Indemnification of Parent Indemnified Parties. (a) From and after the Closing, subject to the limitations set forth in this Article IX, Parent and Merger Sub and their respective directors, officers, employees, agents, Affiliates, successor and assigns (each a “Parent Indemnified Party” and, collectively, the “Parent Indemnified Parties”) shall be indemnified and held harmless by, on a joint and several basis, the Shareholders from and against, any and all liabilities, obligations, deficiencies, demands, claims, suits, actions, or causes of action, assessments, losses, costs and expenses (including reasonable attorneys’ fees) (hereinafter, a “Loss” or the “Losses”), sustained or incurred by any Parent Indemnified Party, resulting from: (i) any breach of a representation or warranty made by the Company in Article III of this Agreement or in any of the other Transaction Documents; (ii) any breach of a covenant made by the Company in this Agreement or any of the Transaction Documents; (iii) any Taxes of the Company or its Subsidiaries for which the Shareholders are liable pursuant to the provisions of Section 8.1; (iv) any claim by any Person for brokerage or finder’s fees or commissions or similar payments based upon any agreement or understanding alleged to have been made by any such Person with the Company or any Subsidiary (or any Person acting on their behalf) in connection with any of the transactions contemplated by this Agreement; (v) any Company Transaction Expenses or Repaid Indebtedness that were not accounted for in the calculation of the payments made by Parent pursuant to Section 2.9; (vi) any error in the calculation of each Shareholder’s Pro Rata Percentage; (vii) any claim by any officer, manager or director of the Company or any of its Subsidiaries for indemnification, contribution, reimbursement or other remedy against the Company or any of its Subsidiaries arising out of or pertaining to matters existing or occurring at or prior to Closing; or (viii) any claim by any Shareholder arising out of the transactions contemplated by this Agreement other than claims against Parent for breach of this Agreement. (b) If any Parent Indemnified Party becomes potentially entitled to any indemnification pursuant to Section 9.2(a), the amount that such Parent Indemnified Party is entitled to recover in connection therewith shall nevertheless be limited as follows: (i) first, no Losses pursuant to Section 9.2(a)(i) shall be payable until the total of all such Losses exceeds $85,000 (the “Deductible”), and then only for the amount by which such claims for such Losses exceed the Deductible shall be paid; and (ii) second, the aggregate amount of Losses pursuant to Section 9.2(a)(i) which the Parent Indemnified Parties shall be entitled to recover pursuant to this Agreement shall be limited to $3,400,000 (the “Cap”); provided, however, that neither the Deductible nor the Cap shall apply to Losses to the extent that such Losses arise from (i) the breach of any Fundamental Representation or any of the representations and warranties set forth in Sections 3.7 (Taxes) or 3.18 (Employee Benefit Plans); (ii) the breach of any of the covenants set forth in Section 8.1 (Tax Matters); or (iii) fraud or criminal or willful misconduct. (iii) In no event shall any Shareholder’s aggregate liability for claims for indemnification of Losses exceed the aggregate of that portion of the Merger Consideration actually received by such Shareholder; provided, however, that the foregoing limitation shall not apply to claims against a Shareholder based on such Shareholder’s own fraud or criminal or willful misconduct. (c) Claims made by the Parent Indemnified Persons for indemnification under this Article IX shall be satisfied, first, from the Parent Common Shares then held pursuant to the Holdback Agreement and, then, directly from the Shareholders by wire transfer of immediately available funds to such bank account(s) as shall be designated in writing by Parent. (d) Parent and the Shareholder Representative shall cause the Escrow Agent to release to the Shareholders (in accordance with their Pro Rata Percentages and to be disbursed in accordance with the Holdback Agreement) (i) on or promptly after the day that is twelve (12) months after the Closing Date, that number of Parent Company Shares or cash, as applicable, with an aggregate value equal to the Holdback Amount less the sum of (1) that number of Parent Common Shares and cash with an aggregate value equal to any then pending claims for indemnification under this Article IX that have been properly asserted by the Parent Indemnified Persons, (2) the Parent Common Shares, if any, previously released to Parent as payment for claims for indemnification under this Article IX, and (3) the Parent Common Shares, if any, released to Parent as payment for the Closing Net Assets Deficit in accordance with Section 2.10(f)(i) hereof. Any unreleased Parent Common Shares and cash shall be retained by the Escrow Agent in accordance with the terms of the Holdback Agreement.]
Appears in 1 contract
Samples: Merger Agreement (Limoneira CO)
Indemnification of Parent Indemnified Parties. (aEach Indemnifying Holder shall be deemed to have agreed upon surrender of his, her or its certificate(s) From and after the Closing, subject which immediately prior to the limitations set forth in this Article IXEffective Time represented shares of Company Stock, Parent and hereby agrees, to indemnify, defend and hold harmless Parent, Merger Sub Sub, their respective Affiliates (including, following the Effective Time, the Surviving Corporation and the Company Subsidiaries) and their respective directors, officers, employees, stockholders, agents, Affiliatesrepresentatives, successor successors and assigns (each a “Parent Indemnified Party” and, collectively, the “Parent Indemnified Parties”) shall be indemnified and held harmless by, on a joint and several basis, the Shareholders from and against, and such Parent Indemnified Parties shall be entitled to be compensated and reimbursed for, any and all liabilitiesDamages based upon, obligations, deficiencies, demands, claims, suits, actions, arising from or causes related to any of action, assessments, losses, costs and expenses the following (including reasonable attorneys’ fees) (hereinafter, each a “Loss” or the “LossesParent Claim”), sustained or incurred by any Parent Indemnified Party, resulting from:):
(ia) any misrepresentation or breach or failure of a any representation or warranty made by the Company or the Stockholder Representative in Article III of this Agreement, the Escrow Agreement or in any certificate required to be delivered by the Company pursuant to Sections 11.1(a), (l) and (p) under this Agreement to be true, complete and correct in all respects as of the other Transaction Documentsdate hereof and as of the Closing Date (in each case, as such representation or warranty would read if all qualifications as to Knowledge and materiality, including each reference to the defined term Material Adverse Effect, were deleted therefrom);
(iib) any breach or non-fulfillment of a any covenant or agreement made or to be performed by the Company in this Agreement or any of the Transaction Documents;
(iii) any Taxes of the Company or its Subsidiaries for which the Shareholders are liable pursuant to the provisions of Section 8.1;
(iv) any claim by any Person for brokerage or finder’s fees or commissions or similar payments based upon any agreement or understanding alleged to have been made by any such Person with the Company or any Subsidiary (or any Person acting on their behalf) in connection with any of the transactions contemplated by this Agreement;
(vc) any amount of Company Transaction Expenses or Repaid Indebtedness that were not accounted for in the calculation of the payments made by Parent pursuant to Section 2.9;
(vi) any error in the calculation of each Shareholder’s Pro Rata Percentage;
(vii) any claim by any officerExpenses, manager or director of the Company or any of its Subsidiaries for indemnification, contribution, reimbursement or other remedy against the Company or any of its Subsidiaries arising out of or pertaining to matters existing or occurring at or prior to Closing; or
(viii) any claim by any Shareholder arising out of the transactions contemplated by this Agreement other than claims against Parent for breach of this Agreement.
(b) If any Parent Indemnified Party becomes potentially entitled to any indemnification pursuant to Section 9.2(a), the amount that such Parent Indemnified Party is entitled to recover in connection therewith shall nevertheless be limited as follows:
(i) first, no Losses pursuant to Section 9.2(a)(i) shall be payable until the total of all such Losses exceeds $85,000 (the “Deductible”), and then only for the amount by which such claims for such Losses exceed the Deductible shall be paid; and
(ii) second, the aggregate amount of Losses pursuant to Section 9.2(a)(i) which the Parent Indemnified Parties shall be entitled to recover pursuant to this Agreement shall be limited to $3,400,000 (the “Cap”); provided, however, that neither the Deductible nor the Cap shall apply to Losses except to the extent that such Losses arise from (i) the breach of any Fundamental Representation or any of the representations and warranties set forth in Sections 3.7 (Taxes) or 3.18 (Employee Benefit Plans); (ii) the breach of any of the covenants set forth in Section 8.1 (Tax Matters); or (iii) fraud or criminal or willful misconduct.
(iii) In no event shall any Shareholder’s aggregate liability for claims for indemnification of Losses exceed the aggregate of that portion of the Merger Consideration actually received by such Shareholder; provided, however, that the foregoing limitation shall not apply to claims against a Shareholder based on such Shareholder’s own fraud or criminal or willful misconduct.
(c) Claims made by the Parent Indemnified Persons for indemnification under this Article IX shall be satisfied, first, from the Parent Common Shares then held pursuant to the Holdback Agreement and, then, directly from the Shareholders by wire transfer of immediately available funds to such bank account(s) as shall be designated in writing by Parent.
(d) Parent and the Shareholder Representative shall cause the Escrow Agent to release to the Shareholders (in accordance with their Pro Rata Percentages and to be disbursed in accordance with the Holdback Agreement) (i) on or promptly after the day that is twelve (12) months after the Closing Date, that number of Parent Company Shares or cash, as applicable, with an aggregate value equal to the Holdback Amount less the sum of (1) that number of Parent Common Shares and cash with an aggregate value equal to any then pending claims for indemnification under this Article IX that Transaction Expenses have been properly asserted by the Parent Indemnified Persons, (2) the Parent Common Shares, if any, previously released to Parent as payment for claims for indemnification under this Article IX, and (3) the Parent Common Shares, if any, released to Parent as payment for the Closing Net Assets Deficit included in accordance with Section 2.10(f)(i) hereof. Any unreleased Parent Common Shares and cash shall be retained by the Escrow Agent in accordance with the terms of the Holdback Agreement.]Estimated Company Transaction Expenses;
Appears in 1 contract
Samples: Merger Agreement (Vmware, Inc.)
Indemnification of Parent Indemnified Parties. (a) From Subject to the terms and limitations in this ARTICLE X, from and after the Closing, subject to the limitations set forth in this Article IXParticipating Securityholders shall indemnify and hold harmless the Parent Entities, Parent and Merger Sub the Surviving Corporation, their respective Affiliates and their respective directorsRepresentatives, officers, employees, agents, Affiliates, successor successors and assigns (each a “Parent Indemnified Party” and, collectively, the “Parent Indemnified Parties”), severally (and not jointly and severally) shall be indemnified and held harmless byin accordance with their respective Pro Rata Portion, on a joint and several basis, the Shareholders from and against, any and against all liabilities, obligations, deficiencies, demands, claims, suits, actions, or causes of action, assessments, losses, costs and expenses (including reasonable attorneys’ fees) (hereinafter, a “Loss” or the “Losses”), sustained or incurred by Losses that any Parent Indemnified PartyParty may at any time suffer, resulting incur or become subject to as a result of or arising from:
(i) the failure of any breach of a representation or warranty made by of the Company set forth in Article III of this Agreement or in any of the other Transaction Documentscertificates or documents furnished by the Company pursuant to this Agreement to be true and correct in all respects (a “Company Warranty Breach”);
(ii) any breach of a covenant made failure by the Company to perform, fulfill or comply with any covenant set forth in this Agreement or in any of the Transaction Documentscertificates or documents furnished by the Company pursuant to this Agreement;
(iii) any Taxes failure by the Seller Representative to perform, fulfill or comply with any covenant set forth in this Agreement or in any of the certificates or documents furnished by the Company or its Subsidiaries for which the Shareholders are liable pursuant to the provisions of Section 8.1this Agreement;
(iv) any claim by any Person for brokerage or finder’s fees or commissions or similar payments based upon any agreement or understanding alleged to have been made by any such Person with the Company or any Subsidiary (or any Person acting on their behalf) in connection with any of the transactions contemplated by this AgreementDissenter Costs;
(v) any Company Transaction Expenses or Repaid Indebtedness that were not accounted for in the calculation of the payments made by Parent pursuant claim with respect to Section 2.9any Termination Obligations;
(vi) any error in claim by any Participating Securityholder with respect to the calculation of each Shareholder’s Pro Rata PercentageExpense Fund;
(vii) any claim by any officerliability not otherwise reserved for (to extent not reflected in the Closing Working Capital or the Financials) arising from the Pre-Closing Transactions (other than claims with respect to Taxes attributable thereto or resulting therefrom, manager or director of the Company or any of its Subsidiaries for indemnification, contribution, reimbursement or other remedy against the Company or any of its Subsidiaries arising out of or pertaining to matters existing or occurring at or prior to Closingwhich are covered on Exhibit A); orand
(viii) any claim by any Shareholder arising out unpaid Company Transaction Expenses, Closing Indebtedness, Company Closing Bonuses or Pre-Closing Taxes, to the extent not taken into consideration in determination of the transactions contemplated by this Agreement other than claims against Parent for breach of this AgreementClosing Merger Consideration.
(b) If Notwithstanding anything to the contrary contained herein, the Participating Securityholders shall not be required to indemnify, defend or hold harmless any Parent Indemnified Party becomes potentially entitled to against, or reimburse, or otherwise have any indemnification pursuant to Section 9.2(a)liability under this Agreement to, the amount that such any Parent Indemnified Party is entitled for the portion of any Losses related to recover the Excluded Business (other than Losses incurred as a result of the Pre-Closing Transactions) and incurred as a result of a Company Warranty Breach except to the extent such Losses related to the Excluded Business arise from or in connection therewith with a Third Party Claim.
(c) Notwithstanding anything to the contrary contained herein, the Participating Securityholders shall nevertheless not be limited required to indemnify, defend or hold harmless any Parent Indemnified Party against, or reimburse, or otherwise have any liability under this Agreement to, any Parent Indemnified Party for any Losses as follows:a result of a Company Warranty Breach (other than a Company Warranty Breach of a Fundamental Representation) with respect to any claim for Losses;
(i) firstif the aggregate amount of Losses with respect to any particular Company Warranty Breach (other than a Company Warranty Breach of a Fundamental Representation) is less than Twenty-Five Thousand Dollars ($25,000) (the “Threshold”), no and such Losses pursuant to Section 9.2(a)(ishall not be counted for purposes of determining if the Deductible has been reached;
(ii) shall be payable until the total aggregate amount of all such Losses (excluding the Losses with respect to any particular Company Warranty Breach that are less than the Threshold) for which the Parent Indemnified Parties are entitled to indemnification as a result of Company Warranty Breaches (other than a Company Warranty Breach of a Fundamental Representation) exceeds an amount equal to Two Million Five Hundred Thousand Dollars ($85,000 2,500,000) (the “Deductible”), and then only for the amount by which such claims for such Losses exceed the Deductible shall be paid; and
(ii) second, the aggregate amount of Losses pursuant to Section 9.2(a)(i) after which the Parent Indemnified Parties shall shall, subject to any limitations or restrictions set forth in this ARTICLE X, be entitled to recover pursuant indemnification for all Losses in excess of One Million Dollars ($1,000,000) for which the Parent Indemnified Parties are entitled to this Agreement shall be limited to indemnification as a result of Company Warranty Breaches; and
(iii) that, when aggregated with all other Losses (other than those that do not meet the Threshold), exceeds Ninety-Five Million Dollars ($3,400,000 94,695,556) (the “Cap”); provided, howeverwhich shall first be satisfied from the Indemnity Escrow Shares based on the Share Value of the Indemnity Escrow Shares as of the time such Indemnity Escrow Shares are delivered to Parent in satisfaction of the Participating Securityholders’ indemnification obligations hereunder. In the event that the Indemnity Escrow Shares are insufficient to satisfy the Participating Securityholders’ indemnification obligations hereunder, that neither such deficiency will be satisfied by the Deductible nor Participating Securityholders severally (and not jointly and severally) based on their Pro Rata Portion of an amount equal to (A) the Cap shall apply to Losses less (B) the Share Value of all Indemnity Escrow Shares released to the extent that such Losses arise from (i) Parent Indemnified Parties, valued based on the breach of any Fundamental Representation or any Share Value of the representations and warranties set forth in Sections 3.7 (Taxes) or 3.18 (Employee Benefit Plans); (ii) the breach of any Indemnity Escrow Shares as of the covenants set forth time such Indemnity Escrow Shares are delivered to Parent in Section 8.1 (Tax Matters); or (iii) fraud or criminal or willful misconduct.
(iii) In no event shall any Shareholder’s aggregate liability for claims for indemnification of Losses exceed the aggregate of that portion satisfaction of the Merger Consideration actually received by Participating Securityholders’ indemnification obligations hereunder. The satisfaction of such Shareholder; provided, however, that the amount shall be paid in cash. The foregoing limitation limitations on indemnification shall not apply to claims against Losses incurred by any Parent Indemnified Party resulting from or arising out of (A) a Shareholder based on such ShareholderCompany Warranty Breach of a Fundamental Representation, for which each Participating Securityholder’s own aggregate liability (severally (and not jointly and severally)) shall not exceed its Pro Rata Portion of $948,849,406 (the “Fundamental Rep Cap”), less all amounts previously paid out with respect to other indemnification claims; or (B) (1) any of the matters set forth in clauses (ii) through (viii) of Section 10.2(a), for which the aggregate liability of each Participating Securityholder (severally (and not jointly and severally)) shall not exceed its Pro Rata Portion of $948,849,406, less all amounts previously paid out with respect to other indemnification claims; or (2) any fraud or criminal or willful misconduct.
(c) Claims made by breach of the Parent Indemnified Persons Company, for indemnification under this Article IX which the Participating Securityholders shall be satisfied, first, from the Parent Common Shares then held pursuant to the Holdback Agreement and, then, directly from the Shareholders by wire transfer of immediately available funds to such bank account(sseverally (and not jointly and severally) as shall be designated in writing by Parent.
(d) Parent and the Shareholder Representative shall cause the Escrow Agent to release to the Shareholders (liable in accordance with their respective Pro Rata Percentages and to be disbursed Portion for the full amount of the Loss. In addition, the limitations set forth in accordance with the Holdback Agreement) clauses (i) on or promptly after and (ii) above shall not apply to a Company Warranty Breach of a Company Tax Rep, but the day that is twelve limitation set forth in clause (12iii) months after above shall apply thereto. The satisfaction of amounts payable directly by a Participating Securityholder referenced in this paragraph shall be paid in cash or, at the Closing Date, that number election of Parent Company Shares or cash, as applicable, with an aggregate value equal to the Holdback Amount less the sum of (1) that number of Parent Common Shares and cash with an aggregate value equal to any then pending claims for indemnification under this Article IX that have been properly asserted such Participating Securityholder by the Parent Indemnified Persons, (2) the Parent Common Shares, if any, previously released return to Parent as payment for claims for indemnification under this Article IX, and (3) the Parent Common Shares, if any, released of any Subordinate Shares held by such Participating Securityholder that are still subject to Parent as payment for the Closing Net Assets Deficit in accordance with Section 2.10(f)(i) hereof. Any unreleased Parent Common Shares and cash shall be retained by the Escrow Agent in accordance with lock up pursuant to the terms of the Holdback Lock-Up Agreement, which Subordinate Shares will be valued at the Share Value of such Subordinate Shares as of the time such Subordinate Shares are delivered to Parent in satisfaction of the Participating Securityholders’ indemnification obligations hereunder. Notwithstanding the foregoing, the Fundamental Rep Cap will be recalculated on each date (each, a “Recalculation Date”) on which a Loss is finally determined to be due to a Parent Indemnified Party as follows: if the Share Price on such Recalculation Date is less than $9.92978 (the “Base Price”), then the Fundamental Rep Cap will be reduced, solely for purposes of limiting the amount of Losses payable on such Recalculation Date, by a percentage equal to the percentage drop in the Share Price as of such Recalculation Date from the Base Price. By way of example, if the Share Price as of the Recalculation Date is $7.94380, then the Fundamental Rep Cap will be reduced by 20% (i.e., 7.94380 divided by 9.92978 equals 0.8; 1.0 minus 0.8 multiplied by 100 equals 20%). The Fundamental Rep Cap will be recalculated on each Recalculation Date, but in no event will it exceed $948,849,406.]
Appears in 1 contract
Samples: Merger Agreement
Indemnification of Parent Indemnified Parties. Subject to Section 13.3 below, each Company Stockholder who accepts payment of consideration pursuant to this Agreement upon conversion of the share(s) of Company Stock pursuant to Section 2, shall be deemed to have agreed, and hereby agrees, to indemnify, defend and hold harmless Parent, Merger Sub, their respective affiliates (aincluding, without limitation, following the Effective Time, the Surviving Corporation) From and after the Closing, subject to the limitations set forth in this Article IX, Parent and Merger Sub and their respective directors, officers, employeesrepresentatives, agents, Affiliates, successor successors and assigns (each a “Parent Indemnified Party” and, collectively, the “Parent Indemnified Parties”) shall be indemnified and entitled to be held harmless by, on a joint and several basis, the Shareholders indemnified from and against, and shall be entitled to be compensated and reimbursed for, any and all liabilities, obligations, deficiencies, demands, claims, suits, actions, Damages arising from or causes related to any of action, assessments, losses, costs and expenses the following (including reasonable attorneys’ fees) (hereinafter, each a “Loss” or the “LossesParent Claim”), sustained or incurred by any Parent Indemnified Party, resulting from:):
(ia) any misrepresentation or breach or failure of a any representation or warranty made by the Company or the Representative in Article III of this Agreement to be true and correct in all respects (in each case, as such representation or in any of warranty would read if all qualifications as to materiality, including, without limitation, each reference to the other Transaction Documentsdefined term Material Adverse Effect, were deleted therefrom);
(iib) any breach or non-fulfillment of a any covenant made or agreement to be performed by the Company in this Agreement or any of the Transaction Documents;
(iii) any Taxes of the Company or its Subsidiaries for which the Shareholders are liable pursuant prior to the provisions of Section 8.1Effective Time;
(iv) any claim by any Person for brokerage or finder’s fees or commissions or similar payments based upon any agreement or understanding alleged to have been made by any such Person with the Company or any Subsidiary (or any Person acting on their behalf) in connection with any of the transactions contemplated by this Agreement;
(v) any Company Transaction Expenses or Repaid Indebtedness that were not accounted for in the calculation of the payments made by Parent pursuant to Section 2.9;
(vi) any error in the calculation of each Shareholder’s Pro Rata Percentage;
(vii) any claim by any officer, manager or director of the Company or any of its Subsidiaries for indemnification, contribution, reimbursement or other remedy against the Company or any of its Subsidiaries arising out of or pertaining to matters existing or occurring at or prior to Closing; or
(viii) any claim by any Shareholder arising out of the transactions contemplated by this Agreement other than claims against Parent for breach of this Agreement.
(b) If any Parent Indemnified Party becomes potentially entitled to any indemnification pursuant to Section 9.2(a), the amount that such Parent Indemnified Party is entitled to recover in connection therewith shall nevertheless be limited as follows:
(i) first, no Losses pursuant to Section 9.2(a)(i) shall be payable until the total of all such Losses exceeds $85,000 (the “Deductible”), and then only for the amount by which such claims for such Losses exceed the Deductible shall be paid; and
(ii) second, the aggregate amount of Losses pursuant to Section 9.2(a)(i) which the Parent Indemnified Parties shall be entitled to recover pursuant to this Agreement shall be limited to $3,400,000 (the “Cap”); provided, however, that neither the Deductible nor the Cap shall apply to Losses to the extent that such Losses arise from (i) the breach of any Fundamental Representation or any of the representations and warranties set forth in Sections 3.7 (Taxes) or 3.18 (Employee Benefit Plans); (ii) the breach of any of the covenants set forth in Section 8.1 (Tax Matters); or (iii) fraud or criminal or willful misconduct.
(iii) In no event shall any Shareholder’s aggregate liability for claims for indemnification of Losses exceed the aggregate of that portion of the Merger Consideration actually received by such Shareholder; provided, however, that the foregoing limitation shall not apply to claims against a Shareholder based on such Shareholder’s own fraud or criminal or willful misconduct.
(c) Claims made any amount paid by Parent, the Parent Indemnified Persons for indemnification under this Article IX shall be satisfied, first, from Company or the Parent Common Surviving Corporation to any Company Stockholder with respect to Dissenting Shares then held pursuant to the Holdback Agreement andDGCL in excess of the value such Person would have received in the Merger for such Dissenting Shares had such shares been converted pursuant to Section 2, thenand all interest, directly from costs, expenses and fees incurred by the Shareholders by wire transfer of immediately available funds to such bank account(s) as shall be designated Company, Parent or the Surviving Corporation in writing by Parent.
(d) Parent and the Shareholder Representative shall cause the Escrow Agent to release to the Shareholders (in accordance with their Pro Rata Percentages and to be disbursed in accordance connection with the Holdback Agreement) (i) on or promptly after exercise of all dissenters’ rights under the day that is twelve (12) months after the Closing Date, that number of Parent Company Shares or cash, as applicable, with an aggregate value equal to the Holdback Amount less the sum of (1) that number of Parent Common Shares and cash with an aggregate value equal to any then pending claims for indemnification under this Article IX that have been properly asserted by the Parent Indemnified Persons, (2) the Parent Common Shares, if any, previously released to Parent as payment for claims for indemnification under this Article IX, and (3) the Parent Common Shares, if any, released to Parent as payment for the Closing Net Assets Deficit in accordance with Section 2.10(f)(i) hereof. Any unreleased Parent Common Shares and cash shall be retained by the Escrow Agent in accordance with the terms of the Holdback AgreementDGCL.]
Appears in 1 contract
Indemnification of Parent Indemnified Parties. (a) From Subject to this Section 6.3, from and after the ClosingClosing Date, subject to the limitations set forth in this Article IXParent, Federal, Purchaser, each Affiliate of Parent and Merger Sub and their respective directors, officers, employees, agentsAffiliates, Affiliatesrepresentatives, successor and assigns (each a “Parent Indemnified Party” and, collectively, the collectively “Parent Indemnified Parties”) shall be indemnified entitled to payment and held harmless byreimbursement from the Company and Stockholders, on a joint jointly and several basis, the Shareholders from and against, any and all liabilities, obligations, deficiencies, demands, claims, suits, actions, or causes of action, assessments, losses, costs and expenses severally (including reasonable attorneys’ fees) (hereinafter, a “Loss” or collectively the “LossesParent Indemnifying Parties”)) of the amount of Losses suffered, sustained incurred or incurred paid by any Parent Indemnified Party, resulting from:
by reason of or otherwise arising from (ia) any breach by the Company, any Stockholder or Voting Trustee of a any covenant, agreement or obligation in this Agreement (whether to be performed before, on or after the Closing Date), (b) in respect of any Excluded Liabilities, (c) any misrepresentation or inaccuracy in, or breach of, any representation or warranty made by the Company Company, any Stockholder or Voting Trustee in Article III of this Agreement 3 or any Exhibits or the certificates or other Closing documents delivered pursuant Section 7.2, or (d) any one or more Covered Matters. Notwithstanding anything herein to the contrary, if there is a misrepresentation or inaccuracy in, or a breach of, a representation or warrant in Article 3 or in any of the other Transaction Documents;
(ii) any breach of a covenant made by the Company in this Agreement or any of the Transaction Documents;
(iii) any Taxes of the Company or its Subsidiaries for which the Shareholders are liable pursuant to the provisions of Section 8.1;
(iv) any claim by any Person for brokerage or finder’s fees or commissions or similar payments based upon any agreement or understanding alleged to have been made by any such Person with the Company or any Subsidiary (or any Person acting on their behalf) in connection with any of the transactions contemplated by this Agreement;
(v) any Company Transaction Expenses or Repaid Indebtedness that were not accounted for in the calculation of the payments made by Parent certificate given pursuant to Section 2.9;
7.2.1 which has a Materiality Qualification (vi) any error in the calculation of each Shareholder’s Pro Rata Percentage;
(vii) any claim by any officer, manager or director of the Company or any of its Subsidiaries for indemnification, contribution, reimbursement or other remedy against the Company or any of its Subsidiaries arising out of or pertaining which breach shall be determined giving effect to matters existing or occurring at or prior to Closing; or
(viii) any claim by any Shareholder arising out of the transactions contemplated by this Agreement other than claims against Parent for breach of this Agreement.
(b) If any Parent Indemnified Party becomes potentially entitled to any indemnification pursuant to Section 9.2(asuch Materiality Qualification), the amount that such Parent Indemnified Party is entitled to recover in connection therewith shall nevertheless be limited as follows:
(i) first, no Losses pursuant to Section 9.2(a)(i) shall be payable until the total of all such Losses exceeds $85,000 (the “Deductible”), and then only for the amount by which such claims for such Losses exceed the Deductible shall be paid; and
(ii) second, the aggregate amount of Losses pursuant to Section 9.2(a)(i) which the Parent Indemnified Parties shall be entitled to recover pursuant to this Agreement shall be limited to $3,400,000 (indemnification for all Losses suffered, incurred or paid by any Parent Indemnified Party by reason of or otherwise arising from such aforesaid misrepresentation, inaccuracy or breach, with such indemnifiable Losses determined as if the “Cap”); providedMateriality Qualification were deleted from the one or more respective misrepresented, however, that neither the Deductible nor the Cap shall apply to Losses to the extent that such Losses arise from (i) the breach of any Fundamental Representation inaccurate or any of the breached representations and warranties set forth in Sections 3.7 (Taxes) or 3.18 (Employee Benefit Plans); (ii) the breach subject to Section 6.3.5.2 and all other applicable terms and conditions of any of the covenants set forth in Section 8.1 (Tax Matters); or (iii) fraud or criminal or willful misconduct6.3.
(iii) In no event shall any Shareholder’s aggregate liability for claims for indemnification of Losses exceed the aggregate of that portion of the Merger Consideration actually received by such Shareholder; provided, however, that the foregoing limitation shall not apply to claims against a Shareholder based on such Shareholder’s own fraud or criminal or willful misconduct.
(c) Claims made by the Parent Indemnified Persons for indemnification under this Article IX shall be satisfied, first, from the Parent Common Shares then held pursuant to the Holdback Agreement and, then, directly from the Shareholders by wire transfer of immediately available funds to such bank account(s) as shall be designated in writing by Parent.
(d) Parent and the Shareholder Representative shall cause the Escrow Agent to release to the Shareholders (in accordance with their Pro Rata Percentages and to be disbursed in accordance with the Holdback Agreement) (i) on or promptly after the day that is twelve (12) months after the Closing Date, that number of Parent Company Shares or cash, as applicable, with an aggregate value equal to the Holdback Amount less the sum of (1) that number of Parent Common Shares and cash with an aggregate value equal to any then pending claims for indemnification under this Article IX that have been properly asserted by the Parent Indemnified Persons, (2) the Parent Common Shares, if any, previously released to Parent as payment for claims for indemnification under this Article IX, and (3) the Parent Common Shares, if any, released to Parent as payment for the Closing Net Assets Deficit in accordance with Section 2.10(f)(i) hereof. Any unreleased Parent Common Shares and cash shall be retained by the Escrow Agent in accordance with the terms of the Holdback Agreement.]
Appears in 1 contract
Samples: Asset Purchase Agreement (Caci International Inc /De/)
Indemnification of Parent Indemnified Parties. Each Escrow Participant shall be deemed to have agreed, and hereby agrees, to indemnify, defend and hold harmless the Parent Indemnified Parties from, against and in respect of, and to pay the Parent Indemnified Parties the amount of, any and all Damages suffered or incurred by any of the Parent Indemnified Parties or to which any of the Parent Indemnified Parties may otherwise become directly or indirectly subject (a) From regardless of whether or not such Damages relate to any Third Party Claim), and after that arise from or as a result of, or are directly or indirectly connected with any of the Closing, subject to the limitations set forth in this Article IX, Parent and Merger Sub and their respective directors, officers, employees, agents, Affiliates, successor and assigns following (each a “Parent Indemnified Party” and, collectively, the “Parent Indemnified PartiesClaim”) shall be indemnified and held harmless by, on a joint and several basis, the Shareholders from and against, any and all liabilities, obligations, deficiencies, demands, claims, suits, actions, or causes of action, assessments, losses, costs and expenses (including reasonable attorneys’ fees) (hereinafter, a “Loss” or the “Losses”), sustained or incurred by any Parent Indemnified Party, resulting from:):
(ia) any misrepresentation or breach or failure to be true and correct of a any representation or warranty made by the Company or the Escrow Participants’ Representative in Article III of this Agreement or in any document, certificate or other instrument required to be delivered by the Company or the Escrow Participants’ Representative under this Agreement (in each case, as such representation or warranty would read if all qualifications as to materiality, including, each reference to the defined term Material Adverse Effect, were deleted therefrom) (for purposes of this Agreement, each statement or other item of information set forth in the other Transaction Documents;
(ii) any breach of Company Disclosure Schedule shall be deemed to be a covenant representation and warranty made by the Company in this Agreement or any of the Transaction DocumentsAgreement);
(iiib) any breach or non-fulfillment of any covenant or agreement made or to be performed by the Company Securityholders, the Company or the Escrow Participants’ Representative in this Agreement or in any agreement or instrument entered into in connection with this Agreement;
(c) all Transaction Expenses, except to the extent that such Transaction Expenses have been included in Closing Transaction Expenses;
(d) all Company Debt, except to the extent that such Company Debt has been included in Closing Company Debt;
(e) all Excess Change in Control Payments;
(f) any fraud or intentional misrepresentation or breach of this Agreement by a Company Securityholder, the Company or the Escrow Participants’ Representative in connection with the Transactions;
(g) any amounts that a Company Securityholder is entitled to receive in connection with the Merger pursuant to the Company Organizational Documents, a written or oral agreement with the Company or any other Law that is in excess of the amount indicated on the updated Transaction Schedule delivered to Parent prior to the Closing as the amount such Company Securityholder is entitled to receive in connection with the Merger;
(h) any other inaccuracy in the Transaction Schedule;
(i) (i) any Taxes of the Company or its Subsidiaries for which the Shareholders are liable pursuant to the provisions of Section 8.1;
(iv) any claim by any Person for brokerage or finder’s fees or commissions or similar payments based upon any agreement or understanding alleged to have been made by any such Person Acquired Companies with the Company or any Subsidiary (or any Person acting on their behalf) in connection with any of the transactions contemplated by this Agreement;
(v) any Company Transaction Expenses or Repaid Indebtedness that were not accounted for in the calculation of the payments made by Parent pursuant to Section 2.9;
(vi) any error in the calculation of each Shareholder’s Pro Rata Percentage;
(vii) any claim by any officer, manager or director of the Company or any of its Subsidiaries for indemnification, contribution, reimbursement or other remedy against the Company or any of its Subsidiaries arising out of or pertaining to matters existing or occurring at or prior to Closing; or
(viii) any claim by any Shareholder arising out of the transactions contemplated by this Agreement other than claims against Parent for breach of this Agreement.
(b) If any Parent Indemnified Party becomes potentially entitled respect to any indemnification pursuant to Section 9.2(a), the amount that such Parent Indemnified Party is entitled to recover in connection therewith shall nevertheless be limited as follows:
(i) first, no Losses pursuant to Section 9.2(a)(i) shall be payable until the total of all such Losses exceeds $85,000 (the “Deductible”), and then only for the amount by which such claims for such Losses exceed the Deductible shall be paid; and
(ii) second, the aggregate amount of Losses pursuant to Section 9.2(a)(i) which the Parent Indemnified Parties shall be entitled to recover pursuant to this Agreement shall be limited to $3,400,000 (the “Cap”); provided, however, that neither the Deductible nor the Cap shall apply to Losses to the extent that such Losses arise from (i) the breach of any Fundamental Representation or any of the representations and warranties set forth in Sections 3.7 (Taxes) or 3.18 (Employee Benefit Plans); (ii) the breach of any of the covenants set forth in Section 8.1 (Tax Matters); or (iii) fraud or criminal or willful misconduct.
(iii) In no event shall any Shareholder’s aggregate liability for claims for indemnification of Losses exceed the aggregate of that portion of the Merger Consideration actually received by such Shareholder; provided, however, that the foregoing limitation shall not apply to claims against a Shareholder based on such Shareholder’s own fraud or criminal or willful misconduct.
(c) Claims made by the Parent Indemnified Persons for indemnification under this Article IX shall be satisfied, first, from the Parent Common Shares then held pursuant to the Holdback Agreement and, then, directly from the Shareholders by wire transfer of immediately available funds to such bank account(s) as shall be designated in writing by Parent.
(d) Parent and the Shareholder Representative shall cause the Escrow Agent to release to the Shareholders (in accordance with their Pro Rata Percentages and to be disbursed in accordance with the Holdback Agreement) (i) year ending on or promptly after before the day that is twelve (12) months Closing Date and for any Tax year beginning before and ending after the Closing Date, any Taxes allocable (as determined in the following sentence) to the portion of such period beginning before and ending on the Closing Date and (ii) the unpaid Taxes of any Person (other than the Company) under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or foreign Law) to the extent any Acquired Company is liable therefore as a result of events occurring on or prior to the Closing Date, as a transferee or successor, by Contract, or otherwise. For purposes of the preceding sentence, in the case of any Taxes that are imposed on a periodic basis and are payable for a Tax period that includes (but does not end on) the Closing Date, the portion of such Tax that relates to the portion of such Tax period ending on the Closing Date shall (i) in the case of any Taxes other than Taxes based upon or related to income or receipts, be deemed to be the amount of such Tax for the entire Tax period multiplied by a fraction the numerator of which is the number of Parent Company Shares days in the Tax period ending on the Closing Date and the denominator of which is the number of days in the entire Tax period, and (ii) in the case of any Tax based upon or cashrelated to income or receipts, as applicable, with an aggregate value be deemed equal to the Holdback Amount less amount which would by payable if the sum of relevant Tax period ended on the Closing Date;
(1j) any Contract between Depomed, Inc. and the Company, including the ProQuinXR Agreements and the Termination and Assignment Agreement dated July 5, 2007;
(k) that number certain letter agreement by and between the Company and Jxxx X. Xxxxxxxxxx, Xx. dated July 5, 2007 entered into in connection with the termination of Parent Common Shares the ProQuinXR Agreements;
(l) any Liabilities that arise from or are a result of, or are directly or indirectly connected with the assets related to Prosed (including the disposition thereof) or the assets acquired by Pharma pursuant to the Stock Purchase Agreement by and cash with an aggregate value equal among Pharma and the stockholders of Metagen Pharmaceuticals, Inc., dated September 18, 2005;
(m) any breach of Section 6.05(c) by the Escrow Participants’ Representative or its legal, financial, accounting and other representatives;
(n) any legal proceeding relating to any then pending claims for indemnification under this Article IX that have been properly asserted by inaccuracy, breach, or other matter of the Parent Indemnified Persons, type referred to in Section 9.02(a) – (2m);
(o) the Parent Common Sharesamount, if any, previously released to Parent as payment for claims for indemnification under this Article IX, and (3) the Parent Common Shares, if any, released to Parent as payment for by which the Closing Net Assets Working Capital Deficit Amount (if any) is greater than the Net Working Capital Escrow Fund; and
(p) any amount paid by Parent, the Company or the Surviving Corporation to any Company Stockholder with respect to Dissenting Shares pursuant to the DGCL in accordance with Section 2.10(f)(iexcess of the value such Person would have received in the Merger for such Dissenting Shares had such shares been converted pursuant to Article II, and all interest, costs, expenses and fees (including attorneys’ fees) hereof. Any unreleased Parent Common Shares and cash shall be retained incurred by the Escrow Agent Company, Parent or the Surviving Corporation in accordance connection with the terms exercise of all appraisal rights under the Holdback AgreementDGCL.]
Appears in 1 contract
Samples: Merger Agreement (Allergan Inc)
Indemnification of Parent Indemnified Parties. (a) From After the Closing Date and after the Closing, subject to the limitations set forth in this Article IXherein, Parent and Merger Sub the Parent, together with its Affiliates (including the Surviving Entity after the Closing) and their respective officers, directors, officersrepresentatives, employeesshareholders, partners, members, managers, agents, AffiliatesBusiness Employees, successor successors and permitted assigns (each a each, an “Parent Indemnified Party” and, and collectively, the “Parent Indemnified Parties”) shall be entitled to be indemnified solely from the Holdback Shares (except as set forth in Sections 8.2(b) and held harmless by(d) below) against any Losses, on a joint and several basisdirectly or indirectly, the Shareholders from and against, any and all liabilities, obligations, deficiencies, demands, claims, suits, actions, arising out of or causes of action, assessments, losses, costs and expenses (including reasonable attorneys’ fees) (hereinafter, a “Loss” or the “Losses”), sustained or incurred by any Parent Indemnified Party, resulting from:
(ia) any breach of a any warranty or the inaccuracy of any representation or warranty made by of the Company in Article III of this Agreement or in any of the other Transaction Documents;
(ii) any breach of a covenant made by the Company contained in this Agreement or any Transaction Document (it being understood that for purposes of the Transaction Documents;
(iiithis Section 8.2(a) any Taxes of the Company or its Subsidiaries for which the Shareholders are liable pursuant to the provisions of Section 8.1;
(iv) any claim by any Person for brokerage or finder’s fees or commissions or similar payments based upon any agreement or understanding alleged such representations shall be deemed to have been made as of the date of this Agreement and as of the Closing (except that any representation or warranty that speaks as of the date of this Agreement or any other date shall only be deemed to have been made as of such date));
(b) any breach or inaccuracy of any representation made by any Shareholder in a Letter of Transmittal; provided that, notwithstanding anything in this Agreement to the contrary, all Losses subject to indemnification as described in this Section 8.2(b) (irrespective of the amount of such Person with Losses) shall be assessed solely against such breaching Shareholder’s respective Holdback Shares, and shall not reduce or otherwise affect the number of Holdback Shares distributable to any of the non-breaching Shareholders;
(c) any breach by the Company or the Shareholders’ Representative, or failure of any Subsidiary (such Persons to perform, any of their covenants or obligations contained in this Agreement or any Person acting Transaction Document; and
(d) any Action of any Shareholder relating to the allocation or entitlement to a portion of the Merger Consideration, or the calculations and determinations set forth on their behalf) in connection with the Consideration Spreadsheet, or any of other matter relating to the Merger or the transactions contemplated by this Agreement;
(v) , including any Company Transaction Expenses such claims under any purported contractual, employment or Repaid Indebtedness other rights that were not accounted for in the calculation assert entitlement to any security of the payments made by Parent Company or any portion of the Merger Consideration, other than any claims relating to Parent’s failure to pay any portion of the Merger Consideration pursuant to this Agreement; provided that, notwithstanding anything in this Agreement to the contrary, all Losses subject to indemnification as described in this Section 2.9;
8.2(d) (viirrespective of the amount of such Losses) shall be assessed solely against such breaching Shareholder’s respective Holdback Shares, and shall not reduce or otherwise affect the number of Holdback Shares distributable to any error of the non-breaching Shareholders. All Losses subject to indemnification as described in this Section 8.2 shall be assessed against the calculation of Holdback Shares on a joint and several basis in accordance with each Shareholder’s Pro Rata Percentage;
Portion (vii) any claim by any officer, manager or director of the Company or any of its Subsidiaries for indemnification, contribution, reimbursement or other remedy against the Company or any of its Subsidiaries arising out of or pertaining to matters existing or occurring at or prior to Closing; or
(viii) any claim by any Shareholder arising out of the transactions contemplated by this Agreement other than claims against Parent for breach of this Agreement.
(b) If any Parent Indemnified Party becomes potentially entitled to any indemnification pursuant to Section 9.2(a), the amount that such Parent Indemnified Party is entitled to recover in connection therewith shall nevertheless be limited except as follows:
(i) first, no Losses pursuant to Section 9.2(a)(i) shall be payable until the total of all such Losses exceeds $85,000 (the “Deductible”), and then only for the amount by which such claims for such Losses exceed the Deductible shall be paid; and
(ii) second, the aggregate amount of Losses pursuant to Section 9.2(a)(i) which the Parent Indemnified Parties shall be entitled to recover pursuant to this Agreement shall be limited to $3,400,000 (the “Cap”); provided, however, that neither the Deductible nor the Cap shall apply to Losses to the extent that such Losses arise from (i) the breach of any Fundamental Representation or any of the representations and warranties set forth in Sections 3.7 (Taxes8.2(b) or 3.18 (Employee Benefit Plans); (ii) the breach of any of the covenants set forth in Section 8.1 (Tax Matters); or (iii) fraud or criminal or willful misconduct.
(iii) In no event shall any Shareholder’s aggregate liability for claims for indemnification of Losses exceed the aggregate of that portion of the Merger Consideration actually received by such Shareholder; provided, however, that the foregoing limitation shall not apply to claims against a Shareholder based on such Shareholder’s own fraud or criminal or willful misconduct.
(c) Claims made by the Parent Indemnified Persons for indemnification under this Article IX shall be satisfied, first, from the Parent Common Shares then held pursuant to the Holdback Agreement and, then, directly from the Shareholders by wire transfer of immediately available funds to such bank account(s) as shall be designated in writing by Parent.
and (d) Parent and the Shareholder Representative shall cause the Escrow Agent to release to the Shareholders (in accordance with their Pro Rata Percentages and to be disbursed in accordance with the Holdback Agreement) (i) on or promptly after the day that is twelve (12) months after the Closing Date, that number of Parent Company Shares or cash, as applicable, with an aggregate value equal to the Holdback Amount less the sum of (1) that number of Parent Common Shares and cash with an aggregate value equal to any then pending claims for indemnification under this Article IX that have been properly asserted by the Parent Indemnified Persons, (2) the Parent Common Shares, if any, previously released to Parent as payment for claims for indemnification under this Article IX, and (3) the Parent Common Shares, if any, released to Parent as payment for the Closing Net Assets Deficit in accordance with Section 2.10(f)(i) hereof. Any unreleased Parent Common Shares and cash shall be retained by the Escrow Agent in accordance with the terms of the Holdback Agreementabove).]
Appears in 1 contract
