Limitations of Indemnification. The indemnification of Purchaser Indemnitees by Sellers under Section 9.1 hereof shall be limited as follows: (i) Purchaser Indemnitees shall not be entitled to any payment under the indemnification provisions set forth in Section 9.1(a) or (b) unless and to the extent the total claims of Purchaser Indemnitees pursuant to such indemnification claim exceed an amount equal to Four Hundred Forty Thousand and No/100ths Dollars ($440,000) (the "Deductible") (at which time Purchaser Indemnitees shall be entitled to claim all damages incurred in excess of the Deductible, up to the maximum set forth in clause (a)(ii) below); provided that the Deductible shall not apply to, and Purchaser Indemnitees shall be fully compensated for, (x) any breach of Sections 3.2, 3.3, 3.4, 3.14 (with respect to Taxes), 3.16, 4.1 and 4.2 and (y) any failure of performance of any covenant of Sellers set forth in this Agreement that is to be performed on or after the Closing and provided, further, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Deductible shall be reduced to $414,000, and in the event that no Earnout Payment is payable the Deductible shall be reduced to $388,000; and (ii) Sellers' aggregate liability to Purchaser Indemnitees under the indemnification provided under Section 9.1 hereof shall in no event exceed, collectively, an amount equal to Eight Million Eight Hundred Thousand and No/100ths Dollars ($8,800,000) (the "Cap"); provided, however, that the Cap shall not apply to performance of covenants hereunder that are to be performed from and after Closing, or to any breach of Sections 3.2, 3.3, 3.4, 3.14 (with respect to Taxes), 3.16, 4.1 and 4.2 hereunder; provided, further, that neither the Deductible nor the Cap shall apply to any Losses arising out of, relating to or resulting from actual fraud by Sellers; provided, further, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Cap shall be reduced to $8,282,000, and in the event that no Earnout Payment is payable, the Cap shall be reduced to $7,765,000; and provided, finally, that to the extent that any Purchaser Indemnitee makes a claim pursuant to Section 9.1(a) for Losses that resulted or are alleged to have resulted from the breach of a representation or warranty of Sellers, Metal Resources or the Company, such representation, warranty or covenant shall be deemed to not be breached if on or prior to the Closing Purchaser had actual knowledge that the representation or warranty was breached in the respect alleged to have caused the Losses; provided, however, that this Section 9.4(a) shall not apply for the purposes of determining the satisfaction of the Purchaser and Parent Closing conditions set forth in Section 7 hereof; and provided, further, that for the purpose of this Section 9.4(a), any claim pursuant to Section 9.1(a) for Losses that resulted or are alleged to have resulted from the breach of a representation or warranty of Sellers, Metal Resources, or the Company, the Purchaser shall be deemed to have actual knowledge concerning the alleged breach of a representation or warranty of Sellers, Metal Resources, or the Company where any of Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxx, or Xxxxxx X. Xxxxxx shall have received specific information at least five (5) business days prior to the Closing which would cause a reasonable person to conclude, after review of the representations and warranties contained herein, that such a breach had occurred. (b) Purchaser Indemnitees shall not be entitled to any payment under the indemnification provisions set forth in Section 9.1(c) unless and to the extent the total claims of Purchaser Indemnitees pursuant to such indemnification claim exceed an amount equal to Four Hundred Forty Thousand and No/100ths Dollars ($440,000) (the "Environmental Deductible"); provided, however, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Environmental Deductible shall be reduced to $414,000, and in the event that no Earnout Payment is payable, the Environmental Deductible shall be reduced to $388,000, at which time Purchaser Indemnitees shall be entitled to claim all damages incurred in excess of the Environmental Deductible, up to (when together with any other damages in excess of the Deductible in Section 9.4(a)(i)) the Cap. To the extent that an indemnification obligation of Sellers pursuant to one of the provisions of Section 9.1 herein overlaps with an indemnification obligation pursuant to any other provision of Section 9.1 herein or any other provision of this Agreement, the Purchaser Indemnitees shall be entitled to only one of such indemnification payments. (c) Notwithstanding the foregoing, Purchaser agrees that prior to making a claim for indemnification hereunder, it shall first (i) utilize or avail itself (or cause Metal Resources and the Company to utilize or avail itself) of all remedies, protections, and limitations provided under the Consent Order, and (ii) seek to recover against and utilize all remedies available to it, Metal Resources, or the Company, including a final determination by court order or decision, if required, to recover against and shall exhaust any policies of insurance for which Sellers reasonably believe coverage may exist; provided, however, that in the event that notwithstanding Purchaser's compliance with the foregoing provisions of this Section 9.4(c), Purchaser, Metal Resources, or the Company shall have received written notice from any insurer under any material Company insurance policy that any claim by the Company, Metal Resources, or Purchaser for which Sellers would have responsibility hereunder has been denied, and such determination shall not have been rescinded or reversed five (5) business days prior to the date which is one (1) year after the Closing Date, then the Purchaser may then seek to recover against the Sellers, prior to a final determination of responsibility under any material Company insurance policy, subject to the limitations contained herein. Except as paid to a third party, any liability or undertaking of Sellers to indemnify Purchaser under this Article 9 or any other liability of Sellers to Purchaser hereunder shall also be subject to the following additional limitations: (I) no loss, damage or expense shall be deemed to have been sustained by Purchaser to the extent of (a) any Tax savings actually realized with respect thereto or (b) any proceeds actually recovered by Purchaser, Metal Resources or the Company from insurance policies with respect thereto net of the amount of any required deductible or co-pay, policy premium increase or other expense directly attributable to such insurance claim, and (II) no Purchaser Indemnitees shall be entitled to recovery to the extent that (a) the Real Property is used from and after the Closing Date in a manner that is not the same or similar to its current industrial use, (b) the groundwater at or beneath the Real Property is used by any Person for any reason, or (c) the Real Property soils are managed in a manner that is inconsistent with any limitations imposed under the Consent Order, under any Environmental Law or any other limitation imposed by any Governmental Authority. (d) Any Seller may satisfy all or any portion of its indemnification obligation to a Purchaser Indemnitee by the tender of common shares of the Parent in full or partial satisfaction thereof, and the indemnification obligation of such Seller for any Loss with respect thereto shall be reduced by the Deemed Value (as hereafter defined) of each common share of the Parent so applied in satisfaction of such indemnification obligation, multiplied by the number of such common shares tendered by the Seller for such purpose. For purposes hereof, "Deemed Value" shall be, with respect to a common share of Parent, the greater of (i) such Seller's purchase price of such common share as set forth on the Seller's trade confirmation or brokerage statement (or similar evidence reflecting the purchase price for such securities), and (ii) the closing price of such common share on the Nasdaq National Market or any recognized public stock exchange or over the counter market, on which such common share is then listed or quoted, in each case as of the day immediately preceding the date of final determination of the indemnification obligations hereunder. For purposes hereof, the "date of final determination" shall be: (A) the date on which the judgment is rendered, or (B) the date on which a settlement is paid, if no judgment shall have been rendered. In the event a Seller satisfies an indemnification obligation hereunder by tendering Parent common shares and such Seller holds Parent common shares with different purchases prices, such Seller may in its sole discretion determine which Parent common shares to tender and the order in which such common shares are tendered. The foregoing provision shall apply, mutatis mutandis, to the common shares of the Parent or any successor entity or security thereto. (e) In no event shall a party be liable hereunder for incidental, consequential, special, punitive or exemplary damages. (f) Except as specified above, the right to indemnification, payment of Losses of Purchaser Indemnitees or for other remedies based on any representation, warranty, covenant or obligation of Sellers, Metal Resources, and/or the Company contained in or made pursuant to this Agreement shall not be affected by (i) any investigation conducted with respect to, or any knowledge acquired (or capable or being acquired) at any time, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, or obligation, or (ii) the waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification based on such representations, warranties, covenants, and obligations.
Appears in 2 contracts
Samples: Limited Liability Company Interest Purchase Agreement, Limited Liability Company Interest Purchase Agreement (Atlas Industries Holdings LLC)
Limitations of Indemnification. The (a) No party hereto obligated to provide indemnification of Purchaser Indemnitees by Sellers under Section 9.1 hereof hereunder (the “Indemnifying Party”) shall be limited as follows:
required to indemnify a party hereto seeking indemnification (the “Indemnified Party”) hereunder unless and until the aggregate amount of all Losses for which the applicable Indemnifying Party is otherwise obligated to make payment pursuant to this Article 12 exceeds $100,000, whereupon such Indemnifying Party shall be obligated to pay the entire aggregate amount of all such Losses; provided that no such threshold shall apply to (i) Purchaser Indemnitees shall not be entitled any indemnification for which the Sellers are obligated to any payment under the indemnification provisions set forth in provide pursuant to Section 9.1(a) 12.1(b), or (bii) unless and any indemnification for which the Buyers are obligated to the extent the total claims of Purchaser Indemnitees provide pursuant to such indemnification claim exceed an amount equal to Four Hundred Forty Thousand and No/100ths Dollars ($440,000) (Section 12.2(b), in which case the "Deductible") (at which time Purchaser Indemnitees Buyers or the Sellers, as the case may be, as the Indemnified Parties, shall be entitled to claim all damages incurred in excess of the Deductible, up to the maximum set forth in clause (a)(ii) below); provided that the Deductible shall not apply toreceive, and Purchaser Indemnitees the Sellers or the Buyers, as the case may be, as the Indemnifying Parties, shall be fully compensated forobligated to pay, (x) the entire amount of all such Losses associated therewith whether or not such threshold is attained. The amount of any breach Losses recoverable by an Indemnified Party under this Section 12.4 shall be calculated net of Sections 3.2, 3.3, 3.4, 3.14 (any insurance proceeds or other third-party recoveries received by such Indemnified Party with respect to Taxes), 3.16, 4.1 and 4.2 and (y) any failure of performance of any covenant of Sellers set forth in this Agreement that is to be performed on or after the Closing and provided, further, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Deductible shall be reduced to $414,000, and in the event that no Earnout Payment is payable the Deductible shall be reduced to $388,000; and (ii) Sellers' aggregate liability to Purchaser Indemnitees under the indemnification provided under Section 9.1 hereof shall in no event exceed, collectively, an amount equal to Eight Million Eight Hundred Thousand and No/100ths Dollars ($8,800,000) (the "Cap"); provided, however, that the Cap shall not apply to performance of covenants hereunder that are to be performed from and after Closing, or to any breach of Sections 3.2, 3.3, 3.4, 3.14 (with respect to Taxes), 3.16, 4.1 and 4.2 hereunder; provided, further, that neither the Deductible nor the Cap shall apply to any Losses arising out of, relating to or resulting from actual fraud by Sellers; provided, further, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Cap shall be reduced to $8,282,000, and in the event that no Earnout Payment is payable, the Cap shall be reduced to $7,765,000; and provided, finally, that to the extent that any Purchaser Indemnitee makes a claim pursuant to Section 9.1(a) for Losses that resulted or are alleged to have resulted from the breach of a representation or warranty of Sellers, Metal Resources or the Company, such representation, warranty or covenant shall be deemed to not be breached if on or prior to the Closing Purchaser had actual knowledge that the representation or warranty was breached in the respect alleged to have caused the Losses; provided, however, that this Section 9.4(a) shall not apply for the purposes of determining the satisfaction of the Purchaser and Parent Closing conditions set forth in Section 7 hereof; and provided, further, that for the purpose of this Section 9.4(a), any claim pursuant to Section 9.1(a) for Losses that resulted or are alleged to have resulted from the breach of a representation or warranty of Sellers, Metal Resources, or the Company, the Purchaser shall be deemed to have actual knowledge concerning the alleged breach of a representation or warranty of Sellers, Metal Resources, or the Company where any of Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxx, or Xxxxxx X. Xxxxxx shall have received specific information at least five (5) business days prior to the Closing which would cause a reasonable person to conclude, after review of the representations and warranties contained herein, that such a breach had occurredthereto.
(b) Purchaser Indemnitees After the Closing, the maximum liability of the Sellers for any breach of the Sellers’ representations, warranties and covenants under this Agreement (except for any such breach involving fraud) shall not be entitled to any payment under the indemnification provisions set forth in Section 9.1(c) unless and aggregate amount of the Purchase Price paid to the extent Sellers by the total claims of Purchaser Indemnitees Buyers pursuant to such indemnification claim exceed an amount equal to Four Hundred Forty Thousand and No/100ths Dollars ($440,000) (the "Environmental Deductible"); provided, however, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Environmental Deductible shall be reduced to $414,000, and in the event that no Earnout Payment is payable, the Environmental Deductible shall be reduced to $388,000, at which time Purchaser Indemnitees shall be entitled to claim all damages incurred in excess of the Environmental Deductible, up to (when together with any other damages in excess of the Deductible in Section 9.4(a)(i)) the Cap. To the extent that an indemnification obligation of Sellers pursuant to one of the provisions of Section 9.1 herein overlaps with an indemnification obligation pursuant to any other provision of Section 9.1 herein or any other provision of this Agreement, the Purchaser Indemnitees shall be entitled to only one of such indemnification payments3.1 hereof.
(c) Notwithstanding the foregoing, Purchaser agrees that prior to making a claim for indemnification hereunder, it shall first (i) utilize or avail itself (or cause Metal Resources and the Company to utilize or avail itself) of all remedies, protections, and limitations provided under the Consent Order, and (ii) seek to recover against and utilize all remedies available to it, Metal Resources, or the Company, including a final determination by court order or decision, if required, to recover against and shall exhaust any policies of insurance for which Sellers reasonably believe coverage may exist; provided, however, that in the event that notwithstanding Purchaser's compliance with the foregoing provisions of this Section 9.4(c), Purchaser, Metal Resources, or the Company shall have received written notice from any insurer under any material Company insurance policy that any claim by the Company, Metal Resources, or Purchaser for which Sellers would have responsibility hereunder has been denied, and such determination shall not have been rescinded or reversed five (5) business days prior to the date which is one (1) year after the Closing Date, then the Purchaser may then seek to recover against the Sellers, prior to a final determination of responsibility under any material Company insurance policy, subject to the limitations contained herein. Except as paid to a third party, any liability or undertaking of Sellers to indemnify Purchaser under this Article 9 or any other liability of Sellers to Purchaser hereunder shall also be subject to the following additional limitations: (I) no loss, damage or expense shall be deemed to have been sustained by Purchaser to the extent of (a) any Tax savings actually realized with respect thereto or (b) any proceeds actually recovered by Purchaser, Metal Resources or the Company from insurance policies with respect thereto net of the amount of any required deductible or co-pay, policy premium increase or other expense directly attributable to such insurance claim, and (II) no Purchaser Indemnitees shall be entitled to recovery to the extent that (a) the Real Property is used from and after the Closing Date in a manner that is not the same or similar to its current industrial use, (b) the groundwater at or beneath the Real Property is used by any Person for any reason, or (c) the Real Property soils are managed in a manner that is inconsistent with any limitations imposed under the Consent Order, under any Environmental Law or any other limitation imposed by any Governmental Authority.
(d) Any Seller may satisfy all or any portion of its indemnification obligation to a Purchaser Indemnitee by the tender of common shares of the Parent in full or partial satisfaction thereof, and the indemnification obligation of such Seller for any Loss with respect thereto shall be reduced by the Deemed Value (as hereafter defined) of each common share of the Parent so applied in satisfaction of such indemnification obligation, multiplied by the number of such common shares tendered by the Seller for such purpose. For purposes hereof, "Deemed Value" shall be, with respect to a common share of Parent, the greater of (i) such Seller's purchase price of such common share as set forth on the Seller's trade confirmation or brokerage statement (or similar evidence reflecting the purchase price for such securities), and (ii) the closing price of such common share on the Nasdaq National Market or any recognized public stock exchange or over the counter market, on which such common share is then listed or quoted, in each case as of the day immediately preceding the date of final determination of the indemnification obligations hereunder. For purposes hereof, the "date of final determination" shall be: (A) the date on which the judgment is rendered, or (B) the date on which a settlement is paid, if no judgment shall have been rendered. In the event a Seller satisfies an indemnification obligation hereunder by tendering Parent common shares and such Seller holds Parent common shares with different purchases prices, such Seller may in its sole discretion determine which Parent common shares to tender and the order in which such common shares are tendered. The foregoing provision shall apply, mutatis mutandis, to the common shares of the Parent or any successor entity or security thereto.
(e) In no event shall a party be liable hereunder for incidental, consequential, special, punitive or exemplary damages.
(f) Except as specified above, the right to indemnification, payment of Losses of Purchaser Indemnitees or for other remedies based on any representation, warranty, covenant or obligation of Sellers, Metal Resources, and/or the Company contained in or made pursuant to this Agreement shall not be affected by (i) any investigation conducted with respect to, or any knowledge acquired (or capable or being acquired) at any time, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, or obligation, or (ii) the waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification based on such representations, warranties, covenants, and obligations.
Appears in 1 contract
Limitations of Indemnification. The (a) Notwithstanding the terms of this Article 9, neither party shall be entitled to take action on the indemnity provided under this Agreement until a threshold Loss amount of $25,000 has been accumulated under the terms of this Article 9. Such $25,000 threshold does not apply, however, to (i) claims by Buyer for indemnification of Purchaser Indemnitees due to a breach by Sellers under of any covenant in this Agreement; (ii) claims by Buyer for indemnification due to breach by Sellers of the representations and warranties made in Sections 4.7 (Taxes) and 4.11 (Environmental); and (iv) claims by Buyer for indemnification pursuant to Section 9.1 hereof 9.1(a)(ii) and (iii). At such time as the aggregate of all Losses exceed $25,000, such party shall be limited entitled to indemnification for all Losses, and such amount shall be deducted from the aggregate amount payable under this Article 9.
(b) Except as followsprovided in Section 9.6(c), each of Buyer and the Sellers' maximum aggregate liability under and with respect to this Agreement, the transactions contemplated hereby, or any claims (whether in contract, tort, or otherwise) associated herewith shall be the amount of Three Million and 00/100 Dollars ($3,000,000) except that the foregoing limit on maximum aggregate liability shall not apply with respect to:
(i) Purchaser Indemnitees shall not be entitled to any payment under the indemnification provisions claim for intentional fraud;
(ii) any claim for breach, inaccuracy or misrepresentation of any representation or warranty set forth in Section 9.1(a4.7 (Taxes);
(iii) any claim by Buyer for indemnification for any Liability arising out of or (b) unless and relating to the extent death on or about October 24, 1998, of Xxxxxx Xxxx, an employee of Miami Aircraft Corporation who was allegedly struck by a fuel truck driven by an employee of Aero following the total claims fueling at the Midway FBO of Purchaser Indemnitees pursuant to such indemnification claim exceed an amount equal to Four Hundred Forty Thousand and No/100ths Dollars airplane operated by American Airlines.
($440,000) (the "Deductible") (at which time Purchaser Indemnitees shall be entitled to claim all damages incurred in excess of the Deductible, up to the maximum set forth in clause (a)(ii) below); provided that the Deductible shall not apply to, and Purchaser Indemnitees shall be fully compensated for, (xiv) any breach of Sections 3.2claim for breach, 3.3, 3.4, 3.14 (with respect to Taxes), 3.16, 4.1 and 4.2 and (y) any failure of performance inaccuracy or misrepresentation of any covenant of Sellers set forth in this Agreement that is to be performed on or after the Closing and provided, further, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Deductible shall be reduced to $414,000, and in the event that no Earnout Payment is payable the Deductible shall be reduced to $388,000; and (ii) Sellers' aggregate liability to Purchaser Indemnitees under the indemnification provided under Section 9.1 hereof shall in no event exceed, collectively, an amount equal to Eight Million Eight Hundred Thousand and No/100ths Dollars ($8,800,000) (the "Cap"); provided, however, that the Cap shall not apply to performance of covenants hereunder that are to be performed from and after Closing, or to any breach of Sections 3.2, 3.3, 3.4, 3.14 (with respect to Taxes), 3.16, 4.1 and 4.2 hereunder; provided, further, that neither the Deductible nor the Cap shall apply to any Losses arising out of, relating to or resulting from actual fraud by Sellers; provided, further, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Cap shall be reduced to $8,282,000, and in the event that no Earnout Payment is payable, the Cap shall be reduced to $7,765,000; and provided, finally, that to the extent that any Purchaser Indemnitee makes a claim pursuant to Section 9.1(a) for Losses that resulted or are alleged to have resulted from the breach of a representation or warranty of Sellers, Metal Resources or the Company, such representation, warranty or covenant shall be deemed to not be breached if on or prior to the Closing Purchaser had actual knowledge that the representation or warranty was breached in the respect alleged to have caused the Losses; provided, however, that this Section 9.4(a) shall not apply for the purposes of determining the satisfaction of the Purchaser and Parent Closing conditions set forth in Section 7 hereof4.16 and 4.17 (Employees; and provided, further, that for the purpose of this Section 9.4(aEmployee Benefit Plans), ; and
(v) any claim by Buyer for indemnification pursuant to Section 9.1(a) for Losses that resulted or are alleged to have resulted from the breach of a representation or warranty of Sellers, Metal Resources, or the Company, the Purchaser shall be deemed to have actual knowledge concerning the alleged breach of a representation or warranty of Sellers, Metal Resources, or the Company where any of Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxx, or Xxxxxx X. Xxxxxx shall have received specific information at least five (5) business days prior to the Closing which would cause a reasonable person to conclude, after review of the representations and warranties contained herein, that such a breach had occurred.
(b) Purchaser Indemnitees shall not be entitled to any payment under the indemnification provisions set forth in Section 9.1(c) unless and to the extent the total claims of Purchaser Indemnitees pursuant to such indemnification claim exceed an amount equal to Four Hundred Forty Thousand and No/100ths Dollars ($440,000) (the "Environmental Deductible"9.1(a)(iii); provided, however, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Environmental Deductible shall be reduced to $414,000, and in the event that no Earnout Payment is payable, the Environmental Deductible shall be reduced to $388,000, at which time Purchaser Indemnitees shall be entitled to claim all damages incurred in excess of the Environmental Deductible, up to (when together with any other damages in excess of the Deductible in Section 9.4(a)(i)) the Cap. To the extent that an indemnification obligation of Sellers pursuant to one of the provisions of Section 9.1 herein overlaps with an indemnification obligation pursuant to any other provision of Section 9.1 herein or any other provision of this Agreement, the Purchaser Indemnitees shall be entitled to only one of such indemnification payments.
(c) Notwithstanding With respect to all environmental matters, including, without limitation, those matters listed below, Sellers' maximum aggregate liability to Buyer under this Agreement, the foregoing, Purchaser agrees that prior to making a claim for indemnification hereunder, it shall first (i) utilize or avail itself (or cause Metal Resources and the Company to utilize or avail itself) of all remedies, protections, and limitations provided under the Consent Order, and (ii) seek to recover against and utilize all remedies available to it, Metal Resourcestransactions contemplated hereby, or the Companyany claims by Buyer (whether in contract, including a final determination by court order tort or decision, if required, to recover against and shall exhaust any policies of insurance for which Sellers reasonably believe coverage may exist; provided, however, that in the event that notwithstanding Purchaser's compliance with the foregoing provisions of this Section 9.4(c), Purchaser, Metal Resources, or the Company shall have received written notice from any insurer under any material Company insurance policy that any claim by the Company, Metal Resources, or Purchaser for which Sellers would have responsibility hereunder has been denied, and such determination shall not have been rescinded or reversed five (5otherwise) business days prior to the date which is one (1) year after the Closing Date, then the Purchaser may then seek to recover against the Sellers, prior to a final determination of responsibility under any material Company insurance policy, subject to the limitations contained herein. Except as paid to a third party, any liability or undertaking of Sellers to indemnify Purchaser under this Article 9 or any other liability of Sellers to Purchaser hereunder shall also be subject to the following additional limitations: (I) no loss, damage or expense associated herewith shall be deemed Five Hundred Eighty-Five Thousand and 00/100 Dollars ($585,000) (such aggregate liability to have been sustained by Purchaser to the extent of (a) any Tax savings actually realized with respect thereto or (b) any proceeds actually recovered by Purchaser, Metal Resources or the Company from insurance policies with respect thereto net of the amount of any required deductible or co-pay, policy premium increase or other expense directly attributable to such insurance claim, and (II) no Purchaser Indemnitees shall be entitled to recovery to the extent that (a) the Real Property is used from and after the Closing Date accrue as provided in a manner that is not the same or similar to its current industrial use, (b) the groundwater at or beneath the Real Property is used by any Person for any reason, or (c) the Real Property soils are managed in a manner that is inconsistent with any limitations imposed under the Consent Order, under any Environmental Law or any other limitation imposed by any Governmental Authority.Section 6.13(a)):
(d) Any Seller may satisfy all or any portion of its indemnification obligation to a Purchaser Indemnitee by the tender of common shares of the Parent in full or partial satisfaction thereof, and the indemnification obligation of such Seller for any Loss with respect thereto shall be reduced by the Deemed Value (as hereafter defined) of each common share of the Parent so applied in satisfaction of such indemnification obligation, multiplied by the number of such common shares tendered by the Seller for such purpose. For purposes hereof, "Deemed Value" shall be, with respect to a common share of Parent, the greater of (i) such Seller's purchase price of such common share as set forth on the Seller's trade confirmation or brokerage statement (or similar evidence reflecting the purchase price for such securities), and (ii) the closing price of such common share on the Nasdaq National Market or any recognized public stock exchange or over the counter market, on which such common share is then listed or quoted, in each case as of the day immediately preceding the date of final determination of the indemnification obligations hereunder. For purposes hereof, the "date of final determination" shall be: (A) the date on which the judgment is rendered, or (B) the date on which a settlement is paid, if no judgment shall have been rendered. In the event a Seller satisfies an indemnification obligation hereunder by tendering Parent common shares and such Seller holds Parent common shares with different purchases prices, such Seller may in its sole discretion determine which Parent common shares to tender and the order in which such common shares are tendered. The foregoing provision shall apply, mutatis mutandis, to the common shares of the Parent or any successor entity or security thereto.
(e) In no event shall a party be liable hereunder for incidental, consequential, special, punitive or exemplary damages.
(f) Except as specified above, the right to indemnification, payment of Losses of Purchaser Indemnitees or for other remedies based on any representation, warranty, covenant or obligation of Sellers, Metal Resources, and/or the Company contained in or made pursuant to this Agreement shall not be affected by (i) any investigation conducted with respect toclaim for breach, inaccuracy or any knowledge acquired (or capable or being acquired) at any time, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, or obligation, or (ii) the waiver of any condition based on the accuracy misrepresentation of any representation or warrantywarranty set forth in Section 4.11 (Environmental);
(ii) any violation of an Environmental Law caused by any act or omission of Sellers, any of their predecessors, officers, agents, contractors, employees or on invitees, involving the performance Real Property or any other property previously used in the Business;
(iii) any environmental contamination or environmental condition of the Real Property (including but not limited to contamination by Regulated Substances arising prior to the Closing Date and contamination as a result of migration of contaminants to or compliance with from adjacent properties occurring before the Closing Date), existing prior to transfer of the Purchased Assets to Buyer;
(iv) any covenant release or obligationthreatened release of Regulated Substances relating to the operations of Sellers or any of their predecessors;
(v) any liability arising under an Environmental Law relating to the operations of Sellers or any of their predecessors; or
(vi) any liability for any off-site disposal by Sellers or any of their predecessors, will not affect the right to indemnification based on such representationsincluding, warrantieswithout limitation, covenants, and obligationstoxic tort liability.
Appears in 1 contract
Samples: Asset Purchase Agreement (Aero Services International Inc)
Limitations of Indemnification. The indemnification (a) Notwithstanding the provisions of Purchaser Indemnitees by Sellers under Section 9.1 hereof shall be limited as follows:
6.2(a): (i) Purchaser Indemnitees the Buyer Indemnifying Parties shall not be entitled to any payment liable for Losses under the indemnification provisions set forth in Section 9.1(a) or (b6.2(a)(i) unless and to the extent the total claims aggregate amount of Purchaser Indemnitees pursuant to such indemnification claim exceed an amount equal to Four Hundred Forty Thousand and No/100ths Dollars ($440,000) (the "Deductible") (at which time Purchaser Indemnitees shall be entitled to claim all damages incurred in excess of the Deductible, up to the maximum set forth in clause (a)(ii) below); provided that the Deductible shall not apply to, and Purchaser Indemnitees shall be fully compensated for, (x) any breach of Sections 3.2, 3.3, 3.4, 3.14 (Losses with respect to Taxesall such breaches or inaccuracies of such representations and warranties exceeds $250,000 (the “Indemnification Deductible”), 3.16, 4.1 and 4.2 and (y) any failure of performance of any covenant of Sellers set forth in this Agreement that is to be performed on or after the Closing and provided, further, that in the which event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Deductible all such Losses exceeding $125,000 shall be reduced subject to $414,000, and in the event that no Earnout Payment is payable the Deductible shall be reduced to $388,000indemnification; and (ii) Sellers' aggregate liability to Purchaser Indemnitees under the indemnification provided Buyer Indemnifying Parties’ maximum liability, as the case may be, under Section 9.1 hereof 6.2(a)(i) shall in no event exceed, collectively, an amount equal to Eight Million Eight Hundred Thousand and No/100ths Dollars ($8,800,000) not exceed the Closing Cash Consideration (the "Cap"“Cash Indemnification Limit”); provided, however, that the Cap Indemnification Deductible shall not apply to performance of covenants hereunder that are to be performed any Losses incurred by the Buyer Indemnified Parties resulting from and after Closing, or to any a breach of Sections 3.2, 3.3, 3.4, 3.14 the Indefinite Fundamental Representations and the Buyer Indemnifying Parties’ maximum liability under Section 6.2(a)(ii) and (with respect vi) shall not exceed (x) the Closing Cash Consideration plus (y) the aggregate amount of any principal repayments made by Buyer to TaxesSeller or Seller Parent under the Notes (the “Total Indemnification Limit”), 3.16, 4.1 and 4.2 hereunder; provided, further, that neither the Indemnification Deductible nor the Cap Cash Indemnification Limit or the Total Indemnification Limit shall apply to any Losses arising out of, relating to or resulting from actual fraud incurred by Sellers; provided, further, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Cap shall be reduced to $8,282,000, Buyer Indemnified Parties and in the event that no Earnout Payment is payable, the Cap shall be reduced to $7,765,000; and provided, finally, that to the extent that any Purchaser Indemnitee makes a claim asserted pursuant to Section 9.1(a6.2(a)(iii) through (v).
(b) Notwithstanding the provisions of Section 6.3(a): (i) the Buyer shall not be liable for Losses that resulted under Section 6.3(a)(i) unless the aggregate amount of Losses with respect to all such breaches or are alleged to have resulted from inaccuracies of such representations and warranties exceeds the breach of a representation or warranty of SellersIndemnification Deductible, Metal Resources or the Company, in which event all such representation, warranty or covenant Losses exceeding $125,000 shall be deemed subject to indemnification; and (ii) the Buyer’s maximum liability, as the case may be, under Section 6.3(a)(i) shall not be breached if on or prior to exceed the Closing Purchaser had actual knowledge that the representation or warranty was breached in the respect alleged to have caused the LossesCash Indemnification Limit; provided, however, that this Section 9.4(a) neither the Indemnification Deductible nor the Cash Indemnification Limit or the Total Indemnification Limit shall not apply for to any Losses incurred by the purposes of determining the satisfaction of the Purchaser Seller Indemnified Parties and Parent Closing conditions set forth in Section 7 hereof; and provided, further, that for the purpose of this Section 9.4(a), any claim asserted pursuant to Section 9.1(a6.3(a)(ii) for Losses that resulted or are alleged to have resulted from the breach of a representation or warranty of Sellers, Metal Resources, or the Company, the Purchaser shall be deemed to have actual knowledge concerning the alleged breach of a representation or warranty of Sellers, Metal Resources, or the Company where any of Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxx, or Xxxxxx X. Xxxxxx shall have received specific information at least five through (5) business days prior to the Closing which would cause a reasonable person to conclude, after review of the representations and warranties contained herein, that such a breach had occurrediv).
(b) Purchaser Indemnitees shall not be entitled to any payment under the indemnification provisions set forth in Section 9.1(c) unless and to the extent the total claims of Purchaser Indemnitees pursuant to such indemnification claim exceed an amount equal to Four Hundred Forty Thousand and No/100ths Dollars ($440,000) (the "Environmental Deductible"); provided, however, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Environmental Deductible shall be reduced to $414,000, and in the event that no Earnout Payment is payable, the Environmental Deductible shall be reduced to $388,000, at which time Purchaser Indemnitees shall be entitled to claim all damages incurred in excess of the Environmental Deductible, up to (when together with any other damages in excess of the Deductible in Section 9.4(a)(i)) the Cap. To the extent that an indemnification obligation of Sellers pursuant to one of the provisions of Section 9.1 herein overlaps with an indemnification obligation pursuant to any other provision of Section 9.1 herein or any other provision of this Agreement, the Purchaser Indemnitees shall be entitled to only one of such indemnification payments.
(c) Notwithstanding the foregoing, Purchaser agrees that prior to making a claim for indemnification hereunder, it shall first (i) utilize or avail itself (or cause Metal Resources and the Company to utilize or avail itself) of all remedies, protections, and limitations provided under the Consent Order, and (ii) seek to recover against and utilize all remedies available to it, Metal Resources, or the Company, including a final determination by court order or decision, if required, to recover against and shall exhaust any policies of insurance for which Sellers reasonably believe coverage may exist; provided, however, that in the event that notwithstanding Purchaser's compliance with the foregoing provisions of this Section 9.4(c), Purchaser, Metal Resources, or the Company shall have received written notice from any insurer under any material Company insurance policy that any claim by the Company, Metal Resources, or Purchaser for which Sellers would have responsibility hereunder has been denied, and such determination shall not have been rescinded or reversed five (5) business days prior to the date which is one (1) year after the Closing Date, then the Purchaser may then seek to recover against the Sellers, prior to a final determination of responsibility under any material Company insurance policy, subject to the limitations contained herein. Except as paid to a third party, any liability or undertaking of Sellers to indemnify Purchaser under this Article 9 or any other liability of Sellers to Purchaser hereunder shall also be subject to the following additional limitations: (I) no loss, damage or expense shall be deemed to have been sustained by Purchaser to the extent of (a) any Tax savings actually realized with respect thereto or (b) any proceeds actually recovered by Purchaser, Metal Resources or the Company from insurance policies with respect thereto net of the amount of any required deductible or co-pay, policy premium increase or other expense directly attributable to such insurance claim, and (II) no Purchaser Indemnitees shall be entitled to recovery to the extent that (a) the Real Property is used from and after the Closing Date in a manner that is not the same or similar to its current industrial use, (b) the groundwater at or beneath the Real Property is used by any Person for any reason, or (c) the Real Property soils are managed in a manner that is inconsistent with any limitations imposed under the Consent Order, under any Environmental Law or any other limitation imposed by any Governmental Authority.
(d) Any Seller may satisfy all or any portion of its indemnification obligation to a Purchaser Indemnitee by the tender of common shares of the Parent in full or partial satisfaction thereof, and the indemnification obligation of such Seller for any Loss with respect thereto shall be reduced by the Deemed Value (as hereafter defined) of each common share of the Parent so applied in satisfaction of such indemnification obligation, multiplied by the number of such common shares tendered by the Seller for such purpose. For purposes hereof, "Deemed Value" shall be, with respect to a common share of Parent, the greater of (i) such Seller's purchase price of such common share as set forth on the Seller's trade confirmation or brokerage statement (or similar evidence reflecting the purchase price for such securities), and (ii) the closing price of such common share on the Nasdaq National Market or any recognized public stock exchange or over the counter market, on which such common share is then listed or quoted, in each case as of the day immediately preceding the date of final determination of the indemnification obligations hereunder. For purposes hereof, the "date of final determination" shall be: (A) the date on which the judgment is rendered, or (B) the date on which a settlement is paid, if no judgment shall have been rendered. In the event a Seller satisfies an indemnification obligation hereunder by tendering Parent common shares and such Seller holds Parent common shares with different purchases prices, such Seller may in its sole discretion determine which Parent common shares to tender and the order in which such common shares are tendered. The foregoing provision shall apply, mutatis mutandis, to the common shares of the Parent or any successor entity or security thereto.
(e) In no event shall a party be liable hereunder for incidental, consequential, special, punitive or exemplary damages.
(f) Except as specified above, the right to indemnification, payment of Losses of Purchaser Indemnitees or for other remedies based on any representation, warranty, covenant or obligation of Sellers, Metal Resources, and/or the Company contained in or made pursuant to this Agreement shall not be affected by (i) any investigation conducted with respect to, or any knowledge acquired (or capable or being acquired) at any time, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, or obligation, or (ii) the waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification based on such representations, warranties, covenants, and obligations.
Appears in 1 contract
Limitations of Indemnification. The indemnification (a) Notwithstanding the provisions of Purchaser Indemnitees by Sellers under Section 9.1 hereof shall be limited as follows:
6.2(a): (i) Purchaser Indemnitees the Buyer Indemnifying Parties shall not be entitled to any payment liable for Losses under the indemnification provisions set forth in Section 9.1(a) or (b6.2(a)(i) unless and to the extent the total claims aggregate amount of Purchaser Indemnitees pursuant to such indemnification claim exceed an amount equal to Four Hundred Forty Thousand and No/100ths Dollars ($440,000) (the "Deductible") (at which time Purchaser Indemnitees shall be entitled to claim all damages incurred in excess of the Deductible, up to the maximum set forth in clause (a)(ii) below); provided that the Deductible shall not apply to, and Purchaser Indemnitees shall be fully compensated for, (x) any breach of Sections 3.2, 3.3, 3.4, 3.14 (Losses with respect to Taxesall such breaches or inaccuracies of such representations and warranties exceeds $250,000 (the “Indemnification Deductible”), 3.16, 4.1 and 4.2 and (y) any failure of performance of any covenant of Sellers set forth in this Agreement that is to be performed on or after the Closing and provided, further, that in the which event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Deductible all such Losses exceeding $125,000 shall be reduced subject to $414,000, and in the event that no Earnout Payment is payable the Deductible shall be reduced to $388,000indemnification; and (ii) Sellers' aggregate liability to Purchaser Indemnitees under the indemnification provided Buyer Indemnifying Parties’ maximum liability, as the case may be, under Section 9.1 hereof 6.2(a)(i) shall in no event exceed, collectively, an amount equal to Eight Million Eight Hundred Thousand and No/100ths Dollars ($8,800,000) not exceed the Closing Cash Consideration (the "Cap"“Cash Indemnification Limit”); provided, however, that the Cap Indemnification Deductible shall not apply to performance of covenants hereunder that are to be performed any Losses incurred by the Buyer Indemnified Parties resulting from and after Closing, or to any a breach of Sections 3.2, 3.3, 3.4, 3.14 the Indefinite Fundamental Representations and the Buyer Indemnifying Parties’ maximum liability under Section 6.2(a)(ii) and (with respect vi) shall not exceed (x) the Closing Cash Consideration plus (y) the aggregate amount of any principal repayments made by Buyer to TaxesSeller or Seller Parent under the Notes (the “Total Indemnification Limit”), 3.16, 4.1 and 4.2 hereunder; provided, further, that neither the Indemnification Deductible nor the Cap Cash Indemnification Limit or the Total Indemnification Limit shall apply to any Losses arising out of, relating to or resulting from actual fraud incurred by Sellers; provided, further, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Cap shall be reduced to $8,282,000, Buyer Indemnified Parties and in the event that no Earnout Payment is payable, the Cap shall be reduced to $7,765,000; and provided, finally, that to the extent that any Purchaser Indemnitee makes a claim asserted pursuant to Section 9.1(a6.2(a)(iii) for Losses that resulted or are alleged to have resulted from the breach of a representation or warranty of Sellers, Metal Resources or the Company, such representation, warranty or covenant shall be deemed to not be breached if on or prior to the Closing Purchaser had actual knowledge that the representation or warranty was breached in the respect alleged to have caused the Losses; provided, however, that this Section 9.4(a) shall not apply for the purposes of determining the satisfaction of the Purchaser and Parent Closing conditions set forth in Section 7 hereof; and provided, further, that for the purpose of this Section 9.4(athrough (v), any claim pursuant to Section 9.1(a) for Losses that resulted or are alleged to have resulted from the breach of a representation or warranty of Sellers, Metal Resources, or the Company, the Purchaser shall be deemed to have actual knowledge concerning the alleged breach of a representation or warranty of Sellers, Metal Resources, or the Company where any of Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxx, or Xxxxxx X. Xxxxxx shall have received specific information at least five (5) business days prior to the Closing which would cause a reasonable person to conclude, after review of the representations and warranties contained herein, that such a breach had occurred.
(b) Purchaser Indemnitees shall not be entitled to any payment under the indemnification provisions set forth in Section 9.1(c) unless and to the extent the total claims of Purchaser Indemnitees pursuant to such indemnification claim exceed an amount equal to Four Hundred Forty Thousand and No/100ths Dollars ($440,000) (the "Environmental Deductible"); provided, however, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Environmental Deductible shall be reduced to $414,000, and in the event that no Earnout Payment is payable, the Environmental Deductible shall be reduced to $388,000, at which time Purchaser Indemnitees shall be entitled to claim all damages incurred in excess of the Environmental Deductible, up to (when together with any other damages in excess of the Deductible in Section 9.4(a)(i)) the Cap. To the extent that an indemnification obligation of Sellers pursuant to one of Notwithstanding the provisions of Section 9.1 herein overlaps with an indemnification obligation pursuant to any other provision of Section 9.1 herein or any other provision of this Agreement, the Purchaser Indemnitees shall be entitled to only one of such indemnification payments.
(c) Notwithstanding the foregoing, Purchaser agrees that prior to making a claim for indemnification hereunder, it shall first 6.3(a): (i) utilize or avail itself (or cause Metal Resources and the Company to utilize or avail itself) of all remedies, protections, and limitations provided under the Consent Order, and (ii) seek to recover against and utilize all remedies available to it, Metal Resources, or the Company, including a final determination by court order or decision, if required, to recover against and shall exhaust any policies of insurance for which Sellers reasonably believe coverage may exist; provided, however, that in the event that notwithstanding Purchaser's compliance with the foregoing provisions of this Section 9.4(c), Purchaser, Metal Resources, or the Company shall have received written notice from any insurer under any material Company insurance policy that any claim by the Company, Metal Resources, or Purchaser for which Sellers would have responsibility hereunder has been denied, and such determination Buyer shall not have been rescinded be liable for Losses under Section 6.3(a)(i) unless the aggregate amount of Losses with respect to all such breaches or reversed five (5) business days prior to inaccuracies of such representations and warranties exceeds the date Indemnification Deductible, in which is one (1) year after the Closing Date, then the Purchaser may then seek to recover against the Sellers, prior to a final determination of responsibility under any material Company insurance policy, subject to the limitations contained herein. Except as paid to a third party, any liability or undertaking of Sellers to indemnify Purchaser under this Article 9 or any other liability of Sellers to Purchaser hereunder event all such Losses exceeding $125,000 shall also be subject to the following additional limitations: (I) no loss, damage or expense shall be deemed to have been sustained by Purchaser to the extent of (a) any Tax savings actually realized with respect thereto or (b) any proceeds actually recovered by Purchaser, Metal Resources or the Company from insurance policies with respect thereto net of the amount of any required deductible or co-pay, policy premium increase or other expense directly attributable to such insurance claim, and (II) no Purchaser Indemnitees shall be entitled to recovery to the extent that (a) the Real Property is used from and after the Closing Date in a manner that is not the same or similar to its current industrial use, (b) the groundwater at or beneath the Real Property is used by any Person for any reason, or (c) the Real Property soils are managed in a manner that is inconsistent with any limitations imposed under the Consent Order, under any Environmental Law or any other limitation imposed by any Governmental Authority.
(d) Any Seller may satisfy all or any portion of its indemnification obligation to a Purchaser Indemnitee by the tender of common shares of the Parent in full or partial satisfaction thereof, and the indemnification obligation of such Seller for any Loss with respect thereto shall be reduced by the Deemed Value (as hereafter defined) of each common share of the Parent so applied in satisfaction of such indemnification obligation, multiplied by the number of such common shares tendered by the Seller for such purpose. For purposes hereof, "Deemed Value" shall be, with respect to a common share of Parent, the greater of (i) such Seller's purchase price of such common share as set forth on the Seller's trade confirmation or brokerage statement (or similar evidence reflecting the purchase price for such securities), indemnification; and (ii) the closing price of such common share on Buyer’s maximum liability, as the Nasdaq National Market or any recognized public stock exchange or over the counter marketcase may be, on which such common share is then listed or quoted, in each case as of the day immediately preceding the date of final determination of the indemnification obligations hereunder. For purposes hereof, the "date of final determination" shall be: (A) the date on which the judgment is rendered, or (B) the date on which a settlement is paid, if no judgment shall have been rendered. In the event a Seller satisfies an indemnification obligation hereunder by tendering Parent common shares and such Seller holds Parent common shares with different purchases prices, such Seller may in its sole discretion determine which Parent common shares to tender and the order in which such common shares are tendered. The foregoing provision shall apply, mutatis mutandis, to the common shares of the Parent or any successor entity or security thereto.
(e) In no event shall a party be liable hereunder for incidental, consequential, special, punitive or exemplary damages.
(f) Except as specified above, the right to indemnification, payment of Losses of Purchaser Indemnitees or for other remedies based on any representation, warranty, covenant or obligation of Sellers, Metal Resources, and/or the Company contained in or made pursuant to this Agreement shall not be affected by (i) any investigation conducted with respect to, or any knowledge acquired (or capable or being acquired) at any time, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, or obligation, or (ii) the waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification based on such representations, warranties, covenants, and obligations.under
Appears in 1 contract
Limitations of Indemnification. The Notwithstanding any other provision of this Agreement to the contrary, the right of the Indemnified Parties to indemnification of Purchaser Indemnitees by Sellers under Section 9.1 hereof 8.2 and 8.4 shall be limited as followssubject to the following provisions:
(ia) Purchaser Indemnitees No indemnification shall not be entitled payable pursuant to any payment under the indemnification provisions set forth in Section 9.1(a) or (b) 8.2 hereof unless and to the extent the total of all such claims of Purchaser Indemnitees pursuant to such indemnification claim exceed an amount equal to Four exceeds One Hundred Forty Fifty Thousand and No/100ths Dollars ($440,000150,000) in the aggregate (the "Threshold Amount"), whereupon the amount of such claims in excess of the Threshold Amount shall be recoverable in accordance with the terms hereof. No indemnification shall be payable pursuant to Section 8.4(b) hereof unless the Seller or the Parent has actually paid Two Million Dollars ($2,000,000) in the aggregate pursuant to Section 8.4(a) (the "DeductiblePoly-Gel Threshold Amount") (at which time Purchaser Indemnitees shall be entitled to claim all damages incurred ), whereupon the amount of such claims in excess of the Deductible, up Poly-Gel Threshold Amount shall be recoverable in accordance with the terms hereof.
(b) The maximum aggregate liability of the Seller and the Parent to provide indemnification pursuant to Section 8.4(a) hereof shall not exceed Two Million Dollars ($2,000,000). Subject to the maximum set forth in clause preceding sentence and (a)(iic) below); provided that , the Deductible maximum aggregate liability of the Seller and the Parent to provide indemnification pursuant to this Agreement shall not apply to, and Purchaser Indemnitees shall be fully compensated for, exceed the lesser of (xi) any breach of Sections 3.2, 3.3, 3.4, 3.14 Seven Million Dollars (with respect to Taxes$7,000,000), 3.16, 4.1 and 4.2 and (y) any failure of performance of any covenant of Sellers set forth in this Agreement that is to be performed on or after the Closing and provided, further, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Deductible shall be reduced to $414,000, and in the event that no Earnout Payment is payable the Deductible shall be reduced to $388,000; and (ii) Sellers' aggregate liability to Purchaser Indemnitees the Cash Consideration, as may be reduced , as contemplated in Section 2.2(b), plus, any and all amounts actually paid in cash by the Buyer under the indemnification provided Note to the Seller, plus, solely by way of offset, if and only to the extent available and for so long as the Additional Note is a valid and enforceable obligation of the Buyer, pursuant to the terms of Section 8.5(g), any amount remaining to be paid under Section 9.1 hereof shall in no event exceed, collectively, an amount equal to Eight Million Eight Hundred Thousand and No/100ths Dollars ($8,800,000) (the "Cap")Additional Note; provided, however, that nothing in this Agreement shall limit, terminate or condition the Cap shall not apply to performance of covenants hereunder that are to be performed from and after Closing, or to any breach of Sections 3.2, 3.3, 3.4, 3.14 (prohibition set forth in Section 8.5(g) with respect to Taxes)the right of offset, counterclaim or set-off against the Note.
(c) The maximum aggregate liability of the Seller and the Parent to provide indemnification pursuant to Section 5.8 as well as any claim for indemnification for breaches of the representations and warranties contained in Sections 3.10, 3.16, 4.1 3.18 and 4.2 hereunder; provided, further, that neither the Deductible nor the Cap shall apply to first three sentences of Section 3.28 or any Losses arising out of, relating to or resulting from actual claim of fraud by Sellers; providedthe Buyer shall not exceed an amount equal to (i) the Cash Consideration as may be reduced, furtheras contemplated in Section 2.2(b), that plus (ii) any and all amounts actually paid in cash by the event that either Buyer under the First Earnout Amount or Note to the Second Earnout Amount is not payable hereunderSeller, the Cap shall be reduced to $8,282,000plus (iii) solely by way of offset, if and in the event that no Earnout Payment is payable, the Cap shall be reduced to $7,765,000; and provided, finally, that only to the extent that any Purchaser Indemnitee makes available and for so long as the Additional Note is a claim valid and enforceable obligation of the Buyer, pursuant to the terms of Section 9.1(a) for Losses that resulted or are alleged 8.5(g), any amount remaining to have resulted from be paid under the breach of a representation or warranty of Sellers, Metal Resources or the Company, such representation, warranty or covenant shall be deemed to not be breached if on or prior to the Closing Purchaser had actual knowledge that the representation or warranty was breached in the respect alleged to have caused the LossesAdditional Note; provided, however, that nothing in this Section 9.4(a) Agreement shall not apply for limit, terminate or condition the purposes of determining the satisfaction of the Purchaser and Parent Closing conditions prohibition set forth in Section 7 hereof; and provided, further, that for the purpose of this Section 9.4(a), any claim pursuant to Section 9.1(a8.5(g) for Losses that resulted or are alleged to have resulted from the breach of a representation or warranty of Sellers, Metal Resources, or the Company, the Purchaser shall be deemed to have actual knowledge concerning the alleged breach of a representation or warranty of Sellers, Metal Resources, or the Company where any of Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxx, or Xxxxxx X. Xxxxxx shall have received specific information at least five (5) business days prior with respect to the Closing which would cause a reasonable person to concluderight of offset, after review of the representations and warranties contained herein, that such a breach had occurred.
(b) Purchaser Indemnitees shall not be entitled to any payment under the indemnification provisions set forth in Section 9.1(c) unless and to the extent the total claims of Purchaser Indemnitees pursuant to such indemnification claim exceed an amount equal to Four Hundred Forty Thousand and No/100ths Dollars ($440,000) (the "Environmental Deductible"); provided, however, that in the event that either the First Earnout Amount counterclaim or the Second Earnout Amount is not payable hereunder, the Environmental Deductible shall be reduced to $414,000, and in the event that no Earnout Payment is payable, the Environmental Deductible shall be reduced to $388,000, at which time Purchaser Indemnitees shall be entitled to claim all damages incurred in excess of the Environmental Deductible, up to (when together with any other damages in excess of the Deductible in Section 9.4(a)(i)) the Cap. To the extent that an indemnification obligation of Sellers pursuant to one of the provisions of Section 9.1 herein overlaps with an indemnification obligation pursuant to any other provision of Section 9.1 herein or any other provision of this Agreement, the Purchaser Indemnitees shall be entitled to only one of such indemnification payments.
(c) Notwithstanding the foregoing, Purchaser agrees that prior to making a claim for indemnification hereunder, it shall first (i) utilize or avail itself (or cause Metal Resources and the Company to utilize or avail itself) of all remedies, protections, and limitations provided under the Consent Order, and (ii) seek to recover against and utilize all remedies available to it, Metal Resources, or the Company, including a final determination by court order or decision, if required, to recover against and shall exhaust any policies of insurance for which Sellers reasonably believe coverage may exist; provided, however, that in the event that notwithstanding Purchaser's compliance with the foregoing provisions of this Section 9.4(c), Purchaser, Metal Resources, or the Company shall have received written notice from any insurer under any material Company insurance policy that any claim by the Company, Metal Resources, or Purchaser for which Sellers would have responsibility hereunder has been denied, and such determination shall not have been rescinded or reversed five (5) business days prior to the date which is one (1) year after the Closing Date, then the Purchaser may then seek to recover set-off against the Sellers, prior to a final determination of responsibility under any material Company insurance policy, subject to the limitations contained herein. Except as paid to a third party, any liability or undertaking of Sellers to indemnify Purchaser under this Article 9 or any other liability of Sellers to Purchaser hereunder shall also be subject to the following additional limitations: (I) no loss, damage or expense shall be deemed to have been sustained by Purchaser to the extent of (a) any Tax savings actually realized with respect thereto or (b) any proceeds actually recovered by Purchaser, Metal Resources or the Company from insurance policies with respect thereto net of the amount of any required deductible or co-pay, policy premium increase or other expense directly attributable to such insurance claim, and (II) no Purchaser Indemnitees shall be entitled to recovery to the extent that (a) the Real Property is used from and after the Closing Date in a manner that is not the same or similar to its current industrial use, (b) the groundwater at or beneath the Real Property is used by any Person for any reason, or (c) the Real Property soils are managed in a manner that is inconsistent with any limitations imposed under the Consent Order, under any Environmental Law or any other limitation imposed by any Governmental AuthorityNote.
(d) Any Seller may satisfy all To the extent that Buyer, the Company or any portion of its indemnification obligation to a Purchaser Indemnitee by their respective Affiliates receive any payment from the tender of common shares of Seller and/or the Parent in full connection with the non-payment of any account or partial satisfaction thereofnote receivable of the Company in the ordinary course, and subsequent to the indemnification obligation receipt of such Seller for any Loss with respect thereto shall be reduced payment by the Deemed Value (as hereafter defined) of each common share of Buyer, the Parent so applied in satisfaction of such indemnification obligationCompany or their respective Affiliates, multiplied by the number of such common shares tendered by Buyer, the Seller for such purpose. For purposes hereof, "Deemed Value" shall be, Company or their respective Affiliates receive any payment from the an obligor with respect to a common share of Parentsuch account or note receivable, then Buyer shall (and shall cause the greater Company and such Affiliate to) hold in trust for and pay to the Seller the lesser of (i) the amount received from such Seller's purchase price of such common share as set forth on the Seller's trade confirmation or brokerage statement (or similar evidence reflecting the purchase price for such securities), obligor and (ii) the closing price amount paid by the Seller and/or the Parent on account of such common share on the Nasdaq National Market or any recognized public stock exchange or over the counter marketreceivable, on which such common share is then listed or quoted, in each case as within fifteen (15) days of the day immediately preceding the date of final determination of the indemnification obligations hereunder. For purposes hereof, the "date of final determination" shall be: (A) the date on which the judgment is rendered, or (B) the date on which a settlement is paid, if no judgment shall have been rendered. In the event a Seller satisfies an indemnification obligation hereunder by tendering Parent common shares and such Seller holds Parent common shares with different purchases prices, such Seller may in its sole discretion determine which Parent common shares to tender and the order in which such common shares are tendered. The foregoing provision shall apply, mutatis mutandis, to the common shares of the Parent or any successor entity or security theretoreceipt thereof.
(e) In no the event the Tangible Net Worth as set forth on the Statement of Tangible Net Worth exceeds the Minimum Tangible Net Worth, the Buyer shall not be entitled to assert a party claim for Indemnifiable Losses pursuant to Section 8.2, arising from a breach of the Seller's and Parent's representations or warranties relating to the specific items and amounts used in the calculation of the Tangible Net Worth, until the amount of such Indemnifiable Losses exceeds the difference between the Minimum Tangible Net Worth and the Tangible Net Worth, and then only to the extent that such Indemnifiable Losses would have caused the Tangible Net Worth to be liable hereunder less than the Minimum Tangible Net Worth. Notwithstanding the foregoing, in the event the Tangible Net Worth as set forth on the Statement of Tangible Net Worth is less than the Minimum Tangible Net Worth and the Purchase Price is reduced pursuant to Section 2.4, the Buyer shall not be entitled to assert a claim for incidentalIndemnifiable Losses pursuant to Section 8.2, consequential, special, punitive to the extent such claim arises from a breach of the Seller's and Parent's representations or exemplary damageswarranties relating to the specific items that resulted in such decrease in the Purchase Price pursuant to Section 2.4.
(f) Except as specified aboveset forth in Section 5.9, the right to indemnification, payment of Losses of Purchaser Indemnitees indemnification or for any other remedies remedy based on any representationrepresentations, warrantywarranties, covenant or obligation of Sellers, Metal Resources, and/or the Company contained covenants and obligations in or made pursuant to this Agreement shall will not be affected by (i) any investigation conducted with respect to, or any knowledge acquired (or capable or of being acquired) at any time, whether before or after the execution and delivery of this Agreement or the Closing Date, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, covenant or obligation, or (ii) the . The waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification or any other remedy based on such representations, warranties, covenants, covenants and obligations.
Appears in 1 contract
Limitations of Indemnification. The indemnification of Purchaser following limitations shall apply with regard to KM's obligations to indemnify the Company and the FRC Parties Indemnitees by Sellers under Section 9.1 hereof shall be limited as followspursuant to Sections 8.2:
(i) Purchaser KM's Liability for the matters described under Section 8.2(a) of this Agreement or pursuant to Section 8.2(b) in so far as the Adverse Consequences arising therefrom do not relate to a Retained Liability set forth in clauses (i) through (xvii) of the definition of Retained Liabilities set forth in Article I (the "Undefined Retained Liabilities") shall not exceed $30 million (the "Cap"). The limitations on KM's indemnification obligations set forth in the prior sentence shall not apply to (A) losses resulting from any breach of the representations and warranties set forth in Sections 3.1 3.2, 3.4, 3.6, 5.1 and 5.15 or (B) fraud or willful misconduct by the AMCI Parties or any of their Affiliates. KM's liability under this Agreement for all matters other than Retained Liabilities and fraud or willful misconduct by the AMCI Parties or any of their Affiliates shall not exceed $100 million. KM's Liability for Adverse Consequences related to Retained Liabilities (other than Undefined Retained Liabilities), fraud or willful misconduct by the AMCI Parties or any of their Affiliates shall be unlimited.
(ii) Except as set forth in the last sentence of this subparagraph (ii), the AMCI Parties and their Affiliates will have no Liability for any Adverse Consequences, unless and until the aggregate Adverse Consequences (after taking into account the present value (discounted by 8%) of any Tax Benefit presently quantifiable with certainty by, and insurance and indemnity proceeds presently quantifiable with certainty to, the indemnified party with respect thereto) for which the Company or the FRC Parties Indemnitees are entitled to recover under this Agreement exceeds $1 million (the "Threshold Amount") after which, the Company and the FRC Parties Indemnitees will be entitled to recover all amounts to which they are entitled as indemnification under this Agreement to the extent such Adverse Consequences exceed the Threshold Amount. In calculating the Threshold Amount or the Adverse Consequences under this Section, all Adverse Consequences (after taking into account any the present value (discounted by 8%) of any Tax Benefit presently quantifiable with certainty by, and insurance and indemnity proceeds presently quantifiable with certainty to, the indemnified party with respect thereto) which individually total less than $50,000 shall be excluded in their entirety and the AMCI Parties and their Affiliates shall have no Liability hereunder to the Company and the FRC Parties Indemnitees for such Adverse Consequences; provided that for purposes of this sentence, the Adverse Consequences from any events or actions resulting from the same or substantially similar occurrences shall be aggregated. Notwithstanding anything in this Section 8.2(c)(ii) to the contrary, the limitations on the AMCI Parties' indemnification obligations set forth in the first two sentences of this Section 8.2(c)(ii) shall not apply to Adverse Consequences resulting from (A) any breach of the representations and warranties set forth in Sections 3.1 3.2, 3.4, 3.6, 5.1 and 5.15, (B) any matter referred to in Section 8.2(b)(i) through (x) except to the extent such Adverse Consequences relate to an Undefined Retained Liability or (C) fraud or willful misconduct by the AMCI Parties or any of their Affiliates.
(iii) The Company and the FRC Parties acknowledge and agree that, except as set forth below, the indemnification provisions in this Article VIII and the termination rights in Section 11.1 shall be the exclusive remedies of the Company and the FRC Parties Indemnitees with respect to the transactions contemplated by this Agreement and any other events, circumstances or conditions relating to the ownership or operation of the Subject Companies prior to the Closing Date, and whether any claims or causes of action asserted with respect to such matters are brought in contract, tort or any other legal theory whatsoever. The Company and the FRC Parties hereby waive any claim or cause of action pursuant to common or statutory law or otherwise against the AMCI Parties and its Affiliates with respect to Adverse Consequences or obligations of any nature whatsoever that relate to this Agreement or are attributable to the Business or the ownership of the Contributed Interests whether arising before, on or after the Closing Date other than claims (A) pursuant to the terms of this Agreement, (B) for fraud or intentional misrepresentation and (C) for injunctive relief. The Company and the FRC Parties agree that after the Closing any claims for indemnification pursuant to Section 8.2(b)(iv) as it relates to clauses (ix) and (xxiii) of the definition of Retained Liabilities shall first be compensated by using the Escrowed Amount; provided, however, that Company's and the FRC Parties remedies shall in no way be limited.
(iv) Notwithstanding any other provision of this Agreement, KM shall not be liable for any Adverse Consequences suffered by a the Company or the FRC Parties Indemnitees to the extent that an amount has been reserved, provided or allowed for in the Financial Statements of the Subject Companies or were taken into account in the calculation of the Working Capital Balance as of the Closing Date, and KM shall not be liable for Adverse Consequences to the extent they arose from (A) a change in accounting or Tax Law, policy or practice made after the Closing Date or (B) any legislation not in force on the Closing Date.
(v) Notwithstanding any other provision of this Agreement, KM shall not be liable under this Article VIII for an amount to the extent, if any, that any Adverse Consequences giving rise to such amount results from a failure on the part of the Company, the FRC Parties Indemnitees or any Affiliate to exercise good faith in not jeopardizing or prejudicing the interests of the Indemnifying Party.
(vi) Notwithstanding anything herein to the contrary, no indemnified party shall be entitled to indemnification under this Article VIII for Adverse Consequences arising out of or relating to breach of any representation or warranty in this Agreement if the indemnifying party can establish that the indemnified party had actual knowledge before the Closing Date of facts or circumstances which would cause the representation or warranty to be untrue.
(vii) Except for matters involving fraud or willful misconduct, it is understood and agreed by the Company and the FRC Parties that no director, officer, employee, agent, shareholder or Affiliate of the AMCI Parties (including any shareholder, partner, director, officer, employee, agent or Affiliate of a shareholder) other than KM shall have (i) any personal liability to the Company or a FRC Parties Indemnity as a result of the breach of any representation, warranty, covenant or agreement of the AMCI Parties contained herein or otherwise arising out of or in connection with the transactions contemplated hereby or (ii) any personal obligation to indemnify the Company or the FRC Parties Indemnitees for any of their claims pursuant to Section 8.2, and the Company and FRC, for itself and all other FRC Parties Indemnitees, hereby waives and releases and shall have no recourse against any of such parties described in this Section 8.2(c)(vii) as a result of the breach of any representation, warranty, covenant or agreement of the AMCI Parties contained herein or otherwise arising out of or in connection with the transactions contemplated hereby.
(viii) Notwithstanding any other provision of this Article VIII, if the Company has been indemnified with respect to a matter arising under this Section 8.2, then the FRC Parties Indemnitees shall not be entitled to any payment further indemnification under the indemnification provisions set forth in this Section 9.1(a) or (b) unless and to the extent the total claims of Purchaser Indemnitees pursuant to such indemnification claim exceed an amount equal to Four Hundred Forty Thousand and No/100ths Dollars ($440,000) (the "Deductible") (at which time Purchaser Indemnitees shall be entitled to claim all damages incurred in excess of the Deductible, up to the maximum set forth in clause (a)(ii) below); provided that the Deductible shall not apply to, and Purchaser Indemnitees shall be fully compensated for, (x) any breach of Sections 3.2, 3.3, 3.4, 3.14 (8.2 with respect to Taxes), 3.16, 4.1 and 4.2 and (y) any failure of performance of any covenant of Sellers set forth in this Agreement that is to be performed on or after the Closing and provided, further, that loss in the event that either value of the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Deductible shall be reduced to $414,000, and FRC Parties' interest in the event that no Earnout Payment is payable the Deductible shall be reduced to $388,000; and (ii) Sellers' aggregate liability to Purchaser Indemnitees under the indemnification provided under Section 9.1 hereof shall in no event exceed, collectively, an amount equal to Eight Million Eight Hundred Thousand and No/100ths Dollars ($8,800,000) (the "Cap"); provided, however, that the Cap shall not apply to performance of covenants hereunder that are to be performed from and after Closing, or to any breach of Sections 3.2, 3.3, 3.4, 3.14 (with respect to Taxes), 3.16, 4.1 and 4.2 hereunder; provided, further, that neither the Deductible nor the Cap shall apply to any Losses arising out of, relating to or resulting from actual fraud by Sellers; provided, further, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Cap shall be reduced to $8,282,000, and in the event that no Earnout Payment is payable, the Cap shall be reduced to $7,765,000; and provided, finally, that to the extent that any Purchaser Indemnitee makes a claim pursuant to Section 9.1(a) for Losses that resulted or are alleged to have resulted from the breach of a representation or warranty of Sellers, Metal Resources or the Company, such representation, warranty or covenant shall be deemed to not be breached if on or prior to the Closing Purchaser had actual knowledge that the representation or warranty was breached in the respect alleged to have caused the Losses; provided, however, that this Section 9.4(a) shall not apply for the purposes of determining the satisfaction of the Purchaser and Parent Closing conditions set forth in Section 7 hereof; and provided, further, that for the purpose of this Section 9.4(a), any claim pursuant to Section 9.1(a) for Losses that resulted or are alleged to have resulted from the breach of a representation or warranty of Sellers, Metal Resources, or the Company, the Purchaser shall be deemed to have actual knowledge concerning the alleged breach of a representation or warranty of Sellers, Metal Resources, or the Company where any of Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxx, or Xxxxxx X. Xxxxxx shall have received specific information at least five (5) business days prior to the Closing which would cause a reasonable person to conclude, after review of the representations and warranties contained herein, that such a breach had occurred.
(b) Purchaser Indemnitees shall not be entitled to any payment under the indemnification provisions set forth in Section 9.1(c) unless and to the extent the total claims of Purchaser Indemnitees pursuant to such indemnification claim exceed an amount equal to Four Hundred Forty Thousand and No/100ths Dollars ($440,000) (the "Environmental Deductible"); provided, however, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Environmental Deductible shall be reduced to $414,000, and in the event that no Earnout Payment is payable, the Environmental Deductible shall be reduced to $388,000, at which time Purchaser Indemnitees shall be entitled to claim all damages incurred in excess of the Environmental Deductible, up to (when together with any other damages in excess of the Deductible in Section 9.4(a)(i)) the Cap. To the extent that an indemnification obligation of Sellers pursuant to one of the provisions of Section 9.1 herein overlaps with an indemnification obligation pursuant to any other provision of Section 9.1 herein or any other provision of this Agreement, the Purchaser Indemnitees shall be entitled to only one of such indemnification payments.
(c) Notwithstanding the foregoing, Purchaser agrees that prior to making a claim for indemnification hereunder, it shall first (i) utilize or avail itself (or cause Metal Resources and the Company to utilize or avail itself) of all remedies, protections, and limitations provided under the Consent Order, and (ii) seek to recover against and utilize all remedies available to it, Metal Resources, or the Company, including a final determination by court order or decision, if required, to recover against and shall exhaust any policies of insurance for which Sellers reasonably believe coverage may exist; provided, however, that in the event that notwithstanding Purchaser's compliance with the foregoing provisions of this Section 9.4(c), Purchaser, Metal Resources, or the Company shall have received written notice from any insurer under any material Company insurance policy that any claim by the Company, Metal Resources, or Purchaser for which Sellers would have responsibility hereunder has been denied, and such determination shall not have been rescinded or reversed five (5) business days prior to the date which is one (1) year after the Closing Date, then the Purchaser may then seek to recover against the Sellers, prior to a final determination of responsibility under any material Company insurance policy, subject to the limitations contained herein. Except as paid to a third party, any liability or undertaking of Sellers to indemnify Purchaser under this Article 9 or any other liability of Sellers to Purchaser hereunder shall also be subject to the following additional limitations: (I) no loss, damage or expense shall be deemed to have been sustained by Purchaser to the extent of (a) any Tax savings actually realized with respect thereto or (b) any proceeds actually recovered by Purchaser, Metal Resources or the Company from insurance policies with respect thereto net of the amount of any required deductible or co-pay, policy premium increase or other expense directly attributable to such insurance claim, and (II) no Purchaser Indemnitees shall be entitled to recovery to the extent that (a) the Real Property is used from and after the Closing Date in a manner that is not the same or similar to its current industrial use, (b) the groundwater at or beneath the Real Property is used by any Person for any reason, or (c) the Real Property soils are managed in a manner that is inconsistent with any limitations imposed under the Consent Order, under any Environmental Law or any other limitation imposed by any Governmental Authority.
(d) Any Seller may satisfy all or any portion of its indemnification obligation to a Purchaser Indemnitee by the tender of common shares of the Parent in full or partial satisfaction thereof, and the indemnification obligation of such Seller for any Loss with respect thereto shall be reduced by the Deemed Value (as hereafter definedopposed to out of pocket losses) of each common share of the Parent so applied in satisfaction of such indemnification obligation, multiplied by the number of such common shares tendered by the Seller for such purpose. For purposes hereof, "Deemed Value" shall be, with respect to a common share of Parent, the greater of (i) such Seller's purchase price of such common share as set forth on the Seller's trade confirmation or brokerage statement (or similar evidence reflecting the purchase price for such securities), and (ii) the closing price of such common share on the Nasdaq National Market or any recognized public stock exchange or over the counter market, on which such common share is then listed or quoted, in each case as of the day immediately preceding the date of final determination of the indemnification obligations hereunder. For purposes hereof, the "date of final determination" shall be: (A) the date on which the judgment is rendered, or (B) the date on which a settlement is paid, if no judgment shall have been rendered. In the event a Seller satisfies an indemnification obligation hereunder by tendering Parent common shares and such Seller holds Parent common shares with different purchases prices, such Seller may in its sole discretion determine which Parent common shares to tender and the order in which such common shares are tendered. The foregoing provision shall apply, mutatis mutandis, to the common shares of the Parent or any successor entity or security thereto.
(e) In no event shall a party be liable hereunder for incidental, consequential, special, punitive or exemplary damages.
(f) Except as specified above, the right to indemnification, payment of Losses of Purchaser Indemnitees or for other remedies based on any representation, warranty, covenant or obligation of Sellers, Metal Resources, and/or the Company contained in or made pursuant to this Agreement shall not be affected by (i) any investigation conducted with respect to, or any knowledge acquired (or capable or being acquired) at any time, suffered with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, or obligation, or (ii) the waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification based on such representations, warranties, covenants, and obligationssame matter.
Appears in 1 contract
Samples: Contribution Agreement (Alpha Natural Resources, Inc.)
Limitations of Indemnification. The (a) Neither Seller Indemnified Parties or Buyer Indemnified Parties, as the case may be, shall be indemnified for any claim for indemnification of Purchaser Indemnitees by Sellers under Section 9.1 hereof shall be limited as follows:
(i) Purchaser Indemnitees shall not be entitled to any payment under the indemnification provisions set forth in 5.2, or Section 9.1(a) or (b) 5.3 unless and to until the extent the total claims aggregate amount of Purchaser Indemnitees pursuant to all Losses resulting from such indemnification claim exceed breaches or inaccuracies exceeds an aggregate amount equal to Four Hundred Forty Thousand and No/100ths Dollars ($440,000) 50,000 (the "“Deductible") (at ”), in which time Purchaser Indemnitees case Seller Indemnified Parties or Buyer Indemnified Parties, as the case may be, shall be entitled to claim recover only the amount of all damages incurred such Losses in excess of the Deductible.
(b) The maximum amount which may be recovered by either the Buyer Indemnified Parties or the Seller Indemnified Parties pursuant to Section 5.2, up or Section 5.3, respectively, shall not exceed $3,000,000 (the “Cap”).
(c) Notwithstanding anything herein to the maximum set forth in clause (a)(ii) below); provided that the Deductible shall not apply to, and Purchaser Indemnitees shall be fully compensated for, (x) any breach of Sections 3.2, 3.3, 3.4, 3.14 (with respect to Taxes), 3.16, 4.1 and 4.2 and (y) any failure of performance of any covenant of Sellers set forth in this Agreement that is to be performed on or after the Closing and provided, further, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereundercontrary, the Deductible shall be reduced to $414,000, and in the event that no Earnout Payment is payable the Deductible shall be reduced to $388,000; and (ii) Sellers' aggregate liability to Purchaser Indemnitees under the indemnification provided under Section 9.1 hereof shall in no event exceed, collectively, an amount equal to Eight Million Eight Hundred Thousand and No/100ths Dollars ($8,800,000) (the "Cap"); provided, however, that the Cap shall not apply to performance (i) Losses to the extent such Losses arise from or relate to a Breach of covenants hereunder that are any Seller Fundamental Representation, the Other Extended Survival Representations or any Buyer Fundamental Representation, (ii) any indemnification obligations pursuant to be performed from and after ClosingSection 5.2(c), (d), (e), (f), (g), (h) or (i), or to any breach of Sections 3.2, 3.3, 3.4, 3.14 (with respect to Taxes), 3.16, 4.1 and 4.2 hereunder; provided, further, that neither the Deductible nor the Cap shall apply to any Losses arising out of, relating to or resulting from actual fraud by Sellers; provided, further, that iii) in the event that either of fraud, securities fraud, violation of Law, or willful or intentional misconduct.
(d) Notwithstanding the First Earnout Amount or the Second Earnout Amount is not payable several nature of Sellers’ indemnification obligations hereunder, the Cap Escrow Amount shall be reduced available to $8,282,000satisfy indemnification obligations on a joint and several basis.
(e) Notwithstanding anything herein to the contrary, the obligations of a Seller under Section 5.2 shall not in the aggregate exceed the aggregate amount received by such Seller and the Escrow Amount to the extent released to such Seller, except to the extent such Losses arise from or relate to (ii) any indemnification obligations pursuant to Section 5.2(g) and (h), or (iii) in the event that no Earnout Payment is payableof fraud, the Cap shall be reduced to $7,765,000; and providedsecurities fraud, finally, that to the extent that any Purchaser Indemnitee makes a claim pursuant to Section 9.1(a) for Losses that resulted or are alleged to have resulted from the breach violation of a representation or warranty of Sellers, Metal Resources or the Company, such representation, warranty or covenant shall be deemed to not be breached if on or prior to the Closing Purchaser had actual knowledge that the representation or warranty was breached in the respect alleged to have caused the Losses; provided, however, that this Section 9.4(a) shall not apply for the purposes of determining the satisfaction of the Purchaser and Parent Closing conditions set forth in Section 7 hereof; and provided, further, that for the purpose of this Section 9.4(a), any claim pursuant to Section 9.1(a) for Losses that resulted or are alleged to have resulted from the breach of a representation or warranty of Sellers, Metal ResourcesLaw, or the Company, the Purchaser shall be deemed to have actual knowledge concerning the alleged breach of a representation willful or warranty of Sellers, Metal Resources, or the Company where any of Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxx, or Xxxxxx X. Xxxxxx shall have received specific information at least five (5) business days prior to the Closing which would cause a reasonable person to conclude, after review of the representations and warranties contained herein, that such a breach had occurredintentional misconduct.
(bf) Purchaser Indemnitees The Buyer Indemnified Parties shall not be entitled to recover for any payment under the indemnification provisions set forth in Section 9.1(c) unless and to the extent the total claims of Purchaser Indemnitees particular Loss pursuant to this Agreement if such indemnification claim exceed an amount equal to Four Hundred Forty Thousand Loss was expressly and No/100ths Dollars ($440,000) (the "Environmental Deductible"); provided, however, that specifically reflected as a liability in the event that either the First Earnout Amount calculation of Closing Working Capital or the Second Earnout Amount is not payable hereunder, the Environmental Deductible shall be reduced to $414,000, and as Indebtedness or a Sellers’ Closing Cost included in the event that no Earnout Payment is payable, the Environmental Deductible shall be reduced to $388,000, at which time Purchaser Indemnitees shall be entitled to claim all damages incurred in excess calculation of the Environmental DeductiblePurchase Price, up to (when together with any other damages in excess of the Deductible in Section 9.4(a)(i)) the Cap. To the extent that an indemnification obligation of Sellers pursuant to one of the provisions of Section 9.1 herein overlaps with an indemnification obligation pursuant to any other provision of Section 9.1 herein or any other provision of this Agreement, the Purchaser Indemnitees shall be entitled to only one of such indemnification payments.
(c) Notwithstanding the foregoing, Purchaser agrees that prior to making a claim for indemnification hereunder, it shall first (i) utilize or avail itself (or cause Metal Resources and the Company to utilize or avail itself) of all remedies, protections, and limitations provided under the Consent Order, and (ii) seek to recover against and utilize all remedies available to it, Metal Resources, or the Company, including a final determination by court order or decision, if required, to recover against and shall exhaust any policies of insurance for which Sellers reasonably believe coverage may exist; provided, however, that in the event that notwithstanding Purchaser's compliance with the foregoing provisions of this Section 9.4(c), Purchaser, Metal Resources, or the Company shall have received written notice from any insurer under any material Company insurance policy that any claim by the Company, Metal Resources, or Purchaser for which Sellers would have responsibility hereunder has been denied, and such determination shall not have been rescinded or reversed five (5) business days prior to the date which is one (1) year after the Closing Date, then the Purchaser may then seek to recover against the Sellers, prior to a final determination of responsibility under any material Company insurance policy, subject to the limitations contained herein. Except as paid to a third party, any liability or undertaking of Sellers to indemnify Purchaser under this Article 9 or any other liability of Sellers to Purchaser hereunder shall also be subject to the following additional limitations: (I) no loss, damage or expense shall be deemed to have been sustained by Purchaser to the extent of (a) any Tax savings actually realized with respect thereto or (b) any proceeds actually recovered by Purchaser, Metal Resources or the Company from insurance policies with respect thereto net of the amount of any required deductible or co-pay, policy premium increase or other expense directly attributable to such insurance claim, and (II) no Purchaser Indemnitees shall be entitled to recovery to the extent that (a) the Real Property is used from and after effect thereof was to reduce dollar for dollar the Closing Date in a manner that is not the same or similar Purchase Price as compared to its current industrial use, (b) the groundwater at or beneath the Real Property is used by any Person for any reason, or (c) the Real Property soils are managed in a manner that is inconsistent with any limitations imposed under the Consent Order, under any Environmental Law or any other limitation imposed by any Governmental Authority.
(d) Any Seller may satisfy all or any portion of its indemnification obligation to a Purchaser Indemnitee by the tender of common shares of the Parent in full or partial satisfaction thereof, and the indemnification obligation of such Seller for any Loss with respect thereto shall be reduced by the Deemed Value (as hereafter defined) of each common share of the Parent so applied in satisfaction of such indemnification obligation, multiplied by the number of such common shares tendered by the Seller for such purpose. For purposes hereof, "Deemed Value" shall be, with respect to a common share of Parent, the greater of (i) such Seller's purchase price of such common share as set forth on the Seller's trade confirmation or brokerage statement (or similar evidence reflecting the purchase price for such securities), and (ii) the closing price of such common share on the Nasdaq National Market or any recognized public stock exchange or over the counter market, on which such common share is then listed or quoted, in each case as of the day immediately preceding the date of final determination of the indemnification obligations hereunder. For purposes hereof, the "date of final determination" shall be: (A) the date on which the judgment is rendered, or (B) the date on which a settlement is paid, if no judgment shall what it would have been rendered. In absent such recorded liability (with the event a Seller satisfies an indemnification obligation hereunder by tendering Parent common shares and such Seller holds Parent common shares with different purchases prices, such Seller may in its sole discretion determine which Parent common shares intent of this provision being merely to tender and the order in which such common shares are tendered. The foregoing provision shall apply, mutatis mutandis, to the common shares of the Parent or any successor entity or security theretoavoid “double counting”).
(e) In no event shall a party be liable hereunder for incidental, consequential, special, punitive or exemplary damages.
(f) Except as specified above, the right to indemnification, payment of Losses of Purchaser Indemnitees or for other remedies based on any representation, warranty, covenant or obligation of Sellers, Metal Resources, and/or the Company contained in or made pursuant to this Agreement shall not be affected by (i) any investigation conducted with respect to, or any knowledge acquired (or capable or being acquired) at any time, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, or obligation, or (ii) the waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification based on such representations, warranties, covenants, and obligations.
Appears in 1 contract
Samples: Membership Interest Purchase Agreement (XPEL, Inc.)
Limitations of Indemnification. The indemnification of Purchaser Indemnitees by Sellers under Section 9.1 hereof shall be limited as follows:
(i) Purchaser Indemnitees shall not be entitled to any payment under the indemnification provisions set forth in Section 9.1(a) or (b) unless and to the extent the total claims of Purchaser Indemnitees pursuant to such indemnification claim exceed an amount equal to Four Hundred Forty Thousand and No/100ths Dollars ($440,000) (the "Deductible") (at which time Purchaser Indemnitees shall be entitled to claim all damages incurred in excess of the Deductible, up to the maximum set forth in clause (a)(ii) below); provided that the Deductible shall not apply to, and Purchaser Indemnitees shall be fully compensated for, (x) any breach of Sections 3.2, 3.3, 3.4, 3.14 (with respect to Taxes), 3.16, 4.1 and 4.2 and (y) any failure of performance of any covenant of Sellers set forth in this Agreement that is to be performed on or after the Closing and provided, further, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Deductible shall be reduced to $414,000, and in the event that no Earnout Payment is payable the Deductible shall be reduced to $388,000; and (ii) Sellers' aggregate liability to Purchaser Indemnitees under the indemnification provided under Section 9.1 hereof shall in no event exceed, collectively, an amount equal to Eight Million Eight Hundred Thousand and No/100ths Dollars ($8,800,000) (the "Cap"); provided, however, that the Cap shall not apply to performance of covenants hereunder that are to be performed from and after Closing, or to any breach of Sections 3.2, 3.3, 3.4, 3.14 (with respect to Taxes), 3.16, 4.1 and 4.2 hereunder; provided, further, that neither the Deductible nor the Cap shall apply to any Losses arising out of, relating to or resulting from actual fraud by Sellers; provided, further, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Cap shall be reduced to $8,282,000, and in the event that no Earnout Payment is payable, the Cap shall be reduced to $7,765,000; and provided, finally, that to the extent that any Purchaser Indemnitee makes a claim pursuant to Section 9.1(a) for Losses that resulted or are alleged to have resulted from the breach of a representation or warranty of Sellers, Metal Resources or the Company, such representation, warranty or covenant shall be deemed to not be breached if on or prior to the Closing Purchaser had actual knowledge that the representation or warranty was breached in the respect alleged to have caused the Losses; provided, however, that this Section 9.4(a) shall not apply for the purposes of determining the satisfaction of the Purchaser and Parent Closing conditions set forth in Section 7 hereof; and provided, further, that for the purpose of this Section 9.4(a), any claim pursuant to Section 9.1(a) for Losses that resulted or are alleged to have resulted from the breach of a representation or warranty of Sellers, Metal Resources, or the Company, the Purchaser shall be deemed to have actual knowledge concerning the alleged breach of a representation or warranty of Sellers, Metal Resources, or the Company where any of Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxx, or Xxxxxx X. Xxxxxx shall have received specific information at least five (5) business days prior to the Closing which would cause a reasonable person to conclude, after review of the representations and warranties contained herein, that such a breach had occurred.
(b) Purchaser Indemnitees shall not be entitled to any payment under the indemnification provisions set forth in Section 9.1(c) unless and to the extent the total claims of Purchaser Indemnitees pursuant to such indemnification claim exceed an amount equal to Four Hundred Forty Thousand and No/100ths Dollars ($440,000) (the "Environmental Deductible"); provided, however, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Environmental Deductible shall be reduced to $414,000, and in the event that no Earnout Payment is payable, the Environmental Deductible shall be reduced to $388,000, at which time Purchaser Indemnitees shall be entitled to claim all damages incurred in excess of the Environmental Deductible, up to (when together with any other damages in excess of the Deductible in Section 9.4(a)(i)) the Cap. To the extent that an indemnification obligation of Sellers pursuant to one of the provisions of Section 9.1 herein overlaps with an indemnification obligation pursuant to any other provision of Section 9.1 herein or Notwithstanding any other provision of this Agreement, the Purchaser Indemnitees shall be entitled to only one of such indemnification payments.
(ci) Notwithstanding the foregoing, Purchaser agrees that prior to making a neither Buyer nor Seller nor any other Person may assert any claim for indemnification hereunder, it shall first or any Loss unless the fact that gives rise to such claim gives rise to Loss in excess of One Thousand Dollars (i$1,000.00) utilize or avail itself (or cause Metal Resources excluding litigation expenses and the Company to utilize or avail itself) attorneys fees incurred solely for purposes of all remedies, protectionsmaking a determination under this clause), and limitations provided under in that event the Consent Orderobligation of Seller or Buyer or Principal Stockholders together, and as the case may be, shall apply only to the amount of the Loss in excess of One Thousand Dollars ($1,000.00), (ii) seek to recover against and utilize all remedies available to it, Metal Resources, or neither the Company, including a final determination by court order or decision, if required, to recover against and shall exhaust Buyer nor the Seller nor any policies other Person may assert any claim for indemnification of insurance any Loss unless the aggregate amount for which Sellers reasonably believe coverage Seller or Buyer or Principal Stockholders together, as the case may exist; providedbe, however, that in would have had an indemnification obligation under this Agreement (but for the event that notwithstanding Purchaser's compliance with the foregoing provisions operation of this Section 9.4(cclause) exceeds Twenty-Five Thousand Dollars ($25,000.00), Purchaserand in that event the obligation of Seller or Buyer or Principal Stockholders together, Metal Resourcesas the case may be, or the Company shall have received written notice from any insurer under any material Company insurance policy that any claim by the Company, Metal Resources, or Purchaser for which Sellers would have responsibility hereunder has been denied, and such determination shall not have been rescinded or reversed five (5) business days prior apply only to the date which is one (1) year after the Closing Date, then the Purchaser may then seek to recover against the Sellers, prior to a final determination of responsibility under any material Company insurance policy, subject to the limitations contained herein. Except as paid to a third party, any liability or undertaking of Sellers to indemnify Purchaser under this Article 9 or any other liability of Sellers to Purchaser hereunder shall also be subject to the following additional limitations: (I) no loss, damage or expense shall be deemed to have been sustained by Purchaser to the extent of (a) any Tax savings actually realized with respect thereto or (b) any proceeds actually recovered by Purchaser, Metal Resources or the Company from insurance policies with respect thereto net of the amount of any required deductible or cothe Loss in excess of Twenty-pay, policy premium increase or other expense directly attributable to such insurance claim, and Five Thousand Dollars (II) no Purchaser Indemnitees shall be entitled to recovery to the extent that (a) the Real Property is used from and after the Closing Date in a manner that is not the same or similar to its current industrial use, (b) the groundwater at or beneath the Real Property is used by any Person for any reason, or (c) the Real Property soils are managed in a manner that is inconsistent with any limitations imposed under the Consent Order, under any Environmental Law or any other limitation imposed by any Governmental Authority.
(d) Any Seller may satisfy all or any portion of its indemnification obligation to a Purchaser Indemnitee by the tender of common shares of the Parent in full or partial satisfaction thereof, and the indemnification obligation of such Seller for any Loss with respect thereto shall be reduced by the Deemed Value (as hereafter defined) of each common share of the Parent so applied in satisfaction of such indemnification obligation, multiplied by the number of such common shares tendered by the Seller for such purpose. For purposes hereof, "Deemed Value" shall be, with respect to a common share of Parent, the greater of (i) such Seller's purchase price of such common share as set forth on the Seller's trade confirmation or brokerage statement (or similar evidence reflecting the purchase price for such securities$25,000.00), and (iiiii) the closing price of such common share on the Nasdaq National Market or any recognized public stock exchange or over the counter market, on which such common share is then listed or quoted, in each case as of the day immediately preceding the date of final determination of the indemnification obligations hereunder. For purposes hereof, the "date of final determination" shall be: (A) the date on which the judgment is rendered, or (B) the date on which a settlement is paid, if no judgment shall have been rendered. In the event a Seller satisfies an indemnification obligation hereunder by tendering Parent common shares and such Seller holds Parent common shares with different purchases prices, such Seller may in its sole discretion determine which Parent common shares to tender and the order in which such common shares are tendered. The foregoing provision shall apply, mutatis mutandis, to the common shares of the Parent or any successor entity or security thereto.
(e) In no event shall a party be liable hereunder the aggregate amount paid by Seller to Buyer and any other Person or by Buyer and the Principal Stockholders to the Seller and any other Person for incidental, consequential, special, punitive or exemplary damages.
(f) Except as specified above, the right to indemnification, payment indemnification of Losses exceed Six Hundred Thousand Dollars ($600,000.00). The dollar thresholds set forth in this subsection have been negotiated for the special purpose of Purchaser Indemnitees the provisions to which they relate and are not to be taken as evidence of the level of materiality for purpose of any other provisions of this Agreement or for any statutory or any other remedies based on any representation, warranty, covenant or obligation law that may be applicable to the transactions contemplated by this Agreement under which a level of Sellers, Metal Resources, and/or the Company materiality might be an issue. The limitations contained in or made the Section 15(f) shall not apply to any indemnification obligation arising pursuant to this Agreement shall not be affected by (iSection 15(a)(i)(B), 15(a)(ii) any investigation conducted with respect to, or any knowledge acquired (or capable or being acquired) at any time, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, or obligation, or (ii) the waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification based on such representations, warranties, covenants, and obligations15(b)(ii).
Appears in 1 contract
Limitations of Indemnification. The indemnification (a) Notwithstanding the provisions of Purchaser Indemnitees by Sellers under Section 9.1 hereof shall be limited as follows:
6.2(a), (i) Purchaser Indemnitees the Indemnifying Parties shall not be entitled to any payment liable for Losses under the indemnification provisions set forth in Section 9.1(a) or (b6.2(a)(i) unless and to the extent the total claims aggregate amount of Purchaser Indemnitees pursuant to such indemnification claim exceed an amount equal to Four Hundred Forty Thousand and No/100ths Dollars ($440,000) (the "Deductible") (at which time Purchaser Indemnitees shall be entitled to claim all damages incurred in excess of the Deductible, up to the maximum set forth in clause (a)(ii) below); provided that the Deductible shall not apply to, and Purchaser Indemnitees shall be fully compensated for, (x) any breach of Sections 3.2, 3.3, 3.4, 3.14 (Losses with respect to Taxesall such misrepresentations or breaches of warranty exceeds $50,000 (the “Indemnification Deductible”), 3.16, 4.1 and 4.2 and (y) any failure of performance of any covenant of Sellers set forth in this Agreement that is to be performed on or after the Closing and provided, further, that in the which event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Deductible all such Losses exceeding $25,000 shall be reduced subject to $414,000, and in the event that no Earnout Payment is payable the Deductible shall be reduced to $388,000; indemnification and (ii) Sellers' the Indemnifying Parties’ maximum liability, as the case may be, under Sections 6.2(a)(i), 6.2(a)(ii) and 6.2(a)(iii) shall not exceed $1,500,000 in the aggregate liability to Purchaser Indemnitees under the indemnification provided under Section 9.1 hereof shall in no event exceed, collectively, an amount equal to Eight Million Eight Hundred Thousand and No/100ths Dollars ($8,800,000) (the "Cap"“Indemnification Limit”); provided, however, that the Cap shall not apply to performance of covenants hereunder that are to be performed from and after Closing, or to any breach of Sections 3.2, 3.3, 3.4, 3.14 (with respect to Taxes), 3.16, 4.1 and 4.2 hereunder; provided, further, that neither the Indemnification Deductible nor the Cap Indemnification Limit shall apply to any Losses arising out of, relating to or resulting from actual fraud incurred by Sellers; provided, further, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Cap shall be reduced to $8,282,000, Indemnified Parties and in the event that no Earnout Payment is payable, the Cap shall be reduced to $7,765,000; and provided, finally, that to the extent that any Purchaser Indemnitee makes a claim asserted pursuant to Section 9.1(a6.2(a)(iv) through (ix).
(b) Notwithstanding the provisions of Section 6.3(a), (i) the Buyer shall not be liable for Losses that resulted under Section 6.3(a)(i) unless the aggregate amount of Losses with respect to all such misrepresentations or are alleged to have resulted from breaches of warranty exceeds the breach of a representation or warranty of SellersIndemnification Deductible, Metal Resources or the Company, in which event all such representation, warranty or covenant Losses exceeding $25,000 shall be deemed subject to indemnification and (ii) the Buyer’s maximum liability, as the case may be, under Sections 6.3(a)(i) and 6.3(a)(ii) shall not be breached if on or prior to exceed the Closing Purchaser had actual knowledge that the representation or warranty was breached in the respect alleged to have caused the LossesIndemnification Limit; provided, however, that this Section 9.4(a) neither the Indemnification Deductible nor the Indemnification Limit shall not apply for to any Losses incurred by the purposes of determining the satisfaction of the Purchaser Seller Indemnified Parties and Parent Closing conditions set forth in Section 7 hereof; and provided, further, that for the purpose of this Section 9.4(a), any claim asserted pursuant to Section 9.1(a6.3(a)(iii) for Losses that resulted or are alleged to have resulted from the breach of a representation or warranty of Sellers, Metal Resources, or the Company, the Purchaser shall be deemed to have actual knowledge concerning the alleged breach of a representation or warranty of Sellers, Metal Resources, or the Company where any of Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxx, or Xxxxxx X. Xxxxxx shall have received specific information at least five (5) business days prior to the Closing which would cause a reasonable person to conclude, after review of the representations and warranties contained herein, that such a breach had occurred.
(b) Purchaser Indemnitees shall not be entitled to any payment under the indemnification provisions set forth in Section 9.1(c) unless and to the extent the total claims of Purchaser Indemnitees pursuant to such indemnification claim exceed an amount equal to Four Hundred Forty Thousand and No/100ths Dollars ($440,000) (the "Environmental Deductible"); provided, however, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Environmental Deductible shall be reduced to $414,000, and in the event that no Earnout Payment is payable, the Environmental Deductible shall be reduced to $388,000, at which time Purchaser Indemnitees shall be entitled to claim all damages incurred in excess of the Environmental Deductible, up to (when together with any other damages in excess of the Deductible in Section 9.4(a)(i)) the Cap. To the extent that an indemnification obligation of Sellers pursuant to one of the provisions of Section 9.1 herein overlaps with an indemnification obligation pursuant to any other provision of Section 9.1 herein or any other provision of this Agreement, the Purchaser Indemnitees shall be entitled to only one of such indemnification payments.
(c) Notwithstanding the foregoing, Purchaser agrees that prior to making a claim for indemnification hereunder, it shall first (i) utilize or avail itself (or cause Metal Resources and the Company to utilize or avail itself) of all remedies, protections, and limitations provided under the Consent Order, and (ii) seek to recover against and utilize all remedies available to it, Metal Resources, or the Company, including a final determination by court order or decision, if required, to recover against and shall exhaust any policies of insurance for which Sellers reasonably believe coverage may exist; provided, however, that in the event that notwithstanding Purchaser's compliance with the foregoing provisions of this Section 9.4(civ), Purchaser, Metal Resources, or the Company shall have received written notice from any insurer under any material Company insurance policy that any claim by the Company, Metal Resources, or Purchaser for which Sellers would have responsibility hereunder has been denied, and such determination shall not have been rescinded or reversed five (5) business days prior to the date which is one (1) year after the Closing Date, then the Purchaser may then seek to recover against the Sellers, prior to a final determination of responsibility under any material Company insurance policy, subject to the limitations contained herein. Except as paid to a third party, any liability or undertaking of Sellers to indemnify Purchaser under this Article 9 or any other liability of Sellers to Purchaser hereunder shall also be subject to the following additional limitations: (I) no loss, damage or expense shall be deemed to have been sustained by Purchaser to the extent of (a) any Tax savings actually realized with respect thereto or (b) any proceeds actually recovered by Purchaser, Metal Resources or the Company from insurance policies with respect thereto net of the amount of any required deductible or co-pay, policy premium increase or other expense directly attributable to such insurance claim, and (II) no Purchaser Indemnitees shall be entitled to recovery to the extent that (a) the Real Property is used from and after the Closing Date in a manner that is not the same or similar to its current industrial use, (b) the groundwater at or beneath the Real Property is used by any Person for any reason, or (c) the Real Property soils are managed in a manner that is inconsistent with any limitations imposed under the Consent Order, under any Environmental Law or any other limitation imposed by any Governmental Authority.
(d) Any Seller may satisfy all or any portion of its indemnification obligation to a Purchaser Indemnitee by the tender of common shares of the Parent in full or partial satisfaction thereof, and the indemnification obligation of such Seller for any Loss with respect thereto shall be reduced by the Deemed Value (as hereafter defined) of each common share of the Parent so applied in satisfaction of such indemnification obligation, multiplied by the number of such common shares tendered by the Seller for such purpose. For purposes hereof, "Deemed Value" shall be, with respect to a common share of Parent, the greater of (i) such Seller's purchase price of such common share as set forth on the Seller's trade confirmation or brokerage statement (or similar evidence reflecting the purchase price for such securities), and (ii) the closing price of such common share on the Nasdaq National Market or any recognized public stock exchange or over the counter market, on which such common share is then listed or quoted, in each case as of the day immediately preceding the date of final determination of the indemnification obligations hereunder. For purposes hereof, the "date of final determination" shall be: (A) the date on which the judgment is rendered, or (B) the date on which a settlement is paid, if no judgment shall have been rendered. In the event a Seller satisfies an indemnification obligation hereunder by tendering Parent common shares and such Seller holds Parent common shares with different purchases prices, such Seller may in its sole discretion determine which Parent common shares to tender and the order in which such common shares are tendered. The foregoing provision shall apply, mutatis mutandis, to the common shares of the Parent or any successor entity or security thereto.
(e) In no event shall a party be liable hereunder for incidental, consequential, special, punitive or exemplary damages.
(f) Except as specified above, the right to indemnification, payment of Losses of Purchaser Indemnitees or for other remedies based on any representation, warranty, covenant or obligation of Sellers, Metal Resources, and/or the Company contained in or made pursuant to this Agreement shall not be affected by (i) any investigation conducted with respect to, or any knowledge acquired (or capable or being acquired) at any time, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, or obligation, or (ii) the waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification based on such representations, warranties, covenants, and obligations.
Appears in 1 contract
Limitations of Indemnification. The indemnification of Purchaser following limitations shall apply with regard to the Seller's obligations to indemnify the Buyer Indemnitees by Sellers under Section 9.1 hereof shall be limited as follows:pursuant to Sections 8.2(a) and 8.2(b):
(i) Purchaser Indemnitees Except as set forth below, the Seller's Liability for (A) the matters described under Section 8.2(a) of this Agreement shall not be entitled to exceed 50% of the Purchase Price (the "Cap") paid in accordance with Section 2.2 (provided that the Seller's Liability for the losses resulting from any payment under breach of the indemnification provisions representations and warranties set forth in Section 9.1(a) or 3.1 (a), (b), (d) and (e) and Section 4.1 (a), (c), (d), (h), (k) and (o), when added to Seller's Liability for other matters described under Section 8.2(a) of this Agreement, shall not exceed 100% of the Purchase Price) and (B) the matters described in Sections 8.2(b)(vi) through 8.2(b)(ix), when added to Seller's Liability for any other matters under this Agreement, shall not exceed 100% of the Purchase Price.
(ii) Except as set forth below, the Seller and its Affiliates will have no Liability for any Adverse Consequences, unless and until the aggregate Adverse Consequences for which the Buyer Indemnitees are entitled to recover under this Agreement exceeds 1% of the extent the total claims of Purchaser Indemnitees pursuant to such indemnification claim exceed an amount equal to Four Hundred Forty Thousand and No/100ths Dollars ($440,000) Purchase Price paid in accordance with Section 2.2 (the "Deductible") (at which time Purchaser Indemnitees shall be entitled to claim all damages incurred in excess of the Deductible, up to the maximum set forth in clause (a)(ii) below); provided that the Deductible shall not apply to, and Purchaser Indemnitees shall be fully compensated for, (x) any breach of Sections 3.2, 3.3, 3.4, 3.14 (with respect to Taxes), 3.16, 4.1 and 4.2 and (y) any failure of performance of any covenant of Sellers set forth in this Agreement that is to be performed on or after the Closing and provided, further, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Deductible shall be reduced to $414,000, and in the event that no Earnout Payment is payable the Deductible shall be reduced to $388,000; and (ii) Sellers' aggregate liability to Purchaser Indemnitees under the indemnification provided under Section 9.1 hereof shall in no event exceed, collectively, an amount equal to Eight Million Eight Hundred Thousand and No/100ths Dollars ($8,800,000) (the "CapThreshold Amount"); provided, however, once such amount exceeds the Threshold Amount, the Buyer Indemnitees will be entitled to recover all amounts to which they are entitled to indemnification under this Agreement. In addition, in calculating the Threshold Amount or the Adverse Consequences under this Section, all Adverse Consequences which individually total less than $50,000 shall be excluded in their entirety and the Seller and its Affiliates shall have no Liability hereunder to the Buyer Indemnitees for such Adverse Consequences; provided that for purposes of this sentence, the Cap Adverse Consequences from any events or actions resulting from the same or substantially similar occurrences shall be aggregated. Notwithstanding anything in this Section 8.2(c)(ii) to the contrary, the limitations on the Seller's indemnification obligations set forth in the first two sentences of this Section 8.2(c)(ii) shall not apply to performance of covenants hereunder that are to be performed losses resulting from and after Closing, or to any breach of Sections 3.2, 3.3, 3.4, 3.14 (with respect to Taxes), 3.16, 4.1 and 4.2 hereunder; provided, further, that neither the Deductible nor the Cap shall apply to any Losses arising out of, relating to or resulting from actual fraud by Sellers; provided, further, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Cap shall be reduced to $8,282,000, and in the event that no Earnout Payment is payable, the Cap shall be reduced to $7,765,000; and provided, finally, that to the extent that any Purchaser Indemnitee makes a claim pursuant to Section 9.1(a) for Losses that resulted or are alleged to have resulted from the breach of a representation or warranty of Sellers, Metal Resources or the Company, such representation, warranty or covenant shall be deemed to not be breached if on or prior to the Closing Purchaser had actual knowledge that the representation or warranty was breached in the respect alleged to have caused the Losses; provided, however, that this Section 9.4(a) shall not apply for the purposes of determining the satisfaction of the Purchaser and Parent Closing conditions set forth in Section 7 hereof; and provided, further, that for the purpose of this Section 9.4(a), any claim pursuant to Section 9.1(a) for Losses that resulted or are alleged to have resulted from the breach of a representation or warranty of Sellers, Metal Resources, or the Company, the Purchaser shall be deemed to have actual knowledge concerning the alleged breach of a representation or warranty of Sellers, Metal Resources, or the Company where any of Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxx, or Xxxxxx X. Xxxxxx shall have received specific information at least five (5) business days prior to the Closing which would cause a reasonable person to conclude, after review of the representations and warranties contained herein, that such a breach had occurred.
(b) Purchaser Indemnitees shall not be entitled to any payment under the indemnification provisions set forth in Section 9.1(c3.1 (a), (b), (d), and (e) unless and Section 4.1 (a), (c), (d), (h), (k) and (o).
(iii) Any indemnification with respect to Fox River provided in this Agreement shall not apply with respect to any loss in the value of the Buyer's interest in Fox River Shares, but rather would be limited to any Adverse Consequences (other than any loss in the value of the Buyer's interest in Fox River Shares) that the Buyer Indemnitees incur, provided, however that this Section 8.2(c)(iii) shall not in any way limit any indemnification by Seller to Buyer Indemnitees with respect to the extent Throughput Agreement.
(iv) The Buyer acknowledges and agrees that, except as set forth below, the total claims indemnification provisions in this Article VIII and the termination rights in Section 10.1 shall be the exclusive remedies of Purchaser the Buyer, the Buyer Indemnitees and their Affiliates with respect to the transactions contemplated by this Agreement. The Buyer hereby waives any claim or cause of action pursuant to such indemnification claim exceed an amount equal common or statutory law or otherwise against the Seller and its Affiliates with respect to Four Hundred Forty Thousand and No/100ths Dollars ($440,000) (Adverse Consequences or obligations of any nature whatsoever that relate to this Agreement or are attributable to the "Environmental Deductible"); providedSubject Assets, howeverthe Acquired Equity Interests, that in the event that either Acquired Companies, the First Earnout Amount Acquired Assets or the Second Earnout Amount is not payable hereunderownership and operation of the Acquired Companies, Fox River or the Acquired Assets, whether arising before, on or after the Closing Date other than claims (i) pursuant to the terms of this Agreement, (ii) related to the Retained Assets and Liabilities, (iii) for fraud, intentional misrepresentation or similar cause of action and (iv) for injunctive relief.
(v) Notwithstanding the above, in no event shall the limitations set forth in Section 8.2(c)(i) and (ii) apply with respect to losses resulting from (A) fraud or willful misconduct by the Seller or its Affiliates (other than the Acquired Companies or Fox River) or (B) matters described under Section 8.2(b)(i) - (v) of this Agreement. Furthermore, in no event shall the limitation in Section 8.2(c)(ii) apply with regard to the right of the Buyer Indemnitees to recover any Adverse Consequences associated with any Non-Mining Environmental Deductible shall be reduced to $414,000Liabilities, and in such that the event that no Earnout Payment is payable, the Environmental Deductible shall be reduced to $388,000, at which time Purchaser Buyer Indemnitees shall be entitled to claim all damages incurred indemnification under Section 8.2 for such matters without regard to the Threshold Amount; provided that the Seller shall have no liability for any such Adverse Consequences in excess of the Environmental Deductible, up to (when together deductible amount under the Non-Mining Insurance Policy and with any other damages the Buyer's sole recovery of such Adverse Consequences in excess of the Deductible in Section 9.4(a)(i)) the Cap. To the extent that an indemnification obligation of Sellers pursuant deductible amount being its entitlement to one of the provisions of Section 9.1 herein overlaps with an indemnification obligation pursuant to any other provision of Section 9.1 herein or any other provision of this Agreement, the Purchaser Indemnitees shall be entitled to only one of such indemnification payments.
(c) Notwithstanding the foregoing, Purchaser agrees that prior to making a claim for indemnification hereunder, it shall first (i) utilize or avail itself (or cause Metal Resources and the Company to utilize or avail itself) of all remedies, protections, and limitations provided seek recovery under the Consent Order, and (ii) seek to recover against and utilize all remedies available to it, Metal Resources, or the Company, including a final determination by court order or decision, if required, to recover against and shall exhaust any policies of insurance for which Sellers reasonably believe coverage may exist; provided, however, that in the event that notwithstanding Purchaser's compliance with the foregoing provisions of this Section 9.4(c), Purchaser, Metal Resources, or the Company shall have received written notice from any insurer under any material Company insurance policy that any claim by the Company, Metal Resources, or Purchaser for which Sellers would have responsibility hereunder has been denied, and such determination shall not have been rescinded or reversed five (5) business days prior to the date which is one (1) year after the Closing Date, then the Purchaser may then seek to recover against the Sellers, prior to a final determination of responsibility under any material Company insurance policy, subject to the limitations contained herein. Except as paid to a third party, any liability or undertaking of Sellers to indemnify Purchaser under this Article 9 or any other liability of Sellers to Purchaser hereunder shall also be subject to the following additional limitations: (I) no loss, damage or expense shall be deemed to have been sustained by Purchaser to the extent of (a) any Tax savings actually realized with respect thereto or (b) any proceeds actually recovered by Purchaser, Metal Resources or the Company from insurance policies with respect thereto net of the amount of any required deductible or coNon-pay, policy premium increase or other expense directly attributable to such insurance claim, and (II) no Purchaser Indemnitees shall be entitled to recovery to the extent that (a) the Real Property is used from and after the Closing Date in a manner that is not the same or similar to its current industrial use, (b) the groundwater at or beneath the Real Property is used by any Person for any reason, or (c) the Real Property soils are managed in a manner that is inconsistent with any limitations imposed under the Consent Order, under any Environmental Law or any other limitation imposed by any Governmental AuthorityMining Insurance Policy.
(d) Any Seller may satisfy all or any portion of its indemnification obligation to a Purchaser Indemnitee by the tender of common shares of the Parent in full or partial satisfaction thereof, and the indemnification obligation of such Seller for any Loss with respect thereto shall be reduced by the Deemed Value (as hereafter defined) of each common share of the Parent so applied in satisfaction of such indemnification obligation, multiplied by the number of such common shares tendered by the Seller for such purpose. For purposes hereof, "Deemed Value" shall be, with respect to a common share of Parent, the greater of (i) such Seller's purchase price of such common share as set forth on the Seller's trade confirmation or brokerage statement (or similar evidence reflecting the purchase price for such securities), and (ii) the closing price of such common share on the Nasdaq National Market or any recognized public stock exchange or over the counter market, on which such common share is then listed or quoted, in each case as of the day immediately preceding the date of final determination of the indemnification obligations hereunder. For purposes hereof, the "date of final determination" shall be: (A) the date on which the judgment is rendered, or (B) the date on which a settlement is paid, if no judgment shall have been rendered. In the event a Seller satisfies an indemnification obligation hereunder by tendering Parent common shares and such Seller holds Parent common shares with different purchases prices, such Seller may in its sole discretion determine which Parent common shares to tender and the order in which such common shares are tendered. The foregoing provision shall apply, mutatis mutandis, to the common shares of the Parent or any successor entity or security thereto.
(e) In no event shall a party be liable hereunder for incidental, consequential, special, punitive or exemplary damages.
(f) Except as specified above, the right to indemnification, payment of Losses of Purchaser Indemnitees or for other remedies based on any representation, warranty, covenant or obligation of Sellers, Metal Resources, and/or the Company contained in or made pursuant to this Agreement shall not be affected by (i) any investigation conducted with respect to, or any knowledge acquired (or capable or being acquired) at any time, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, or obligation, or (ii) the waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification based on such representations, warranties, covenants, and obligations.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Alpha Natural Resources, Inc.)
Limitations of Indemnification. The indemnification of Purchaser Indemnitees by Sellers Seller under Section 9.1 hereof shall be further limited as follows:
(i) Purchaser Indemnitees shall not be entitled to any payment under the indemnification provisions set forth in Section 9.1(a) or (b) unless and to the extent the total aggregate claims of Purchaser Indemnitees pursuant to such indemnification claim provisions exceed an amount equal to Four Hundred Forty Thousand and No/100ths Dollars One Percent ($440,0001%) of the Base Cash Consideration in the aggregate (the "“Deductible"”) (at which time Purchaser Indemnitees shall only be entitled to claim all damages incurred Losses in excess of the Deductible, Deductible up to the maximum set forth in clause (a)(ii) belowCap); provided that the Deductible shall not apply to, and Purchaser Indemnitees shall be fully compensated for, (x) any breach of Sections 3.2, 3.3, 3.4, 3.14 (with respect to Taxes3.8, 3.11(a), 3.163.14, 4.1 and 3.19, 3.23, 4.1, 4.2 and 4.3 (y) any failure of performance of any covenant of Sellers set forth in this Agreement that is to be performed on or after the Closing and provided, further, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereundercollectively, the Deductible shall be reduced to $414,000, and in the event that no Earnout Payment is payable the Deductible shall be reduced to $388,000“Specified Representations”); and (ii) Sellers' Seller’s aggregate liability to Purchaser Indemnitees under the indemnification provided under Section 9.1 9.1(a) hereof or otherwise shall in no event exceed, collectively, an amount equal to Eight Million Eight Hundred Thousand Seven and No/100ths Dollars One-Half Percent ($8,800,0007.5%) of the Base Consideration (the "“Cap"”); provided, however, that the Cap shall not apply to performance any breach of covenants hereunder that are the Specified Representations or, for the avoidance of doubt, the matters subject to be performed from and after Closing, or indemnification pursuant to Section 9.1(b). In no event shall Seller’s aggregate liability to Purchaser Indemnitees with respect to any breach of Sections 3.2, 3.3, 3.4, 3.14 (with respect to Taxes), 3.16, 4.1 and 4.2 hereunder; provided, further, that neither the Deductible nor Specified Representations exceed the Cap shall apply to any Losses arising out of, relating to or resulting from actual fraud by Sellers; provided, further, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Cap shall be reduced to $8,282,000, and in the event that no Earnout Payment is payable, the Cap shall be reduced to $7,765,000; and provided, finally, that to the extent that any Purchaser Indemnitee makes a claim pursuant to Section 9.1(a) for Losses that resulted or are alleged to have resulted from the breach of a representation or warranty of Sellers, Metal Resources or the Company, such representation, warranty or covenant shall be deemed to not be breached if on or prior to the Closing Purchaser had actual knowledge that the representation or warranty was breached in the respect alleged to have caused the Losses; provided, however, that this Section 9.4(a) shall not apply for the purposes of determining the satisfaction of the Purchaser and Parent Closing conditions set forth in Section 7 hereof; and provided, further, that for the purpose of this Section 9.4(a), any claim pursuant to Section 9.1(a) for Losses that resulted or are alleged to have resulted from the breach of a representation or warranty of Sellers, Metal Resources, or the Company, the Purchaser shall be deemed to have actual knowledge concerning the alleged breach of a representation or warranty of Sellers, Metal Resources, or the Company where any of Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxx, or Xxxxxx X. Xxxxxx shall have received specific information at least five (5) business days prior to the Closing which would cause a reasonable person to conclude, after review of the representations and warranties contained herein, that such a breach had occurredBase Cash Consideration.
(b) Purchaser Indemnitees shall not be entitled to any payment under the indemnification provisions set forth in Section 9.1(c) unless and to the extent the total claims of Purchaser Indemnitees pursuant to such indemnification claim exceed an amount equal to Four Hundred Forty Thousand and No/100ths Dollars ($440,000) (the "Environmental Deductible"); provided, however, that in the event that either the First Earnout Amount or the Second Earnout Amount is not payable hereunder, the Environmental Deductible shall be reduced to $414,000, and in the event that no Earnout Payment is payable, the Environmental Deductible shall be reduced to $388,000, at which time Purchaser Indemnitees shall be entitled to claim all damages incurred in excess of the Environmental Deductible, up to (when together with any other damages in excess of the Deductible in Section 9.4(a)(i)) the Cap. To the extent that an indemnification obligation of Sellers pursuant to one of the provisions of Section 9.1 herein overlaps with an indemnification obligation pursuant to any other provision of Section 9.1 herein or any other provision of this Agreement, the Purchaser Indemnitees shall be entitled to only one of such indemnification payments.
(c) Notwithstanding the foregoing, Purchaser agrees that prior to making a claim for indemnification hereunder, it shall first (i) utilize or avail itself (or cause Metal Resources and the Company to utilize or avail itself) of all remedies, protections, and limitations provided under the Consent Order, and (ii) seek to recover against and utilize all remedies available to it, Metal Resources, or the Company, including a final determination by court order or decision, if required, to recover against and shall exhaust any policies of insurance for which Sellers reasonably believe coverage may exist; provided, however, that in the event that notwithstanding Purchaser's compliance with the foregoing provisions of this Section 9.4(c), Purchaser, Metal Resources, or the Company shall have received written notice from any insurer under any material Company insurance policy that any claim by the Company, Metal Resources, or Purchaser for which Sellers would have responsibility hereunder has been denied, and such determination shall not have been rescinded or reversed five (5) business days prior to the date which is one (1) year after the Closing Date, then the Purchaser may then seek to recover against the Sellers, prior to a final determination of responsibility under any material Company insurance policy, subject to the limitations contained herein. Except as paid to a third party, any liability or undertaking of Sellers Seller to indemnify Purchaser under this Article 9 or any other liability of Sellers pursuant to Purchaser hereunder Section 9.1 shall also be subject to the following additional limitations: (I) no loss, damage or expense Losses shall be deemed to have been sustained by Purchaser to the extent of any proceeds actually recovered by Purchaser or either Company from (ax) any Tax savings actually realized third party with respect thereto or (by) any proceeds actually recovered by Purchaser, Metal Resources or the Company from insurance policies with respect thereto thereto, net of the amount of any required deductible or co-pay, policy premium increase or other expense directly attributable to such insurance claim, and (II) no Purchaser Indemnitees shall be entitled to recovery to the extent that (a) the Real Property is used from and after the Closing Date in a manner that is not the same or substantially similar to its current industrial use, (b) the groundwater at or beneath the Real Property is used by any Person for any reason, or . Nothing contained in this Agreement shall limit Purchaser’s common law duty to mitigate.
(c) the Real Property soils are managed in a manner that is inconsistent with any limitations imposed under the Consent OrderIN NO EVENT SHALL A PARTY BE LIABLE HEREUNDER FOR SPECIAL, under any Environmental Law or any other limitation imposed by any Governmental AuthorityPUNITIVE OR EXEMPLARY DAMAGES (EXCEPT TO THE EXTENT OWED OR PAID TO A THIRD PARTY).
(d) Any Seller may satisfy all or any portion of its indemnification obligation to a Purchaser Indemnitee by the tender of common shares of the Parent in full or partial satisfaction thereof, and the indemnification obligation of such Seller for any Loss with respect thereto shall be reduced by the Deemed Value (as hereafter defined) of each common share of the Parent so applied in satisfaction of such indemnification obligation, multiplied by the number of such common shares tendered by the Seller for such purpose. For purposes hereof, "Deemed Value" shall be, with respect to a common share of Parent, the greater of (i) such Seller's purchase price of such common share as set forth on the Seller's trade confirmation or brokerage statement (or similar evidence reflecting the purchase price for such securities), and (ii) the closing price of such common share on the Nasdaq National Market or any recognized public stock exchange or over the counter market, on which such common share is then listed or quoted, in each case as of the day immediately preceding the date of final determination of the indemnification obligations hereunder. For purposes hereof, the "date of final determination" shall be: (A) the date on which the judgment is rendered, or (B) the date on which a settlement is paid, if no judgment shall have been rendered. In the event a Seller satisfies an indemnification obligation hereunder by tendering Parent common shares and such Seller holds Parent common shares with different purchases prices, such Seller may in its sole discretion determine which Parent common shares to tender and the order in which such common shares are tendered. The foregoing provision shall apply, mutatis mutandis, to the common shares of the Parent or any successor entity or security thereto.
(e) In no event shall a party be liable hereunder for incidental, consequential, special, punitive or exemplary damages.
(f) Except as specified above, the right to indemnification, payment of Losses of Purchaser Indemnitees or for other remedies based on any representation, warranty, covenant or obligation of Sellers, Metal Resources, and/or the Company contained in or made pursuant to this Agreement shall not be affected by (i) any investigation conducted with respect to, or any knowledge acquired (or capable or being acquired) at any time, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, or obligation, or (ii) the waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification based on such representations, warranties, covenants, and obligations.
Appears in 1 contract
