and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant pay duplicative damages. Further, Seller shall not owe obligations to Section 10.2(b)(i) in an aggregate amount in excess more than one of the Indemnification CapPurchaser Indemnified Parties with respect to any single Loss and shall not be required to pay duplicative damages. For avoidance of doubt, multiple Purchaser Indemnified Parties could incur separate Losses (i.e., not a “single Loss”) from the same matter for which indemnification is being sought. (bc) In calculating amounts payable Any indemnification payments made pursuant to an Indemnified Party hereunder, the amount of any indemnified Losses this Agreement shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included treated as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant (as determined for U.S. federal income tax purposes) and shall be reflected as an adjustment to the consideration allocated to a specific asset, if any, giving rise to the adjustment and if any such adjustment does not relate to a specific asset, such adjustment shall be allocated in accordance with the allocation principles set forth in Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss2.6. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIIISection, the Indemnified a Party shall repay have a duty to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such paymentmitigate its Losses. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Asset Purchase Agreement (Kindred Healthcare, Inc)

Indemnification Limitations. (a) In no event shall the Sellers be liable Except with respect to claims based on fraud and except for indemnification pursuant other remedies specifically provided for elsewhere in this Agreement (including with respect to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authorityspecific performance), the first two sentences rights of each the Buyer Indemnified Parties under this Article 9 shall be the sole and exclusive post-Closing remedies of Section 4.4(athe Buyer Indemnified Parties with respect to claims resulting from or relating to any breach of a representation or warranty by Seller contained in this Agreement or the other Transaction Documents or any claim for indemnification under Sections 9.1(d), (e) and 4.4(b(f). (b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and Neither party shall have liability with respect to claims under this Article 9 until the aggregate amount total of all Indemnifiable Losses with respect to Section 10.2(a)(isuch matters exceeds One Hundred Thousand Dollars ($100,000) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case case, the Purchaser Indemnified Parties shall be entitled to indemnification to the full amount of Indemnifiable Losses incurred by them for all the amount of Indemnifiable Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not of One Hundred Thousand Dollars ($100,000). (c) (i) be required Subject to make payments the limitations set forth in this Article 9, if Buyer believes that it has a claim for indemnification pursuant to Section 10.2(a)(i) 9.1 (other than a “Buyer Claim”), the amount of which is then known, the Buyer shall, as soon as reasonably practicable after it becomes aware of such Buyer Claim, notify the Seller of such Buyer Claim by means of a written notice describing the Buyer Claim in respect reasonable detail and setting forth the Buyer’s good faith calculation of the Excluded RepresentationsIndemnifiable Losses incurred by the Buyer with respect thereto (a “Buyer Claim Notice”). If, by the thirtieth (30th) day following receipt of a Buyer Claim Notice by the Seller and others identified in an aggregate amount in excess the Notice section of $18,000,000 this Agreement (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral SourceDispute Period”), (iix) any prior recovery by the Indemnified Party Buyer has not received from any Person with respect to such Losses, including by such Loss being included as a Liability the Seller notice in Final Net Working Capital and actually resulting in an adjustment writing that the Seller objects to the Purchase Price pursuant to Section 3.4(f), Buyer Claim Notice (or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of Indemnifiable Losses set forth therein) asserted in such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell Buyer Claim Notice (an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xiiIndemnification Dispute Notice”), and (xivy) and Section 2.5(b)(vi) (each if such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages Buyer Claim shall not apply have been made prior to the extent any such Excluded Liability relates Escrow Termination Date, the Buyer and the Seller shall deliver a joint written instruction to the Excluded Assets, Escrow Agent instructing the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts Escrow Agent to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement pay to the contrary, after Buyer or to reserve from the Closing, indemnification and specific performance pursuant to Escrow Fund the provisions amount of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth Indemnifiable Losses specified in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and Buyer Claim Notice subject to the terms and conditions of the provisions limitations contained in this Article X 9. If the Indemnifying Party is the Seller, the Seller will be entitled to defend, settle or compromise a Buyer Claim using the Escrow Fund, and Article VIII. All payments made pursuant the Seller and the Buyer shell jointly instruct the Escrow Agent to this Article X and Article VIII shall be made release funds held under by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing Escrow Agreement for this purpose in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to accordance with the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8the Escrow Agreement. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Asset Purchase Agreement (Peerless Systems Corp)

Indemnification Limitations. (a) In Notwithstanding any provision to the contrary contained in this Agreement, Seller shall be under no event shall the Sellers be liable for indemnification pursuant liability to indemnify Purchaser under Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a10.2(a) and 4.4(bno claim under Section 10.2(a) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not made: (i) be required unless notice thereof shall have been given by or on behalf of Purchaser to make payments for indemnification pursuant to Seller, in the manner provided in Section 10.2(a)(i) (other than in respect of 10.4, within the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or Survival Period; (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed loss may be recovered under a policy of insurance in force on or incurred by the Purchaser Indemnified Parties arising out date of such alternative shallloss; provided, subject to the termshowever, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to that this Section 10.2(b)(i10.2(b)(ii) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any that coverage under the applicable policy of insurance is denied by the applicable insurance carrier; (iii) to the extent that such Excluded Liability claim relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) liability arising out of or relating to any act, omission, event or occurrence connected with: (A) the use, ownership or operation of the Hospital, or (B) the use, ownership or operation of any of the Assets, on and after the Effective Time (without regard to whether such use, ownership or operation is consistent with Seller’s policies, procedures and/or practices prior to the Effective Time), other than as specifically included in connection with the Excluded Liabilities; (iv) to the extent that Purchaser had Knowledge of (A) the respective breach of a representation and warranty by Seller or (B) other indemnifiable event, prior to the Effective Time; (v) to the extent such claim relates to an obligation or liability for which Purchaser has agreed to indemnify Seller pursuant to Section 10.3; or (vi) or accrue to Purchaser unless the liability of Seller in respect of any single claim or multiple claims in the aggregate exceeds Two Hundred Fifty Thousand Dollars ($250,000) (a “Relevant Claim”) in which event Purchaser shall be entitled to seek indemnification for the total amount of the Relevant Claim(s). Notwithstanding any provision to the contrary contained in this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard maximum aggregate liability of Seller to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in Purchaser under this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect shall not exceed fifty percent (50%) of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Asset Purchase Agreement (Horizon Health Corp /De/)

Indemnification Limitations. (a) In no event shall the Sellers Honeywell be liable for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)9.2(a)(i) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i9.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds Eight Million Dollars ($1,400,000 8,000,000) (the “Threshold "Deductible Amount"), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses in excess of the Deductible Amount; provided, however, that any Losses in respect of breaches of the representations and warranties contained in Sections 3.4, 3.7 and 3.11 (the "Excluded Representations") shall be recoverable from the first dollardollar of Loss and shall not be subject to the Deductible Amount (and, including both as such, shall not reduce the Threshold Deductible Amount and any amounts in excess thereofotherwise available). Notwithstanding anything herein to the contraryforegoing, the Sellers Honeywell shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations9.2(a)(i) in an aggregate amount in excess of One Hundred Sixty Million Dollars ($18,000,000 (the “Indemnification Cap”160,000,000), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect connection with breaches of any of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i9.2(b)(i) in an aggregate amount in excess of the Indemnification CapOne Hundred Sixty Million Dollars ($160,000,000). (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made is actually recovered pursuant to Article VII or could be made under any other representation, warranty, covenant, or agreement this Article IX and shall be computed net of (i) payments actually recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collectionit being understood and agreed that, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) without affecting the Indemnified Party’s right to indemnification hereunder (each, a “Collateral Source”unless proceeds are recovered), (ii) the Indemnified Party shall, where appropriate and commercially reasonable, make claims under applicable insurance policies, other than self-insurance or retrospective policies but that the Indemnified Party shall have no obligation to engage in any prior recovery litigation in connection therewith); provided, however, that the Purchaser Indemnified Parties shall have no obligation to make any claim under any insurance policy in respect of Losses related to any Excluded Liability or Indebtedness for which Honeywell is obligated to indemnify pursuant to Section 9.2(a). Any indemnification payment payable under this Agreement shall be net of any Tax Benefit actually realized by the Indemnified Party from in respect of any Person with respect to such Lossesindemnified Loss. For purposes hereof, including by such Loss being included as a Liability "Tax Benefit" means any refund of Taxes paid or reduction in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually Taxes which otherwise would have been paid by any Indemnified Party as a result of such party’s indemnified Loss (with the timing of the receipt or realization of such refund or reduction to be estimated in good faith by the Indemnified Party), net of any increase in Taxes paid by the Indemnified Party on account of receipt of the indemnification payment with respect payment. Purchaser shall cause its independent auditor to such Loss. In the event of any indemnification claim paid, Honeywell may, certify in its sole discretion, require the Indemnified Party to grant writing to Honeywell an assignment if and when Purchaser receives or realizes such refund or reduction, and such certification shall be conclusive evidence of the right of such Indemnified Party to assert a claim against any Collateral Source. If the fact and amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such paymentthereof. (c) Subject In no event shall Honeywell or Purchaser be liable for (i) any punitive or consequential damages regardless of the form of action through which such damages are sought or (ii) any lost profits of any Person (but only to the extent that such lost profits would be deemed to constitute consequential damages), unless, in the case of clause (i) and (ii) above, but subject to the other provisions of this Article XSection 9.4, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable recovered by a third party in a Third Party Claim pursuant to an unaffiliated third order entered against a Purchaser Indemnified Party or in a settlement agreement to which a Purchaser Indemnified Party is a party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein Purchaser Indemnified Party shall not include promptly appeal any such order if Honeywell requests it to do so, provided that Honeywell promptly pays all fees, expenses, costs and damages related incurred through to lost profitssuch date and pays all fees, diminution expenses, costs and damages when and as incurred after such date, in value (including multiple of earnings or similar metrics for measuring damageseach case, which are incurred in connection with such Third Party Claim and posts any necessary bonds pending such appeal), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, indemnification for Losses that are imposed on or operation or conduct incurred by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties toarising out of or related or attributable to (i) the Excluded Liabilities or (ii) any Indebtedness for which Honeywell is obligated to indemnify pursuant to Section 9.2(a)(iv). The Parties acknowledge that, subject to the other provisions of Section 9.4, nothing in this Section 9.4(c) shall limit Purchaser's right to seek damages (other than punitive or consequential damages) corresponding to the diminution in value, if any, of the SPI Group as measured against the Purchase Price arising out of or related to Seller’s breach of the representations, warranties and covenants set forth in this Agreement. By way of illustration, in good faithsuch event, Purchaser would be entitled to seek damages corresponding to the amount by which Purchaser would have reduced the Purchase Price paid at closing for the SPI Group (x) agree upon what portion using the same valuation methodology used by Purchaser at the time of damages (if any) constitute consequential damages in connection with the settlement its execution and delivery of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority this Agreement to determine what portion the amount of damages (if anythe Purchase Price) constitute consequential damages as part had Purchaser been aware of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claimbreach on the Closing Date. (d) Notwithstanding anything else contained The remedies provided in this Agreement to Article IX, Article VII and, if the contrary, after the Closing, indemnification and specific performance Restructuring Transactions are not consummated pursuant to the provisions of this Article XSection 10.11(a), Section 6.14 and Article VIII 10.11(b) shall be deemed the sole and exclusive remedy remedies of the parties parties, from and after the Closing Date, with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard related to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for hereincontemplated hereby, except for with respect to claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, based on fraud which claims shall, in any case, be subject to the provisions of Sections 4.233.21, 5.7(a)-(d)3.22, 11.7 4.6, 4.9, 10.8 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision 10.9 of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that Agreement. Nothing herein shall prevent a party from seeking injunctive relief as provided in Section 5.14. All payments made pursuant to this Articles VII and IX shall be entitled deemed to injunctive relief be adjustments to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefPurchase Price.

Appears in 1 contract

Samples: Stock Purchase Agreement (Honeywell International Inc)

Indemnification Limitations. (a) In no event Notwithstanding anything to the contrary contained in this Agreement, the following limitations shall the apply to indemnification claims under this Agreement: (i) Sellers shall not be liable for indemnification required to indemnify and hold harmless any Buyer Indemnified Party pursuant to Section 10.2(a)(i8.2(a), (A) if such claim or demand otherwise was raised (other than whether or not accepted) in connection with the Purchase Price adjustment procedures set forth in Section 2.7, (B) with respect to any individual claim for payment of any Loss, unless such claim involves Losses in excess of $20,000 (nor shall any such item be considered for purposes of calculating the aggregate amount of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(aBuyer Indemnified Parties' Losses) and 4.4(b(C) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser which Buyer Indemnified Parties exceeds shall be entitled exceed $1,400,000 200,000 (the “Threshold Amount”"Seller Deductible"), in which case the Purchaser Seller Indemnifying Party shall only be liable for the amount by which all Losses exceed the Seller Deductible. (ii) (A) The aggregate indemnification obligations of Sellers pursuant to Section 8.2(a)(i) (other than for breaches of the representations and warranties set forth in Sections 3.1 (organization and authority of Sellers) or 3.3 (Foremost Shares)) and Section 8.2(a)(ii) shall in no event exceed $500,000, (B) the aggregate indemnification obligations of Sellers (x) pursuant to Section 8.2(a)(i) solely in respect of breaches of the representations and warrantees set forth in Sections 3.1 (organization and authority of Sellers) and 3.3 (Foremost Shares), (y) pursuant to Section 8.2(a)(iii) (Excluded Liabilities) and (z) pursuant to Section 8.5(a) (Taxes of Foremost) shall in no event exceed $2,000,000 and (C) the cumulative aggregate indemnification obligations of Sellers hereunder shall in no event exceed $2,000,000. (iii) Buyer shall not be required to indemnify and hold harmless any Seller Indemnified Party pursuant to Section 8.2(b), (A) if such claim or demand otherwise was raised (whether or not accepted) in connection with the Purchase Price adjustment procedures set forth in Section 2.7, (B) with respect to any individual claim for payment of any Loss, unless such claim involves Losses in excess of $20,000 (nor shall any such item be considered for purposes of calculating the aggregate amount of the Seller Indemnified Parties' Losses) and (C) until the aggregate amount of Losses to which Seller Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of exceed $18,000,000 200,000 (the “Indemnification Cap”"Buyer Deductible"), or (ii) in which case the Buyer Indemnifying Party shall only be liable for indemnification with respect to any Loss the amount by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and which all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers Buyer Deductible. (iv) The cumulative indemnification obligations of Buyer hereunder shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Capno event exceed $2,000,000. (b) In calculating amounts payable to an Indemnified Party hereunderBuyer acknowledges and agrees that, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement from and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closingdate hereof, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the its sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out relating to the subject matter of or in connection with this Agreement, Agreement shall be pursuant to the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies indemnification provisions set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant heretoArticle VIII. Without limiting the generality or effect In furtherance of the foregoing, as a material inducement to for the Sellers entering into execution and delivery of this AgreementAgreement by Sellers, Purchaser Buyer, on behalf of itself and its Affiliates, hereby waives, from and after the Closingdate hereof, to the fullest extent permitted under applicable law, any claim or cause and all rights, claims and causes of action, known and unknown, foreseen and unforeseen, which action it or any of the other Purchaser Indemnified Parties may have against any Seller Sellers (or any their Affiliates or representatives) relating to the subject matter of this Agreement, the Business (or its Affiliatesoperations) or otherwise, whether known or unknown, including without limitation claims arising under the common law or federal based upon any federal, state or state securities Lawslocal statute, trade regulation Laws law, ordinance, rule or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for hereinregulation, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8Agreement. (ec) The Buyer acknowledges and agrees that, other than the representations and warranties of Sellers and Purchaser acknowledge and agree that expressly set forth in Article III hereof, there are no representations or warranties of Sellers expressed or implied relating to the other parties would be damaged irreparably in the event any provision subject matter of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would Sellers or the Business (or its operations) and that there shall be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have claim against Sellers or the right, in addition Business or their Affiliates or representatives or right to indemnification with respect to any information (whether written or oral), documents or materials furnished by such parties (or any of their Affiliates or representatives) to Buyer or any of its Affiliates or representatives, including any "business plan," "executive summary," confidential information memorandum or other rights and remedies existing marketing materials, or any information contained therein, or any projections, estimates or budgets heretofore delivered to or made available to Buyer of future revenues, expenses or expenditures, future results of operations (or any component thereof), future cash flows or future financial condition (or any component thereof) of the Business. Except as expressly provided in its favorthis Agreement, to enforce its rights and Buyer is accepting the Sellers’ obligations hereunder not only by action for damages but also by action for specific performanceTransferred Assets on an "as is, injunctivewhere is, and/or other equitable reliefwith all faults" basis.

Appears in 1 contract

Samples: Asset and Stock Purchase Agreement (Tufco Technologies Inc)

Indemnification Limitations. (a) In no event shall Notwithstanding any provision to the Sellers be liable for indemnification pursuant to Section 10.2(a)(i) (other than contrary contained in respect of the representations and warranties in Section 4.1 (Corporate Status)this Agreement, Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled under no liability to indemnification for all Losses from the first dollar, including both the Threshold Amount indemnify Seller under 10.3.1 and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not no claim under Section 10.3.1 of this Agreement shall: (i) be required made unless notice thereof shall have been given by or on behalf of Seller to make payments for Purchaser in the manner provided in Section 10.4, unless failure to provide such notice in a timely manner does not materially impair Purchaser’s ability to defend its rights, mitigate damages, seek indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), from a third party or otherwise protect its interests; (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) made to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed loss may be recovered under a policy of insurance in force on or incurred by the Purchaser Indemnified Parties arising out date of such alternative shallloss; provided, subject to the termshowever, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to that this Section 10.2(b)(i10.3.2(a)(ii) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any that coverage under the applicable policy of insurance is denied by the applicable insurance carrier; (iii) be made to the extent that such Excluded Liability claim relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, a liability of Seller or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) TRH arising out of or relating to any act, omission, event or occurrence connected with: (A) the use, ownership or operation of any of the Hospitals, or (B) the use, operation or ownership of any of the Assets or the assets comprising the TRH Businesses, prior to the Effective Time, other than as specifically included in connection with the Assumed Obligations; (iv) be made to the extent such claim relates to an obligation or liability for which Seller has agreed to indemnify Purchaser pursuant to Section 10.2; (v) be made to the extent such claim seeks Consequential Damages; provided, however, the limitation contained in this Section 10.3.2(a)(v) shall not apply to the extent of any payments which Seller or any affiliate of Seller is required to make to a third party which are in the nature of Consequential Damages; and (vi) accrue to Seller unless and only to the extent that (A) the actual liability of Purchaser in respect of any single claim under Section 10.3.1 (a) exceeds Five Thousand Dollars ($5,000) (a “Seller Relevant Claim”) and (B) the total actual liability of Purchaser in respect of all Seller Relevant Claims in the aggregate exceeds One Million Dollars ($1,000,000), in which event Seller shall be entitled to seek indemnification under Section 10.3.1(a) for all Seller Relevant Claims in the full amount of Damages. (b) Notwithstanding any provision to the contrary contained in this Agreement, the Ancillary Agreements and maximum aggregate liability of Purchaser to Seller under this Agreement, subsequent to Purchaser paying the transactions contemplated hereby and thereby Cash Purchase Price at Closing (other than remedies set forth in the Ancillary Agreements with regard as adjusted pursuant to Section 1.4), shall not exceed an additional amount equal to the transactions contemplated thereby)Cash Purchase Price. (c) If Seller is entitled to recover any sum (whether by payment, including discount, credit or otherwise) from any third party in respect of any misrepresentation or breach matter for which a claim of indemnity could be made against Purchaser hereunder, Seller shall use its reasonable endeavors to recover such sum from such third party and any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting sum recovered will reduce the generality or effect amount of the foregoing, as claim. If Purchaser pays to Seller an amount in respect of a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may beclaim, and Seller subsequently recovers from a third party a sum which is referable to that claim, Seller shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary hereinforthwith repay such amount Purchaser less all reasonable costs, nothing charges and expenses incurred by Seller in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure obtaining payment in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, that claim and in any case, be subject to recovering that sum from the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8third party. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Asset Sale Agreement (Health Management Associates Inc)

Indemnification Limitations. Notwithstanding any provision herein to the contrary: (a) In no event shall the Sellers be liable for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 party (the “Threshold Amount”), in which case the Purchaser "Indemnified Parties Party") shall be entitled to indemnification for all Losses under Section 8.2 until the aggregate amount otherwise payable under Section 8.2 exceeds $48,200.00 (the "Materiality Threshold Amount"), in which event the Indemnified Party shall be entitled to indemnification from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 party (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations"Indemnifying Party") to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of exceeds the Indemnification Cap.Materiality Threshold Amount; (b) In calculating amounts payable in no event shall the liability for any party (the Shareholders collectively being considered one party for purposes of this Section 8.4(b)) in the aggregate exceed $1,928,000.00 (the "Maximum Liability Amount"); (c) the amount of the Purchase Price represented by the Pledged Shares reflects part of the Maximum Liability Amount of the Shareholders, and is not in addition thereto, and to an Indemnified Party the extent funds are realized from the Pledged Shares for the payment of indemnification liabilities of the Shareholders hereunder, the amount of any indemnified Losses Shareholders' Maximum Liability Amount shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased decreased by the amount of any Tax detriment actually paid by any Indemnified Party as a result such funds; (d) the indemnification obligations of such party’s receipt each Shareholder hereunder shall be prorata to his respective ownership of the indemnification payment with respect to such Loss. In Company Shares as set forth in Section 1.3(d) hereof, and in the event of any indemnification claim paidby Buyer hereunder, Honeywell mayBuyer's recourse shall first be against the Pledged Shares, in its sole discretion, require prorata as to the Indemnified Party to grant to Honeywell an assignment percentage of the right of such Indemnified Party Pledged Shares issued to assert a claim against any Collateral Source. If the amount each Shareholder pursuant to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIIISection 1.3(d), the Indemnified Party shall repay to the Indemnifying Party, promptly after such determinationand thereafter, any amount that remaining indemnification obligations of the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at Shareholders shall be prorata based on each Shareholder's respective percentage of ownership of the time of such payment. (c) Subject to the other provisions of this Article XCompany Shares, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damagesaggregate indemnification obligations of the Shareholders, except to including the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct amount represented by the Sellers or any of their Affiliates of any business (other than Pledged Shares, exceed the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Maximum Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8.Amount; and (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a No party shall be entitled to injunctive relief to prevent breaches indemnification under this Article 8 based upon any alleged breach of any representation or warranty in this Agreement and to enforce specifically this Agreement and if such party, or any agent, representative, or beneficial owner thereof, knew at the terms and provisions hereof. In particular, the parties acknowledge time of Closing that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder such representation or warranty was not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relieftrue.

Appears in 1 contract

Samples: Stock Purchase Agreement (Brown & Brown Inc)

Indemnification Limitations. Notwithstanding any provision herein to the contrary: (a) In no event shall the Sellers be liable for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 party (the “Threshold Amount”), in which case the Purchaser "Indemnified Parties Party") shall be entitled to indemnification for all Losses under Section 8.2 until the aggregate amount otherwise payable under Section 8.2 exceeds $1,800.00 (the "Materiality Threshold Amount"), in which event the Indemnified Party shall be entitled to indemnification from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 party (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations"Indemnifying Party") to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of exceeds the Indemnification Cap.Materiality Threshold Amount; (b) In calculating amounts payable in no event shall the liability for any party (the Shareholders collectively being considered one party for purposes of this Section 8.4(b)) in the aggregate exceed $72,000.00 (the "Maximum Liability Amount"); (c) the amount of the Purchase Price represented by the Pledged Shares reflects part of the Maximum Liability Amount of the Shareholders, and is not in addition thereto, and to an Indemnified Party the extent funds are realized from the Pledged Shares for the payment of indemnification liabilities of the Shareholders hereunder, the amount of any indemnified Losses Shareholders' Maximum Liability Amount shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased decreased by the amount of any Tax detriment actually paid by any Indemnified Party as a result such funds; (d) the indemnification obligations of such party’s receipt each Shareholder hereunder shall be prorata to his respective ownership of the indemnification payment with respect to such Loss. In Company Shares as set forth in Section 1.3(d) hereof, and in the event of any indemnification claim paidby Buyer hereunder, Honeywell mayBuyer's recourse shall first be against the Pledged Shares, in its sole discretion, require prorata as to the Indemnified Party to grant to Honeywell an assignment percentage of the right of such Indemnified Party Pledged Shares issued to assert a claim against any Collateral Source. If the amount each Shareholder pursuant to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIIISection 1.3(d), the Indemnified Party shall repay to the Indemnifying Party, promptly after such determinationand thereafter, any amount that remaining indemnification obligations of the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at Shareholders shall be prorata based on each Shareholder's respective percentage of ownership of the time of such payment. (c) Subject to the other provisions of this Article XCompany Shares, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damagesaggregate indemnification obligations of the Shareholders, except to including the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct amount represented by the Sellers or any of their Affiliates of any business (other than Pledged Shares, exceed the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Maximum Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8.Amount; and (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a No party shall be entitled to injunctive relief to prevent breaches indemnification under this Article 8 based upon any alleged breach of any representation or warranty in this Agreement and to enforce specifically this Agreement and if such party, or any agent, representative, or beneficial owner thereof, knew at the terms and provisions hereof. In particular, the parties acknowledge time of Closing that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder such representation or warranty was not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relieftrue.

Appears in 1 contract

Samples: Stock Purchase Agreement (Brown & Brown Inc)

Indemnification Limitations. (a) In no event The Sellers and the Shareholders shall the Sellers be liable under Section 8.1(a) in respect of a misrepresentation or breach of warranty only if, and then only to the extent that, the aggregate amount of any Buyer Losses for which the Buyer is entitled to indemnification pursuant to such clause exceeds $100,000; provided, however, the Sellers' and the Shareholders' liability under Section 10.2(a)(i8.1(a) shall not be so limited if such Buyer Losses arise from a breach of any of the representations set forth in Sections 2.1, 2.2(a), 2.4(a) - (other than in respect d)(i) or 2.13. (b) The aggregate liability of the Sellers and Shareholders under Section 8.1(a) for Buyer Losses arising from a breach of the representations and warranties set forth in Section 4.1 (Corporate StatusSections 2.1, 2.2(a), Section 4.2 2.4(a) - (Authority)d)(i) or 2.13 shall not exceed the sum of the VTC, the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization)Contingent Payment, Section 4.7 (Taxes)if any, and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such paymentAdditional Payments. (c) Subject The aggregate liability of the Sellers and Shareholders under Section 8.1(a) for Buyer Losses arising from a breach of any representation or warranty other than those set forth in Sections 2.1, 2.2(a), 2.4(a) - (d)(i) or 2.13 shall not exceed $7,500,000. At Closing, Weatherford shall place fifty percent of the Weatherford Shares (the "Escrow Shares") in an escrow account, on terms reasonably satisfactory to Weatherford and the other provisions Seller, as security for the indemnification obligations of the Seller and Shareholders hereunder. All expenses of the escrow shall be borne by the Seller. All dividends and distributions in respect of the Escrow Shares shall be retained in such escrow account. The Seller shall have the right to direct the escrow agent to sell such Weatherford Shares in a Resale provided all the proceeds of such sale, including any investment grade debt securities purchased from a reinvestment of the proceeds, are retained in such escrow account. The Escrow Shares, any dividends or distributions in respect thereof and any proceeds therefrom shall be held in escrow for a period of two years following the Closing Date; provided, however, that if the Buyer or Weatherford shall have made a claim for indemnification pursuant to this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent 8 which has not been finally resolved by such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assetsdate, the Purchased Entities’ Excluded AssetsEscrow Shares, any dividends or operation distributions in respect thereof and any proceeds therefrom shall continue to be held in escrow until all claims have been resolved. Weatherford shall be entitled to offset against the Escrow Shares, any dividends or conduct by distributions in respect thereof or any proceeds therefrom, any amount which it shall be entitled to recover from the Sellers Seller or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties Shareholders with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made indemnifiable Buyer Losses pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers8, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23Section 8.6. Notwithstanding the foregoing, 5.7(a)-(d)if the Buyer, 11.7 the Seller and 11.8. (e) The Sellers and Purchaser acknowledge and the Shareholders do not agree on any amount that the other parties would be damaged irreparably in the event any provision of this Agreement Buyer is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief recover pursuant to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particularArticle 8, the parties acknowledge that Buyer shall not entitled to exercise its right of offset pursuant to this Section 8.9(c) until the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only matter has been resolved by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.binding

Appears in 1 contract

Samples: Asset Purchase Agreement (Weatherford International Inc /New/)

Indemnification Limitations. The rights and obligations of the Parties set forth in this Article VIII shall be subject to the following limitations: (a) In no event shall the The maximum aggregate amount that Sellers will be liable required to pay for indemnification pursuant to arising under Section 10.2(a)(i) (other than 8.3 in respect of all Claims by any Purchaser Indemnified Parties relating to the representations and warranties in Section 4.1 breach of any representation or warranty shall be fifteen percent (Corporate Status), Section 4.2 15%) of the Purchase Price (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded RepresentationsSellers’ Indemnification Cap”) and Section 4.17 no Seller shall have liability (Sufficiency of Assets)for indemnification or otherwise) unless and until the aggregate amount of all Losses with respect to the matters described in Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein 8.3 relating to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery breach of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned representation or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount warranty in excess of the Sellers’ Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder; provided, however, that if the amount of any indemnified Losses shall be determined without duplication of any other Loss Claim for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party arises from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated therebyany breach of Sections 3.2(b), including 3.3, 3.10, 3.14 or 11.18 or Article X or fraud by any Seller in respect of any misrepresentation representation or breach of any warranty, covenant or other provision contained warranty in this Agreement or in any certificate delivered other documents or instruments entered into in connection herewith or pursuant hereto. Without limiting , or as a result of a breach of covenant, then the generality or effect of Sellers’ Indemnification Cap shall not apply and the maximum aggregate amount that a Seller will be required to pay for such claim shall not be subject to any limit. (b) Notwithstanding the foregoing, as a material inducement no Seller shall be required to pay any amount with respect to any Claim for indemnification relating to the Sellers entering into this Agreementbreach of any representation or warranty, Purchaser hereby waivesand no Seller shall have liability (for indemnification or otherwise) with respect to the matters described herein unless and until the total, from and after the Closing, any claim or cause cumulative amount with respect to all Claims for which indemnification required hereunder has exceeded one-half of action, known and unknown, foreseen and unforeseen, which it or any one percent (0.5%) of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under Purchase Price (the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims“Sellers’ Indemnification Basket”), Taxafter which the Seller’s liability will be for the amount in excess of the Sellers’ Indemnification Basket; provided, environmentalhowever, real estate that the Seller’ Indemnification Basket will not apply to any indemnification Claims arising from or employee mattersin connection with breach of Sections 3.1, 3.2(b), by reason of this Agreement and the transactions provided for herein3.3, except for claims or causes of action brought under and 3.4(a), 3.8(b), 3.8(d) (subject to the terms and conditions of the provisions contained therein), 3.10, 3.11 3.13 3.14 or Article X or any fraud by any Sellers in any representation or warranty in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser Agreement or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation actual documents or warranty, which claims shall, instruments entered into in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8connection herewith or pursuant hereto. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Membership Interest Purchase Agreement (Lennar Corp /New/)

AutoNDA by SimpleDocs

Indemnification Limitations. (a) In no event shall Notwithstanding anything to the Sellers be liable for indemnification pursuant to Section 10.2(a)(icontrary in this Agreement: (i) (other than in respect None of the representations Purchaser Indemnified Persons and warranties in Equityholder Indemnified Persons may assert any claim for Losses under Section 4.1 (Corporate Status10.01(a), Section 4.2 (Authority10.01(b)(i) or 10.02(a), the first two sentences of each of Section 4.4(a) and 4.4(b) as applicable, (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)A) unless and until the aggregate amount of all such Losses with respect to Section 10.2(a)(i) that are imposed on actually incurred or incurred suffered by the such Purchaser Indemnified Parties Persons or Equityholder Indemnified Persons, as applicable, exceeds $1,400,000 an amount equal to 0.5% of the Base Purchase Price (the “Threshold AmountDeductible”), in which case the and then Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollarPersons or Equityholder Indemnified Persons, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contraryas applicable, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and may recover only such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. Deductible and (bB) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost individual claim or series of collectionrelated claims where the Losses relating thereto are less than $50,000; provided, deductiblehowever, retroactive premium adjustmentthat the Deductible and the limitations set forth in clause (i)(B) shall not apply to any indemnification obligation of Seller or Purchaser, reimbursement obligation as applicable, arising out of or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party resulting from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to breach of the Purchase Price pursuant to Section 3.4(f), (I) Fundamental Representations or (iiiII) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment.Specified Representations; (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable aggregate liability of Seller or Purchaser, as applicable, for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple all claims of earnings or similar metrics for measuring damagesLosses under Section 10.01(a), nor damages payable to an unaffiliated third party10.01(b)(i) arising out or 10.02(a) (other than Losses in respect of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iva breach of the Fundamental Representations or the Specified Representations), as applicable, exceed the Indemnity Cap; (v)(Aiii) in no event shall the aggregate liability of Seller under Sections 10.01(a) and 10.01(b) (other than in respect of a breach of the representations and warranties set forth in Section 3.07) exceed an amount equal to the Base Purchase Price; (iv) in no event shall the aggregate liability of Purchaser for all claims of Losses in respect of (1) a breach of the Fundamental Representations or (2) Section 10.02(b) and 10.02(c) exceed, in each case of clauses (1) and (2), an amount equal to the Base Purchase Price; and (vii)(B), (ix), (x), (xi), (xii), and (xivv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages Indemnity Cap shall not apply to any claims of Losses under Section 10.01(b)(ii), 10.01(c), or 10.01(d). (b) The Indemnified Parties shall use commercially reasonable efforts to mitigate all Losses for which such Indemnified Parties are seeking indemnification under this Article X, and no Indemnified Party shall be entitled to indemnification for any Losses to the extent of any Losses that are solely attributable to such Indemnified Party’s failure to use commercially reasonable efforts to mitigate such Losses. The amount of any Losses for which indemnification is provided for under this Article X shall be offset by any amounts actually recovered in cash by the Indemnified Parties as a result of any insurance proceeds actually received by the Indemnified Parties with respect to such Losses (net of the costs and expenses of obtaining any such Excluded Liability relates insurance proceeds, including the costs, if any, resulting from premium adjustments with respect to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Businesssuch insurance policy). Purchaser and the Sellers shall, Seller agree to (and Purchaser shall agree to cause the Purchaser other Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause make any claims for insurance and/or indemnification available from any third party and to diligently pursue such claims in good faith. (c) Any indemnification payments made pursuant to Section 10.01 or 10.02 shall be treated as an adjustment to the purchase price for all Tax purposes, unless otherwise required by applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim.Law; (d) Notwithstanding anything else contained in any other provision of this Agreement to the contrary, no Purchaser Indemnified Person shall be entitled to indemnification under this Article X for any Losses (i) to the extent such Losses are fully reflected in the Final Closing Adjustment and arise out of or are based upon the breach or failure to be true and correct of any representation or warranty set forth in Article III or Article IV or (ii) in respect of any liability or obligation of the Company (other than the liabilities and obligations set forth in clause (iii) of the definition of Retained Liabilities), whether arising prior to, on or after the Closing, indemnification that arises under or relates to Environmental Laws or Environmental Permits, or otherwise to Hazardous Materials, as it is the parties’ express agreement and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be intent that the sole and exclusive remedy of for any and all such liabilities and obligations shall be pursuant to the parties Representation and Warranty Policy and the Environmental Policy; (e) No party shall be entitled to make any claim for indemnification under this Article X with respect to (i) any and all claims matter forming the basis for a dispute with respect to the Closing Statement pursuant to Section 2.03 or (whether in contract ii) any Loss to the extent such Indemnified Party has been indemnified or in tort) arising out reimbursed for such Loss under any other provision of or in connection with this Agreement; (f) Upon making any indemnity payment hereunder, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard Indemnifying Party will, to the transactions contemplated thereby)extent of such payment or amount, including be subrogated to all rights of the Indemnified Party against any third party in respect of any misrepresentation the Loss to which such payment or breach amount related; provided, however, if an Equityholder Indemnified Person is the Indemnified Party, the Indemnifying Party making such payment or amount will not be subrogated to the rights of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant heretosuch Equityholder Indemnified Person if the insurer under the Representation and Warranty Policy has a right to subrogation. Without limiting the generality or effect of any other provision hereof, each Indemnified Party and Indemnifying Party will duly execute upon request all instruments reasonably necessary to evidence and perfect the foregoingabove-described subrogation and subordination rights; (g) Any liability for indemnification hereunder will be determined without duplication of recovery by reason of the state of facts giving rise to such liability constituting a breach of more than one representation, warranty, covenant or agreement or more than one right to indemnification; and (h) Except for the representations and warranties contained in Article III and Article IV, (A) Seller and the Company have not made any representation or warranty, expressed or implied, as to Seller or the Company, (B) Purchaser has not relied upon, and will not assert that it has relied upon, and specifically disclaims reliance on, any representation or warranty (express or implied) of Seller or the Company or other information regarding Seller or the Company that is not set forth in Article III or Article IV and (C) except in the case of a material inducement to breach of the Sellers entering into representations and warranties contained in this Agreement, none of Seller or its Affiliates shall have or be subject to any liability to Purchaser hereby waivesor any other person resulting from the furnishing prior to the date hereof to Purchaser or its Representatives, from and after the Closingor their use of or reliance on, any claim or cause of action, known and unknown, foreseen and unforeseen, which it such information or any information, documents or material made available prior to the date hereof to Purchaser or its Representatives in any form in expectation of, or in connection with, the Transactions. (i) The representations, warranties, covenants and agreement of the other Purchaser Indemnifying Party and the Indemnified Parties may have against Party’s right to indemnification with respect thereto, shall not be affected or deemed waived by reason of any Seller investigation made by or on behalf of the Indemnified Party (including any of its Representative) or by reason of the fact that the Indemnified Party or any of its AffiliatesRepresentatives knew or should have known that any such representation or warranty is, including without limitation under the common law was or federal might be inaccurate or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims Indemnified Party’s waiver of any condition set forth in Article VII or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8applicable. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Purchase and Sale Agreement (PBF Logistics LP)

Indemnification Limitations. (a) In Other than pursuant to Section 8.4(i), in no event shall the Sellers Indemnitor Stockholders be liable for indemnification pursuant to Section 10.2(a)(i8.2(a)(i) (other than in respect of the representations and warranties in or Section 4.1 (Corporate Status8.2(a)(ii), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) thereto that are imposed on or incurred by the Purchaser Indemnified Parties thereunder exceeds Two Million Dollars ($1,400,000 2,000,000) (the “Threshold AmountDeductible”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification by the Indemnitor Stockholders in full for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”)Deductible; provided, or (ii) be liable that no claim for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i8.2(a)(i) or Section 8.2(a)(ii) shall be asserted for any individual item or a series of related items where the Losses with respect to such item or series of related items (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, ) are less than One Hundred Fifty Thousand Dollars ($15,000 150,000) (each, a the De Minimis LossBasket”) (and if the Losses relating to such item or series of related items, do not exceed the Basket, then such Losses shall be disregarded and shall not be aggregated for purposes counted toward satisfaction of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amountDeductible). Notwithstanding anything to Further, the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser Indemnitor Stockholders shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i8.2(a)(i), Section 8.2(a)(ii) and/or Section 8.2(a)(iv) in an aggregate amount in excess of Twenty-Five Million Dollars ($25,000,000) (the Indemnification “Cap”). Notwithstanding the prior sentence, the Cap shall not apply to any Losses incurred by Purchaser Indemnified Parties which arise out of or result from the breach of any Fundamental Representation or for any Losses arising out of or relating to Section 8.2(a)(iii), Section 8.2(a)(v) or Section 8.2(a)(vi); provided, however, that in no event shall the aggregate amount payable to Purchaser Indemnified Parties for all Losses which arise out of or result from Section 8.2(a) exceed Three Hundred Ten Million Dollars ($310,000,000) (the “Aggregate Cap”). (b) Notwithstanding anything else to the contrary, on and after the Closing, the sole and exclusive remedy of Purchaser Indemnified Parties for any Losses hereunder will be to make a claim in accordance with the terms of this Article 8 and, at such time that the Purchaser Indemnified Parties’ Losses indemnified hereunder pursuant to Section 8.2(a) equal the Cap, the Purchaser Indemnified Parties will have no further right to indemnification under this Article 8, except for any Losses incurred by the Purchaser Indemnified Parties arising out of or resulting from any breach of any Fundamental Representation or for any Losses arising out of or resulting from Section 8.2(a)(iii), Section 8.2(a)(v) or Section 8.2(a)(vi) all of which shall be subject to the Aggregate Cap, provided, however, that nothing contained in this Agreement shall limit any Party’s remedies for fraud. Notwithstanding anything in this Agreement to the contrary, all amounts payable to Purchaser Indemnified Parties pursuant to this Article 8 shall be satisfied solely from the funds then in the Escrow Account until the funds in the Escrow Account have been exhausted, and thereafter, the Purchaser Indemnified Parties will have no further right to indemnification under this Article 8 except for Losses incurred by the Purchaser Indemnified Parties arising out of or resulting from any breach of any Fundamental Representation or for any Losses arising out of resulting from Section 8.2(a)(iii), Section 8.2(a)(v), or Section 8.2(a)(vi), all of which shall be subject to, in the aggregate, the Aggregate Cap. Notwithstanding anything else herein, the parties hereby acknowledge and agree that, once the funds in the Escrow Account have been exhausted, any liability of the Indemnitor Stockholders hereunder surviving shall be several (in accordance with their respective Percentage Interests) and not joint. If the Closing occurs, the Indemnitor Stockholders will have no indemnification liability under this Article 8 unless during the applicable Survival Period, Purchaser notifies the Indemnitor Stockholders pursuant to the notice provisions set forth in Section 10.2 of a claim specifying the factual basis of that claim in reasonable detail to the extent then known by Purchaser. (c) If the Closing occurs, Purchaser or Merger Sub will have no indemnification liability under this Article 8 with respect to (i) any representation or warranty of Purchaser or Merger Sub, or (ii) any covenant or obligation to be performed and complied with by Purchaser or Merger Sub after the Closing Date, unless on or before the expiration of the applicable Survival Period, the Company Indemnified Parties notify Purchaser pursuant to the provisions set forth in Section 10.2 of a claim specifying the factual basis of that claim in reasonable detail to the extent then known by the Company Indemnified Parties. All payments required from Purchaser or Merger Sub for indemnification pursuant to Section 8.2(b) shall be subject to the Basket, Deductible and Cap; provided, however that the Cap shall not apply to any Losses incurred by the Company Indemnified Parties which arise out of or result from a breach by Purchaser or Merger Sub of Section 4.2 (Power and Authority; Authorization; Valid and Binding), or Section 4.5 (Brokers); provided further, that the Basket, Deductible and Cap shall not apply to any Losses arising out or relating to the failure of the Company to timely pay the Delayed COC Payments; provided further, however, that in no event shall the aggregate amount payable to the Company Indemnified Parties for all Losses pursuant to Section 8.2(b) exceed the Aggregate Cap. (bd) In calculating amounts payable to an Indemnified Party hereunderParty, the amount of any the indemnified Losses shall not be determined without duplication duplicative of any other Loss for which an indemnification claim has been made or could be made under any other representationmade, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”)Losses, (ii) any prior or subsequent recovery by the Indemnified Party from any Person (other than an Indemnifying Party) with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit reduction actually received by a Purchased Entity with respect to such Losses realized in the Indemnified Party’s (or any Affiliate’s) income tax liability for the taxable year of in which the indemnity payment Loss was paid or a prior year, but increased by incurred or in the amount of any Tax detriment actually paid by any Indemnified Party two subsequent taxable years as a result of paying or incurring such party’s receipt Loss, calculated on a with or without basis, and (iv) all reserves related to the specific matter subject to indemnification on the Final Closing Statement or reflected in Adjusted Net Working Capital as of the indemnification payment with respect to such LossClosing. In For the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions purposes of this Article X8, but notwithstanding any other provision of this Agreementanything herein to the contrary, (i) in no event shall the Sellers Company, the Indemnitor Stockholders, Purchaser or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers Merger Sub be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to , special damages, punitive damages, lost profits, damages calculated as a multiple of earnings or revenue, diminution in value (including multiple or loss of earnings business reputation or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8opportunity. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party Each Person entitled to indemnification hereunder shall be entitled obligated to injunctive relief use its reasonable best efforts to prevent breaches mitigate all Losses after becoming aware of this Agreement and any event which could reasonably be expected to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition give rise to any other rights and remedies existing Losses that are indemnifiable or recoverable hereunder or in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefconnection herewith.

Appears in 1 contract

Samples: Merger Agreement (Davita Inc)

Indemnification Limitations. (a) In no event shall Notwithstanding the foregoing, the obligation of Sellers be liable for to provide indemnification pursuant to this Section 10.2(a)(i9.2 will be subject to the following limitations (provided that the following limitations shall not apply to any claim involving fraud): (1) With respect to claims for indemnification by Buyer Parties under Section 9.2(a)(1) (other than in respect of the representations and warranties in Section 4.1 (Corporate StatusFundamental Representations), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) Sellers will have no obligation to provide indemnification unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Buyer Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to under Section 10.2(a)(i9.2(a)(1) (other than in respect of the Excluded Fundamental Representations) in an aggregate amount exceeds 0.5% of the Base Purchase Price (the “Threshold”), and then only for Losses in excess of $18,000,000 the Threshold. (2) To the “Indemnification Cap”), extent that Sellers have any obligation or (ii) be liable for indemnification with respect liability to any Loss by the Purchaser Indemnified Parties a Buyer Party pursuant to Section 10.2(a)(i9.2(a)(1) (other than in respect of the Fundamental Representations and Excluded Representations) to the extent such Loss and all Losses arising out ), Sellers’ total obligation or liability therefor will not exceed 1.0% of the same facts Base Purchase Price. (3) (A) Sellers’ total liability pursuant to (i) Section 9.2(a)(1) for Losses in respect of Excluded Representations, (ii) Section 9.2(a)(7), and circumstances are, (iii) Section 9.2(a)(9) will not exceed 7.5% of the Base Purchase Price in the aggregate, less than $15,000 . (each, a B) Sellers’ total liability with respect to claims made pursuant to Section 9.2(a)(7) on or before the fourth anniversary of the Closing (De Minimis LossFirst Period Claims”) (and such Losses shall be disregarded and shall will not be aggregated for purposes exceed 6.0% of the Threshold Amount unless and until such Losses arising out Base Purchase Price in the aggregate. (C) Sellers’ total liability with respect to claims made pursuant to Section 9.2(a)(7) after the fourth anniversary of the same facts Closing and on or circumstances before the seventh anniversary of the Closing will not exceed 3.5% of the De Minimis Loss amountBase Purchase Price in the aggregate (the “Second Period Cap”); provided that any final liability of Sellers in respect of First Period Claims will reduce the Second Period Cap dollar-for-dollar. Notwithstanding anything (D) Sellers’ total liability with respect to claims made pursuant to Section 9.2(a)(8) will not exceed $25 million in the aggregate. (E) Once (x) a Title Policy is issued to the contrary hereinCompany pursuant to Section 6.18(a) in respect of the Main Facility and (y) Sellers have been liable for at least $10 million with respect to claims made pursuant to Section 9.2(a)(8) relating to the Main Facility, Sellers shall have ninety (90) days after the receipt thereafter only be liable for 50% of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect subject to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price indemnity pursuant to Section 3.4(f), or (iii9.2(a)(8) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay relating to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such paymentMain Facility. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Unit Purchase Agreement

Indemnification Limitations. (a) In no event shall Notwithstanding any provision to the Sellers be liable for indemnification pursuant to Section 10.2(a)(i) (other than contrary contained in respect of the representations and warranties in Section 4.1 (Corporate Status)this Agreement, Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled under no liability to indemnification for all Losses from the first dollar, including both the Threshold Amount indemnify Seller under 10.3.1 and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not no claim under Section 10.3.1 of this Agreement shall: (i) be required made unless notice thereof shall have been given by or on behalf of Seller to make payments for Purchaser in the manner provided in Section 10.4, unless failure to provide such notice in a timely manner does not materially impair Purchaser's ability to defend its rights, mitigate damages, seek indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), from a third party or otherwise protect its interests; (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) made to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed loss may be recovered under a policy of insurance in force on or incurred by the Purchaser Indemnified Parties arising out date of such alternative shallloss; provided, subject to the termshowever, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to that this Section 10.2(b)(i10.3.2(a)(ii) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any that coverage under the applicable policy of insurance is denied by the applicable insurance carrier; (iii) be made to the extent that such Excluded Liability claim relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any a liability of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) Seller arising out of or relating to any act, omission, event or occurrence connected with: (A) the use, ownership or operation of any of the Hospitals, or (B) the use, operation or ownership of any of the Assets, prior to the Effective Time, other than as specifically included in connection with the Assumed Obligations; (iv) be made to the extent such claim relates to an obligation or liability for which Seller has agreed to indemnify Purchaser pursuant to Section 10.2; (v) be made to the extent such claim seeks Consequential Damages; provided, however, the limitation contained in this Section 10.3.2(a)(v) shall not apply to the extent of any payments which Seller or any affiliate of Seller is required to make to a third party which are in the nature of Consequential Damages; and (vi) accrue to Seller under Section 10.3.1(a) unless and only to the extent that (A) the actual liability of Purchaser in respect of any single claim under Section 10.3.1 (a) exceeds the Relevant Claim threshold and (B) the total actual liability of Purchaser in respect of all Relevant Claims under Section 10.3.1(a) in the aggregate exceeds the Aggregate Amount, in which event Seller shall be entitled to seek indemnification under Section 10.3.1 (a) for all Relevant Claims only in an amount of Damages which exceed the Aggregate Amount. (b) Notwithstanding any provision to the contrary contained in this Agreement, the Ancillary Agreements and maximum aggregate liability of Purchaser to Seller under this Agreement, subsequent to Purchaser paying the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard Cash Purchase Price at Closing, shall not exceed an additional amount equal to the transactions contemplated thereby)Cash Purchase Price. (c) If Seller is entitled to recover any sum (whether by payment, including discount, credit or otherwise) from any third party in respect of any misrepresentation or breach matter for which a claim of indemnity could be made against Purchaser hereunder, Seller shall use its reasonable endeavors to recover such sum from such third party and any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting sum recovered will reduce the generality or effect amount of the foregoingclaim. If Purchaser pays to Seller an amount in respect of a claim, as and Seller subsequently recovers from a material inducement third party a sum which is based on the same claim, Seller shall forthwith repay to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any so much of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliatesamount paid by it as does not exceed the sum recovered from the third party less all reasonable costs, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws charges and expenses (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), reasonable attorneys fees) incurred by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained Seller in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing obtaining payment in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, that claim and in any case, be subject to recovering that sum from the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8third party. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Asset Sale Agreement (Integrated Healthcare Holdings)

Indemnification Limitations. Notwithstanding the foregoing, the obligation of Sellers to provide indemnification pursuant to this Section 7.2 will be subject to the following limitations (provided that the following limitations shall not apply to any claim involving Fraud by or on behalf of the Company or any Seller, including any Fraud committed by any officer, manager, director, employee or agent of the Company or any Seller in connection with the consummation of the transactions contemplated by this Agreement): (1) Without limiting the other limitations of this Section 7.2(b), each Seller's total liability pursuant to Section 7.2(a)(1), Section 7.2(a)(3), Section 7.2(a)(4) and Section 7.2(a)(5) will not exceed in the aggregate the final Purchase Price actually received by such Seller, except, in the case of DSD, for DSD's obligations pursuant to Section 7.7(a), which shall not exceed in the aggregate the final Purchase Price actually received by all Sellers under this Agreement. (2) Without limiting the other limitations of this Section 7.2(b), to the extent that coverage is available under the R&W Insurance Policy: (x) no Seller will have any liability pursuant to Section 7.2(a)(1) in respect of Fundamental Representations or pursuant to Section 7.2(a)(3), in any case, other than for the then-remaining amount of the Retention (as such term is defined in the R&W Insurance Policy), unless and until the Limit of Liability (as such term is defined in the R&W Insurance Policy) is met or exceeded; and (y) the Buyer Party shall use commercially reasonable efforts to pursue such claim against the R&W Insurance Policy before pursuing such claim directly against any Seller (but, for clarity, the Buyer Party shall not be under any obligation to institute any suit, action or other proceeding against the insurers under such R&W Insurance Policy and a notice of a claim under this Article 7 may nonetheless be given at any time under this Article 7). (3) The amount of Losses for which indemnification is provided under this Section 7.2 will be offset by: (a) In amounts that are reimbursable by and actually recovered from insurance (net of any deductible or co-payment and all out of pocket costs related to such recovery) and (b) any Tax benefits actually realized by the Indemnified Party by reason of such Losses in the year in which the corresponding indemnity payment is made or any prior year. (4) Any specific Losses for which a Buyer Party would otherwise be entitled to indemnification under the terms of this Section 7.2 shall not be indemnifiable Losses under the terms of this Section 7.2 to the extent such Losses are taken into account in determining and reflected in the final Closing Working Capital or other Purchase Price Components. (5) Except to the extent awarded in a Third Party Claim, in no event shall the Sellers any Seller be liable under this Agreement for indemnification pursuant punitive damages, regardless of the form of action through which such damages are sought. (6) Sellers shall have no obligation to Section 10.2(a)(i) (other than in respect indemnify the Buyer Parties from and against any Losses consisting of or relating to Taxes for any Post-Closing Tax Period as a result of any breach of the representations and warranties in Section 4.1 (Corporate Status), 3.13 other than the representations and warranties in Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”3.13(n) and Section 4.17 (Sufficiency of Assets3.13(o)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Stock Purchase Agreement (Malibu Boats, Inc.)

Indemnification Limitations. Buyer on the one hand and the Sellers on the other hand may recover under indemnification claims under Sections 8.1(b) and 8.2(b), respectively, (a) In no event shall only to the Sellers be liable for indemnification pursuant to Section 10.2(a)(i) (other than extent such Party’s claims in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(ihave exceeded Seven Hundred and Fifty Thousand Dollars ($750,000) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled ) and (b) only up to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate indemnified amount in excess of Fifteen Million Dollars ($18,000,000 15,000,000) (the “Indemnification Buyer Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to claims under Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”8.2(b), (ii) any prior recovery an aggregate amount of Twenty Million Dollars ($20,000,000) (the “Healthcare Cap”) for claims arising under Section 8.1(b) with respect to breaches by the Sellers of Sections 2.20, 2.21, 2.22. 2.23, 2.26 and 2.29 (the “Healthcare Claims”) and (iii) an aggregate amount of Fifteen Million Dollars ($15,000,000) (the “General Sellers Cap”) with respect to all other claims arising under Section 8.1(b) (the “General Buyer Claims”). After the aggregate of all such Losses suffered or incurred by the Indemnified Party from any Person with respect exceeds the Threshold Amount, the Indemnifying Party shall be obligated to indemnify the Indemnified Party for all such Losses, including by such Loss being included Losses that are in excess of the Threshold Amount; provided that the Threshold Amount shall not be counted as a Liability in Final Net Working Capital claim applying against the Buyer Cap, the General Sellers Cap or the Healthcare Cap, as applicable. Any indemnity amounts paid by the Sellers for the General Buyer Claims shall reduce the amount of the Healthcare Cap on a dollar-for-dollar basis and actually resulting in an any indemnity amounts paid by the Sellers for Healthcare Claims shall reduce the amount of the General Sellers Cap on a dollar-for-dollar basis. This Section 8.5 shall not apply to fraud or to any intentional breach of any representation or warranty. No adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party Section 1.3 shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and apply towards the terms and provisions hereof. In particularThreshold Amount, the parties acknowledge that General Sellers Cap or the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefHealthcare Cap.

Appears in 1 contract

Samples: Asset Purchase Agreement (Pediatric Services of America Inc)

Indemnification Limitations. The rights of the Indemnified Parties to indemnification pursuant to the provisions of Section 9.2 and Section 9.3, as applicable, are subject to the following limitations: (a) In no event No Purchaser Indemnified Party shall the Sellers be liable for entitled to indemnification pursuant to Section 10.2(a)(i9.2(a): (i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all indemnifiable Losses with respect paid, incurred, suffered or sustained exceeds an amount equal to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 1,150,000 (the “Threshold AmountDeductible”), in which case the Purchaser case, Indemnified Parties shall be entitled to indemnification for all recover Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i9.2(a) (other than in respect of to the Excluded Representations) in an aggregate amount extent in excess of $18,000,000 the Deductible, but in any case, subject to clause (the “Indemnification Cap”ii) of this Section 9.4(a), or (ii) be liable for indemnification unless the amount of all indemnifiable Losses paid, incurred, suffered or sustained with respect to any Loss an individual claim exceeds an amount equal to $115,000 (the “Per Claim Threshold”); provided, for clarity, that notwithstanding anything to the contrary contained herein, the Deductible and the Per Claim Threshold shall not apply to claims for Losses arising out of, resulting from, relating to or in connection with the matters listed in Sections 9.2(b) through (f). (b) Without limiting the foregoing in Section 9.4(a), the maximum amount recoverable by the Purchaser Indemnified Parties for indemnification claims of the Purchaser Indemnified Parties made pursuant to (i) Section 10.2(a)(i9.2(a) shall be limited to $11,500,000 (other than in respect of the Excluded Representations“Cap”) to the extent such Loss and all Losses arising out of the same facts and circumstances areor (ii) Section 9.2(b) through (f), in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded limited to the amount of the Closing Purchase Price actually received by Parent. (c) The maximum amount recoverable by the Parent Indemnified Parties for indemnification claims of the Parent Indemnified Parties made pursuant to (i) Section 9.3 shall be limited to an amount equal to the Cap or (ii) Sections 9.6(a) through (d), in the aggregate, shall be limited to the amount of the Closing Purchase Price actually received by Parent. (d) No Indemnified Party shall be entitled to indemnification pursuant to Section 9.2 or Section 9.3, as applicable, unless such Indemnified Party has asserted a claim in an Indemnity Claim specifying the details in respect thereof pursuant to Section 9.6(a) and shall not be aggregated delivered to Parent or Purchaser, as applicable, on or prior to the expiration of the applicable survival period specified in Section 9.1. (e) Each of the Purchaser Indemnified Parties acknowledges and agrees that, for purposes hereof, any Losses indemnifiable pursuant to this Agreement shall be reduced by the amount of the Threshold Amount unless and until such Losses arising out any insurance proceeds or other sources of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss actually recovered by the Purchaser Indemnified Parties in Parties. (f) The representations, warranties and covenants of Parent, and the Purchaser Indemnified Party’s right to indemnification with respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claimthereto, including the repair, replacement shall not be affected or redelivery deemed waived by reason of any products investigation made by or on behalf of Purchaser or the Purchaser Indemnified Party or by reason of the fact that are the subject of Purchaser Indemnified Party knew or should have known that any such claimrepresentation or warranty is, which such commercially reasonable alternative is subject to the prior written approval was or might be inaccurate or by reason of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount ’s waiver of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies condition set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the SellersX, as the case may be. (g) Except with respect to any claims that may be made pursuant to the R&W Insurance Policy, if any (which are instead subject to such R&W Insurance Policy), each Purchaser Indemnified Party shall take, and cause its Affiliates to take, commercially reasonable steps to mitigate any Loss upon becoming aware of any event or circumstance that would be reasonably expected to, or does, give rise thereto; provided, that, such commercially reasonable efforts shall not require Purchaser Indemnified Party to institute litigation against any Person or to incur any costs. (h) For purposes of this Article IX, solely for the purposes of calculating the amount of any Loss with respect thereto, any inaccuracy in or breach of any representation or warranty shall be deemed determined without regard to be adjustments any materiality, material adverse effect or other similar qualification contained in or otherwise applicable to the Purchase Price. Notwithstanding anything to the contrary herein, nothing such representation or warranty. (i) The provisions in this Article X shall IX will not affect or operate to limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect rights of any express representation or warranty, which claims shall, in any case, be subject insured to recover under the provisions of Sections 4.23, 5.7(a)-(dR&W Insurance Policy (if any), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Stock Purchase Agreement (On Semiconductor Corp)

Indemnification Limitations. Notwithstanding any contrary provision of this Section 8: (a) In The Sellers shall have no event shall the Sellers be liable obligation to provide indemnification for indemnification Buyer Losses pursuant to this Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) 8 unless and until the aggregate amount of all Buyer Losses with respect for which the Sellers would otherwise be obligated to provide reimbursement or indemnity pursuant to this Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds 8 shall exceed an amount equal to Five Hundred Thousand Dollars ($1,400,000 500,000), (the “Threshold "Basket Amount”), ") in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, event the Sellers shall not (i) be required to make payments jointly and severally liable for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) all Buyer Losses for which they would otherwise be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,0008; provided that the foregoing limitation on consequential damages shall not apply to Buyer Losses resulting from (i) any breach of a representation or warranty contained in any of Sections 6.1, 6.2, 6.7, 6.10, 6.13, 6.18, 6.19 or 6.21 (the extent "Excluded Representations"); (ii) any such Excluded Liability relates claim for indemnification pursuant to Sections 8.1(c), (d), (e), (f), (g), (h), (i) or (j); or (iii) the breach of any covenant or agreement of the Sellers included in this Agreement 35 40 or any Related Writing (collectively, the "Seller Basket Exclusions"). Once Buyer Losses have exceeded the Basket Amount, the Sellers shall be jointly and severally obligated to pay all Buyer Losses in excess of the Basket Amount. The Sellers shall be obligated to pay all Buyer Losses based on the Seller Basket Exclusions without regard to the Excluded Assetsindividual or aggregate amounts thereof and without regard to whether the aggregate of all Buyer Losses shall have exceeded, in the aggregate, the Purchased Entities’ Excluded Assets, or operation or conduct by Basket Amount. The maximum obligation of the Sellers to provide indemnification pursuant to this Section 8 shall be limited to $6,000,000 in the aggregate (the "Cap"); provided, however, that the foregoing limitation shall not apply to any Buyer Losses arising from (i) the Seller Basket Exclusions or any (ii) arising out of their Affiliates the actual fraud of any business the Sellers. (other than b) The Buyer shall have no obligation to provide indemnification for Seller Losses pursuant to this Section 8 unless and until the Business). Purchaser and aggregate amount of all Seller Losses pursuant to this Section 8 shall exceed the Sellers shall, and Purchaser Basket Amount in which case Buyer shall cause be liable for all Seller Losses for which it would otherwise be liable pursuant to this Section 8; provided that the Purchaser Indemnified Parties to, in good faith, foregoing limitation shall not apply to Seller Losses resulting from (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement any breach of a Business Related Excluded Liabilities Claim and representation or warranty contained in any of Sections 7.1 or 7.2, (y) use their respective commercially reasonable efforts any claim for indemnification pursuant to cause Sections 8.2(d), (e), (f), (g) or (h) or (z) the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part breach of any Governmental Order covenant or agreement of the Buyer included in this Agreement or any Related Writing (collectively, the "Buyer Basket Exclusions"). Once Seller Losses have exceeded the Basket Amount, the Buyer shall be obligated to pay all Seller Losses in excess of the Basket Amount. The Buyer shall be obligated to pay all Seller Losses based on the Buyer Basket Exclusions without regard to the individual or aggregate amounts thereof and without regard to whether the aggregate of all Seller Losses shall have exceeded, in the aggregate, the Basket Amount. The maximum obligation of the Buyer to provide indemnification pursuant to this Section 8 shall be limited to the Cap in the aggregate; provided, however, that is entered by the foregoing limitation shall not apply to any Seller Losses arising from (i) the Buyer Basket Exclusions or (ii) the actual fraud of the Buyer. (c) For purposes of determining whether the Sellers shall be required to indemnify Buyer under this Section 8, each representation, warranty and agreement contained in this Agreement shall be read (including for purposes of determining whether a breach of such Governmental Authority representation, warranty or agreement has occurred) without regard and without giving effect to, Knowledge or materiality (including Material Adverse Effect) qualifications that may be contained in connection with a Business Related Excluded Liabilities Claimsuch representation, warranty and agreement. (d) Notwithstanding anything else contained For purposes of determining whether the Basket Amount has been reached, (i) all Shareholder Losses (as defined in this the Stock Purchase Agreement (the "Stock Purchase Agreement"), dated as of the date hereof, among the Sellers, NPC International (Barbados) Holdings Limited and ACS Business Process Solutions, 36 41 Inc.) and all Seller Losses (as defined in the Asset Purchase Agreement (the "Mexico Asset Purchase Agreement"), dated as of the date hereof, among the Parent, NPC Internacional S.A. de C.V. and ACS Business Process Solutions, S.A. de C.V.) shall be aggregated with all Seller Losses, and (ii) all Buyer Losses, as defined herein, in the Stock Purchase Agreement and in the Mexico Asset Purchase Agreement, shall be aggregated. With respect to the contraryCap, after the Closingmaximum obligation of the Sellers and NPC Internacional S.A. de C.V., on the one hand, and the Buyer, ACS Business Process Solutions, S.A. de C.V. and ACS Business Process Solutions, Inc., on the other hand, to provide indemnification pursuant this Section 8 and specific performance pursuant to the applicable indemnification provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Stock Purchase Agreement and the transactions provided for hereinMexico Asset Purchase Agreement shall be limited to $6,000,000 in the aggregate, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary exceptions set forth herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Stock Purchase Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Mexican Asset Purchase Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: u.s. Asset Purchase Agreement (National Processing Inc)

Indemnification Limitations. (a) In no event The Indemnifying Parties shall the Sellers not be liable for indemnification obligated to indemnify any Indemnified Party with respect to any Losses pursuant to clause (i) of Section 10.2(a)(i8.2(a) (other than in respect of the representations and warranties in Section 4.1 (Corporate Statusany Fundamental Representation Claim), Section 4.2 (Authority), except to the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until extent that the aggregate amount of Losses from all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds such claims exceed $1,400,000 1,000,000 (the “Threshold AmountDeductible”), at which point the Indemnifying Parties will be obligated to indemnify the Indemnified Parties from and against all such Losses in which case excess of the Purchaser Deductible. (b) The maximum amount that the Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein recover pursuant to Section 8.2(a) is an amount equal to the contraryAggregate Consideration paid to the Indemnifying Parties pursuant to Article 1, the Sellers shall not except that (i) be required to make payments for indemnification except as set forth in clause (iii) below, in no event will any Indemnifying Party’s aggregate liability pursuant to this Agreement exceed the portion of the Aggregate Consideration actually received by such Indemnifying Party, (ii) the maximum amount that the Indemnified Parties shall be entitled to recover pursuant to clause (i) of Section 10.2(a)(i8.2(a) (other than in respect of any Fundamental Representation Claim) is the Excluded Representations) in an aggregate amount in excess of $18,000,000 (Transaction Indemnity Holdback and the “Indemnification Cap”), or (ii) Transaction Indemnity Holdback shall be liable for indemnification the Indemnifying Parties’ sole recourse with respect to any Loss by the Purchaser Indemnified Parties recovery pursuant to clause (i) of Section 10.2(a)(i8.2(a) (other than any Fundamental Representation Claim) and (iii) there shall be no limitation on the amount that the Indemnified Parties are entitled to recover in respect of claims of Fraud personally committed by an Indemnifying Party. (c) Except for claims made against the Excluded RepresentationsTax Indemnity Holdback under Section 8.1(a), the Indemnified Parties’ first source of recovery for all other claims under Section 8.1(a) and Section 8.2(a) shall be recourse against the Transaction Indemnity Holdback, but if the Transaction Indemnity Holdback is exhausted or insufficient to satisfy any portion of a Loss for which a claim has been made under Section 8.1(a) or Section 8.2(a), subject in all cases to the extent limitations set forth in Section 8.3(a) and Section 8.3(b), the Indemnified Parties shall be entitled to recover such portion of such Losses in respect of such claims directly from the Indemnifying Parties. The Tax Indemnity Holdback shall be the Indemnifying Parties’ sole and exclusive remedy for a Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 Special Indemnity Taxes. (each, a “De Minimis Loss”d) (and such Losses shall be disregarded and shall not be aggregated for For purposes of calculating or determining the Threshold Amount unless and until such amount of Losses arising out of the same facts paid, incurred or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss sustained by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not there shall be deducted from any Losses an amount equal to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of proceeds from any other Loss for which an third-party insurer or any indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) contribution payments recovered actually received by the such Indemnified Party under indemnification agreements or arrangements in connection with third parties or under any insurance policy with respect to such Losses (after deduction for any cost net of applicable costs of recovery or collection, retention, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, to the insurance claim in respect of Losses thereof).The Indemnified Parties shall use commercially reasonable efforts to mitigate any Losses which form the basis for a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Lossesclaim for indemnification hereunder, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) seeking recovery under any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such paymentavailable insurance policies. (ce) Subject Notwithstanding anything to the other provisions of this Article X, but notwithstanding any other provision of contrary in this Agreement, (i) in no event Indemnifying Party shall the Sellers or Purchaser be liable have any liability under this Agreement, including under this Article 8 for any punitive damagesitem, except to the extent such damages are payable to an unaffiliated third party and item is taken into account as a liability (iior a dollar-for-dollar reduction) in no event shall the Sellers be liable for any consequential damages calculation of the Aggregate Consideration (it being understood and agreed that the term “consequential damages” used herein shall not include damages related purpose of this provision is to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xiiavoid double counting), and (xivii) to the extent that there is a Loss attributable to the sales and Section 2.5(b)(vi) (each such indemnification claimuse Tax matters identified on Schedule 5.14(i), a “Business Related Excluded Liabilities Claim”) and the Loss is in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages amount (if any) constitute consequential damages of such Taxes taken into account in connection with determining the settlement Working Capital Adjustment, (A) the Indemnifying Parties shall only be liable for fifty percent (50%) of a Business Related Excluded Liabilities Claim such Loss, subject to the other limitations on indemnification herein, (B) the maximum amount of any such Loss for which the Indemnifying Parties shall be liable shall be $2,500,000 in the aggregate (less any amounts of sales and use Tax assessments paid on or prior to the Closing Date), and (yC) use their respective commercially reasonable efforts to cause all claims for any such Loss may be made up until the applicable Governmental Authority to determine what portion Tax Indemnity Holdback Release Date (for the avoidance of damages doubt, the Sales Tax Reserve shall be retained until the earlier of (if anyi) constitute consequential damages as part the third (3rd) anniversary of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claimthe Closing Date or (ii) the date upon which all Pre-Closing Taxes set forth on Schedule 8.1(a)(iii) have been paid). (df) Notwithstanding anything else contained For the avoidance of doubt, assuming that there is no breach of the covenants set forth in this Agreement Section 5.21, in no event shall Parent or the Company be entitled to recovery for any Losses as a result of Parent’s or the contraryCompany’s failure to timely pay any scheduled payments, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy contract set forth on Schedule 5.21 of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseenCompany Disclosure Letter, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliatesbecome due and payable after December 31, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.82021. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Merger Agreement (8x8 Inc /De/)

Indemnification Limitations. (ai) In no event shall the Sellers be liable for No indemnification pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses payment by Seller with respect to any indemnifiable Damages otherwise payable under Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds 10.2 shall be payable until such time as all such indemnifiable Damages shall aggregate to more than $1,400,000 75,000 (the “Threshold AmountBasket”); provided, that in which case the Purchaser event such indemnifiable Damages exceed the Basket, the Buyer Indemnified Parties shall be entitled to indemnification for the entire amount of all Losses such indemnifiable Damages including the amount of the Basket. This Section 10.2(d)(i) shall not apply to indemnification claims arising out of or resulting from (A) any breach of the Fundamental Representations or (B) any Fraudulent Breach (Damages arising from or related to the foregoing Section 10.2(d)(i)(A) and (B), the “Special Damages”). (ii) From and after the Closing Date until the Release Date, any indemnification claims by the Buyer Indemnified Parties for indemnifiable Damages shall first be satisfied from the first dollarHoldback Fund and, including both to the Threshold Amount and extent the Holdback Fund is insufficient to satisfy the aggregate amount of indemnifiable Damages, the Buyer Indemnified Parties shall have the right to seek indemnification directly from the former members of Seller for any amounts indemnifiable Damages in excess thereofof amounts recovered from the Holdback Fund; provided, however, that the liability of each member or former member of Seller (together with any other liability arising under this Agreement) shall be limited to fifty percent (50%) of the aggregate Transaction Consideration actually received by such member or former member of Seller pursuant to this Agreement. (iii) Subject to Section 10.2(c), from and after the Release Date, Seller shall not be obligated to indemnify the Buyer Indemnified Parties pursuant to Section 10.2, except with respect to Special Damages. The Buyer Indemnified Parties shall have the right to seek indemnification directly from the former members of Seller for any Special Damages; provided, however, that the aggregate liability of each member or former member of Seller for Damages arising out of or resulting from breaches of the Fundamental Representations (together with any other liability arising under this Agreement) shall be limited to fifty percent (50%) of the aggregate Transaction Consideration actually received by such member or former member of Seller pursuant to this Agreement. (iv) Except in the case of fraud, intentional misrepresentation or willful breach in connection with this Agreement, none of Seller or any current or former member of Seller shall collectively be obligated to indemnify the Buyer Indemnified Parties pursuant to this Section 10.2 in the aggregate in excess of fifty percent (50%) of the Transaction Consideration actually received by such Persons pursuant to this Agreement and neither Seller, nor any current or former member of Seller shall be obligated to indemnify the Buyer Indemnified Parties pursuant to this Section 10.2 in excess of fifty percent (50%) of the Transaction Consideration actually received by such Person pursuant to this Agreement. (v) No member or former member of Seller shall be liable to the Buyer Indemnified Parties for an amount of any Damages in excess of his proportionate share of such Damages based upon his percentage ownership of Seller as of the date hereof. (vi) Notwithstanding anything herein to the contrary, the Sellers in no event shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect Seller or any member or former member of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) Seller be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Buyer Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Capgross Transaction Consideration. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (cvii) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies liability limitations set forth in this Section 10.2, the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Buyer Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief set off, and not pay to prevent breaches the former members of this Agreement and Seller, amounts otherwise payable pursuant to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.Section 3.1(c) or Schedule 3.1

Appears in 1 contract

Samples: Asset Purchase Agreement

Indemnification Limitations. Notwithstanding anything contained herein to the contrary, the indemnification obligations of Sellers set forth in Section 11.01 of this Agreement shall be subject to the following limitations: (a) In no event The indemnification obligations set forth in Section 11.01 shall survive for a period of one (1) year following the Sellers be liable for indemnification pursuant Closing (the “Indemnity Period”); provided, however, any claims asserted by the Purchaser Parties in good faith, with specificity and in writing prior to Section 10.2(a)(i) (other than in respect the expiration of the representations and warranties in Indemnity Period shall not thereafter be barred by the expiration of the Indemnity Period. (b) No Seller shall have any obligations under Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and 11.01 until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or Damages incurred by the Purchaser Indemnified Parties thereunder exceeds Two Hundred Fifty Two Thousand and 00/100 Dollars ($1,400,000 252,000.00) (the “Threshold Deductible Amount”), in after which case the Purchaser Indemnified Parties shall be entitled to indemnification under Section 11.01 for the amount of all Losses from the first dollar, including both the Threshold Amount and any amounts such Damages in excess thereof. Notwithstanding anything herein of the Deductible Amount; provided, however, that the aggregate amount of Damages for which the Purchaser Parties shall be entitled to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and 11.01 shall not be aggregated for purposes of the Threshold Amount unless exceed Two Million Five Hundred Twenty Thousand and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount00/100 Dollars ($2,520,000.00). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject Payments by a Seller pursuant to Section 11.01 shall be limited to the amount of any Damages that remain after deducting therefrom any insurance proceeds and any indemnity, contribution or other provisions similar payment received or reasonably expected to be received by the Purchaser Parties in respect of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business)Damages. The Purchaser and the Sellers shall, and Purchaser Parties shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority recover under insurance policies or indemnity, contribution or other similar agreements prior to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claimseeking indemnification under this Agreement. (d) Notwithstanding anything else contained herein to the contrary, no Seller shall be liable under Section 11.01 for any Damages based upon or arising out of any inaccuracy in or breach of any of the representations, warranties, covenants and/or agreements of such Seller contained in this Agreement if Purchaser had Knowledge of such inaccuracy or breach prior to the Closing. (e) Notwithstanding anything in this Agreement to the contrary, the parties hereby acknowledge and agree that Purchaser shall have certain rights, remedies and/or recoveries available to it under the terms of the Master Lease in the event of a breach or default by Sellers thereunder; provided, however, that in no event shall Purchaser be entitled to recover twice (once under this Agreement and again under the Master Lease) for any Damages arising or resulting from the same set of facts and/or circumstances. (f) Purchaser, on behalf of itself and each of the Purchaser Parties, hereby acknowledges and agrees that, from and after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the its sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or for breach of any representations, warranty, covenant or other provision contained agreement set forth in this Agreement or in any certificate delivered shall be pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the indemnification provisions contained set forth in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.811. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Purchase and Sale Agreement (Griffin-American Healthcare REIT IV, Inc.)

Indemnification Limitations. (a) In MacroPore shall have no event shall the Sellers be liable liability (for indemnification pursuant or otherwise) with respect to claims under Section 10.2(a)(i) 9.1 (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(aclaims for breaching Sections 5.11 or 5.16) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount total of all Indemnifiable Losses with respect to Section 10.2(a)(isuch matters, when added to the amount of all claims of Medtronic to indemnification under this Agreement and the License Agreement exceeds One Hundred Fifty Thousand Dollars ($150,000) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the "Threshold Amount”), in ") and then only for the amount by which case the Purchaser Indemnified Parties shall be entitled to indemnification for all such Indemnifiable Losses from the first dollar, including both exceed the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount)Amount. Notwithstanding anything to the contrary hereinin the Agreement, Sellers the total amount of Indemnifiable Losses (other than claims for breaching Sections 5.11 or 5.16) that MacroPore shall have ninety be obligated to pay to Medtronic in the aggregate shall not exceed the lesser of eighty percent (9080%) days after of the receipt total Purchase Price or the portion of an indemnification claim for any Loss the Purchase Price actually paid to and received by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject MacroPore pursuant to the prior written approval terms of the Purchaser Indemnified PartyAgreement (i.e., not if the total amount of Indemnifiable Losses exceeds the portion of Purchase Price actually paid to be unreasonably withheldMacroPore prior to such time but is less than 80% of the total Purchase Price, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by then Medtronic shall only offset such amounts against future installments of the Purchaser Indemnified Parties arising out of such alternative shall, subject Purchase Price up to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess maximum of 80% of the Indemnification Captotal Purchase Price). (b) In calculating addition to any other remedies the indemnified party may have, the indemnified party shall be entitled to set-off any claims to indemnification hereunder against any amounts payable otherwise owed by the indemnified party or its Affiliates to an Indemnified Party hereunder, the indemnifying party as follows: (i) one-half of the amount of Indemnifiable Losses which the indemnified party determines in good faith have been suffered or incurred (excluding Indemnifiable Losses that are merely threatened) may be set-off any indemnified time after such Indemnifiable Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made are suffered or could be made under any other representationincurred, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the remaining amount of such claim to indemnification may be set-off any Tax detriment actually paid by any Indemnified Party as a result of time after such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Sourceis finally determined. If the amount of a set-off asserted by an indemnified party exceeds the amount of such party's finally determined claim to indemnification, then such excess shall be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be promptly paid to an Indemnified Party under this Article X or Article VIII, by the Indemnified Party shall repay to the Indemnifying Party, promptly after indemnified party upon such final determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made together with simple interest at the time rate of six percent (6%) per annum on such paymentexcess accrued from the originally scheduled payment date against which such set-off was asserted. (c) Subject to None of the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained limitations in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII 9.4 shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality way limit or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, prohibit any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8based on fraud. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Asset Purchase Agreement (Macropore Inc)

Indemnification Limitations. (a) In no event shall Notwithstanding the Sellers be liable for indemnification pursuant to Section 10.2(a)(igeneral provisions of this Article 12, and absent intentional misrepresentation (as distinguished from negligent or reckless misrepresentation) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority)common law fraud, the first two sentences of each of Seller shall have no obligation to provide indemnification for matters arising under Section 4.4(a) and 4.4(b) 12.1 above: (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)1) unless and until the aggregate amount of all Losses claims made with respect to matters arising under Section 10.2(a)(i12.1 above is more than One Hundred Twenty Five Thousand Dollars ($125,000) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”) after which point (i.e. when the aggregate amount of all such indemnification claims hereunder equals or exceeds the Threshold Amount), in which case the Purchaser Indemnified Parties shall Buyer Indemnities will be entitled to indemnification for of all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount claims or portion thereof in excess of Fifty Thousand Dollars ($18,000,000 50,000); (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations2) to the extent such Loss and the aggregate amount of all Losses arising out of indemnification claims hereunder exceeds (i) $20,000,000 plus (ii) the same facts and circumstances are, in Inventory Value plus (iii) amounts paid to the aggregate, less than $15,000 Seller under the Note (each, a the De Minimis LossMaximum Amount”) (after which point the Seller will have no obligation to indemnify the Buyer Indemnities from and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses against further claims arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90under Section 12.1(a) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount above in excess of the Indemnification CapMaximum Amount). (b) In calculating amounts payable Buyer Indemnities may not assert any claim for indemnification under this Article 12 if Buyer had actual knowledge of the specific breach or misrepresentation on or prior to an Indemnified Party hereunderthe Closing Date; provided, however, that the amount Seller shall have the burden of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy proof with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery actual knowledge by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such paymentBuyer. (c) Subject The amount of any loss suffered by an indemnified party under this Agreement shall be determined after taking into account all amounts to which the other indemnified party is entitled and actually receives under the provisions of this Article Xany applicable insurance policies (i.e., but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii)actual insurance policies, and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, self-insurance or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Businessretention programs). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) The parties agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) to use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of collect amounts available under any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claiminsurance policy. (d) Notwithstanding anything else contained in The amount of any loss suffered by an indemnified party under this Agreement shall be determined after deduction of any net, actual tax benefit (measured, in all cases by the net, actual tax benefit to the contraryindemnified parties and their subsidiaries, after the Closingif any, indemnification and specific performance pursuant on a consolidated basis) which may accrue to the provisions of this Article X, Section 6.14 and Article VIII shall be indemnified party after giving effect to (i) the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard loss giving rise to the transactions contemplated thereby)claim for indemnification, including in respect (ii) the payment by such party of any misrepresentation or breach such loss, and (iii) the receipt by such party of any warranty, covenant indemnity or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made damage payment pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8Agreement. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Asset Purchase Agreement (Elizabeth Arden Inc)

Indemnification Limitations. The indemnification provided for in Section 8.1 above shall be subject to the following limitations: (a) In Notwithstanding anything to the contrary contained herein, no event shall Indemnified Person may make a claim from the Sellers be liable Escrow Fund in respect of any claim for indemnification that is made pursuant to Section 10.2(a)(i) 8.1 (other than in respect and that does not involve Fraud or any inaccuracy or breach of any of the representations Fundamental Matters and warranties in Section 4.1 (Corporate StatusIP Matters), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by Indemnifiable Damages is greater than 0.50% of the Purchaser Indemnified Parties exceeds $1,400,000 Purchase Price (the “Threshold Amount”"Threshold"), in which case the Purchaser Indemnified Parties Seller shall be entitled liable and required to indemnification pay for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not Indemnifiable Damages (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are amount below the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable LossesThreshold). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunderIf the Asset Purchase is consummated, recovery from the amount of any indemnified Losses Escrow Fund shall be determined without duplication the sole and exclusive remedy for the indemnity obligations under this Agreement for the matters listed in Section 8.1(a), except for claims to the extent arising out of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of resulting from (i) payments recovered by any failure of the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses representations and warranties set forth in Section 2.9 (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related theretothe "IP Matters") (each, a “Collateral Source”), and (ii) any prior recovery by failure of any of the Indemnified Party from any Person with Fundamental Representations (the matters set forth in clause (ii), the "Fundamental Matters"). Recourse for indemnity claims in respect of Fundamental Matters and IP Matters shall be limited to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to 20% of the Purchase Price pursuant to Section 3.4(f)Price, or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year case of IP Matters, and the Purchase Price, in the case of Fundamental Matters, in each case calculated on the basis of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such paymentPurchaser Stock Price. (c) Subject At the election of Seller, all Indemnifiable Claims not settled from the Escrow Fund may be settled through the return of shares of Purchaser Common Stock or payment of cash. For purposes of the satisfaction of all Indemnifiable Damages, Purchaser Common Stock shall be valued at the Purchaser Stock Price (including in the event that Indemnifiable Damages arise following a distribution of the Purchase Price to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except Securityholders pursuant to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple Plan of earnings or similar metrics for measuring damagesLiquidation), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained The Indemnified Persons shall first seek recovery of Indemnifiable Damages from the Escrow Fund; provided that the amounts that an Indemnified Person recovers from the Escrow Amount pursuant to any Fundamental Matters shall not reduce the amount that an Indemnified Person may recover with respect to claims that are not Fundamental Matters. By way of illustration and not limitation, assuming there are no other claims for indemnification, compensation or reimbursement, in this Agreement the event that Indemnifiable Damages resulting from a Fundamental Matter are first satisfied from the Escrow Amount and such recovery fully depletes the Escrow Amount, the maximum amount recoverable by an Indemnified Person pursuant to a subsequent claim that is not a Fundamental Matter shall continue to be the contraryfull value of the Escrow Amount, irrespective of the fact that the Escrow Amount was used to satisfy such Fundamental Matter, such that the amount recoverable for such two claims would be the same regardless of the chronological order in which they were made; (e) Except for equitable remedies, from and after the Closing, indemnification the rights to indemnification, compensation and specific performance pursuant to the provisions of reimbursement set forth in this Article X, Section 6.14 and Article ARTICLE VIII shall be the sole and exclusive remedy of the parties Indemnified Persons against Seller with respect to any and all claims (whether in contract Indemnifiable Damages arising under, pursuant or in tort) arising out of or in connection with related to this Agreement; provided that, for the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect avoidance of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary hereindoubt, nothing in this Article X Section 8.2(e) shall limit any claim by a Purchaser the rights of the Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably Persons against Seller in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only Fraud by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefSeller.

Appears in 1 contract

Samples: Asset Purchase Agreement (Orgenesis Inc.)

Indemnification Limitations. (a) In Notwithstanding anything to the contrary contained herein: (i) no event shall the Sellers be liable individual claim (or series of related claims) for indemnification pursuant to (x) under Sections 7.1(a) arising from any inaccuracy in any representation or warranty set forth in Section 10.2(a)(i3.6 or under Sections 7.1(d) (regardless of whether or not the underlying liability is disclosed on Section 3.6(a) of the Disclosure Schedule) shall be assertable unless it is (or they are) for an amount in excess of the sum of $200,000, in the aggregate (the "TAX THRESHOLD AMOUNT"), or (y) under Sections 7.1(a) (other than arising from any inaccuracy in respect of the representations and warranties any representation or warranty set forth in Section 4.1 (Corporate Status3.6), Section 4.2 (Authorityb), the first two sentences of each of Section 4.4(a(c) and 4.4(bor (e) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Feeor 7.2(a) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification assertable unless it is (or they are) for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 100,000, in the aggregate (the “Indemnification Cap”"GENERAL THRESHOLD AMOUNT" and, together with the Tax Threshold Amount, the "THRESHOLD AMOUNTS"); PROVIDED, HOWEVER, that once the applicable Threshold Amount is exceeded with respect to the relevant class of claims (i.e. $200,000 for the Tax Threshold Amount and $100,000 for the General Threshold Amount), each claim of such class (or series of related claims) shall be assertable for all such amounts (including the applicable Threshold Amount), and the Parties shall be liable with respect to claims of such class for all of the aggregate Damages related to such claims (including the applicable Threshold Amount)(subject to the limitations contained in subsections (ii) and (iii) of this Section 7.5(a) and Section 7.5(b) below); PROVIDED, FURTHER that any claim described in clause (i)(x) above shall be liable for indemnification with respect applied solely towards the Tax Threshold Amount and not the General Threshold Amount and any claim described in clause (i)(y) above shall be applied solely towards the General Threshold Amount and not the Tax Threshold Amount; and PROVIDED, FURTHER that the limitations in this clause (i) do not apply to any Loss by the Purchaser Indemnified Parties pursuant claim relating to any breach of or any inaccuracy in any representation or warranty set forth in Sections 2.1(a), 2.1(b), 2.1(c) or 2.1(e) or any breach of any covenant or agreement set forth in Section 5.17, and do not apply to any claim relating to Section 10.2(a)(i7.2(b); (ii) (other than in respect the aggregate Liability of the Excluded RepresentationsSelling Securityholders under this ARTICLE VII, shall not exceed the Escrow Cash; PROVIDED, HOWEVER, the limitation in this clause (ii) does not apply to any claim relating to any breach of or any inaccuracy in any representation or warranty set forth in Sections 2.1(a), 2.1(b), 2.1(c) or 2.1(e) or any breach of any covenant or agreement set forth in Section 5.17; and (iii) the extent such Loss and all Losses arising out aggregate Liability of the same facts and circumstances areBuyer under this ARTICLE VII, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of exceed $1,280,000; PROVIDED, THAT, the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything limitation in this clause (iii) does not apply to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification any claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant relating to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap7.2(b). (b) In calculating amounts payable Except for any breach of or any inaccuracy in any representation or warranty set forth in ARTICLE II or Section 3.6, for any breach of any covenant or agreement set forth in Section 5.17, or for any Taxes for which the Buyer is entitled to an receive payment from the Escrow Cash or is otherwise entitled to indemnification pursuant to Section 5.9, any recovery for indemnification by any Buyer Indemnified Party hereunderpursuant to this ARTICLE VII shall be made solely against the Escrow Cash pursuant to the terms of this Agreement and the Escrow Agreement. With respect to any breach of or any inaccuracy in any representation or warranty set forth in Section 3.6 or for any Taxes for which the Buyer is entitled to receive payment from the Escrow Cash or is otherwise entitled to indemnification pursuant to Section 5.9, any recovery for indemnification by any Buyer Indemnified Party pursuant to this ARTICLE VII shall first be made against the Escrow Cash and, once the Escrow Cash has been fully released under the terms of the Escrow Agreement at the termination thereof, the Buyer Indemnified Parties may recover for indemnification pursuant to this ARTICLE VII directly against the Selling Securityholders, subject to the limitation set forth in subsection (i) of Section 7.5(a); PROVIDED, HOWEVER, that the aggregate Liability of the Selling Securityholders under this ARTICLE VII with respect thereto from and after the date of such release of the Escrow Cash shall not exceed the aggregate amount of Escrow Cash (if any) distributed to the Selling Securityholders at the termination of the Escrow Agreement. With respect to any indemnified Losses breach of or any inaccuracy in any representation or warranty by a Selling Securityholder set forth in Sections 2.1(d) or 2.1(f), any recovery for indemnification by any Buyer Indemnified Party pursuant to this ARTICLE VII shall first be determined without duplication made against such Selling Securityholder's Pro Rata Share of any other Loss for which an indemnification claim the Escrow Cash and, once such Selling Securityholder's Pro Rata Share of the Escrow Cash has been made or could be made fully depleted, the Buyer Indemnified Parties may recover for indemnification pursuant to this ARTICLE VII directly against such Selling Securityholder, subject to the limitations set forth in subsections (i) and (ii) of Section 7.5(a); PROVIDED, HOWEVER, that the aggregate Liability of such Selling Securityholder under any other representation, warranty, covenant, or agreement and this ARTICLE VII with respect thereto shall be computed net not exceed the lesser of (i) payments recovered by his, her or its Pro Rata Share of the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), Purchase Price and (ii) any prior recovery by the Indemnified Party from any Person with Escrow Cash. With respect to such Lossesany breach of or any inaccuracy in any representation or warranty by a Selling Securityholder set forth in Sections 2.1(a), including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f2.1(b), 2.1(c) or 2.1(e), or (iii) any Tax Benefit actually received breach of any covenant or agreement set forth in Section 5.17 by a Purchased Entity with respect to such Losses Selling Securityholder named in the year of the indemnity payment or a prior yearSection 5.17, but increased by the amount of any Tax detriment actually paid recovery for indemnification by any Buyer Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X ARTICLE VII shall first be made against such Selling Securityholder's Pro Rata Share of the Escrow Cash and, once such Selling Securityholder's Pro Rata Share of the Escrow Cash has been fully depleted or Article VIII had such determination has been made released under the terms of the Escrow Agreement at the time termination thereof, the Buyer Indemnified Parties may recover for indemnification pursuant to this ARTICLE VII directly against such Selling Securityholder; PROVIDED, HOWEVER, that the aggregate Liability of such paymentSelling Securityholder under this ARTICLE VII with respect thereto shall not exceed his, her or its Pro Rata Share of the Purchase Price. (c) Subject Except with respect to the claims based on fraud or willful breach or for injunctive relief or other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contraryequitable remedies, after the Closing, indemnification and specific performance pursuant to the provisions rights of the Indemnified Parties under this Article X, Section 6.14 and Article VIII ARTICLE VII shall be the sole and exclusive remedy remedies of the parties Indemnified Parties and their respective Affiliates with respect to any and all claims covered by this ARTICLE VII and any and all claims otherwise relating to the transactions that are the subject of this Agreement. (whether d) If the Closing occurs, no Selling Securityholder shall have any right of contribution against the Acquired Companies with respect to any breach by the Company of any of its representations, warranties, covenants or agreements, and in contract furtherance of the foregoing, upon the occurrence of the Closing, each Selling Securityholder hereby fully and finally releases the Acquired Companies from any claim of any kind or nature for, and waives any and all rights of every kind or character with respect to, indemnification or contribution by the Acquired Companies with respect to such representations, warranties, covenants or agreements. (e) Notwithstanding anything to the contrary elsewhere in tortthis Agreement, no Party shall, in any event, be liable to any other person for any multiple, consequential, incidental, indirect, special or punitive damages, including loss of future revenue, income or profits, diminution of value or loss of business reputation or opportunity relating to the breach or alleged breach hereof. (f) arising out Notwithstanding any other provision of this ARTICLE VII, the amount of Damages recoverable by an Indemnified Party under this ARTICLE VII with respect to an indemnity claim shall be reduced by the amount of (i) any payment received by such Indemnified Party (or an Affiliate thereof), with respect to the Damages to which such indemnity claim relates, from an insurance carrier (including with respect to insurance against professional Liability) and (ii) the present value of any current or reasonably expected Tax deduction, Tax credit or other Tax benefit to such Indemnified Party with respect to the receipt of such indemnity payment or as a result of the Damages (the "TAX BENEFIT"). Damages shall also exclude any Liability based upon a claim, assessment or deficiency for foreign, federal, state and/or local income or franchise Taxes which arise from adjustments which have the effect only of shifting income, credits and/or deductions from one fiscal period to another. An Indemnified Party shall use commercially reasonable best efforts to pursue, and to cause its Affiliates to pursue, all insurance claims to which it may be entitled in connection with any Damages it incurs, and the Parties shall cooperate with each other in pursuing insurance claims with respect to any Damages or any indemnification obligations with respect to Damages. If an Indemnified Party (or an Affiliate) receives any insurance payment or incurs a Tax Benefit in connection with any claim for Damages for which it has already received an indemnification payment from the Indemnifying Party, it shall pay to the Indemnifying Party, within 30 days of receiving such insurance payment or incurring such Tax Benefit, an amount equal to the excess of (A) the amount previously received by the Indemnified Party under this AgreementARTICLE VII with respect to such claim plus the amount of the insurance payments received and any Tax Benefit incurred, over (B) the amount of Damages with respect to such claim which the Indemnified Party has become entitled to receive under this ARTICLE VII. (g) Notwithstanding any other provision of this ARTICLE VII, the Ancillary Agreements and Parties agree that if the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect effect of any misrepresentation or breach of any warranty, representation and warranty or covenant or other provision contained in this Agreement Agreement, the Company Certificate, the Disclosure Schedule or any other certificate or other document delivered by any Acquired Company or the Securityholders' Representatives pursuant to this Agreement, or in any certificate delivered pursuant hereto. Without limiting other Schedule or Exhibit hereto or thereto, is that (i) the generality or effect amount of the foregoingtrade accounts receivable and other receivables or the inventory (including raw materials, work in process and finished goods) of the Acquired Companies (net of reserves, including excess inventory and obsolete items reflected on the Most Recent Balance Sheet) have been overstated (it being hereby agreed that if the misrepresentation or breach relates specifically to the period of time within which any trade accounts receivable or other receivables are collectible, if such trade accounts receivable or other receivables are in fact collected in full by any Acquired Company subsequent to such represented period of time but prior to April 30, 2008, such misrepresentation or breach shall not be deemed to have overstated the trade accounts receivables or other receivables reflected on the Most Recent Balance Sheet for purposes of this Section 7.5(g)), or (ii) the amount of the Liabilities of the Acquired Companies (or the reserves established therefor) have been understated, the Buyer's Damages caused by such overstatement or understatement, as a material inducement applicable, shall in no event exceed the net amount by which such overstated trade accounts receivable and other receivables, such overstated inventory and/or such understated Liabilities reduces, in the aggregate, the Consolidated Net Working Capital; PROVIDED, HOWEVER, that nothing contained in this Section 7.5(g) shall be deemed to limit (A) the Sellers entering into this Agreement, Purchaser hereby waives, from calculation of the Buyer's Damages with respect to any misrepresentation or breach of any of the representations and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it warranties contained in Section 3.6 or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason covenants contained in Section 5.9 of this Agreement and or (B) the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions indemnification obligations of the provisions contained in this Article X Selling Securityholders relating to such representations, warranties and Article VIII. All payments made covenants or with respect to any Taxes for which the Buyer is entitled to receive payment from the Escrow Cash or is otherwise entitled to indemnification pursuant to Section 5.9. For purposes of this Article X and Article VIII Section 7.5(g), all calculations shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefGAAP.

Appears in 1 contract

Samples: Stock Purchase Agreement (Enzo Biochem Inc)

Indemnification Limitations. The indemnification provided for in Section 7.2 is subject to each of the following limitations: (ai) In no event The Buyer Indemnitees shall the Sellers not be liable for indemnification entitled to recover Losses pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)7.2(a)(i) unless and until the aggregate amount of all Losses with respect that the Buyer Indemnitees are entitled to recover under Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties 7.2(a)(i), exceeds $1,400,000 125,000 (the “Threshold AmountBasket”), in which case case, the Purchaser Indemnified Parties Buyer Indemnitees shall be entitled to indemnification for all recover only Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. of the Basket, subject to the General Cap; provided, that, the Basket shall not apply with respect to any Losses (A) with respect to breaches of or inaccuracies in the Company Fundamental Representations or Seller Fundamental Representations or (B) arising from Fraud by the Company or any Seller. (ii) The aggregate amount payable by the Sellers for Losses pursuant to Section 7.2(a)(i) shall not exceed $2,000,000 (the “General Cap”); provided, however, that the General Cap shall not apply with respect to any Losses (A) with respect to breaches of or inaccuracies in the Company Fundamental Representations or Seller Fundamental Representations or (B) arising from Fraud by the Company or any Seller. (iii) Notwithstanding anything herein else to the contrarycontrary in this Agreement, (A) the Sellers shall not (i) be required to make payments aggregate amount payable by each Seller in cash in respect of claims for indemnification pursuant to Section 10.2(a)(i7.2(a) (other than in respect shall not exceed an amount equal to the sum of the Excluded Representationsproceeds actually paid and the proceeds otherwise payable but set off against for an indemnification claim to such Seller as Purchase Price (including but not limited to the Closing Equity Payment) in an aggregate amount in excess of $18,000,000 (the “Indemnification Purchase Price Cap”); provided, or (ii) be liable for indemnification however, that the Purchase Price Cap shall not apply with respect to any Loss Losses arising from Fraud by the Purchaser Indemnified Parties Company or a Seller; (B) the aggregate liability of each Seller for Losses related to any particular indemnification claim pursuant to Section 10.2(a)(i7.2(a) shall not exceed an amount equal to such Seller’s Pro Rata Percentage of such Losses; provided, however, that such limitation shall not apply with respect to any Losses (other than in 1) with respect to breaches of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, or inaccuracies in the aggregate, less than $15,000 Seller Fundamental Representations made by such Seller or (each, a “De Minimis Loss”2) arising from Fraud by such Seller and (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers C) no Seller shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification liability pursuant to Section 10.2(b)(i7.2(a) in an aggregate amount in excess with respect to any Losses arising from (1) any breach by the other Seller (the “Breaching Seller”) of the Indemnification CapBreaching Seller’s Seller Fundamental Representations, Seller General Representations or any covenant or agreement of such Breaching Seller or (2) Fraud committed by such other Seller, and in each case the Breaching Seller or Seller committing such Fraud shall be liable for 100% of such Losses. (biv) In calculating For all purposes of this Article 7, “Losses” shall be net of any amounts payable actually paid to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or Indemnitee under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages Contract in connection with the settlement facts giving rise to the right of a Business Related Excluded Liabilities Claim indemnification hereunder; provided, however, that the amount deemed to be paid under such insurance policies shall be net of the deductible for such policies, any premium increases and (y) use their respective commercially reasonable efforts to cause any out-of-pocket costs incurred by the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority Indemnitee in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect collection of any misrepresentation such amounts paid under such insurance policy or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8Contract. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Unit Purchase Agreement (Streamline Health Solutions Inc.)

Indemnification Limitations. (a) In no event shall the Sellers be liable for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally 91 omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Asset and Stock Purchase Agreement

Indemnification Limitations. (a) In no event Seller and Parent shall the Sellers not be liable responsible for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Buyer Losses with respect to Section 10.2(a)(i6.1(a) that are imposed on or incurred by unless the Purchaser Indemnified Parties aggregate amount of the Buyer Losses exceeds $1,400,000 15,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount then only in excess of $18,000,000 (such aggregate amount); provided, that the “Indemnification Cap”), or (ii) be liable for indemnification foregoing limitation shall not apply with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts Fundamental Representations or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification CapFraud. (b) In calculating amounts payable Seller and Parent shall not be responsible for Buyer Losses with respect to an Indemnified Party hereunder, Section 6.1(a) in excess of fifteen percent (15%) of the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net sum of (i) payments recovered the Base Purchase Price and (ii) the aggregate amount of Earnout Payments made (or deemed to be made, e.g., by set-off) as of the Indemnified Party under indemnification agreements date the Buyer Losses have been finally determined by mutual agreement or arrangements with third parties a binding order of a court or under any insurance policy arbitrator (for the avoidance of doubt, the foregoing cap determination shall be calculated on a claim by claim basis); provided, that the foregoing limitation shall not apply with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation the Fundamental Representations or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such paymentFraud. (c) Subject Seller and Parent shall not be responsible for Buyer Losses pursuant to Section 6.1 in excess of the other provisions sum of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party Base Purchase Price and (ii) in no event the aggregate amount of Earnout Payments made (or deemed to be made, e.g., by set-off) as of the date the related Buyer Losses have been finally determined by mutual agreement or a binding order of a court or arbitrator (for the avoidance of doubt, the foregoing cap determination shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profitscalculated on a claim by claim basis); provided, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply with respect to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities ClaimFraud. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII Buyer shall not be the sole and exclusive remedy of the parties responsible for Seller Losses with respect to any Section 6.2(a) unless the aggregate amount of the Seller Losses exceeds $15,000 (and all claims (whether then only in contract or in tort) arising out excess of or in connection such aggregate amount); provided, that the foregoing limitation shall not apply with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard respect to the transactions contemplated thereby), including in respect of any misrepresentation Fundamental Representations or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8Fraud. (e) The Sellers Buyer shall not be responsible for Seller Losses with respect to Section 6.2(a) in excess of fifteen percent (15%) of the sum of (i) the Base Purchase Price and Purchaser acknowledge and agree (ii) the aggregate amount of Earnout Payments made (or deemed to be made, e.g., by set-off) as of the date the Seller Losses have been finally determined by mutual agreement or a binding order of a court or arbitrator (for the avoidance of doubt, the foregoing cap determination shall be calculated on a claim by claim basis); provided, that the other parties would foregoing limitation shall not apply with respect to the Fundamental Representations or Fraud. (f) Buyer shall not be damaged irreparably responsible for Seller Losses pursuant to Section 6.2 in excess of the event any provision sum of this Agreement is not performed in accordance with its specific terms (i) the Base Purchase Price and (ii) the aggregate amount of Earnout Payments made (or otherwise is breacheddeemed to be made, so that e.g., by set-off) as of the date the Seller Losses have been finally determined by mutual agreement or a party binding order of a court or arbitrator (for the avoidance of doubt, the foregoing cap determination shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particularcalculated on a claim by claim basis); provided, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser foregoing limitation shall have the right, in addition not apply with respect to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefFraud.

Appears in 1 contract

Samples: Asset Purchase Agreement (Commercial Vehicle Group, Inc.)

Indemnification Limitations. (a) In no event Except for Losses relating to breaches of Fundamental Representations and Losses arising as a result of fraud or intentional misrepresentation, as to which the limitations of this Section 8.6 shall the Sellers be liable not apply, Buyer Indemnified Persons may not assert any claim for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate StatusLosses under Sections 8.1(a), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a8.1(b) and 4.4(bor 8.1(d)(ii) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties such claims under this Agreement exceeds $1,400,000 325,000 (the “Threshold Basket Amount”) and then Buyer Indemnified Persons may assert claims for Losses under Sections 8.1(a), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i8.1(b) be required to make payments for indemnification pursuant to Section 10.2(a)(ior 8.1(d)(ii) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Basket Amount, but shall be subject to the Cap. (b) In calculating amounts payable to an Indemnified Party hereunderno event shall the aggregate liability of Sellers for claims of Losses under Sections 8.1(a), 8.1(b) or 8.1(d)(ii) exceed the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of Indemnification Escrow Fund (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a Collateral SourceCap”); provided, (ii) however, that the Cap shall not apply to any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party arising as a result of such party’s receipt of fraud or intentional misrepresentation by the indemnification payment with respect to such Loss. In Sellers or the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such paymentCompanies. (c) Subject to Sellers Indemnified Persons may not assert any claim for Losses under Section 8.2(a) until the other provisions aggregate amount of such claims under this Article XAgreement exceed the Basket Amount, but notwithstanding any other provision of this Agreement, (i) in no event shall the and then Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification Indemnified Persons may assert claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each all such indemnification claim, a “Business Related Excluded Liabilities Claim”) Losses in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply Basket Amount up to the extent any such Excluded Liability relates to amount of the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities ClaimFinal Purchase Price. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether contrary in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect for purposes of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the indemnification provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by , the Sellers to Purchaser or by Purchaser to determination of the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect amount of any express representation or warranty, which claims Losses shall, in any each case, be subject made without giving effect to any Material Adverse Effect qualification or any materiality or similar qualification contained in the provisions of Sections 4.23representations, 5.7(a)-(d)warranties, 11.7 and 11.8covenants or agreements in this Agreement. (e) Indemnification payments shall be treated by the Parties as an adjustment to the Purchase Price, unless otherwise required by Law. (f) The Sellers obligations of an Indemnifying Party to make payments in respect of indemnification pursuant to this Article VIII shall be limited to the amount of any Loss that remains after deducting therefrom any insurance proceeds (including pursuant to the R&W Insurance Policy), and Purchaser acknowledge and agree any indemnity, contribution or other similar payment actually recovered by the Indemnified Party from any third party with respect thereto, after deducting from such amounts the cost of recovery; provided, however, that the nothing contained in this Section 8.7(a) shall require Buyer or any other parties would Person to commence any Proceeding to recover proceeds under any such insurance policy. (g) Buyer shall mitigate any indemnified Losses as required by Law, with all mitigation costs to be damaged irreparably included in the event any provision amount of this Agreement is the applicable indemnified claim. Losses will not performed in accordance with its specific terms or otherwise is breached, so that include punitive damages (unless awarded pursuant to a third party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefclaim).

Appears in 1 contract

Samples: Stock Purchase Agreement (Universal Logistics Holdings, Inc.)

Indemnification Limitations. (a) In no event shall the Sellers be liable for indemnification pursuant Subject to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status8.2(e), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i8.2(a)(i), except in the cases of (i) that are imposed on fraudulent or incurred willful breach or willful misrepresentation by the Purchaser Indemnified Parties exceeds $1,400,000 Company or its directors or executive officers of any provision of this Agreement or any certificate delivered pursuant to this Agreement by the Company, in which case the maximum liability of any Company Stockholder shall not exceed an aggregate amount which, if added to all other amounts paid or payable as indemnification payments by such Company Stockholder under Section 8.2(a), would equal such Stockholder’s Pro Rata Portion of the Merger Consideration, (the “Threshold Amount”ii) any indemnification claim resulting from, arising out of or in connection with any inaccuracies or misrepresentations in, or breaches of, Section 3.12 (Tax Matters), in which case the Purchaser maximum liability of any Company Stockholder shall not exceed an aggregate amount which, if added to all other amounts paid or payable as indemnification payments by such Company Stockholder under Section 8.2(a), would equal 30% of such Stockholder’s Pro Rata Portion of the Merger Consideration, and (iii) any indemnification claim resulting from, arising out of or in connection with any inaccuracies or misrepresentations in, or breaches of, any of the Specified Representations (other than Section 3.12 (Tax Matters)), the Company Stockholders shall not be obligated to indemnify the Parent Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. of each such Company Stockholder’s Pro Rata Portion of any amounts then held in the Indemnity Escrow Fund. (b) Subject to Section 8.2(e), with respect to Section 8.2(a)(ii) through Section 8.2(a)(x) and any indemnification claim resulting from, arising out of or in connection with any inaccuracies or misrepresentations in, or breaches of, any of the Specified Representations (other than Section 3.12 (Tax Matters), the maximum liability of any Company Stockholder shall not exceed an aggregate amount which, if added to all other amounts paid or payable as indemnification payments by such Company Stockholder under Section 8.2(a), would equal such Stockholder’s Pro Rata Portion of the Merger Consideration. (c) Notwithstanding anything herein to the contrarycontrary set forth in this Agreement, in the event that a Parent Indemnified Party pays, suffers, incurs or sustains any Losses, any claims by such Indemnified Party for Losses shall be made first against the Indemnity Escrow Fund, and, to the extent permitted by this Agreement, second against the Company Stockholders directly. The form of satisfaction of the amount of any indemnification obligation of the applicable Company Stockholders under this Article VIII disbursed to Parent from the Indemnity Escrow Fund shall be in the same proportion as to the aggregate amount of cash and shares of Parent Common Stock then held in the Indemnity Escrow Fund. For purposes of this paragraph, the Sellers value of the shares of Parent Common Stock held in the Indemnity Escrow Fund shall not be deemed to be the Parent Common Stock Value. (d) With respect to Section 8.2(a)(i), other than with respect to the Specified Representations, no Company Indemnifying Party shall be required to indemnify a Parent Indemnified Party hereunder until such time as the aggregate amount of Losses for which the Parent Indemnified Party are entitled to indemnification pursuant to this Agreement exceeds $750,000, at which time the Company Indemnifying Party shall be obligated to indemnify the Parent Indemnified Party for the full amount of all such Losses, subject to the limitations set forth in this Article VIII. (e) Except in the case of fraudulent or willful breach or willful misrepresentation of any provision of this Agreement or any certificate delivered by the Company pursuant to this Agreement on the part of the Company or its directors or executive officers, from and after the Effective Time, (i) the Company Stockholders shall not be required obligated to make payments for indemnification indemnify the Parent Indemnified Parties pursuant to Section 10.2(a)(i8.2(a)(i) hereof for any indemnification claim that is made after the Applicable Expiration Date of the representation and warranty that forms the basis for such indemnification claim, and (ii) the Parent and Merger Subs shall not be obligated to indemnify the Company Indemnified Parties for any indemnification claim that is made after the Applicable Expiration Date of the representation and warranty that forms the basis for such indemnification claim; provided, however, that such indemnification obligations shall not terminate with respect to any item as to which an Indemnified Party shall have, before the Applicable Expiration Date of the representation and warranty that forms the basis for such indemnification claim, previously made a bona fide claim by validly delivering a Claim Certificate of such indemnification claim pursuant to this Article VIII. (f) In no event will an Indemnifying Party be liable for any lost profits, lost opportunity, or punitive damages of any kind (other than in any such damages underlying a Third Party Claim for which an Indemnified Party is otherwise entitled to indemnification). The amount of Losses payable by an Indemnifying Party shall be reduced by any amounts actually received by an Indemnified Party directly with respect of the Excluded Representationsto such indemnifiable Losses from (i) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”)any insurance proceeds, or (ii) any indemnity or contribution amounts from a third party; provided, however, for purposes of clarification, there shall be liable for indemnification with respect no obligation on the part of any Indemnified Party to any Loss by seek such indemnity, payments or contributions; provided, however, that notwithstanding the Purchaser Indemnified Parties pursuant foregoing, Parent shall use commercially reasonable efforts to Section 10.2(a)(i) (other than in respect of make claims under the Excluded Representations) Company’s directors’ and officers’ liability insurance and employment practices liability insurance “tail” policies to the extent that such Loss claims could be covered under such policies. (g) Each of Parent and the Company acknowledges and agrees (on behalf of itself and all Losses arising out of the same facts and circumstances areother Indemnified Parties, in the aggregate, less than $15,000 (each, a “De Minimis Loss”respectively) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shallthat, subject to the terms, conditions Section 8.2(e) and limitations contained herein, be considered indemnifable Lossesexcept as permitted by Sections 8.4(b) and 8.4(c). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained provisions in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to Parent Indemnified Parties and the Company Indemnified Parties for any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, against the Ancillary Agreements Company Indemnifying Parties and the transactions contemplated hereby Parent Indemnifying Parties, respectively, for Losses and thereby (any and all other than remedies set forth in damages incurred by the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Parent Indemnified Parties may have against any Seller or any of its Affiliatesand the Company Indemnified Parties, including without limitation under the common law or federal or state securities Lawsrespectively, trade regulation Laws or other Laws (including any relating with respect to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for contemplated hereby, (ii) all applicable statutes of limitations or other claims periods with respect to claims hereunder shall be shortened to the applicable claims periods and survival periods expressly set forth herein, except for and (iii) the Parent Indemnified Parties and the Company Indemnified Parties irrevocably waive any and all rights they may have to make claims or causes against the Company Indemnifying Parties and the Parent Indemnifying Parties, respectively, under statutory and common law as a result of action brought under any Losses and subject to the terms any and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made all other damages incurred by the Sellers Parent Indemnified Parties and the Company Indemnified Parties, respectively, with respect to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and transactions contemplated hereby, whether or not in excess of the maximum amounts permitted to be recovered pursuant to the indemnification provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefherein.

Appears in 1 contract

Samples: Agreement and Plan of Reorganization (Harmonic Inc)

Indemnification Limitations. (a) In no event Notwithstanding anything to the contrary contained in this Agreement, the following limitations shall the apply to indemnification claims under this Agreement: (i) Sellers shall not be liable for indemnification required to indemnify and hold harmless any Buyer Indemnified Party pursuant to Section 10.2(a)(i8.2(a), (A) if such claim or demand otherwise was raised (other than whether or not accepted) in connection with the Purchase Price adjustment or Net Cash Flow reconciliation procedures set forth in Section 2.7(a) and (b), respectively, (B) with respect to any individual claim for payment of any Loss, unless such claim involves Losses in excess of $20,000 (nor shall any such item be considered for purposes of calculating the aggregate amount of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(aBuyer Indemnified Parties' Losses) and 4.4(b(C) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser which Buyer Indemnified Parties exceeds shall be entitled exceed $1,400,000 200,000 (the “Threshold Amount”"Seller Deductible"), in which case the Purchaser Seller Indemnifying Party shall only be liable for the amount by which all Losses exceed the Seller Deductible. (ii) (A) The aggregate indemnification obligations of Sellers pursuant to Section 8.2(a)(i) (other than for breaches of the representations and warranties set forth in Sections 3.1 (organization and authority of Sellers) or 3.3 (Foremost Shares)) and Section 8.2(a)(ii) shall in no event exceed $500,000, (B) the aggregate indemnification obligations of Sellers (x) pursuant to Section 8.2(a)(i) solely in respect of breaches of the representations and warrantees set forth in Sections 3.1 (organization and authority of Sellers) and 3.3 (Foremost Shares), (y) pursuant to Section 8.2(a)(iii) (Excluded Liabilities) and (z) pursuant to Section 8.5(a) (Taxes of Foremost) shall in no event exceed $2,000,000 and (C) the cumulative aggregate indemnification obligations of Sellers hereunder shall in no event exceed $2,000,000. (iii) Buyer shall not be required to indemnify and hold harmless any Seller Indemnified Party pursuant to Section 8.2(b), (A) if such claim or demand otherwise was raised (whether or not accepted) in connection with the Purchase Price adjustment or Net Cash Flow reconciliation procedures set forth in Section 2.7(a) and (b), respectively, (B) with respect to any individual claim for payment of any Loss, unless such claim involves Losses in excess of $20,000 (nor shall any such item be considered for purposes of calculating the aggregate amount of the Seller Indemnified Parties' Losses) and (C) until the aggregate amount of Losses to which Seller Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of exceed $18,000,000 200,000 (the “Indemnification Cap”"Buyer Deductible"), or (ii) in which case the Buyer Indemnifying Party shall only be liable for indemnification with respect to any Loss the amount by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and which all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers Buyer Deductible. (iv) The cumulative indemnification obligations of Buyer hereunder shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Capno event exceed $2,000,000. (b) In calculating amounts payable to an Indemnified Party hereunderBuyer acknowledges and agrees that, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement from and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closingdate hereof, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the its sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out relating to the subject matter of or in connection with this Agreement, Agreement shall be pursuant to the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies indemnification provisions set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant heretoArticle VIII. Without limiting the generality or effect In furtherance of the foregoing, as a material inducement to for the Sellers entering into execution and delivery of this AgreementAgreement by Sellers, Purchaser Buyer, on behalf of itself and its Affiliates, hereby waives, from and after the Closingdate hereof, to the fullest extent permitted under applicable law, any claim or cause and all rights, claims and causes of action, known and unknown, foreseen and unforeseen, which action it or any of the other Purchaser Indemnified Parties may have against any Seller Sellers (or any their Affiliates or representatives) relating to the subject matter of this Agreement, the Business (or its Affiliatesoperations) or otherwise, whether known or unknown, including without limitation claims arising under the common law or federal based upon any federal, state or state securities Lawslocal statute, trade regulation Laws law, ordinance, rule or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for hereinregulation, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8Agreement. (ec) The Buyer acknowledges and agrees that, other than the representations and warranties of Sellers and Purchaser acknowledge and agree that expressly set forth in Article III hereof, there are no representations or warranties of Sellers expressed or implied relating to the other parties would be damaged irreparably in the event any provision subject matter of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would Sellers or the Business (or its operations) and that there shall be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have claim against Sellers or the right, in addition Business or their Affiliates or representatives or right to indemnification with respect to any information (whether written or oral), documents or materials furnished by such parties (or any of their Affiliates or representatives) to Buyer or any of its Affiliates or representatives, including any "business plan," "executive summary," confidential information memorandum or other rights and remedies existing marketing materials, or any information contained therein, or any projections, estimates or budgets heretofore delivered to or made available to Buyer of future revenues, expenses or expenditures, future results of operations (or any component thereof), future cash flows or future financial condition (or any component thereof) of the Business. Except as expressly provided in its favorthis Agreement, to enforce its rights and Buyer is accepting the Sellers’ obligations hereunder not only by action for damages but also by action for specific performanceTransferred Assets on an "as is, injunctivewhere is, and/or other equitable reliefwith all faults" basis.

Appears in 1 contract

Samples: Asset and Stock Purchase Agreement (Tufco Technologies Inc)

Indemnification Limitations. (a) In no event No Indemnifying Party shall have any liability or obligation to the Sellers be liable for indemnification pursuant Indemnified Parties to Section 10.2(a)(i) the extent that the aggregate Losses are less than $125,000 (other than in respect of the representations and warranties in Section 4.1 (Corporate Status"Basket"), Section 4.2 (Authority)such Basket only including individual Losses of $2,000.00 or greater. Thereafter, liability shall be for the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate full amount of all such Losses with respect without regard to Section 10.2(a)(i) that are imposed on the Basket or incurred by to the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all minimum individual Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereofdescribed above. Notwithstanding anything herein to the contrary, the Sellers Basket and minimum individual Losses set forth herein shall not apply to Losses related to fraud, willful misconduct or breaches of the representations and warranties set forth in Section 2.1 (i) be required to make payments for indemnification pursuant to Organization of the Company), Section 10.2(a)(i2.2 (Company Capital Structure), Section 2.4(c) (other than Subsidiary Capital Stock), Section 2.5 (Authority), Section 2.13 (Taxes), Section 2.16 (Intellectual Property) or Article III,. (b) The parties agree that all Losses under this Agreement shall take into account the amount of (x) any tax benefits actually realized by any Indemnified Party attributable to such Losses or derived therefrom in respect any period to and including the end of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (taxable year following the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) year in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of Loss was incurred and (y) the amounts actually recovered under any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser insurance policies by any Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood provided that any and all costs or other Losses imposed on or incurred by the Purchaser such Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser Party shall not be required to make payments seek recovery for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect prior to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior seeking recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment under this Article VII. All indemnification payments made hereunder shall be deemed adjustments to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such paymentPrice. (c) Subject The maximum aggregate liability of the Principal Shareholders to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event Indemnified Parties shall the Sellers or Purchaser be liable for any punitive damages, except limited hereunder to the extent such damages are payable aggregate amount due to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value Principal Shareholders hereunder (including multiple of earnings or similar metrics for measuring damagesamounts held in escrow), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement The Principal Shareholders shall have no indemnification obligations to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Buyer Indemnified Parties may have against any Seller or any for Losses arising solely from the disclosure to the Buyer of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws following contracts (including Losses resulting from the termination of any relating to Intellectual Property, products liability (including Products Liability Claimssuch contracts), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject which were disclosed to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser Buyer prior to the SellersClosing Date: MediaFlo, as the case may be, Qualcomm and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8Commonwealth Bank. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Stock Purchase Agreement (Compuware Corp)

Indemnification Limitations. Notwithstanding anything in this Agreement, including the indemnity provisions of this Article 6, the Parties agree as follows: (a) In Notwithstanding anything else in this Agreement: (i) no event shall claim for Damages may be made under this Article 6 for any individual matter representing Damages less than $200,000; and (ii) no Damages may be recovered from the Sellers be liable for indemnification Vendors pursuant to Section 10.2(a)(i) (other than in respect 6.2 of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) this Agreement unless and until the accumulated aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect Damages of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i6.2 exceeds $2,000,000, in which event (subject to Section 6.5(b) and Section 6.5(e)) the Vendors shall be liable only for the amount of Damages exceeding such threshold. For the sole purpose of determining if the total of all such Damages exceeds $2,000,000, the applicable representations and warranties contained in an aggregate amount in excess of the Indemnification Capthis Agreement or any Ancillary Agreement shall be read without regard to materiality, Material Adverse Change or similar qualification. (b) In calculating amounts payable Subject to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”Section 6.5(c), (ii) any prior recovery by no Damages may be recovered from the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price Vendors pursuant to Section 3.4(f), or (iii6.2(a) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in and the year sole recourse of the indemnity payment or a prior year, but increased by Purchaser for any such Damages shall be recovery under the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such paymentR&W Insurance Policy. (c) Subject The limitation in Section 6.5(b) shall have no application to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except claim to recover Damages to the extent such damages are payable to an unaffiliated third party claim is based on: (i) the incorrectness or breach of any of the Vendors’ Fundamental Representations and Warranties; (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business the Exclusions; or (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (xiii) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities ClaimVendors’ Fraud. (d) Notwithstanding anything else contained Other than in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions case of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this AgreementVendors’ Fraud, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect total aggregate liability of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made Marubeni pursuant to this Article X and Article VIII Agreement shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to not exceed fifty percent (50%) of its Proportionate Share of the Purchase Price. Notwithstanding anything , and the total aggregate liability of the Nippon Paper Vendors pursuant to this Agreement shall not exceed fifty percent (50%) of their Proportionate Share of the contrary hereinPurchase Price; provided, nothing in this Article X shall limit however, that the total aggregate liability of Marubeni for any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating based on Section 6.5(c)(ii) shall not exceed ten percent (10%) of its Proportionate Share of the Purchase Price, and the total aggregate liability of the Nippon Paper Vendors for any disclosure in claim based on Section 6.5(c)(ii) shall not exceed ten percent (10%) of their Proportionate Share of the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8Purchase Price. (e) The Sellers and Purchaser acknowledge and agree indemnity provided in Section 6.2(b) shall exclude any amounts that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and are actually recoverable under the terms and provisions hereof. In particular, of the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefR&W Insurance Policy.

Appears in 1 contract

Samples: Share Purchase Agreement (Mercer International Inc.)

Indemnification Limitations. (a) In no event shall Except with respect to claims based on fraud (whether or not committed by the Sellers be liable for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (AuthorityCompany Stockholders), the first two sentences rights of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties Indemnified Parties with respect to any and all claims (whether in contract or in tort) resulting from, arising out of or in connection with this Agreement, the Ancillary Agreements Agreement and the transactions contemplated hereby and thereby (other than remedies set forth hereby. The Indemnifying Parties shall not be obligated to indemnify the Indemnified Parties in excess of any amounts then held in the Ancillary Agreements with regard to Escrow Fund. The sole recourse for the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided exclusive means for herein, except for claims or causes of action brought the Indemnified Parties to enforce their rights under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made the Escrow Fund as provided herein and in the Escrow Agreement. Neither Parent nor any other Indemnified Party may attempt to collect any Losses directly from the Company Stockholders, except with respect to claims based on fraud with respect to this Agreement or any certificates required to be delivered pursuant to this Agreement (whether or not committed by the Sellers Company Stockholders), in which case neither Parent nor any other Indemnified Party may attempt to Purchaser or by Purchaser collect any Losses from any Company Stockholder in excess of the aggregate Merger Consideration actually paid to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Pricesuch Company Stockholder. Notwithstanding anything to the contrary hereinset forth in this Agreement, nothing herein shall limit the liability of an Indemnifying Party in respect of Losses to the extent arising out of any fraud on the part of such Indemnifying Party. (b) With respect to Section 8.2(a)(i), other than with respect to the Specified Representations, no Indemnifying Party shall be required to indemnify any Indemnified Parties hereunder until such time as the aggregate amount of Losses for which the Indemnified Parties are entitled to indemnification pursuant to this Agreement exceeds One Hundred Seventy Five Thousand Dollars ($175,000.00) (the “Deductible”), after which time the Indemnifying Parties shall be obligated to indemnify the Indemnified Parties for all such Losses in excess of the Deductible (but still subject to the Threshold), up to the amount then held in the Escrow Fund, subject to the other limitations set forth in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8VIII. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Merger Agreement (Actividentity Corp)

Indemnification Limitations. (a) In no event shall the Sellers Honeywell be liable for indemnification pursuant to Section 10.2(a)(i9.2(a)(ii)(A) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority)Sections 3.2, the first two sentences of each of Section 4.4(aSections 3.4(a) and 4.4(b) (Capitalization3.4(b), Section 4.7 (Taxes)3.7, and Section 4.21 3.20 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i9.2(a)(ii)(A) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds nine hundred thousand dollars ($1,400,000 900,000) (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers Honeywell shall not (ix) be required to make payments for indemnification pursuant to Section 10.2(a)(i9.2(a)(ii)(A) (other than in respect of Section 3.2, the Excluded Representationsfirst two sentences of each of Sections 3.4(a) and 3.4(b), Section 3.7 and Section 3.20) in an aggregate amount in excess of nine million dollars ($18,000,000 9,000,000) (the “Indemnification Cap”), or (iiy) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i9.2(a)(ii)(A) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i9.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered actually received by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital Losses and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit benefit actually received by a Purchased Entity any Indemnified Party with respect to such Losses in the year of the indemnity payment or a prior yearLosses, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the any Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X IX or Article VIII VII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X IX or Article VIII, VII the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party Responsible Parties would not have had to pay pursuant to this Article X IX or Article VIII VII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article XSection 9.4, but notwithstanding any other provision of this Agreement, (i) in no event shall Honeywell, the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 IX and Article VIII VII and Section 5.14(d) shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements Agreement and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby)hereby, including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers other parties hereto entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties its Affiliates may have against any Seller or any of its Affiliatesthe other parties hereto, including without limitation under the common law or federal or state securities Lawslaws, trade regulation Laws laws or other Laws laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X IX and Article VIIIVII and Section 5.14(d). All payments made pursuant to this Article X IX and Article VIII VII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall Section 9.4 will limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, for fraud which claims shall, in any case, be subject to the provisions of Sections 4.233.22, 5.7(a)-(d)4.7, 11.7 10.8 and 11.810.9 of this Agreement. (e) The Sellers and Purchaser acknowledge and agree that the Notwithstanding any other parties would be damaged irreparably in the event any provision of this Agreement is not performed Agreement, in accordance with its specific terms no event shall Honeywell or otherwise is breachedthe Sellers be liable for any Losses related to any breach or inaccuracy of any representation or warranty contained in Section 3.11 (Environmental Matters) to the extent such Loss or Losses constitute a Purchaser Environmental Liability. For purposes of this paragraph, so that a party “Purchaser Environmental Liability” shall be entitled any Loss or Losses that: (i) arise from any action that causes, or any negligent or intentional action that exacerbates, any environmental condition or noncompliance with Environmental Laws (including any Management of any Materials of Environmental Concern) by any of the Purchaser Indemnified Parties or the Companies and their Subsidiaries after Closing, including, without limitation, any negligent or intentional failure to injunctive relief comply with any Environmental Law; (ii) solely with respect to prevent breaches Liability for the conduct of environmental remedial actions, are not required pursuant to any Environmental Law, imposed as a result of a Third-Party Claim or necessary to address conditions of contamination exceeding applicable remedial standards; (iii) are required by a cleanup or remediation standard for the Property other than an industrial standard (or a commercial standard, if applicable to such Property as of the Closing Date); or (iv) are detected or caused by any Voluntary Environmental Investigation. For purposes of this Agreement paragraph, (i) “Management” means generation, production, handling, distribution, processing, storage, treatment, transportation, recycling, reuse and/or disposal, as those terms are defined in any Environmental Law, and (ii) “Voluntary Environmental Investigation” means any environmental sampling or testing of soil or groundwater at any Property except to the extent Purchaser reasonably believes such sampling or testing is (A) required by any Environmental Law or Governmental Authority, (B) reasonably conducted in response to a Third Party Claim asserting Liability for any environmental condition at any Property, (C) conducted by the Sellers in performance of their respective obligations herein, (D) necessary in connection with a due diligence review for any sale, conveyance or financing transaction involving any Property based upon findings from a Phase I environmental site assessment, (E) required for the bona fide construction, expansion, demolition, repair, maintenance, or closure by or on behalf of the Companies or their Subsidiaries of any structures or operations at any Property in the ordinary course of business and to enforce specifically this Agreement and the terms and provisions hereof. In particularextent such sampling or testing is consistent with industry practice, or (F) required to respond to material facts indicating a potentially significant risk to human health or the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefenvironment.

Appears in 1 contract

Samples: Stock Purchase Agreement (Sensata Technologies Holland, B.V.)

Indemnification Limitations. (a) In no event Except for Losses relating to breaches of Sections 3.1, 3.3, 3.4, 3.8 and 3.23 and Losses arising as a result of fraud, willful breach or criminal liability, as to which the limitations of this Section 8.6 shall not apply, (i) Buyer’s Indemnified Persons may not assert any claim for Losses under Section 8.1(a) until the Sellers be liable for indemnification pursuant to Section 10.2(a)(i) aggregate amount of such claims under this Agreement exceed $280,000 (other than in respect of the representations and warranties in Section 4.1 (Corporate Status“Basket”), Section 4.2 (Authority)provided that, the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until if the aggregate amount of all Losses with respect exceeds the Basket, then this subparagraph (i) shall cease to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties have effect and Seller shall be entitled to indemnification liable for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) which Seller would be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. 8 without giving effect to this subparagraph (c) Subject i), including all Losses initially incurred up to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party Basket; and (ii) in no event shall the Sellers aggregate liability of Seller for claims of Losses under Sections 8.1(a) and (b) exceed $10,000,000. For the avoidance of doubt, the Basket and other limitations set forth in this Section 8.6(a) shall not apply to Losses arising from Sections 8.1(c), (d), (e) or (f) or arising as a result of fraud, willful breach or criminal liability. (b) Seller’s Indemnified Persons may not assert any claim for Losses under Section 8.2(a) until the aggregate amount of such claims under this Agreement exceed the Basket, provided that, if the aggregate amount of all Losses exceeds the Basket, then this paragraph (b) shall cease to have effect and Buyer shall be liable for all Losses for which Buyer would be liable pursuant to this Article 8 without giving effect to this paragraph (b), including all Losses initially incurred up to the Basket. (c) No Indemnified Person shall have a right to indemnification with respect to any incidental, special, punitive or consequential damages incurred or suffered by an Indemnified Person hereunder, and in no event shall Losses include a Person’s incidental, special, punitive or consequential damages, except for any consequential damages (it being understood that may be duly proven with respect to Losses relating to breaches of Sections 3.1, 3.3, 3.4, 3.8 and agreed that the term “consequential damages” used herein shall not include damages related 3.23 and Losses relating to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claimfraud. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII Indemnification payments shall be the sole and exclusive remedy of treated by the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments an adjustment to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim unless otherwise required by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8Law. (e) The Sellers Buyer’s Indemnified Persons may not assert any claim for Losses related to or in any way arising out of the non-competition provisions of (i) the Employment and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Non-Competition Agreement, money damages would be inadequate dated January 16, 1998, with Art Chatoff, as amended, or (ii) the Employment and Purchaser would have no adequate remedy at lawNon-Competition Agreement, so dated January 16, 1998, with Gxxxx Xxxxxxx, as amended, provided, however, that Purchaser this Section 8.6(e) shall have not limit claims for Losses relating to the right, matters identified in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefSection 8.1(c).

Appears in 1 contract

Samples: Stock Purchase Agreement (Champion Enterprises Inc)

Indemnification Limitations. Notwithstanding anything to the contrary in this Agreement: (a) In no event Any Parent Indemnitee or Shareholder Indemnitee shall the Sellers not be liable entitled to indemnification for indemnification pursuant to Section 10.2(a)(iLosses under Sections 9.01(a) (other than in with respect to misrepresentations of any Fundamental Rep and fraudulent misrepresentations), 9.01(b) (to the extent arising out of a breach of Section 5.01) or 9.02(a) (other than with respect to misrepresentations of any Fundamental Rep and fraudulent misrepresentations) unless (i) such Losses from any single claim or aggregated claims arising out of the representations and warranties same facts, events or circumstances is an amount in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences excess of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes)$250,000, and Section 4.21 (Finder’s Feeii) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on for such claims by such Parent Indemnitee or incurred by the Purchaser Indemnified Parties Shareholder Indemnitee, as applicable, under this Agreement exceeds $1,400,000 20,000,000 (the “Threshold AmountDeductible”), and then Parent Indemnitee or Shareholder Indemnitee, as applicable, may only recover for the aggregate Losses amount of all Losses in which case excess of the Purchaser Indemnified Parties Deductible. In no event shall be entitled to indemnification the aggregate liability of the Company for all Losses from under this Article IX exceed the first dollarEscrow Amount minus the amount, including both if any, paid to Parent out of the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification Escrow Fund pursuant to Section 10.2(a)(i) (other than 2.02(d)(ii). Any and all payments of any indemnification obligations to any Parent Indemnitee under this Article IX shall be made solely and exclusively from the funds, if any, then constituting the Escrow Fund. Any Parent Indemnitee’s sole recourse for indemnity in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) under this Article IX shall be limited solely and exclusively to the extent such Loss and all Losses arising out of funds, if any, then constituting the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount)Escrow Fund. Notwithstanding anything to the contrary hereinin this Agreement, Sellers in no event shall have ninety (90the aggregate liability of Parent for all Losses arising under Section 9.01(a) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in with respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claimSections 4.07, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any 4.08 and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap4.09 exceed $75,000,000. (b) In calculating amounts payable to an The Indemnified Party hereunder, the shall mitigate all Losses in accordance with applicable Law for which such Indemnified Parties are entitled or may be entitled to indemnification under this Article IX. The amount of any indemnified Losses for which indemnification is provided for under this Article IX shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments offset by any amounts actually recovered by the Indemnified Party under Parties as a result of any indemnification agreements by any third party and any insurance proceeds or arrangements with other amounts received by the Indemnified Parties from third parties or under any insurance policy with respect to such Losses (after deduction for any net of the cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related theretorecovery) (each, a “Collateral Source”), and (ii) reduced to take account of any prior recovery tax benefit actually realized by the Indemnified Party arising from the incurrence or payment of any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting the Tax year in an adjustment to which the Purchase Price pursuant to Section 3.4(fLoss was incurred (or in the succeeding Tax year), or (iii) in each case on a “with and without” basis. If any Tax Benefit such insurance proceeds and/or other amounts are actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid and/or authorized for deferred accounting by any Indemnified Party as a result of such party’s Parent Indemnitee after receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had IX, Parent shall promptly repay to the Company such determination been made at the time portion of such paymentindemnification payment equal to the amounts so recovered or realized. (c) Subject Any payments made pursuant to Section 2.02, 9.01 or 9.02 shall be treated as an adjustment to the other provisions purchase price for all tax purposes, unless otherwise required by a final determination (which shall include the execution of this Article X, but notwithstanding a Form 870-AD or successor form). (d) The amount of the Loss arising out of any item included as a liability in calculating Net Working Capital shall be calculated net of the amount so included. The amount of the Loss arising out of any reduction in value of any Current Asset acquired at the Closing shall be calculated net of the reported value of such Current Asset used in calculating Net Working Capital. Notwithstanding any other provision of this Agreement to the contrary, no Parent Indemnitee shall be entitled to indemnification under this Article IX for any Losses to the extent such Losses are reflected in the Final Indebtedness or in the Final Net Working Capital. (e) Notwithstanding anything to the contrary in this Agreement, neither the Parent Indemnitee nor Shareholder Indemnitee shall be entitled to indemnification under this Article IX with respect to any losses, liabilities, damages or expenses that are in the nature of punitive, speculative, special or treble or other multiple damages required by statute, law, ordinance, rule, regulation or code, in each case of any kind or nature, regardless of the form of action through which any of the foregoing are sought (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damagesparties), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (df) Notwithstanding anything else contained to the contrary in this Agreement Agreement, no Parent Indemnitee shall be entitled to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of under this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties IX with respect to any and all claims (whether in contract breach or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect inaccuracy of any misrepresentation or breach of any representation, warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect agreement of the foregoing, Company made as of the Closing Date as a material inducement to result of a matter arising between the Sellers entering into this Agreement, Purchaser hereby waives, from execution and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason delivery of this Agreement and the transactions provided for hereinClosing, except for claims if: (i) the Company provides written notice to Parent prior to Closing, describing in detail such breach or causes of action brought under inaccuracy, (ii) Company simultaneously and subject irrevocably informs Parent in writing that Parent is not required to consummate the terms Transactions and conditions of (iii) the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8Closing occurs. (eg) The Sellers representations and Purchaser acknowledge and agree warranties of the Company shall not be affected or deemed waived by reason of any investigation made by or on behalf of Parent or Sub (including any of the representatives of Parent or Sub) or by reason of the fact that Parent or Sub or any of the other parties would representatives of Parent or Sub knew or should have known that any such representation or warranty is or might be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefinaccurate.

Appears in 1 contract

Samples: Merger Agreement (Hill-Rom Holdings, Inc.)

Indemnification Limitations. (a) In Notwithstanding anything to the contrary contained in this Agreement, in no event shall the Sellers Seller be liable for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)7.2(a)(i) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i7.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 the amount set forth on Part I of Schedule 7.4 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both in excess of the Threshold Amount and any amounts Amount; provided, however, that the limitation set forth in excess thereof. Notwithstanding anything herein to the contrary, the Sellers this sentence shall not (i) be required apply with respect to make payments any claim for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representationsany breach of Sections 4.1 (Corporate Status), 4.2 (Authority), 4.7 (Personal Properties) in an aggregate amount in excess of $18,000,000 and 4.8 (the No Brokers) (each, a Indemnification CapSeller Fundamental Representation and Warranty”). Notwithstanding the foregoing, or (ii) Seller shall not be liable for indemnification with respect to any Loss from a claim by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect hereunder of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 the amount set forth on Part II of Schedule 7.4 (each, a “De Minimis Loss”) (and all such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless Amount; provided, however, that the limitations set forth in this sentence shall not apply with respect to any claim for indemnification in respect of any Seller Fundamental Representation and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Warranty. (b) Notwithstanding anything to the contrary hereincontained in this Agreement, Sellers in no event shall have ninety (90Purchaser be liable for indemnification pursuant to Section 7.2(b)(i) days after unless and until the receipt aggregate amount of an indemnification claim for any Loss by the Purchaser Indemnified Parties in all Losses with respect of to Section 4.20(b7.2(b)(i) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Seller Indemnified Parties arising out exceeds the Threshold Amount, in which case the Seller Indemnified Parties shall be entitled to indemnification for all Losses in excess of such alternative shallthe Threshold Amount; provided, subject however, that the limitation set forth in this sentence shall not apply with respect to the termsany claim for indemnification in respect of any breach of Sections 5.1 (Corporate Status) and 5.2 (Authority) (each, conditions a “Purchaser Fundamental Representation and limitations contained herein, be considered indemnifable LossesWarranty”). Notwithstanding the foregoing, Purchaser shall not be liable for indemnification under Section 7.2(b)(i) with respect to any Loss from a claim by the Seller Indemnified Parties hereunder of less than the De Minimis Loss and all such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount; provided, however, that the limitations set forth in this sentence shall not apply with respect to any claim for indemnification in respect of any Purchaser Fundamental Representation and Warranty, payment shortfalls, or audit findings. (c) Notwithstanding anything to the contrary contained in this Agreement, in no event shall Seller be required to make payments for indemnification with respect to any breaches of any representations and warranties or have any other Liability or obligation pursuant to Section 10.2(b)(i) this Agreement in an aggregate amount in excess of the Indemnification Capamount set forth on Part III of Schedule 7.4; provided, however, that the limitations set forth in this sentence shall not apply with respect to any claim in respect of any Seller Fundamental Representation and Warranty, which shall not exceed an aggregate amount in excess of the Purchase Price of this Agreement. (bd) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered amounts recoverable by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy of Seller relating to the period prior to the date hereof with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), and (ii) any actual prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell Seller may, in its sole discretion, require the any Indemnified Party to grant to Honeywell Seller an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII 8 is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, 8 the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the such Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII 7 had such determination been made at the time of such payment. (ce) Subject to the other provisions of this Article XSection 7.4, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser Seller be liable for any punitive damages or any special, incidental, indirect or consequential damages of any kind or nature (including lost profits, damages resulting from business interruption or any damages, except losses that are imposed on or incurred by any customers of Purchaser or any other third party that does business with Purchaser, or losses arising out of the operation or use of the Licensed Intellectual Property, including the infringement of third party Intellectual Property rights by the Licensed Products or the use or inability to use any Licensed Intellectual Property), or any diminution in value or losses based upon any multiplier of earnings or any other valuation metric, regardless of the extent form of action through which such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business)sought. Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closingexcept with respect to any equitable remedies, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII 7 shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements Agreement and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby)hereby, including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers other parties hereto entering into this Agreement, Purchaser hereby waives, from and after the Closing, waives any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties its Affiliates may have against any Seller or any of its Affiliatesthe other parties hereto, including without limitation under the common law or federal or state securities Lawslaws, trade regulation Laws laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters)laws, by reason of this Agreement, the events giving rise to this Agreement and the transactions provided for hereinherein or contemplated hereby or thereby, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII8. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and 7 shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything . (f) An Indemnifying Party shall not be liable under this Article 7 for any Losses relating to any matter to the contrary herein, nothing extent that the amount of such matter is reflected in the inventory adjustment under Section 1.5. (g) The obligations of the Indemnifying Party to provide indemnification under this Article X 7 shall limit any claim be terminated, modified or abated as appropriate to the extent that the underlying Loss, cause of action or other claim: (i) would not have arisen but for a knowing voluntary act or knowing failure to act that is carried out by a Purchaser or at the express written request of, or with the express written approval or concurrence of, or with the knowing assistance of, the Indemnified Party, (ii) is based, in whole or in part, on the fraud, bad faith or willful misconduct of the Indemnified Party alleging or any of its Affiliates, (iii) is a Loss, cause of action or claim with respect to which the Indemnified Party or any of its Affiliates has taken action (or caused action to be taken) to accelerate the time period in which such matter is asserted or payable or (iv) is primarily a possible or potential Loss, cause of action or claim that Sellers defrauded the Indemnified Party believes may be asserted rather than a Loss, cause of action or claim that has, in fact, been filed of record against such Person Indemnified Party or paid or incurred by intentionally omitting or misstating any disclosure such Indemnified Party. (h) No Indemnified Party shall have a right to recover Losses hereunder in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation claim if such claim would not have arisen but for a change after the Effective Date in legislation or warranty, which claims shall, accounting policies or a change after the Effective Date in any case, be subject interpretation of applicable Law as determined by a court or pursuant to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8an administration rule making decision. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Asset Purchase and License Agreement (Innovative Solutions & Support Inc)

Indemnification Limitations. (a) In no event shall the Sellers Honeywell be liable for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)9.2(a)(i) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i9.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”)4,250,000, in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereofof $2,500,000. Notwithstanding anything herein to the contraryforegoing, the Sellers Honeywell shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations9.2(a)(i) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses)100,000,000. Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i9.2(b)(i) in an aggregate amount in excess of $100,000,000. Notwithstanding the Indemnification Capforegoing, the provisions of this Section 9.4(a) shall not apply to any claims for indemnification in respect of a breach of any of the representations and warranties set forth in Section 3.2 (Authority), Section 3.4 (Capitalization), Section 3.5(d) (Certain Obligations), Section 3.19 (Finder’s Fee), Section 4.2 (Authority) and Section 4.8 (Finder’s Fee). (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered actually received by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that each of the term “consequential damages” used herein parties shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective its commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part obtain such insurance payments). Any indemnification payment payable under this Article IX shall be net of any Governmental Order that is entered Tax Benefit realized by such Governmental Authority the Indemnified Party in connection with a Business Related Excluded Liabilities Claim. respect of any indemnified Loss. For purposes hereof, “Tax Benefit” shall mean the present value (d) Notwithstanding anything else contained in this Agreement computed using an interest rate equal to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies “prime rate” as set forth in the Ancillary Agreements Wall Street Journal on the Closing Date) of any refund of Taxes paid or reduction in the amount of Taxes which otherwise would have been paid as a result of such indemnified Loss (with regard the timing of the receipt or realization of such refund or reduction to be estimated in good faith by the Indemnified Party), net of any increase in Taxes paid by the Indemnified Party on account of receipt of the indemnification payment, in each case computed at the highest applicable marginal statutory tax rates. Upon making any payment to an Indemnified Party for any indemnification claim pursuant to this Article IX, the Indemnifying Party shall be subrogated, to the transactions contemplated thereby)extent of such payment, including in respect of to any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting rights that the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties Party may have against any Seller or any of its Affiliates, including without limitation under other Persons with respect to the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement subject matter underlying such indemnification claim and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII Indemnified Party shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, take such actions as the case Indemnifying Party may be, and shall be deemed reasonably require to be adjustments perfect such subrogation or to pursue such rights against such other persons as the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8may have. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

Appears in 1 contract

Samples: Stock Purchase Agreement (Indalex Holding Corp.)

Indemnification Limitations. (a) In no event Except as otherwise provided in Section 8.4, (i) the Escrow Fund shall constitute the Sellers be liable sole and exclusive remedy of the Indemnified Party or Parties for indemnification Indemnifiable Matters pursuant to Section 10.2(a)(i8.2(a)(i), and (ii) (other than the maximum amount that the Indemnified Party or Parties may recover from each Indemnifying Party for Losses in respect of any Indemnifiable Matters under or pursuant to (A) Section 8.2(a)(i) shall be limited to an amount equal to such Indemnifying Party’s Pro Rata Portion of the representations property in the Escrow Fund, for this purpose excluding the Additional Escrow Amount; (B) Section 8.2(a)(ii) through Section 8.2(a)(viii), shall be limited to the portion of the Final Adjusted Merger Consideration received by such Indemnifying Party or Parties and warranties (C) Section 8.2(a)(ix) shall be limited to an amount equal to such Indemnifying Party’s or Parties’ Pro Rata Share of the Escrow Fund, for this purpose including the Additional Escrow Amount, in addition to any related Indemnifiable Matters pursuant to Section 8.2(a)(i). (b) Except as otherwise provided in Section 4.1 (Corporate Status)8.4, no Indemnified Party or Parties shall be entitled to recover any Losses in respect of any Indemnifiable Matters under or pursuant to Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)8.2(a)(i) unless and until the aggregate amount of all Losses with respect for which the Indemnified Party or Parties are entitled to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties indemnification pursuant to this Agreement exceeds $1,400,000 1,000,000 (the “Threshold AmountThreshold”), in which case the Purchaser Indemnified Party or Parties shall be entitled to indemnification for the full amount of all such Losses from the first dollar, dollar (including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein amount of the Threshold). (c) In determining the amount of Losses for which the Indemnified Parties are entitled to the contraryindemnification under this Article VIII, the Sellers shall not gross amount of the indemnification will be reduced by (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) any insurance proceeds actually received by such Indemnified Parties (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to excluding any Loss costs incurred by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which recovering or seeking to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery recover any insurance proceeds and net of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive related premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”increases), (ii) any indemnification payments actually received by such Indemnified Parties under Contracts in effect as of immediately prior recovery to the Effective Time (excluding any costs incurred by the Indemnified Party from any Person with respect Parties in recovering or seeking to recover such Losses, including by such Loss being included as a Liability in Final Net Working Capital payments) and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses amounts accrued, reflected or otherwise taken into account in the year calculation of the indemnity payment or a prior yearClosing Net Working Capital, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect in each case related to such Loss. In the event of any indemnification claim paid; provided, Honeywell mayhowever, in its sole discretion, require the that no Indemnified Party shall have any obligation to grant to Honeywell an assignment of the right of seek recovery under any insurance policy or from any third party Persons if such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, reasonably determines in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order faith that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties recovery would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefunlikely.

Appears in 1 contract

Samples: Merger Agreement (Solarcity Corp)

Indemnification Limitations. (a) In no event shall the Sellers be liable Purchaser's Indemnified Persons may not assert any Claim for indemnification pursuant to Losses under Section 10.2(a)(i8.2(a) (other than in with respect of to the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(aFundamental Representations) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties such Claims under this Agreement exceeds $1,400,000 850,000 (the “Threshold Amount”"Deductible"), in which case and then Purchaser's Indemnified Persons may only assert Claims for the Purchaser Indemnified Parties excess of such aggregate Claims over such amount. In no event shall be entitled to indemnification the aggregate liability of Seller for all Claims for Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to under Section 10.2(a)(i8.2(a) (other than with respect to the Fundamental Representations and other than with respect to the Intellectual Property Representations included in respect Section 3.12(c) as the same relate to Intellectual Property Rights under issued patents) exceed $12,500,000 (but with it being understood, however, that nothing in this Agreement (including this Section 8.4) shall limit or restrict any of the Excluded RepresentationsPurchaser's Indemnified Persons' right to maintain or recover any amounts in connection with any action or claim based upon intentional misrepresentation or fraud). No Claim for Losses under Section 8.2(a) in an aggregate amount may be made, and no Losses shall be applied against the Deductible set forth above, with respect to any Claim or group of similar or related Claims that does not cause Losses in excess of $18,000,000 (50,000, exclusive of attorneys' fees, court costs and costs of litigation. For purposes of determining whether there has been any breach of a representation or warranty subject to indemnification pursuant to this Article VIII and for purposes of calculating the “Indemnification Cap”)amount of Losses with respect thereto, such representations and warranties alleged to have been breached shall be construed as if any qualification or (ii) be liable for indemnification limitation with respect to any Loss materiality, whether by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) reference to the extent such Loss and terms "material," "in all Losses arising out of material respects," "in any material respect," "Material Adverse Effect," or any similar words or phrases, were omitted from the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject text of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed representations and warranties (it being understood that any for purposes of determining whether a breach of a representation or warranty constitutes intentional misrepresentation or fraud that such qualifications and all costs or other Losses imposed on or incurred limitations with respect to materiality, whether by the Purchaser Indemnified Parties arising out of such alternative shall, subject reference to the termsterms "material," "in all material respects," "in any material respect," "Material Adverse Effect," or any similar words or phrases, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess omitted from the text of the Indemnification Capsuch representations and warranties). (b) In calculating amounts payable to All Losses recoverable by an Indemnified Party hereunderunder Section 8.2 and Section 8.3 shall be net of insurance proceeds and recoveries from third parties actually received by such Indemnified Party. If such Losses are covered by a Pre-Closing Insurance Policy, Purchaser and the Company shall cooperate with Seller, at Seller's request and at Seller's expense, in any reasonable manner in connection with Seller's efforts to recover the amount of available coverage from the applicable insurer (but with it being understood that Seller's indemnification obligations hereunder shall not be contingent upon or otherwise subject to any such insurance recovery). In addition, and for the avoidance of doubt, the parties acknowledge and agree that neither Purchaser nor the Company shall have any obligation to seek to recover any amounts under insurance policies purchased at or after the Closing in order to mitigate or otherwise reduce the amount of any indemnified Losses. Purchaser and the Company shall use commercially reasonable and good faith efforts consistent with reasonable business judgment to collect amounts that may be reasonably recoverable from third parties in respect of Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement (and shall exercise substantially the same degree of effort and prudence that such parties would be computed net of expected to exercise under the circumstances if such Losses were not recoverable under Section 8.2), but (i) payments recovered by such efforts shall not include any requirement of Purchaser or the Indemnified Party under indemnification agreements Company to commence any litigation or arrangements with third parties arbitration proceeding or under offer or grant any insurance policy with respect accommodation (financial or otherwise) to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein Seller's indemnification obligations hereunder shall not include damages related be contingent upon or otherwise subject to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claimthird party recovery. (dc) Notwithstanding anything else contained in this Agreement The amount of any indemnification payment related to the contrary, after the Closing, indemnification a Loss arising under Section 8.2 and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII 8.3 shall be reduced to take account of any net Tax savings actually realized by the sole and exclusive remedy Indemnified Party arising from the incurrence or payment of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth such Loss in the Ancillary Agreements with regard to the transactions contemplated thereby), including taxable year in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement which such Loss is incurred or in any certificate delivered pursuant hereto. Without limiting the generality or effect preceding taxable year as a result of the foregoinguse of net operating loss carrybacks. In computing the amount of any such Tax benefit, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws Party shall (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall i) be deemed to be adjustments to recognize all other items of income, gain, loss, deduction, or credit before recognizing any item arising from the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect receipt of any express representation indemnity payment hereunder or warranty, which claims shall, in the incurrence or payment of any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 indemnified Loss and 11.8. (eii) The Sellers take into account any related tax costs and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereofexpenses. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this AgreementIndemnified Party does not realize any net Tax savings in the taxable year in which such Loss is incurred (or in any preceding taxable year), money damages would be inadequate and Purchaser would have no adequate remedy at lawbut does realize a net Tax savings in any of the two subsequent years, so that Purchaser the Indemnified Party shall have promptly pay over to the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and Indemnifying Party the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefamount of such net Tax savings when actually realized.

Appears in 1 contract

Samples: Membership Interest Purchase Agreement (Matria Healthcare Inc)

Indemnification Limitations. (a) In Except in the case of (i) breach of any Fundamental Representation or (ii) Fraud, no event Indemnifying Party shall be required to indemnify the Sellers be liable for indemnification pursuant to Indemnified Party under Section 10.2(a)(i5.2(b) (other than in respect of the representations and warranties in or Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)5.3(b) unless and until the aggregate amount of all the Losses with respect to for which a right of indemnification is provided under Section 10.2(a)(i5.2(b) that are imposed on or incurred by the Purchaser Indemnified Parties Section 5.3(b), as applicable, exceeds Two Hundred Thousand Dollars ($1,400,000 200,000.00) (the “Threshold AmountBasket”), in at which case the Purchaser Indemnified Parties shall be entitled time rights to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i5.2(b) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”or Section 5.3(b), or (ii) as applicable, may be liable asserted for indemnification with respect to the total amount of any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claimLosses, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification CapBasket. (b) In calculating amounts payable to an Indemnified Party hereunder, Except in the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net case of (i) payments recovered by breach of any Fundamental Representation or (ii) Fraud, the aggregate amount of all Losses for which an Indemnifying Party shall be required to indemnify the Indemnified Party under indemnification agreements (A) Section 5.2(b) and Section 5.2(e) or arrangements with third parties (B) or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”Section 5.3(b), as applicable, shall not exceed Four Million Dollars (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f$4,000,000.00), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject The aggregate amount of all Losses for which Sellers shall be required to indemnify the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third partyIndemnified Parties under Section 5.2(b) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) or related to breaches of any of the Fundamental Representations and Section 2.5(b)(vi5.2(c) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply exceed the amount of the Purchase Price actually received by Sellers pursuant to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser Sections 1.7 and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim1.9. (d) Notwithstanding anything else contained herein, (i) Sellers shall not be liable or obligated to indemnify, hold harmless or defend any Purchaser Indemnified Party pursuant to Section 5.2 if the basis for such liability or obligation was discovered or identified in this Agreement to whole or in part as a result of a Phase II environmental site assessment or other intrusive sampling, testing or investigation (collectively, “Intrusive Tests”) undertaken by or on behalf of, or with the contraryconsent or approval of, any Purchaser Indemnified Party, after the ClosingClosing Date, indemnification and specific performance except to the extent that such Intrusive Test was (A) required by applicable Law, or (B) undertaken in response to an Legal Proceeding instituted by a third-party against a Purchaser Indemnified Party, which Legal Proceeding was not directly or indirectly solicited, suggested, encouraged or initiated by any Purchaser Indemnified Party; (ii) Sellers shall not be liable for or obligated to conduct any Remedial Action, or indemnify, hold harmless or defend any Purchaser Indemnified Party for any Losses relating or attributable to any Remedial Action (A) to a clean-up standard that is more stringent than is required to allow the Owned Real Property to be used for the conduct of the Business thereon in substantially the same manner as conducted as of the Closing Date, or (B) that is not incurred in a commercially prudent manner; and (iii) Sellers shall not be liable or obligated to indemnify, hold harmless or defend any Purchaser Indemnified Party pursuant to Section 5.2(e) after the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy fifth anniversary of the parties with respect to any and all claims Closing Date. (whether in contract or in torte) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary else contained herein, nothing in this Article X Agreement shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect liability of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefFraud.

Appears in 1 contract

Samples: Asset Purchase Agreement (Gulf Island Fabrication Inc)

Indemnification Limitations. (a) In no event With respect to claims for Losses arising under Section 9.2(a), the Seller shall the Sellers not be liable for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and Losses until the aggregate amount of all such Losses under Section 9.2(a) exceeds *** (the “Threshold”), at which point the Seller shall become liable only for aggregate Losses under Section 9.2(a) in excess of the Threshold; provided, that any Losses or series of related Losses with respect to a particular breach or series of related breaches must equal or exceed *** to count toward the Threshold; and provided, further, that the limitations set forth in this Section 10.2(a)(i9.4(a) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required apply to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect claims based on fraud, intentional misrepresentation or a breach of any of the Excluded Fundamental Representations. (b) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim except for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose claims based on fraud, intentional misrepresentation or a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery breach of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified PartyFundamental Representations, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by i) the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser Seller shall not be required to make payments liable for indemnification pursuant to any Losses under Section 10.2(b)(i9.2(a) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment***. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be but subject to the provisions of Sections 4.23, 5.7(a)-(dlimitations set forth in Section 9.4(b), 11.7 the aggregate liability of (i) the Seller for all Losses under this Article IX shall not exceed ***, and 11.8(ii) the Buyer for all Losses under this Article IX shall not exceed ***. *** Represents material omitted per the registrant's Confidential Treatment Request and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. (d) The Seller shall not have any right of contribution against the Company with respect to any breach by the Company of any of its representations, warranties, covenants or agreements. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser Each Party shall have the right, in addition to any other rights and remedies existing in its favorfavor hereunder, to enforce its rights and the Sellers’ obligations hereunder of the other Parties hereto, not only by an action or actions for damages Losses but also by an action or actions for specific performance, injunctive, injunctive and/or other equitable relief. (f) An Indemnified Person may not assert multiple claims under Section 9.2 or Section 9.3, as applicable, in order to recover duplicative Losses in respect of a single set of facts or circumstances that give rise to a breach of more than one representation, warranty, covenant or agreement in this Agreement; provided, however, that neither the foregoing limitation nor any other limitation set forth in this Article IX, shall restrict an Indemnified Person’s ability to elect the particular representation, warranty, covenant or agreement, or combination of any one or more of the foregoing, under which it will seek indemnification with respect to a single set of facts or circumstances that has given rise to a breach under more than one representation, warranty, covenant or agreement in this Agreement. (g) The rights to indemnification set forth in this Article IX shall not be affected or limited by (i) any investigation conducted by or on behalf of the Indemnified Person or any knowledge acquired (or capable of being acquired) by the Indemnified Person, whether before or after the date of this Agreement, with respect to the inaccuracy or non-compliance with any representation, warranty, covenant or obligation which is the subject of indemnification hereunder, or (ii) any waiver by the Indemnified Person of any closing condition relating to the accuracy of representations and warranties or the performance of or compliance with agreements and covenants.

Appears in 1 contract

Samples: Stock Purchase Agreement (Agl Resources Inc)

Indemnification Limitations. In seeking indemnification under this Section 11.2 following the Closing, the Indemnified Persons shall exercise their remedies: (ai) In no event shall subject to subsection 11.2(b)(ii), for matters arising out of the Sellers be liable for indemnification General Representations or the Special Representations, by taking delivery from the Escrow Shares of up to all of the Escrow Shares deposited in escrow as of the Closing (or an amount equal thereto in the case of stock splits, stock dividends, reverse stock splits or reverse stock dividends) and any other assets deposited in escrow pursuant to the Escrow Agreement; and (ii) in the event of (A) any Tax liability referred to in Section 10.2(a)(i11.2(a)(i), (B) (other than in respect a breach of any of the representations and warranties contained in the first paragraph of Section 4.1 (Corporate Status4.1, the first sentence of Section 4.9 and Sections 4.2(a), Section 4.2 4.3, 4.8 and 5.4, or (AuthorityC) IVG Damages arising out of the matters described in subsections 11.2(a)(iii), (iv) or (v) above, the Indemnified Persons shall be entitled to collect IVG Damages from the Shareholders in addition to taking delivery of any Escrow Shares. Except for the breach of any covenant of the Shareholders in Article 11 and indemnification arising out of liability referred to in subsections 11.2(a)(i) and (v), the first two sentences of each of indemnification provided for in Section 4.4(a11.2(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) will not apply unless and until the aggregate amount of all Losses with respect to IVG Damages for which one or more Indemnified Persons seeks indemnification under Section 10.2(a)(i11.2(a) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”)100,000, in which case event the Purchaser Indemnified Parties shall be entitled to indemnification provided for in Section 11.2(a) will include all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount IVG Damages in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to such sum. The provisions of this Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses 11.2 shall be disregarded and shall not be aggregated the sole remedy against the Shareholders for purposes breach of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount)Article 4. Notwithstanding anything to the contrary hereinin this Agreement, Sellers shall have ninety (90) days the parties agree that the Unpaid Taxes will not be deemed to result in IVG Damages if they are paid by the Surviving Corporation after the receipt of an indemnification claim for any Loss by Effective Time in accordance with written agreements with the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which Taxing Authorities to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made Taxes are due; UNLESS at the time of any such payment., (cA) Subject to the other provisions there is a material breach of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII shall be the sole and exclusive remedy of the parties with respect to any and all claims (whether in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller Ancillary Agreements on behalf of SES or any of the Shareholders; (B) the Surviving Corporation and its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating subsidiaries fail to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject have positive EBITDA on a consolidated basis at least equal to the terms and conditions amount of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded each such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8.payment when made; or (eC) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably in the event any provision Surviving Corporation's board of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled directors has failed to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only approve such payment by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefresolution.

Appears in 1 contract

Samples: Asset Purchase Agreement (Internet Golf Association Inc)

Indemnification Limitations. Notwithstanding any other provision contained in this Agreement, the indemnity obligations of the Selling Securityholders pursuant to Section 11.2 or otherwise, will be limited in the following respects: (a) In no event shall the Sellers Selling Securityholders will only be liable for indemnification pursuant to Damages arising under Section 10.2(a)(i11.2(a) (other than in respect of if a claim for indemnity is made by the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed Indemnitee on or incurred by before the Purchaser Indemnified Parties exceeds $1,400,000 First Expiry Date; (b) the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) Selling Securityholders will only be liable for indemnification with respect to any Loss Damages arising under Section 11.2(b) if a claim for indemnity is made by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed Indemnitee on or incurred by before the Purchaser Indemnified Parties arising out of such alternative shall, subject to Second Expiry Date; (c) the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser Selling Securityholders shall not be required to make payments for any indemnification payment pursuant to Section 10.2(b)(i11.2 unless the Damages exceeds $50,000 in the aggregate; (d) in an aggregate amount the Selling Securityholders shall not be required to make any indemnification payment pursuant to Section 11.2(a) in excess of the Indemnification CapSecond Escrow Amount in accordance with the Escrow Agreement shall be the only and sole source of payment for the indemnification rights of the Indemnitees under Section 11.2(a); (e) VWP and DEI shall not be required to make any indemnification payment pursuant to Section 11.2(a) or 11.2(b) in excess of their respective Pro Rata interest in the Second Escrow Amount as set out in this Section 11.3 in excess of their respective Pro Rata interests and such Pro Rata payment out of the Second Escrow Amount in accordance with the Escrow Agreement shall be the only and sole source of payment for the indemnification rights of the Indemnitees under Section 11.2 in the case of VWP and DEI; (f) the aggregate amount of Damages for which a Selling Securityholder may be liable to the Indemnitees under Section 11.2(b) or otherwise will first be satisfied out of the balance of the Second Escrow Amount, if any, after all indemnification claims under Section 11.2(a) have been paid and any Damages in excess of the balance of the Second Escrow Amount, if any, will be limited solely to the amount set opposite the Selling Securityholder's name in Schedule 11.3, provided that neither VWP nor DEI shall be responsible or liable for any such additional amounts; and (g) the liability of VWP and DEI for any and all indemnification claims under Section 11.2 or any other claims which may have been made against either of VWP or DEI under this Agreement is limited to their Pro-Rata interests in the Second Escrow Amount as set out in Schedule 11.3. (bh) In calculating amounts payable to an Indemnified Party hereunder, For the amount purposes of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by determining the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year liability of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party Elliotts in their capacity as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay Selling Shareholders pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to11, in good faithaddition to any Securities owned or held directly by each Elliott as set out in Part 3.0 xx xxe Disclosure Schedule, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification and specific performance pursuant to the provisions of this Article X, Section 6.14 and Article VIII each Elliott shall be the sole and exclusive remedy of the parties with respect deemed to any and all claims (whether hxxx XXX Shares equal to his or her proportionate interest in contract or in tort) arising out of or in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard to the transactions contemplated thereby), including in respect of any misrepresentation or breach of any warranty, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoing, as a material inducement to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, BEA and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing own any Securities sold by Protec Management Ltd. as set out in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in Part 4 of the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject pursuant to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8. (e) The Sellers and Purchaser acknowledge and agree that the other parties would be damaged irreparably this Agreement in the event any provision of this Agreement is not performed in accordance with its specific terms same proportion, and his or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefher liability adjusted upwards accordingly.

Appears in 1 contract

Samples: Stock Purchase Agreement (Titan Corp)

Indemnification Limitations. (a) In no event shall the Sellers be liable for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the representations and warranties in Section 4.1 (Corporate Status), Section 4.2 (Authority), the first two sentences of each of Section 4.4(a) and 4.4(b) (Capitalization), Section 4.7 (Taxes), and Section 4.21 (Finder’s Fee) (collectively, the “Excluded Representations”) and Section 4.17 (Sufficiency of Assets)) unless and until the aggregate amount of all Losses with respect to Section 10.2(a)(i) that are imposed on or incurred by the Purchaser Indemnified Parties exceeds $1,400,000 (the “Threshold Amount”), in which case the Purchaser Indemnified Parties shall be entitled to indemnification for all Losses from the first dollar, including both the Threshold Amount and any amounts in excess thereof. Notwithstanding anything herein to the contrary, the Sellers shall not (i) be required to make payments for indemnification pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) in an aggregate amount in excess of $18,000,000 (the “Indemnification Cap”), or (ii) be liable for indemnification with respect to any Loss by the Purchaser Indemnified Parties pursuant to Section 10.2(a)(i) (other than in respect of the Excluded Representations) to the extent such Loss and all Losses arising out of the same facts and circumstances are, in the aggregate, less than $15,000 (each, a “De Minimis Loss”) (and such Losses shall be disregarded and shall not be aggregated for purposes of the Threshold Amount unless and until such Losses arising out of the same facts or circumstances exceed the De Minimis Loss amount). Notwithstanding anything to the contrary herein, Sellers shall have ninety (90) days after the receipt of an indemnification claim for any Loss by the Purchaser Indemnified Parties in respect of Section 4.20(b) (Products Liability; Warranty) in which to propose a commercially reasonable alternative to satisfy such claim, including the repair, replacement or redelivery of any products that are the subject of such claim, which such commercially reasonable alternative is subject to the prior written approval of the Purchaser Indemnified Party, not to be unreasonably withheld, conditioned or delayed (it being understood that any and all costs or other Losses imposed on or incurred by the Purchaser Indemnified Parties arising out of such alternative shall, subject to the terms, conditions and limitations contained herein, be considered indemnifable Losses). Purchaser shall not be required to make payments for indemnification pursuant to Section 10.2(b)(i) in an aggregate amount in excess of the Indemnification Cap. (b) In calculating amounts payable to an Indemnified Party hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, covenant, or agreement and shall be computed net of (i) payments recovered by the Indemnified Party under indemnification agreements or arrangements with third parties or under any insurance policy with respect to such Losses (after deduction for any cost of collection, deductible, retroactive premium adjustment, reimbursement obligation or other cost or expense directly related thereto) (each, a “Collateral Source”), (ii) any prior recovery by the Indemnified Party from any Person with respect to such Losses, including by such Loss being included as a Liability in Final Net Working Capital and actually resulting in an adjustment to the Purchase Price pursuant to Section 3.4(f), or (iii) any Tax Benefit actually received by a Purchased Entity with respect to such Losses in the year of the indemnity payment or a prior year, but increased by the amount of any Tax detriment actually paid by any Indemnified Party as a result of such party’s receipt of the indemnification payment with respect to such Loss. In the event of any indemnification claim paid, Honeywell may, in its sole discretion, require the Indemnified Party to grant to Honeywell an assignment of the right of such Indemnified Party to assert a claim against any Collateral Source. If the amount to be netted hereunder from any payment required under this Article X or Article VIII is determined after payment of any amount otherwise required to be paid to an Indemnified Party under this Article X or Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article X or Article VIII had such determination been made at the time of such payment. (c) Subject to the other provisions of this Article X, but notwithstanding any other provision of this Agreement, (i) in no event shall the Sellers or Purchaser be liable for any punitive damages, except to the extent such damages are payable to an unaffiliated third party and (ii) in no event shall the Sellers be liable for any consequential damages (it being understood and agreed that the term “consequential damages” used herein shall not include damages related to lost profits, diminution in value (including multiple of earnings or similar metrics for measuring damages), nor damages payable to an unaffiliated third party) arising out of indemnification claims for Excluded Liabilities described in Sections 2.5(a)(iv), (v)(A), (vii)(B), (ix), (x), (xi), (xii), and (xiv) and Section 2.5(b)(vi) (each such indemnification claim, a “Business Related Excluded Liabilities Claim”) in excess of $28,000,000; provided that the foregoing limitation on consequential damages shall not apply to the extent any such Excluded Liability relates to the Excluded Assets, the Purchased Entities’ Excluded Assets, or operation or conduct by the Sellers or any of their Affiliates of any business (other than the Business). Purchaser and the Sellers shall, and Purchaser shall cause the Purchaser Indemnified Parties to, in good faith, (x) agree upon what portion of damages (if any) constitute consequential damages in connection with the settlement of a Business Related Excluded Liabilities Claim and (y) use their respective commercially reasonable efforts to cause the applicable Governmental Authority to determine what portion of damages (if any) constitute consequential damages as part of any Governmental Order that is entered by such Governmental Authority in connection with a Business Related Excluded Liabilities Claim. (d) Notwithstanding anything else contained in this Agreement to the contrary, after except for claims arising from, related to or associated with fraud or intentional misrepresentation, (i) the ClosingBuyer Indemnitees, as a group, shall not be entitled to indemnification for any Losses under this Article 8 in excess of the sum of $5,000,000 (the “Buyer Indemnitee Cap Amount”), and specific performance pursuant (ii) the Seller Indemnitees, as a group, shall not be entitled to indemnification for any Losses under this Article 8 in excess of $5,000,000 (the “Seller Indemnitee Cap Amount”). (b) In the event that Seller would have, but for this subsection, an obligation to pay indemnity to or for a Buyer Indemnitee under this Article 8, no indemnity payments shall be owed by Seller, notwithstanding the other sections in this Article 8, until the aggregate of all indemnity payments owed under this Article 8 to Buyer Indemnitees, in the aggregate, by Seller exceeds $75,000, in the aggregate. In the event that the amount of indemnity payments owed by Seller to Buyer Indemnitees, in the aggregate, exceeds $75,000, in the aggregate, Seller shall be liable to pay the excess above $75,000 to the provisions full amount of the Buyer Indemnitees Cap Amount. (c) In the event that Buyer would have, but for this subsection, an obligation to pay indemnity to or for a Seller Indemnitee under this Article X8, Section 6.14 and Article VIII no indemnity payments shall be owed by Buyer, notwithstanding the sole and exclusive remedy other sections in this Article 8, until the aggregate of all indemnity payments owed under this Article 8 to Seller Indemnitees, in the aggregate, by Buyer exceeds $50,000, in the aggregate. In the event that the amount of indemnity payments owed by Buyer to Seller Indemnitees, in the aggregate, exceeds $50,000, in the aggregate, Buyer shall be liable to pay the excess above $50,000 to the full amount of the parties with respect Seller Indemnitees Cap Amount. (d) The limitations in this Section 8.07 apply to any and all claims (whether obligations of Seller, in contract or in tort) arising out of or in connection with the aggregate, to provide indemnity under this Purchase Agreement, the Ancillary Agreements Transaction Documents, and the transactions contemplated hereby and thereby (other than remedies set forth in the Ancillary Agreements with regard relation to the transactions contemplated therebytransaction referenced in Section 6.19 (“Global Seller Indemnity Obligations”), including such that sub-section (b) provides a limitation on the first $75,000 in respect of any misrepresentation or breach of any warrantyGlobal Seller Indemnity Obligations, covenant or other provision contained in this Agreement or in any certificate delivered pursuant hereto. Without limiting the generality or effect of the foregoingand, as a material inducement subsection (c) provides an absolute cap to the Sellers entering into this Agreement, Purchaser hereby waives, from and after the Closing, any claim or cause of action, known and unknown, foreseen and unforeseen, which it or any of the other Purchaser Indemnified Parties may have against any Global Seller or any of its Affiliates, including without limitation under the common law or federal or state securities Laws, trade regulation Laws or other Laws (including any relating to Intellectual Property, products liability (including Products Liability Claims), Tax, environmental, real estate or employee matters), by reason of this Agreement and the transactions provided for herein, except for claims or causes of action brought under and subject to the terms and conditions of the provisions contained in this Article X and Article VIII. All payments made pursuant to this Article X and Article VIII shall be made by the Sellers to Purchaser or by Purchaser to the Sellers, as the case may be, and shall be deemed to be adjustments to the Purchase Price. Notwithstanding anything to the contrary herein, nothing in this Article X shall limit any claim by a Purchaser Indemnified Party alleging that Sellers defrauded such Person by intentionally omitting or misstating any disclosure in the Disclosure Schedule where such omission or misstatement constitutes a breach in any material respect of any express representation or warranty, which claims shall, in any case, be subject to the provisions of Sections 4.23, 5.7(a)-(d), 11.7 and 11.8Indemnity Obligations. (e) The Sellers limitations in Section 8.07 apply to all obligations of Buyer, in the aggregate, to provide indemnity under this Purchase Agreement, the Transaction Documents, and Purchaser acknowledge and agree in relation to the transaction referenced in Section 6.19 (“Global Buyer Indemnity Obligations”), such that the other parties would be damaged irreparably in the event any provision provisions of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof. In particular, the parties acknowledge that the Business is unique and recognize and affirm that in the event that the Sellers breach this Agreement, money damages would be inadequate and Purchaser would have no adequate remedy at law, so that Purchaser shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the Sellers’ obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable reliefsub-section (a) provide an absolute cap on Global Buyer Indemnity Obligations.

Appears in 1 contract

Samples: Asset Purchase Agreement (RE/MAX Holdings, Inc.)

Draft better contracts in just 5 minutes Get the weekly Law Insider newsletter packed with expert videos, webinars, ebooks, and more!