Limitations on Indemnification; Exclusive Remedy. (a) No claim for indemnification under Section 8.1(a) or Section 8.2(a) for breach of any representation or warranty shall be valid unless made within the applicable Survival Period as defined in Section 8.6. (b) No party shall be obligated to indemnify any other party or parties under Section 8.1(a) or Section 8.2(a) unless the Claimant's aggregate amount of Losses as to which a right of indemnification is provided under Section 8.1(a) or Section 8.2(a) shall exceed $2,500,000, in which event $1,250,000 plus all of such Losses above $2,500,000 shall be indemnifiable; provided that Purchaser's right to recover under Section 8.1(a) for breach of any representation or warranty contained in Section 4.1, 4.2 or 4.3 shall not be subject to such limitation. (c) In no event shall the aggregate liability (i) of Lee xxxsuant to Section 8.1(a), on the one hand, or of the Purchaser pursuant to Section 8.2(a), on the other hand, exceed $75,000,000 (provided that Lee'x xxxbility for breach of any representation or warranty contained in Sections 4.1, 4.2 or 4.3 shall not be subject to such limitation); or (ii) of Lee xxxsuant to Section 8.1(a) for breach of any representation or warranty contained in Section 4.1, 4.2 or 4.3 and pursuant to Section 8.1(b), (c) and (d), on the one hand, or of the Purchaser pursuant to Section 8.2(b), (c) or (d), on the other hand, exceed the sum of the Asset Purchase Price plus the Stock Purchase Price. (d) Any Loss relating to any of the Acquired Companies for which indemnification is provided under this Agreement shall be (i) increased by any Tax Cost and (ii) reduced by any Tax Benefit which the Claimant incurs or receives prior to or during the Taxable Period in which the corresponding indemnification payment is received by the Claimant. In addition, if indemnification under this Agreement results in an increase in the basis of any asset (other than stock) or increase in the amount of any net operating loss of the Claimant, the Claimant shall pay the Indemnitor, within ninety (90) days after the end of each Tax Period, the (e) If any remediation or other work or action is required in order to correct or cure a violation of any Environmental Law or of any demand (a "Violation"), Purchaser shall promptly notify Lee-XXXC after acquiring knowledge of such requirement and shall present a remediation plan to Lee-XXXC at least twenty (20) days prior to performing such remediation. The remediation plan shall be designed to minimize the remediation cost to the extent feasible while providing for a reasonable and customary level of clean-up in compliance with applicable Law. Lee xxxll have ten (10) days to review and approve the remediation plan, the approval of which cannot be unreasonably withheld. (f) If Purchaser acquires knowledge prior to Closing that any representation, warranty, covenant or agreement of Lee-XXXC contained in this Agreement or any of the Schedules attached hereto has been materially breached, is materially false or requires material modification or amendment to be correct, Purchaser shall notify Lee-XXXC within ten (10) days after acquiring such knowledge. Lee-XXXC shall have up to thirty (30) days to take corrective action to cure such breach. If Lee-XXXC cannot reasonably cure such breach within thirty (30) days, despite its good faith efforts, Lee-XXXC shall have such additional time as may be reasonably necessary to effectuate a cure if such breach is capable of being cured, but in no event more than an additional sixty (60) days. If Lee-XXXC fails to cure such a breach, and the breach is material to the assets, business, operations, results of operations or financial condition of any Lee-XXXC Station or Acquired Company Station, Purchaser may close the transactions contemplated by this Agreement and pursue its rights to indemnification under Article 8 or terminate this Agreement under Article 9.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Emmis Communications Corp)
Limitations on Indemnification; Exclusive Remedy. (a) No claim for indemnification under Section 8.1(a) or Section 8.2(a) for breach of any representation or warranty shall be valid unless made within the applicable Survival Period as defined in Section 8.6.
(b) No party shall be obligated to indemnify any other party or parties under Section 8.1(a) or Section 8.2(a) unless the Claimant's aggregate amount of Losses as to which a right of indemnification is provided under Section 8.1(a) or Section 8.2(a) shall exceed $2,500,0003,000,000, in which event $1,250,000 2,000,000 plus all of such Losses above $2,500,000 3,000,000 shall be indemnifiable; provided that the Purchaser's right to recover under Section 8.1(a) for breach of any representation or warranty contained in Section 4.1, 4.2 or 4.3 shall not be subject to such limitation.
(c) In no event shall the aggregate liability (i) of Lee xxxsuant to Section 8.1(a), on the one hand, or of the Purchaser pursuant to Section 8.2(a), on the other hand, exceed $75,000,000 (provided that Lee'x xxxbility for breach of any representation or warranty contained in Sections 4.1, 4.2 or 4.3 shall not be subject to such limitation); .
(c) No individual breach of any such representation or (ii) warranty shall be deemed to have occurred unless the actual Loss incurred as a result thereof is in excess of Lee xxxsuant $3,000. In no event shall the aggregate liability of the HPI Indemnitors pursuant to Section 8.1(a) exceed $50,000,000, which amount shall be reduced on the date that is six (6) days after the six-month anniversary of the Closing Date to $35,000,000 and reduced on the date that is the eighteen-month anniversary of the Closing Date to $15,000,000 except that the reduction of the aggregate liability limit on the six-month and eighteen-month anniversaries shall not otherwise limit the Purchaser's entitlement to indemnification for any Loss for which a proper notice of claim for indemnification under Section 8.1(a) was given prior to the six-month or eighteen-month anniversary, as applicable, but which remained unresolved at the time the liability limit was reduced (provided that the HPI Indemnitors' liability for breach of any representation or warranty contained in Section Sections 4.1, 4.2 or 4.3 and 4.2, 4.3, 4.5(b), 4.11(b), 4.16 or, subject to Section 4.19(c), 4.19 shall not be subject to such limitation). In no event shall the aggregate liability of the HPI Indemnitors pursuant to Section 8.1(b), (c) this Agreement exceed the Stock Purchase Price less the Cash Amount and (d), on the one hand, or aggregate liability of the Purchaser pursuant to Section 8.2(b), (c) or (d), on the other hand, this Agreement exceed the sum of the Asset Purchase Price plus the Stock Purchase PricePrice less the Cash Amount.
(d) Any Loss relating The indemnity payment hereunder with respect to any Loss shall be calculated on an "After-Tax Basis", which shall mean an amount which is sufficient to compensate the Claimant for the event giving rise to such Loss (the "Indemnified Event"), determined after taking into account (1) all increases in federal, state, local or other Taxes (including estimated Taxes) payable by the Claimant as a result of the Acquired Companies receipt of the indemnity payment (as a result of the indemnity payment being included in income but not as a result of a reduction of tax basis); provided, however, that for which indemnification is provided under this Agreement shall be (i) increased by any all federal and state Income Tax Cost purposes, the Purchaser and (ii) reduced by any Tax Benefit which the Claimant incurs or receives prior HPI Stockholders agree to or during the Taxable Period in which the corresponding report each indemnification payment is received made by or to either of them in respect of a Loss as an adjustment to the Claimant. In additionStock Purchase Price, if and the parties hereto agree to report each indemnification under this Agreement results payment to the Purchaser by HEC in an increase in the basis respect of any asset (other than stock) or increase a Loss as a decrease in the amount realized by the HPI Stockholders in the HPI Redemption, unless there is a Final Determination to the contrary affecting the Claimant (it being understood that if any reporting position is later disallowed as a result of a Final Determination, the Indemnitor shall indemnify the Claimant for the effects of such disallowance, and it being further understood that the obligations under this parenthetical clause shall remain in effect without limitation as to time), (2) to the extent not previously taken into account in computing the amount of such Loss, all increases in federal, state, local and other Taxes (including estimated Taxes) payable by the Claimant for all affected taxable years or periods ending on or before the Closing Date and, with respect to any net operating loss Straddle Period, the portion of the ClaimantStraddle Period ending on and including the Closing Date as a result of the Indemnified Event, and (3) to the extent not previously taken into account in computing the amount of the such Loss, all reductions in federal, state, local and foreign Taxes (including estimated Taxes) realized by the Claimant for all affected taxable years and periods as a result of the Indemnified Event. All calculations shall pay be made at the Indemnitor, within ninety time of the relevant indemnification payment using reasonable assumptions (90as agreed to by the indemnifying and indemnified party) days after and present value concepts (using a discount rate equal to the end applicable federal rate in effect at the time of each Tax Period, thethe Indemnified Event (based on the Federal mid-term rate) using semi-annual compounding plus four (4) percentage points).
(e) With respect to any claims for indemnification arising from or related to Environmental Law or Hazardous Materials Activity, the HPI Indemnitors shall have no liability under this Article 8 if any such claim is triggered by an environmental investigation undertaken by the Purchaser (other than an investigation undertaken in connection with a financing or sale of a property), or any notification by the Purchaser (or its affiliates) to any Governmental Authority, unless such investigation or notification is required by Environmental Law. If any remediation or other work or action Remedial Action is required by Environmental Law in order to correct or cure a violation of any Environmental Law or of any demand (a "Violation")third party demand, the Purchaser shall promptly notify Lee-XXXC the HPI Stockholders Representative after acquiring knowledge of such requirement and shall present a remediation plan to Lee-XXXC the HPI Stockholders Representative at least twenty ninety (2090) days prior to performing such remediationRemedial Action (unless a Governmental Authority requires that the Purchaser or an Acquired Company take such action in a shorter period). The remediation plan shall be designed to minimize the remediation cost to the extent feasible while providing for a reasonable and customary level of clean-up in compliance with applicable Environmental Law. Lee xxxll Unless the Purchaser is ordered to perform such remediation or other work by any Governmental Authority, the HPI Stockholders Representative shall have ten thirty (1030) days to review and approve the remediation plan, the approval of which cannot be unreasonably withheldwithheld or delayed.
(f) If the Purchaser acquires knowledge Knowledge prior to Closing that any representation, warranty, covenant or agreement of Lee-XXXC the HPI Stockholders, HPI or HEC contained in this Agreement or any of the Schedules attached hereto has been materially breached, is materially false or requires material modification or amendment to be correct, the Purchaser shall notify Lee-XXXC in writing the HPI Stockholders, HPI or HEC (as applicable) as soon as practicable, but in any event within ten five (105) days Business Days after acquiring such knowledgeKnowledge. Lee-XXXC Subject to Section 6.11, if the Purchaser acquires Knowledge prior to Closing that any representation, warranty, covenant or agreement of the HPI Stockholders, HPI or HEC contained in this Agreement or any of the Schedules attached hereto has been breached, is false or requires modification or amendment to be correct and the Purchaser has failed to notify the HPI Stockholders of such Knowledge prior to the Closing, then the Purchaser shall have up no right or remedy after the Closing with respect to thirty (30) days such inaccuracy or breach and shall be deemed to take corrective action to cure such breach. If Lee-XXXC cannot reasonably cure such breach within thirty (30) days, despite its good faith efforts, Lee-XXXC shall have such additional time as may be reasonably necessary to effectuate a cure if such breach is capable of being cured, but in no event more than an additional sixty (60) days. If Lee-XXXC fails to cure such a breach, and the breach is material to the assets, business, operations, results of operations or financial condition of any Lee-XXXC Station or Acquired Company Station, Purchaser may close the transactions contemplated by this Agreement and pursue waived its rights to indemnification in respect thereof and any Loss in respect thereof shall be disregarded for purposes of the threshold and deductible contained in Section 8.5(b).
(g) With respect to any indemnification pursuant to Section 8.1(a), indemnification by the HPI Indemnifying Stockholders shall be several in the proportions set forth in Schedule 8.5(g) and not joint. The Purchaser acknowledges and agrees that the exclusive source of any amounts determined to be payable to it for an inaccuracy of a representation or breach of a warranty pursuant to Section 8.1(a) hereof (other than liability for breach of any representation or warranty contained in Sections 4.1, 4.2, 4.3, 4.5(b), 4.11(b), 4.16 and, subject to Section 4.19(c), 4.19, which shall not be subject to such limitation) shall be the Escrow Amount, pursuant to the terms of the Escrow Agreement. With respect to any indemnification pursuant to Section 8.1(b) or (c), the Purchaser shall first seek indemnification from HEC. To the extent HEC fails to satisfy its indemnification obligations in respect thereof, the HPI Indemnifying Stockholders shall severally and not jointly indemnify for Losses incurred pursuant to Sections 8.1(b) and (c) in the proportions set forth in Schedule 8.5(g).
(h) The Indemnitor shall not be liable under Article 8 for any (1) Loss relating to any matter to the extent that there is included in the calculation of Closing Working Capital of HPI a specific liability or terminate reserve relating to such matter, but only to the extent of such reserve, (2) consequential or punitive Loss (other than a consequential or punitive Loss payable in connection with a third Person Action), or (3) Loss for lost profits (other than lost profits payable in connection with a third Person Action).
(i) The parties hereto acknowledge and agree that, in the case of the breach of any representation or warranty, covenant or agreement with respect to any asset, obligation, liability or other condition of Sioux City, the Loss for which the HPI Indemnitors shall be required to indemnify pursuant to Article 8, subject to all of the other limitations and conditions contained in this Agreement Article 8, shall not exceed 50% (i.e., the ownership percentage of HPI, direct and indirect, in Sioux City) of the Loss incurred by Sioux City by reason of such breach.
(j) The Purchaser acknowledges and agrees that, except as provided in Section 6.11, no item disclosed to the Purchaser in any closing certificate delivered to the Purchaser or otherwise in respect of Section 7.1(a) shall be the subject of indemnification under this Article 98 and any Loss incurred in respect thereof shall be disregarded for purposes of the threshold and deductible contained in Section 8.5(b).
Appears in 1 contract
Limitations on Indemnification; Exclusive Remedy. (a) No claim for indemnification may be made under Section 8.1(aSections 11.2(a) or Section 8.2(a11.3(a) for breach of any representation (or warranty shall be valid under Sections 11.2 (o) or 11.3(e) to the extent such claim relates to a claim under Sections 11.2(a) or 11.3(a)) unless made within the period of survival of the applicable Survival Period representation or warranty as defined described in Section 8.611.1. No claim for indemnification may be made under Sections 11.2(b), 11.2(c) or 11.3(b) (or under Sections 11.2(o) or 11.3(e) to the extent such claim relates to a claim under Sections 11.2(b), 11.2(c) or 11.3(b)) after the one year anniversary of the Closing Date, excluding claims relating to covenants to be performed after the Closing. No claim for indemnification may be made under Section 11.2(f) (or under Section 11.2(o) to the extent such claim relates to a claim under Section 11.2(f)) after the twenty-one (21) month anniversary of the Closing Date. Claims for indemnification under the other provisions of Section 11.2 and 11.3 may be brought at any time after the Closing.
(b) No party Seller shall be obligated to indemnify any other party or parties Buyer under Section 8.1(aSections 11.2(a)-(c) or Section 8.2(a) unless only to the Claimant's extent that the aggregate amount of any Losses suffered or incurred by Buyer, as to which a right of Buyer would be entitled to indemnification is provided under Section 8.1(a) or Section 8.2(a) thereunder, shall exceed $2,500,0001,000,000, in which event $1,250,000 plus all of any such Losses above $2,500,000 amounts shall be indemnifiable; provided that Purchaser's right payable to recover under Section 8.1(a) for breach of any representation or warranty contained in Section 4.1, 4.2 or 4.3 shall not be subject to the extent such limitationamounts exceed $1,000,000.
(c) In no event shall the Seller's aggregate liability (iunder Sections 11.2(a)-(c) of Lee xxxsuant to Section 8.1(a), on the one hand, or of the Purchaser pursuant to Section 8.2(a), on the other hand, exceed $75,000,000 (provided that Lee'x xxxbility for breach of any representation or warranty contained in Sections 4.1, 4.2 or 4.3 shall not be subject to such limitation); or (ii) of Lee xxxsuant to Section 8.1(a) for breach of any representation or warranty contained in Section 4.1, 4.2 or 4.3 and pursuant to Section 8.1(b), (c) and (d), on the one hand, or of the Purchaser pursuant to Section 8.2(b), (c) or (d), on the other hand, exceed the sum of the Asset Purchase Price plus the Stock Purchase Price8,000,000.
(d) Any Loss relating Losses but shall be entitled to make a claim against the other party pursuant to this Article 11 in order to preserve its rights under this Article 11.
(1) The indemnification provided in Sections 11.2(e) and 11.2(f) is personal to Buyer and its Affiliates. Following the Closing, if Buyer shall (A) assign its indemnification rights under Sections 11.2(e) or 11.2(f) to any Person (other than to an Affiliate of Buyer), (B) if the Company sells, leases, or disposes of all or a substantial portion of its ownership interest in the facility or real property assets at Pine Forge Pennsylvania to any Person (other than an Affiliate of Buyer), or (C) violates any of the Acquired Companies for which provisions of Section 6.20(d)(1) hereof, the indemnification is provided under this Agreement in Sections 11.2(e) and 11.2(f) shall immediately terminate and be (i) increased of no further force and effect except as to claims thereunder that have already been made by any Tax Cost and (ii) reduced by any Tax Benefit which the Claimant incurs or receives Buyer prior to or during the Taxable Period such time, in respect of which the corresponding Buyer's indemnification payment is received by the Claimant. In addition, if indemnification under rights shall survive as in effect before giving effect to this Agreement results in an increase in the basis of any asset (other than stock) or increase in the amount of any net operating loss of the Claimant, the Claimant shall pay the Indemnitor, within ninety (90) days after the end of each Tax Period, theSection 11.6(e).
(e2) If any remediation or other work or action is required in order Seller to correct or cure a violation of any Environmental Law or of any demand (a "Violation"), Purchaser shall promptly notify Lee-XXXC after acquiring knowledge then assume control of such requirement matter if time and shall present a remediation plan circumstances reasonably permit) settle such matter and recover from Seller all amounts to Lee-XXXC at least twenty (20) days prior to performing such remediation. The remediation plan shall be designed to minimize the remediation cost to the extent feasible while providing for a reasonable and customary level of clean-up in compliance with applicable Law. Lee xxxll have ten (10) days to review and approve the remediation plan, the approval of which cannot be unreasonably withheldit is entitled under Article 11.
(f) If Purchaser acquires knowledge prior to The parties hereto agree that after Closing that any representation, warranty, covenant or agreement the sole remedies of Lee-XXXC contained the parties are those set forth in this Agreement or any Article 11 (except with respect to covenants to be performed after the Closing, including but not limited to Section 6.20(c) and 11.5, in respect of a breach of which all remedies of the Schedules attached hereto has been materially breachedparties shall be available, is materially false whether at law, equity or requires material modification or amendment to be correct, Purchaser shall notify Lee-XXXC within ten (10) days after acquiring such knowledge. Lee-XXXC shall have up to thirty (30) days to take corrective action to cure such breach. If Lee-XXXC cannot reasonably cure such breach within thirty (30) days, despite its good faith efforts, Lee-XXXC shall have such additional time as may be reasonably necessary to effectuate a cure if such breach is capable of being cured, but in no event more than an additional sixty (60) days. If Lee-XXXC fails to cure such a breachotherwise, and except for the breach is material to the assetsEscrow Agreement, business, operations, results of operations or financial condition of any Lee-XXXC Station or Acquired Company Station, Purchaser may close the transactions contemplated by this Agreement and pursue which shall be governed in accordance with its rights to indemnification under Article 8 or terminate this Agreement under Article 9terms).
Appears in 1 contract
Samples: Stock Purchase Agreement (Spectrasite Holdings Inc)
Limitations on Indemnification; Exclusive Remedy. (a) No claim for indemnification under Section 8.1(a) or Section 8.2(a) for breach of any representation or warranty shall be valid unless made within the applicable Survival Period as defined in Section 8.6.
(b) No party shall be obligated to indemnify any other party or parties under Section 8.1(a) or Section 8.2(a) unless the Claimant's aggregate amount of Losses as to which a right of indemnification is provided under Section 8.1(a) or Section 8.2(a) shall exceed $2,500,000, in which event $1,250,000 plus all of such Losses above $2,500,000 shall be indemnifiable; provided that Purchaser's right to recover under Section 8.1(a) for breach of any representation or warranty contained in Section 4.1, 4.2 or 4.3 shall not be subject to such limitation.
(c) In no event shall the aggregate liability (i) of Lee xxxsuant Xxx pursuant to Section 8.1(a), on the one hand, or of the Purchaser pursuant to Section 8.2(a), on the other hand, exceed $75,000,000 (provided that Lee'x xxxbility Xxx'x liability for breach of any representation or warranty contained in Sections 4.1, 4.2 or 4.3 shall not be subject to such limitation); or (ii) of Lee xxxsuant Xxx pursuant to Section 8.1(a) for breach of any representation or warranty contained in Section 4.1, 4.2 or 4.3 and pursuant to Section 8.1(b), (c) and (d), on the one hand, or of the Purchaser pursuant to Section 8.2(b), (c) or (d), on the other hand, exceed the sum of the Asset Purchase Price plus the Stock Purchase Price.
(d) Any Loss relating to any of the Acquired Companies for which indemnification is provided under this Agreement shall be (i) increased by any Tax Cost and (ii) reduced by any Tax Benefit which the Claimant incurs or receives prior to or during the Taxable Period in which the corresponding indemnification payment is received by the Claimant. In addition, if indemnification under this Agreement results in an increase in the basis of any asset (other than stock) or increase in the amount of any net operating loss of the Claimant, the Claimant shall pay the Indemnitor, within ninety (90) days after the end of each Tax Period, thethe Tax Benefit, if any, realized for such Tax Period by the Claimant that is attributable to such increase in basis or net operating loss. In the event any indemnification paid by an Indemnitor is reduced by a Tax Benefit, or the Claimant pays the Indemnitor the amount of any Tax Benefit, and there is a subsequent Final Determination denying the Tax Benefit, the Indemnitor shall promptly reimburse the Claimant for the amount of the Tax Benefit that was denied. In the event any indemnification paid by an Indemnitor is increased by a Tax Cost, or the Claimant receives payment for any Tax Cost, and there is a subsequent Final Determination reducing the Tax Cost, the Indemnitor shall promptly be reimbursed by the Claimant for the amount of the Tax Cost that was reduced. To the extent permitted by law, any indemnity payments made under this Agreement relating to any of the Acquired Companies shall be treated as an adjustment to the Stock Purchase Price.
(e) If any remediation or other work or action is required in order to correct or cure a violation of any Environmental Law or of any demand (a "Violation"), Purchaser shall promptly notify LeeXxx-XXXC NMBC after acquiring knowledge of such requirement and shall present a remediation plan to LeeXxx-XXXC NMBC at least twenty (20) days prior to performing such remediation. The remediation plan shall be designed to minimize the remediation cost to the extent feasible while providing for a reasonable and customary level of clean-up in compliance with applicable Law. Lee xxxll Xxx shall have ten (10) days to review and approve the remediation plan, the approval of which cannot be unreasonably withheld.
(f) If Purchaser acquires knowledge prior to Closing that any representation, warranty, covenant or agreement of LeeXxx-XXXC NMBC contained in this Agreement or any of the Schedules attached hereto has been materially breached, is materially false or requires material modification or amendment to be correct, Purchaser shall notify LeeXxx-XXXC NMBC within ten (10) days after acquiring such knowledge. LeeXxx-XXXC NMBC shall have up to thirty (30) days to take corrective action to cure such breach. If LeeXxx-XXXC NMBC cannot reasonably cure such breach within thirty (30) days, despite its good faith efforts, LeeXxx-XXXC NMBC shall have such additional time as may be reasonably necessary to effectuate a cure if such breach is capable of being cured, but in no event more than an additional sixty (60) days. If LeeXxx-XXXC NMBC fails to cure such a breach, and the breach is material to the assets, business, operations, results of operations or financial condition of any LeeXxx-XXXC NMBC Station or Acquired Company Station, Purchaser may close the transactions contemplated by this Agreement and pursue its rights to indemnification under Article 8 or terminate this Agreement under Article 9.
Appears in 1 contract
