Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations: (a) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b) and Section 10.2(c) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), with respect to such Losses; (b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i) or Section 10.2(b)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers) or (y) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers); (c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company); (d) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.15) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority); (e) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company); (f) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value; (g) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
Appears in 3 contracts
Samples: Contribution Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.), Contribution Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.), Contribution Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.)
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(c10.2(e) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(b)(ii10.2(c)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (xw) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers) or ), (yx) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers);, (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i10.2(d)(i) or Section 10.2(c)(ii10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) ), Section 10.2(a)(iv)(A), or Section 10.2(a)(iv)(A10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a) and ), Section 10.4(b) and Section 12.1512.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority)) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(ef) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(c)(ii10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(c)(i10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(c)(ii10.2(e)(i) (as limited by the provisions of Section 10.4(a) and ), Section 10.4(d) and Section 12.1512.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(c)(i10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company)) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(fg) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i10.2(d)(i) and Section 10.2(c)(ii10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i10.2(d)(i) and Section 10.2(c)(ii10.2(d)(ii) in excess of the Aggregate Unit Value;
(gh) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreement.
Appears in 3 contracts
Samples: Contribution Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.), Contribution Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.), Contribution Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.)
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b) and Section 10.2(c) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Purchaser Indemnitees shall not be entitled to recover in respect of any individual claim receive amounts pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i6.2(a) or Section 10.2(b)(ii) unless the aggregate (other than for Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach breaches of the representations Special Representations) for any individual item or series of related items based on substantially the same facts and warranties set forth in Section 3.2 (Capitalization circumstances where the Losses relating to such item or series of related items based on substantially the Group Companies)same facts and circumstances are less than $10,000, Section 3.3 (Authority) or Section 3.15 (Brokers) or (y) Section 10.2(b)(i) to the extent and such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers);
(c) the Member Indemnitees Losses shall not be entitled applied against the Basket.
(b) Seller shall not have any obligation to recover in indemnify Purchaser Indemnitees with respect of any individual claim to Losses arising under Section 6.2(a) (other than pursuant to Section 10.2(c)(i) breaches or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with inaccuracies in any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(ASpecial Representations) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.15) all Losses thereunder exceeds $5,000,000 50,000 (the “ThresholdBasket”); provided, however, that once such aggregate amount of such Losses exceeds the Basket, Seller shall be liable for the entire amount of such Losses otherwise recoverable under Section 6.2(a).
(c) Seller shall not have any obligation to indemnify Purchaser Indemnitees with respect to Losses arising under Section 6.2(a) (other than pursuant to breaches or inaccuracies in which case, any of the Parent Indemnitees shall only be entitled to recover Losses Special Representations) in excess of an aggregate amount equal to $1,000,000 (the Threshold; provided, that the Threshold “Cap”). Seller shall not apply have any obligation to any claim for indemnification indemnify Purchaser Indemnitees with respect to Losses arising under Section 6.2(a) pursuant to Section 10.2(a)(i) to the extent such claim is based upon a breach or inaccuracy of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) a Special Representation or Section 3.3 (Authority);
(e6.2(b) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply an aggregate amount equal to any claim for indemnification pursuant to Section 10.2(c)(i$2,000,000.
(d) Notwithstanding anything to the extent such claim is based upon a breach of the representations contrary in this Agreement, each Party’s rights to indemnification and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) any other recovery under law or Section 5.10 (New Company);
(f) except equity with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c)Losses based upon fraud, the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectivelywillful misconduct or intentional misrepresentation, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) limited in excess any way, including by any of the Aggregate Unit Value;
(g) the aggregate liability terms and conditions of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;this Agreement.
Appears in 2 contracts
Samples: Asset Purchase Agreement (Cleanspark, Inc.), Asset Purchase Agreement (Pioneer Power Solutions, Inc.)
Limitations on Indemnification Obligations. The rights to indemnification pursuant (a) Notwithstanding anything in Section 6.2 to the provisions of Section 10.2 are subject to the following limitationscontrary:
(ai) the amount of any and all indemnifiable Losses recoverable pursuant to Section 10.2(a), Section 10.2(b) and Section 10.2(c) shall be determined net of any amounts actually recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, Indemnified Party under insurance policies or other collateral sources (such as contractual indemnities of any Person Indemnified Party which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), ) with respect to such LossesLosses (net of any costs of recovery, insurance deductibles, chargebacks and to the extent reasonably quantifiable, increases in insurance premiums resulting from such insurance claim);
(bii) the Parent Buyer Indemnitees shall not be entitled to recover in respect of for any individual claim Losses pursuant to Section 10.2(a)(i), 6.2(a)(i) and Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i) or Section 10.2(b)(ii6.2(a)(ii) unless and until the aggregate amount of such Losses relating pursuant to Section 6.2(a)(i) and Section 6.2(a)(ii) equals or exceeds Two Hundred Fifty Thousand Dollars ($250,000) (the “Deductible”); provided that if the aggregate amount of such Losses (limited as provided in Section 6.5(a)) pursuant to Section 6.2(a)(i) and Section 6.2(a)(ii) equals or exceeds the Deductible, the Buyer Indemnitees shall be entitled to recover those Losses in excess of the Deductible, subject to the limitations in Section 6.5(a)(iii);
(iii) the maximum amount of indemnifiable Losses arising out of such claim (together with any related claims or other claims which arise resulting from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties causes set forth in Section 3.2 (Capitalization 6.2(a)(i) which may be recovered from the Company, and the maximum amount of indemnifiable Losses arising out of or resulting from the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers) or (y) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty causes set forth in Section 4.2 6.2(b)(i) which may be recovered from Buyer, whether pursuant to any single claim or multiple claims, shall not exceed a total amount equal to five percent (Authority), Section 4.4 5%) of the Purchase Price (Title) or Section 4.6 (Brokersthe “Cap”);
(civ) the Member Company Indemnitees shall not be entitled to recover in respect of for any individual claim Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii6.2(b)(i) unless and until the aggregate Losses relating to or arising out amount of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification Losses pursuant to (xSection 6.2(b)(i) equals or exceeds the Deductible; provided that if the aggregate amount of such Losses pursuant to Section 10.2(c)(i6.2(b)(i) to equals or exceeds the extent such claim is based upon a breach of Deductible, the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent Company Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.15) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover those Losses in excess of the Threshold; providedDeductible, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(a)(i) subject to the extent such claim is based upon a breach of the representations and warranties limitation set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority);
(e) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i6.5(a)(iii) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold6.5(a)(iv); provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);and
(fv) except with respect to in determining the amount of any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including Loss, no adjustment shall be made as a result of any waiver multiple, increase factor, or any other premium over fair market, book or historical value which may have been paid by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess Buyer as part of the Aggregate Unit Value;
(g) the aggregate liability of any Contributor Purchase Price whether or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received such multiple, increase factor or other premium has been used by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, Buyer at the Parent Closing time of, or in connection with, calculating or preparing its bid or any preliminary or final Purchase Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;.
Appears in 2 contracts
Samples: Asset Purchase Agreement, Asset Purchase Agreement (Zayo Group LLC)
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) Notwithstanding the foregoing, or anything in this Agreement to the contrary, (i) the aggregate amount payable to the Parent Indemnified Parties with respect to claims under Section 12.2 shall not exceed fifty million dollars ($50,000,000) (the “Cap”) and (ii) no indemnity shall be payable to any Parent Indemnified Party with respect to any claim under Section 12.2(a) unless and until the aggregate of any and all Losses recoverable pursuant to for which claims are made under Section 10.2(a12.2(a) exceeds two million five hundred thousand dollars ($2,500,000) (the “Basket”), Section 10.2(b) and Section 10.2(c) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (then only to the extent includable such Losses exceed the Basket; provided, however, that the foregoing clauses (i) and (ii) shall not be applicable to, and the Parent Indemnified Parties shall be indemnified in indemnifiable Losses)full for, with respect Losses (x) arising out of, relating to such Losses;or resulting from breaches or inaccuracies in the representations and warranties contained in the Company Fundamental Representations and the Designated Monitor Fundamental Representations, or (y) Losses arising out of or resulting from fraud or intentional misrepresentation by the Company.
(b) Notwithstanding the Parent Indemnitees foregoing, or anything in this Agreement to the contrary, (i) the aggregate amount payable to Company Indemnified Parties with respect to claims under Section 12.3 shall not exceed the Cap and (ii) no indemnity shall be entitled payable to recover in the Company Indemnified Parties with respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i) or Section 10.2(b)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim under Section 12.3(a) unless and until the aggregate of all Losses for indemnification pursuant to (xwhich a claim is made under Section 12.3(a) Section 10.2(a)(i) exceeds the Basket, and then only to the extent such claim is based upon a breach of Losses exceed the Basket; provided, however, that the foregoing clauses (i) and (ii) shall not be applicable to, and the Company Indemnified Parties shall be indemnified in full for, Losses (x) arising out of, relating to or resulting from breaches or inaccuracies in the representations and warranties set forth contained in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers) Parent Fundamental Representations or (y) Section 10.2(b)(i) to the extent such claim is based upon a breach Losses arising out of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers);resulting from fraud or intentional misrepresentation by Parent or Merger Sub.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) Notwithstanding anything to the extent such claim is based upon a breach contrary contained in this Agreement, no Person shall be liable under this Article XII for any consequential, punitive, special, incidental or indirect damages, including lost profits or diminution of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.15) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority);
(e) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(f) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;
(g) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;value.
Appears in 2 contracts
Samples: Acquisition Agreement (EverBank Financial Corp), Acquisition Agreement (EverBank Financial Corp)
Limitations on Indemnification Obligations. The rights of the Indemnified Parties to indemnification pursuant to the provisions of Section 10.2 7.2(a) and Section 7.2(b) are subject to the following limitationsprovisions:
(a) None of the Indemnified Parties shall be entitled to recover for any particular Loss pursuant to Section 7.2(a)(i) or Section 7.2(b)(i) (except in the case of Fraud) unless such Loss equals or exceeds $10,000 (and no such Loss less than $10,000 shall be applied against the Deductible).
(b) The Indemnified Parties shall not be entitled to recover Losses pursuant to Section 7.2(a)(i) or Section 7.2(b)(i) (except in the case of Fraud) until the total amount which the Indemnified Parties would recover under Section 7.2(a)(i) or Section 7.2(b)(i), as applicable, in the aggregate (as limited by the other provisions hereof), but for this Section 7.4(b), exceeds $1,192,500 (the “Deductible”), in which case the applicable Indemnified Parties shall only be entitled to recover Losses in excess of such amount, subject to the other limitations herein.
(c) Except, in each case, in the case of Fraud, (i) the maximum liability of Seller to the Purchaser Indemnitees with respect to any Losses of the Purchaser Indemnitees indemnifiable pursuant to Section 7.2(a)(i) shall not exceed $1,192,500 and (ii) the maximum liability of Seller or Purchaser, as applicable, for indemnifiable Losses pursuant to this Article VII shall not exceed the Aggregate Purchase Price.
(d) The amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b) and Section 10.2(c) indemnifiable hereunder shall be determined net of any amounts actually recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, Indemnified Parties under insurance policies (excluding, in the case of the Purchaser Indemnitees, the Representation and Warranty Insurance Policy) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), ) with respect to such Losses;Losses (which amounts actually recovered by the Indemnified Parties shall be calculated, in each case, net of any reasonable out-of-pocket costs and any Taxes incurred in connection with such recovery). In any case where a Purchaser Indemnitee actually recovers, under insurance policies (excluding, in the case of the Purchaser Indemnitees, the Representation and Warranty Insurance Policy) or from other collateral sources, any amount in respect of a matter for which such Indemnified Party was previously indemnified hereunder, such Indemnified Party shall promptly pay over to the Responsible Party a refund equal to the amount so recovered (after deducting therefrom the amount of the reasonable out-of-pocket costs and expenses and any Taxes incurred in connection with such recovery), if and solely to the extent that such amount of recovery would have reduced the amount to which the Indemnified Party would have been entitled pursuant to the first sentence of this Section 7.4(d), but not in excess of the aggregate amount previously paid to the Indemnified Parties hereunder in respect of such matter.
(be) The Purchaser Indemnitees shall use commercially reasonable efforts to recover under the Parent Indemnitees Representation and Warranty Insurance Policy, to the extent available and subject to applicable retention and other coverage limitations thereunder, for any Losses for Indemnified Taxes pursuant to Section 7.2(a)(iv) or for any Losses pursuant to Section 7.2(a)(ii) prior to seeking indemnification from Seller under this Agreement; provided that nothing in this Section 7.4(e) shall limit the Purchaser Indemnitees’ rights to indemnification pursuant to Section 7.2(a)(iv) or pursuant to Section 7.2(a)(ii) to the extent that recovery is not available under the Representation and Warranty Insurance Policy for any reason with respect to all or any portion of such Losses. The amount of any and all indemnifiable Losses for Indemnified Taxes pursuant to Section 7.2(a)(iv) or for any indemnifiable Losses pursuant to Section 7.2(a)(ii) shall be determined net of any amounts actually recovered by the Indemnified Parties under the Representation and Warranty Insurance Policy with respect to such Losses (which amounts actually recovered by the Indemnified Parties shall be calculated, in each case, net of any reasonable out-of-pocket costs and any Taxes incurred in connection with such recovery). In any case where a Purchaser Indemnitee actually recovers under the Representation and Warranty Insurance Policy any amount in respect of a matter for which such Indemnified Party was previously indemnified hereunder, such Indemnified Party shall promptly pay over to the Responsible Party a refund equal to the amount so recovered (after deducting therefrom the amount of the reasonable out-of-pocket costs and expenses and any Taxes incurred in connection with such recovery), if and solely to the extent that such amount of recovery would have reduced the amount to which the Indemnified Party would have been entitled pursuant to the first sentence of this Section 7.4(e), but not in excess of the aggregate amount previously paid to the Indemnified Parties hereunder in respect of such matter; provided that for the avoidance of doubt, Purchaser shall not be required to repay to Seller any amounts recovered under the Representation and Warranty Insurance Policy to the extent such repayment would, after taking into account the deductible and other limitations under the Representation and Warranty Insurance Policy, have the effect of reducing the amount of indemnifiable Losses actually recovered by Purchaser with respect to such claim below the amount of indemnified Losses to which Purchaser would otherwise be entitled to recover from Seller pursuant to this Article VII, but for this Section 7.4(e). Purchaser covenants and agrees that the Representation and Warranty Insurance Policy will expressly exclude any right of subrogation against the Seller Group (other than with respect to Fraud).
(f) The Indemnified Parties shall be entitled to recover for a Loss only once under Article VII even if a claim or claims for indemnification in respect of such Loss has been made as a result of a breach of more than one representation, warranty, covenant or agreement contained in this Agreement.
(g) The Indemnified Parties shall not be entitled to recover any Loss to the extent such Loss was included in respect or otherwise expressly taken into account in the determination of the Aggregate Purchase Price.
(h) The rights to indemnification of the Indemnified Parties under this Article VII shall not be affected or deemed waived by reason of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(iinvestigation made by or on behalf of any party hereto (including by any of such party’s advisors or representatives) or Section 10.2(b)(ii) unless by reason of the aggregate Losses relating to fact that such party or arising out any of such claim advisors or representatives knew or should have known that any representation or warranty is, was or might be inaccurate.
(together with i) For purposes of determining the breach or inaccuracy of any related claims representation or other claims which arise from a substantially warranty of the Company set forth in Article III or the Seller set forth in Article IV and in calculating the amount of any Losses attributable thereto, any “materiality,” “Material Adverse Effect,” or similar course of conduct or facts) equal or exceed $50,000; providedqualifications in such representations and warranties shall be disregarded, except that this Section 10.4(b) the foregoing shall not apply to any claim for indemnification pursuant to (xi) Section 10.2(a)(i) to the extent such claim is based upon a breach use of the representations and warranties set forth term “Material Contract” in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) any representation or Section 3.15 (Brokers) warranty or (yii) Section 10.2(b)(i) to the extent such claim is based upon a breach of a any representation and or warranty set forth in Section 4.2 (Authority), Section 4.4 (Title3.4(a) or Section 4.6 (Brokers3.6(a);.
(cj) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.15) exceeds $5,000,000 (the “Threshold”), in which case, the Parent The Purchaser Indemnitees shall only be entitled to recover under this Article VII for any breach of any representations and warranties regarding Losses in excess of the Threshold; providedfor Taxes with respect to taxable periods, or portions thereof, that end on or before the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(a)(i) Closing Date, except to the extent such claim is based upon Losses arise from or are attributable to a breach of the representations and or warranties set forth contained in Section 3.2 (Capitalization of the Group CompaniesSections 3.15(e), 3.15(k) or Section 3.3 (Authority3.15(l);
(e) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(f) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;
(g) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;.
Appears in 2 contracts
Samples: Purchase Agreement, Purchase Agreement (Hub Group, Inc.)
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b) and Section 10.2(c) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i) or Section 10.2(b)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000***25; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers) or (y) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers);
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000***26; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);; 25 Certain portions have been omitted in connection with an application for confidential treatment therefor. 26 Certain portions have been omitted in connection with an application for confidential treatment therefor.
(d) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.15) exceeds $5,000,000 ***27 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority);
(e) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(f) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;
(g) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
Appears in 2 contracts
Samples: Contribution Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.), Contribution Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.)
Limitations on Indemnification Obligations. The rights to indemnification pursuant (a) Subject to the provisions of Section 10.2 8.4(b) below, the rights of the Buyer Indemnitees to indemnification pursuant to Section 8.2(a) are subject to the following limitations:
(ai) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b) and Section 10.2(c) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Buyer Indemnitees shall not be entitled to recover in respect of for any individual claim particular Loss pursuant to Section 10.2(a)(iclause (i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i) or Section 10.2(b)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokersii) or (yiv) of Section 10.2(b)(i8.2(a) to the extent unless such claim is based upon a breach Loss (or group of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Titlerelated Losses) equals or Section 4.6 (Brokers)exceeds $250,000;
(cii) the Member Buyer Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent Indemnitees shall will not be entitled to recover Losses pursuant to Section 10.2(a)(iclause (i), Section 10.2(a)(ii(ii) or (iv) of Section 10.2(a)(iv)(A8.2(a) until the aggregate total amount which the Parent Buyer Indemnitees would recover under such sections clauses (as limited by the provisions i), (ii) and (iv) of Section 10.4(a) and Section 10.4(b) and Section 12.15) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority);
(e) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii8.2(a) (as limited by the provisions of Section 10.4(aSections 8.4(a)(i) and Section 10.4(d8.4(c) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), but for this Section 5.6 8.4(a)(ii), exceeds $10,000,000 (Brokers) or Section 5.10 (New Companythe "Threshold");, at which time all amounts from the first dollar of Loss may be recovered; and
(fiii) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not Buyer Indemnitees will be entitled to recover Losses pursuant to Section 10.2(c)(iclauses (i), (ii) and (iv) of Section 10.2(c)(ii8.2(a) in excess of the Aggregate Unit Value;
(g) the an aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess no more than 30% of the Aggregate Consideration Value less Amount.
(b) Notwithstanding anything to the contrary contained herein, the provisions of Section 8.4(a) shall not apply to any Losses resulting from a breach of a representation or warranty contained in any of Section 3.1 (Organization of the Company), Section 3.2 (Authorization), Section 3.3 (Capitalization of the Company) (other than the last sentence of Section 3.3), Section 3.14 (Taxes) and Section 3.26 (Brokers).
(c) The amount of any and all Losses indemnified pursuant to this Article 8 will be determined net of (i) amounts actually received by the Indemnified Party under any insurance policy with respect to such Losses (except to the extent that recovery under such insurance policy results in a premium increase or other damage to the Indemnified Party), (ii) any Tax benefit actually realized by the Indemnified Party arising from the facts or circumstances giving rise to such Losses and (iii) any recoveries obtained by the Indemnified Person from any other third party. Each Indemnified Party shall exercise commercially reasonable efforts to obtain such amounts, benefits and recoveries. If any such amounts, proceeds or recoveries are received by an Indemnified Party with respect to any Losses after an Indemnifying Party has made a payment to the Indemnified Party with respect thereto, the Indemnified Party shall pay to the Indemnifying Party the amount of Escrow Cash and Escrow Units allocated such amounts, benefits or recoveries (up to such Person;the amount of the Indemnifying Party's payment).
Appears in 2 contracts
Samples: Equity Purchase and Merger Agreement (Refco Inc.), Equity Purchase and Merger Agreement (Refco Information Services, LLC)
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) the amount of any and all Losses recoverable Seller shall have no obligation or liability to Buyer pursuant to Section 10.2(a), Section 10.2(b9.2(a) and Section 10.2(c) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (except to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i) or Section 10.2(b)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers) or (y) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers);
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A) until the aggregate amount of Damages incurred or suffered by Buyer which the Parent Indemnitees would recover Seller is otherwise responsible for under such sections Section exceeds [*] Dollars (as limited by the provisions of Section 10.4(a$[*]) and Section 10.4(b) and Section 12.15) exceeds $5,000,000 (the “Threshold”), in at which case, the Parent Indemnitees time Buyer shall only be entitled to recover Losses assert claims against Seller for Damages in excess of of, but excluding [*] (the Threshold“Deductible”); provided, however, that the Threshold maximum liability of Seller for all claims by Buyer under Section 9.2(a) of this Agreement, together, shall not in any case exceed [*] Dollars ($[*]) in the aggregate (the “Cap”), provided, that, the foregoing Cap shall not apply to breaches of Section 5.1.7, for which the maximum liability of Seller for claims by Buyer under Sections 9.2(a) of this Agreement, together with any claim for indemnification other claims made pursuant to Section 10.2(a)(i9.2(a), shall not in any case exceed the [*].
(b) Buyer shall have no obligation or liability to Seller pursuant to Section 9.3(a) of this Agreement, except to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority);
(e) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until that the aggregate amount of Damages incurred or suffered by Seller which the Member Indemnitees would recover Buyer is otherwise responsible for under such Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in at which case, the Member Indemnitees xxxx Xxxxxx shall only be entitled to recover Losses assert claims against Buyer for Damages in excess of of, but excluding, the ThresholdDeductible; provided, however, that the Threshold shall not apply to any claim maximum liability of Buyer for indemnification pursuant to all claims by Seller under Section 10.2(c)(i9.3(a) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(f) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c)Agreement, the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectivelytogether, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;
(g) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not case exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;Cap.
Appears in 2 contracts
Samples: Asset Purchase Agreement, Asset Purchase Agreement (Salix Pharmaceuticals LTD)
Limitations on Indemnification Obligations. The rights to indemnification pursuant Notwithstanding anything to the provisions of contrary contained in this Agreement (but except as set forth in the proviso in this Section 10.2 are subject to the following limitations:10.03):
(a) no Purchaser Indemnitee shall be entitled to recover under Section 10.02(a)(i) or Section 10.02(b)(i) unless and until the aggregate amount of any and all Losses recoverable pursuant (after giving effect to Section 10.2(athe De Minimis Threshold) suffered by Purchaser Indemnitees thereunder exceeds one percent (1%) of the Cash Consideration (the Deductible), Section 10.2(b) and Section 10.2(c) whereupon such Purchaser Indemnitee shall be determined net entitled to recover only such Losses in excess of any amounts recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), with respect to such LossesDeductible;
(b) the Parent Indemnitees no Purchaser Indemnitee shall not be entitled to recover under Section 10.02(a)(i) or Section 10.02(b)(i) with respect to any single claim or series of related claims unless and until the amount of Losses suffered by such Purchaser Indemnitee in respect of any individual such claim or series of related claims exceeds $50,000 (the De Minimis Threshold); and
(c) the Sellers’ maximum aggregate liability pursuant to Section 10.2(a)(i), 10.02(a)(i) and Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i) or Section 10.2(b)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b10.02(b)(i) shall not exceed an amount equal to five percent (5%) of the Cash Consideration (the Cap); provided that the limitations in clauses (a), (b) and (c) above shall not apply with respect to any claim for indemnification pursuant to (x) Section 10.2(a)(i) under Article VII or in respect of Losses to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers) or (y) Section 10.2(b)(i) to the extent such claim is based upon arising from a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) Fundamental Representation or Section 4.6 (Brokers);
(c) Fraud on the Member Indemnitees shall not be entitled to recover in respect part of any individual claim Seller, and in such event, other than with respect to the Fundamental Representations contained in Article III for which each Seller shall be severally, and not jointly, liable for the full amount of such Losses, the Sellers shall be jointly and severally liable to the Purchaser Indemnitees for the full amount of such Losses. Notwithstanding the foregoing and anything contained in this Agreement to the contrary, (1) each Seller’s maximum aggregate liability pursuant to Section 10.2(c)(i10.02(a) or Section 10.2(c)(iiand (b) unless shall not exceed the portion of the Cash Consideration actually received by such Seller; and (2) the Sellers’ combined maximum aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or liability under this Agreement shall not exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach Cash Consideration plus the value of the representations and warranties set forth Consideration Shares (calculated in accordance with Section 5.2 (Authority2.01(d), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.15) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority);
(e) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(f) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;
(g) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;.
Appears in 2 contracts
Samples: Unit Purchase Agreement, Unit Purchase Agreement (KLX Energy Services Holdings, Inc.)
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b) and Section 10.2(c) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i) or Section 10.2(b)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers) or (y) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers);
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent The Purchaser Indemnitees shall not be entitled to recover Losses pursuant to for claims made against the Sellers under Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(Awith respect to breaches of the Non-Fundamental Representations (i) until the aggregate total amount which the Parent Purchaser Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.1510.2(a)(i) exceeds $5,000,000 50,000 (the “ThresholdBasket”), in which case, case the Parent Purchaser Indemnitees shall only be entitled to recover the aggregate amount of all such Losses including the Basket and (ii) for an amount in excess of $5,000,000.00, except that, with respect to Section 4.11, such amount shall be $2,500,000.00; and
(b) In the Threshold; provided, that event a Purchaser Indemnitee recovers the Threshold shall not apply to any claim for indemnification full amount of Losses sought pursuant to Section 10.2(a)(i10.2 from an Indemnifying Party and thereafter receives (i) insurance proceeds directly attributable to the extent such claim is based upon a breach of the representations the, and warranties set forth in Section 3.2 (Capitalization of the Group Companies) payment or Section 3.3 (Authority);
(e) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which casereimbursement of, the Member Indemnitees shall only be entitled to recover Losses in excess of Losses, (ii) indemnity or contribution amounts from third parties (other than Purchaser or the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(iCompany) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(f) except with respect to such Losses, or (iii) any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including direct, recognizable Tax benefit as a result of any waiver by such Losses, then the Contributors Purchaser Indemnitee shall refund to such Indemnifying Party the amount thereof (net of costs of collection and similar costs).
(c) Any claim for indemnification hereunder arising from a single event or occurrence may be asserted under one or more of the separate clauses set forth in Section 8.3(c)10.2, and the aggregate liability assertion of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) a claim for indemnification under one clause shall not exceed preclude or restrict the Aggregate Unit Value indemnified party from asserting a claim for indemnification under one or more different clauses, provided, however, that any Losses recovered by an Indemnified Party under one clause shall be credited against Losses sought to be recovered under a different clause and arising from the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;
(g) the aggregate liability of any Contributor same event or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;occurrence.
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Limitations on Indemnification Obligations. (a) The rights of the Buyer Indemnities to indemnification pursuant to the provisions of Section 10.2 8.2(a) are subject to the following limitations:
(ai) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b) and Section 10.2(c) shall be determined net of any amounts recovered by the Parent Buyer Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i) or Section 10.2(b)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers) or (y) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers);
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent Indemnitees shall will not be entitled to recover Losses pursuant to clause (i) of Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A8.2(a) until the aggregate total amount which the Parent Buyer Indemnitees would recover under such sections clause (as limited by the provisions i) of Section 10.4(a) and Section 10.4(b) and Section 12.15) 8.2(a), but for this clause (ii), exceeds $5,000,000 375,000 (the “"Threshold”") (at which point the Buyer Indemnitees shall be entitled to receive only the aggregate Losses that exceed the Threshold); provided, however, that, subject to clause (ii) of this Section 8.4(a), in which case, the Parent Buyer Indemnitees shall only will be entitled to recover all Losses in excess of (without regard to the Threshold; provided, that the Threshold shall not apply to ) as a result of any claim for indemnification pursuant to Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth contained in Section 3.2 3.5 or Section 3.10 of this Agreement; and
(Capitalization ii) in the aggregate, the Buyer Indemnitees, with respect to Losses pursuant to Section 8.2(a), (x) will be entitled to recover no more than the remaining portion of the Group CompaniesEscrow Amount (the "Cap") and (y) pursuant to this Agreement or Section 3.3 (Authority);
(e) the Member Indemnitees shall in connection with any certificate delivered in connection herewith, will not be entitled to recover Losses pursuant from any source other than the Escrow Account.
(b) No Company Preferred Securityholder shall have any right of contribution against the Company or the Surviving Corporation with respect to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (any amounts payable as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess a result of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties obligations set forth in Section 5.2 (Authority), Section 5.6 (Brokers8.2(a) or Section 5.10 (New Company);hereof.
(fc) except with respect The obligations to any claims resulting from the failure to complete the Financing indemnify and hold harmless pursuant to the terms of this Agreement clause (including as a result of any waiver by the Contributors i) of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP 8.2(a) and Parent Sub pursuant to clause (i) of Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;
(g) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;8.2
Appears in 1 contract
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b) and Section 10.2(c) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees Purchaser Indemnities shall not be entitled to recover in respect of any individual claim receive amounts pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i6.2(a) or Section 10.2(b)(ii) unless the aggregate (other than for Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach breaches of the representations Special Representations) for any individual item or series of related items based on substantially the same facts and warranties set forth in Section 3.2 (Capitalization circumstances where the Losses relating to such item or series of related items based on substantially the Group Companies)same facts and circumstances are less than $10,000, Section 3.3 (Authority) or Section 3.15 (Brokers) or (y) Section 10.2(b)(i) to the extent and such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers);
(c) the Member Indemnitees Losses shall not be entitled applied against the Basket.
(b) Seller shall not have any obligation to recover in indemnify Purchaser Indemnities with respect of any individual claim to Losses arising under Section 6.2(a) (other than pursuant to Section 10.2(c)(i) breaches or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with inaccuracies in any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(ASpecial Representations) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.15) all Losses thereunder exceeds $5,000,000 50,000 (the “ThresholdBasket”); provided, however, that once such aggregate amount of such Losses exceeds the Basket, Seller shall be liable for the entire amount of such Losses otherwise recoverable under Section 6.2(a).
(c) Seller shall not have any obligation to indemnify Purchaser Indemnities with respect to Losses arising under Section 6.2(a) (other than pursuant to breaches or inaccuracies in which case, any of the Parent Indemnitees shall only be entitled to recover Losses Special Representations) in excess of an aggregate amount equal to $200,000 (the Threshold; provided, that the Threshold “Cap”). Seller shall not apply have any obligation to any claim for indemnification indemnify Purchaser Indemnities with respect to Losses arising under Section 6.2(a) pursuant to Section 10.2(a)(i) to the extent such claim is based upon a breach or inaccuracy of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) a Special Representation or Section 3.3 (Authority);
(e6.2(b) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply an aggregate amount equal to any claim for indemnification pursuant to Section 10.2(c)(i$300,000.
(d) Notwithstanding anything to the extent such claim is based upon a breach of the representations contrary in this Agreement, each Party’s rights to indemnification and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) any other recovery under law or Section 5.10 (New Company);
(f) except equity with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c)Losses based upon fraud, the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectivelywillful misconduct or intentional misrepresentation, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) limited in excess any way, including by any of the Aggregate Unit Value;
(g) the aggregate liability terms and conditions of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;this Agreement.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Purchaser Indemnitees to indemnification pursuant to the provisions of Section 10.2 9.2(a), and of the Company Indemnities pursuant to Section 9.2(b), as applicable, are subject to the following limitations:
(a) the The amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b) and Section 10.2(c) shall be determined net of any amounts actually recovered (after deducting therefrom the full amount of the expenses incurred in procuring such recovery) by the Parent Purchaser Indemnitees or their Affiliates, or the Member Indemnitees or their AffiliatesCompany Indemnitees, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), ) with respect to such Losses (provided, that the amount deemed to be so recovered under insurance policies shall be net of (A) the deductible for such policies and (B) any increase in the premium for such policies arising out of or in connection with such Losses;).
(b) The Purchaser Indemnitees or the Parent Indemnitees Company Indemnitees, as applicable, shall not be entitled to recover in respect Losses for any particular claim or series of any individual claim claims arising out of the same facts pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i9.2(a)(i) or Section 10.2(b)(ii) 9.2(b)(i), as applicable, other than with respect to breaches of the Fundamental Representations and Warranties, unless the aggregate such Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers) or (y) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers);100,000.
(c) The Purchaser Indemnitees or the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; providedCompany Indemnitees, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority)as applicable, Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii9.2(a)(i) or Section 10.2(a)(iv)(A) 9.2(b)(i), as applicable, other than with respect to breaches of the Fundamental Representations and Warranties, until the aggregate total amount which the Parent Purchaser Indemnitees or the Company Indemnitees, as applicable, would recover under such sections (Section 9.2(a)(i) or Section 9.2(b)(i), as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.15) applicable, exceeds $5,000,000 4,000,000 (the “ThresholdThreshold Amount”), in which case, the Parent Purchaser Indemnitees or the Company Indemnitees, as applicable, shall only be entitled to recover Losses in excess of the ThresholdThreshold Amount.
(d) The funds in the Indemnity Escrow Account, at any given time, shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 9.2(a), and in no event shall the Purchaser Indemnitees be entitled to recover more than the amount of the funds available in the Indemnity Escrow Account pursuant to Section 9.2(a); provided that nothing in this Article 9 shall in any way limit or restrict the availability of the PPA Escrow Account to fund obligations under Section 2.9.
(e) In no event shall any Company Equityholder’s liability for Losses exceed the net proceeds actually received by such Company Equityholder hereunder.
(f) In no event shall the liability of Parent and Merger Sub for Losses pursuant to Section 9.2(b) exceed the Indemnity Escrow Amount.
(g) No Purchaser Indemnitee or Company Indemnitee, as applicable, shall be entitled to indemnification for any claim if and to the extent (but only to the extent) the Losses with respect to such claim were accounted for in the Actual Adjustment.
(h) For purposes of determining whether there has been a breach for indemnification purposes and the amount of any Losses that are the subject matter of a claim for indemnification hereunder, each representation and warranty in this Agreement and each certificate delivered pursuant hereto (in each case other than the Qualified Representations) shall be read without regard and without giving effect to the term(s) “material” or “Company Material Adverse Effect” contained therein.
(i) Each Person entitled to indemnification hereunder shall take all reasonable steps to mitigate all Losses after becoming aware of any event which would reasonably be expected to give rise to any Losses that are indemnifiable or recoverable hereunder or in connection herewith; provided, that such failure to mitigate Losses in accordance with the Threshold foregoing shall not apply relieve the applicable Responsible Party of its indemnification obligations under this Article 9 except to the extent that any claim Losses were directly the result of such failure to mitigate.
(j) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Indemnity Escrow Funds are reduced to zero, the Purchaser Indemnitees shall have no further rights to indemnification under Section 9.2(a). Where a Purchaser Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for indemnification which such Purchaser Indemnitee was indemnified pursuant to Section 10.2(a)(i) 9.2(a), such Purchaser Indemnitee shall promptly pay over to the extent such claim is based upon a breach Representative the amount so recovered (after deducting therefrom the full amount of the representations and warranties set forth expenses incurred by such Purchaser Indemnitee in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authorityprocuring such recovery);
(e) the Member Indemnitees shall , but not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that sum of (i) any amount previously so paid to or on behalf of such Purchaser Indemnitee in respect of such matter and (ii) any amount expended by the Threshold shall not apply to Representative in pursuing or defending any claim for indemnification pursuant to Section 10.2(c)(i) arising out of such matter; provided that, prior to the extent Survival Period Termination Date, any such claim is based upon a breach of recovered amount shall be deposited into the representations and warranties set forth in Escrow Account to fund the indemnification obligations under Section 5.2 9.2(a) (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(f) except with respect to any claims resulting from the failure to complete the Financing pursuant rather than be paid over to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(cRepresentative), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;
(g) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;.
Appears in 1 contract
Samples: Merger Agreement (Genpact LTD)
Limitations on Indemnification Obligations. The Other than with respect to Losses related to breaches of Fundamental Representations and Section 4.15, the rights of the Purchaser Indemnitees to indemnification pursuant to the provisions provision of Section 10.2 10.2(a)(i) are subject to the following limitations:
(a) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b) and Section 10.2(c) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i) or Section 10.2(b)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers) or (y) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers);
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent Purchaser Indemnitees shall not be entitled to recover Losses for claims made with respect to breaches of the Non-Fundamental Representations (other than breaches of Section 4.15, Losses with respect to which shall not be subject to the limitation in this clause (a)) pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A) until (i) the aggregate Losses relating to or arising out of the same or related facts, events or circumstances exceed $7,500 (any other claim for Losses, a “Minor Claim”) and (ii) the total amount which the Parent Purchaser Indemnitees would recover under such sections Section 10.2(a)(i), excluding all Minor Claims (as limited by the provisions of Section 10.4(a) and 10.6), but for this Section 10.4(b) and Section 12.15) 10.5(a), exceeds $5,000,000 990,000 (the “Threshold”), in which case, case the Parent Purchaser Indemnitees shall only be entitled to recover the aggregate amount of all such Losses (including the amount up to the Threshold), subject to the other limitations herein;
(b) notwithstanding anything to the contrary in excess this Agreement, the amount of Losses for claims made with respect to breaches of the Threshold; providedNon-Fundamental Representations (other than breaches of Section 4.15, that the Threshold Losses with respect to which shall not apply be subject to any claim the limitation in this clause (b)) that may be recovered by the Purchaser Indemnitees shall be limited, individually and in the aggregate, by application to the Escrow Amount; and in no event shall the Purchaser Indemnitees be entitled to recover more than the Escrow Amount for indemnification claims made with respect to breaches of Non-Fundamental Representations (other than claims for breaches of Section 4.15) pursuant to Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority);
(e) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(f) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;
(g) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;aggregate.
Appears in 1 contract
Limitations on Indemnification Obligations. The Notwithstanding anything to the contrary contained in this Agreement, the rights to indemnification indemnification, except in relation to Taxes, pursuant to the provisions of Section 10.2 8.2 and Section 8.3 are subject to the following limitations:
(a) the amount The maximum aggregate Liability of Seller to all Purchaser Indemnified Parties taken together for Losses for any and all Losses recoverable claims for indemnification (i) pursuant to Section 10.2(a8.2(a) shall be limited to $28,050,000.00 (the “Cap”) and (ii) pursuant to Section 8.2(b), Section 10.2(b8.2(c), Section 8.2(d), Section 8.2(e), Section 8.2(f), Section 8.2(g) and Section 10.2(c) 8.2(k), shall be determined net limited to the Adjusted Purchase Price; provided, however, that in no event shall Seller be liable in the aggregate to the Purchaser Indemnified Parties for any claims for indemnification pursuant to this Agreement in an amount greater than the Adjusted Purchase Price (except in the case of any amounts recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreementclaims for indemnification pursuant to Section 8.2(h), including Section 8.2(i) or Section 8.2(j)); provided, further, that in no event shall the Tax Matters Agreements limitations set forth in clause (ii) in respect of Sections 8.2(e), Section 8.2(f) and Section 8.2(g) limit Seller’s indemnification obligation in respect of Excluded Liabilities pursuant to Section 8.2(i). In addition, Seller shall not be liable for Losses for any claims for indemnification pursuant to Section 8.2(a) and Section 8.2(b) unless and to the extent includable in indemnifiable Losses)that each individual claim for indemnification made by the Purchaser Indemnified Party pursuant to Section 8.2(a) and Section 8.2(b) is for an amount greater than $25,000 (the “De Minimis Amount”) and, with respect to claims for indemnification pursuant to Section 8.2(a), the total of all Losses for any such Losses;claims for indemnification shall exceed $1,870,000.00 in the aggregate (the “Deductible”), and then only for the excess amount over the Deductible.
(b) the Parent Indemnitees shall not be entitled The maximum aggregate Liability of Purchaser to recover in respect of all Seller Indemnified Parties taken together for Losses for any individual claim claims for indemnification (i) pursuant to Section 10.2(a)(i8.3(a) shall be limited to the Cap and (ii) pursuant to Section 8.3(b), Section 10.2(a)(ii8.3(c), Section 10.2(a)(iv)(A8.3(d), Section 10.2(b)(i8.3(e), Section 8.3(f) or and Section 10.2(b)(ii8.3(g) unless shall be limited to the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000Adjusted Purchase Price; provided, however, that this Section 10.4(b) in no event shall not apply Purchaser be liable in the aggregate to the Seller Indemnified Parties for any claim claims for indemnification pursuant to this Agreement in an amount greater than the Adjusted Purchase Price (xexcept in the case of claims for indemnification pursuant to Section 8.3(h), Section 8.3(i) or Section 10.2(a)(i8.2(j)); provided, further, that in no event shall the limitations set forth in clause (ii) in respect of Sections 8.3(e) or Section 8.3(f) limit Purchaser’s indemnification obligation in respect of Assumed Liabilities pursuant to Section 8.3(h). In addition, Purchaser shall not be liable for Losses for any claims for indemnification pursuant to Section 8.3(a) and Section 8.3(b) unless and to the extent that each individual claim for indemnification made by a Seller Indemnified Party pursuant to Section 8.3(a) and Section 8.3(b) is for an amount greater than the De Minimis Amount and, with respect to claims for indemnification pursuant to Section 8.3(a), the total of all Losses for any such claims for indemnification shall exceed the Deductible, and then only for the excess amount over the Deductible.
(c) Notwithstanding anything in this Article 8 to the contrary, Seller shall have no obligation under this Article 8 to indemnify any Purchaser Indemnified Party with respect to any Loss to the extent it (i) was included in the Actual Working Capital or (ii) was the subject of a dispute with respect to the Final Working Capital Closing Date Calculation pursuant to the terms of Section 2.3(b) but did not result in an adjustment to the Initial Purchase Price pursuant to Section 2.3(d). Any such Loss shall be disregarded for all purposes of indemnification pursuant to this Article 8.
(d) Recovery by any Indemnified Party of any Loss suffered or incurred by such party as a result of any breach by any other party of any of its obligations under this Agreement shall be limited to the actual damages suffered or incurred by such party as a result of the breach by the breaching party of its obligations hereunder. In furtherance of and without limiting the foregoing, no Indemnified Party shall be entitled to any recovery under this Agreement for (i) special, exemplary, punitive, consequential, incidental or indirect damages and (ii) diminution in value or lost profits (including with respect to any Losses on account of lost opportunities); provided, however, that the foregoing limitation shall not apply in the case of clause (i) to any such Losses (y) to the extent such claim Losses (other than punitive damages) were reasonably foreseeable or (z) if any Indemnified Party is based upon a breach held liable to any third party for such Losses.
(e) Any amounts payable pursuant to the indemnification obligations under this Article 8 shall be paid without duplication, and in no event shall any Indemnified Party be indemnified under different provisions of this Agreement for the same Loss. The amount which an Indemnifying Party is or may be required to pay to an Indemnified Party in respect of Losses for which indemnification is provided under this Agreement will be reduced by any amounts actually received (including amounts received under insurance) by or on behalf of the representations Indemnified Party (after deducting therefrom the full amount of any applicable premiums, deductibles, collection costs, premium adjustments, retrospectively rated premiums or other Losses incurred by it in procuring such recovery) and warranties set forth any Tax benefit actually realized in Section 3.2 (Capitalization the taxable year of such Loss for such Indemnified Party in each case, as a result of the Group Companiesaccrual, incurrence or payment of any such Losses (such amounts (after deducting therefrom the full amount of the Losses incurred by it in procuring such recovery) are collectively referred to herein as “Indemnity Reduction Amounts”); provided, Section 3.3 (Authority) that no Indemnified Party shall be obligated to make such an insurance claim related to any Loss for which it is seeking indemnification or Section 3.15 (Brokers) has obtained indemnification pursuant to this Article 8. If any Indemnified Party receives any Indemnity Reduction Amounts in respect of a claim for which indemnification is provided under this Agreement after the full amount of such claim has been paid by an Indemnifying Party or (y) Section 10.2(b)(i) after an Indemnifying Party has made a partial payment of such claim and such Indemnity Reduction Amounts exceed the remaining unpaid balance of such claim, then the Indemnified Party will promptly remit to the extent such claim is based upon a breach Indemnifying Party an amount equal to the excess (if any) of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers);
(ci) the Member Indemnitees amount theretofore paid by the Indemnifying Party in respect of such claim, less (ii) the amount of the indemnity payment that would have been due if such Indemnity Reduction Amounts in respect thereof had been received before the indemnity payment was made. An insurer or other third party who would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto or have any subrogation rights with respect thereto, solely by virtue of the indemnification provisions hereof, it being expressly understood and agreed that no insurer or any other third party shall be entitled to any benefit they would not be entitled to recover receive in respect the absence of the indemnification provisions by virtue of the indemnification provisions hereof. Each party hereto, as appropriate, will, or will cause each Indemnified Party to, use its commercially reasonable efforts to pursue promptly any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims rights it may have against all third parties which arise from a substantially similar course would reduce the amount of conduct or facts) equal or exceed an amount equal to $50,000; provided, that Losses for which indemnification is provided under this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.15) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority);
(e) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);Agreement.
(f) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including In valuing a Loss, no adjustment shall be made as a result of any waiver multiple, increase factor, or any other premium over fair market value, book or historical value which may have been paid by Purchaser for the Contributors of Section 8.3(c)Shares whether or not such multiple, increase factor or other premium had been used by Purchaser at the aggregate liability of Parent REITtime of, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed or in connection with, calculating or preparing its bid, its proposed purchase price for the Aggregate Unit Value and Shares or its final purchase price for the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;Shares.
(g) Notwithstanding anything to the aggregate liability contrary herein, the rights and remedies of an Indemnified Party shall not be limited by the fact that any Indemnified Party (i) had actual or constructive knowledge (regardless of whether such knowledge was obtained through such Indemnified Party’s own investigation or through disclosure by the other Party, its Representatives or any other Person) of any Contributor breach, event or LVP REIT pursuant circumstances, whether before or after the execution and delivery of this Agreement or the Closing, or (ii) waived (A) any breach of representation or compliance with any covenant or (B) any condition to the Closing set forth in Article 6.
(h) For purposes (i) of determining whether a breach of representation or warranty has occurred for the purposes of Section 10.2(b)(i) 8.2 and Section 10.2(b)(ii8.3 any qualification as to “Material Adverse Effect” contained in Article 3 and Article 4 (other than Section 3.1 and Section 3.7) of this Agreement shall be deemed to be replaced with “material and adverse to the Business” and (ii) of calculating the amount of Losses related thereto, any qualification as to materiality, “Material Adverse Effect” or any similar qualification or standard contained in Article 3 and Article 4 of the Agreement shall be disregarded (it being understood that the word Material in the defined term “Material Contracts,” the qualification as to “Material Adverse Effect” contained in Section 3.7 and the qualification of the word “material” in Section 3.12(a) shall not exceed the aggregate consideration actually received by be disregarded for any of such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(apurposes), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;.
Appears in 1 contract
Samples: Stock Purchase Agreement (Albany International Corp /De/)
Limitations on Indemnification Obligations. The rights (a) Deductibles and Individual Claim Threshold.
(i) Except as provided in Section 6.4(a)(iv) and Section 6.4(a)(v) and after first applying the limitation in Section 6.4(a)(iii), the Buyer Indemnified Persons will not be entitled to indemnification pursuant to any Claims based on Section 6.1(a)(i), other than such Claims with respect to any Fundamental Representation or Specified IP Representation, unless and until the provisions aggregate amount of all Damages of the Buyer Indemnified Persons pursuant to Section 10.2 are 6.1(a)(i) exceeds $12,500,000 (the “General Deductible”). If the aggregate amount of all Damages of the Buyer Indemnified Persons pursuant to any Claims based on Section 6.1(a)(i) exceed the General Deductible, then Seller will be obligated for any Damages pursuant to Section 6.1(a)(i) (other than such Damages with respect to any Fundamental Representation or Specified IP Representation) only in excess of the General Deductible (subject to the following limitations:other express limitations set forth in this ARTICLE VI).
(aii) Except as provided in Section 6.4(a)(iv) and after first applying the amount of any and all Losses recoverable pursuant to limitation in Section 10.2(a6.4(a)(iii), Section 10.2(b) and Section 10.2(c) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall Buyer Indemnified Persons will not be entitled to recover indemnification pursuant to any Claims based on breach of any Specified IP Representation, unless and until the aggregate amount of all Damages of the Buyer Indemnified Persons pursuant to Section 6.1(a)(i) exceed $1,000,000 (the “IP Deductible”). All Claims made pursuant to Section 6.1(a)(i) will be taken into account in determining whether the IP Deductible has been satisfied, without regard to whether such Claim relates to any Specified IP Representation. If the aggregate amount of all Damages of the Buyer Indemnified Persons pursuant to any Claims based on Section 6.1(a)(i) with respect to breach of any Specified IP Representation exceed the IP Deductible, then Sellers will be obligated for any Damages pursuant to Section 6.1(a)(i) with respect to breach of any Specified IP Representation only in excess of the IP Deductible (subject to the other express limitations set forth in this ARTICLE VI).
(iii) No Buyer Indemnified Persons will assert, or be entitled to, Damages for any claims for indemnification pursuant to any Claims based on Section 6.1(a)(i), other than such Claims with respect to any Fundamental Representation, in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i) Damage incurred or Section 10.2(b)(ii) unless the aggregate Losses relating suffered by such Buyer Indemnified Person that is not equal to or arising out in excess of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b.
(iv) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties The limitations set forth in Section 3.2 6.4(a)(i) and (Capitalization ii) will not apply to or otherwise affect the Buyer Indemnified Persons’ ability to make Claims or recover Damages with respect to Claims based on or for (A) a breach or inaccuracy of the Group Companiesany Fundamental Representation (or any inaccuracy of any Seller Closing Certificate with respect to Fundamental Representations), Section 3.3 (AuthorityB) or Section 3.15 Fraud, or, for the avoidance of doubt, (BrokersC) indemnification under Sections 6.1(a)(ii), (iii), (iv), (v) or (yvi).
(v) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty The limitations set forth in Section 4.2 (Authority), Section 4.4 (Title6.4(a)(i) or Section 4.6 (Brokers);
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall will not apply to any claim or otherwise affect the Buyer Indemnified Persons’ ability to make Claims or recover Damages with respect to Claims based on or for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach or inaccuracy of the representations and warranties set forth in Section 5.2 any Specified IP Representation (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions any inaccuracy of Section 10.4(a) and Section 10.4(b) and Section 12.15) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority);
(e) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(f) except Seller Closing Certificate with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(cSpecified IP Representations), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;
(g) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights to indemnification pursuant Notwithstanding anything to the provisions of Section 10.2 are subject to the following limitations:
contrary contained herein, (a) except to the extent provided below, each Seller shall only be obligated to indemnify the Parent Indemnitees for a Parent Indemnitee's aggregate claim for Damages multiplied by such Seller's percentage interest in the Company as set forth on EXHIBIT A attached hereto (based upon the assumption that Xxx Xxxxx is not a stockholder of the Company); (b) only a Seller that breached the terms of Sections 3.2(d), (f), (h), (k) or (x) or the terms of a Seller Ancillary Document to which such Seller is a party shall be liable to the Purchaser Indemnitees for Damages cause by a breach of such section or such agreement, as the case may be; (c) no party hereto shall be obligated to indemnify any other party hereto (i) for any individual claim or related claims for Damages unless the amount of any such claim or related claims exceeds $1,000, and (ii) until and unless all Losses recoverable pursuant to Section 10.2(a)claims or related claims for Damages in excess of $1,000 exceed $20,000 in the aggregate, Section 10.2(band then, only for such excess claims; (d) and Section 10.2(c) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) neither Sellers nor the Parent Indemnitees shall not be entitled to recover in respect of any individual claim liable for Damages pursuant to this Article 5 in excess of the sum of (i) $500,000 in the aggregate; plus (ii) 50% (but 100% with respect to claims for Damages under Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i5.2(c)(iv) or Section 10.2(b)(ii5.2(a) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization 3.2(j)) of the Group Companies)Contingent Consideration payable to Sellers pursuant to Section 1.5 hereof; plus (iii) with respect to claims for Damages against Sheridan, 50% (but 100% with respect to claims for Damages under Section 3.3 (Authority5.2(c)(iv) or Section 3.15 (Brokers5.2(a) or (y) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers);
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 3.2(j)) of the aggregate compensation owed to Sheridan for Bonus and Contingent Consideration (Authorityas such terms are defined in Sheridan's Employment Agreement); provided, however, that the limitations contained in Sections 5.4(a), Section 5.6 (Brokersc) or Section 5.10 (New Company);
and (d) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.15) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim claims for Damages resulting from a breach of Section 5.2(c)(iv) or Sections 3.2(d), (f), (h), (k) or (x) or a breach of a Seller's Ancillary Document; (e) no party hereto shall be entitled to indemnification pursuant to Section 10.2(a)(i) this Article 5 to the extent the indemnified party receives insurance proceeds with respect to such claim is based upon for Damages; and (f) only Sheridan shall be liable to Parent and the Surviving Corporation for a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority);
(e) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(f) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;
(g) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;hereof.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) Sellers shall have no obligation to indemnify the amount of any and all Losses recoverable pursuant Purchaser Indemnitees with respect to Adverse Consequences arising under Section 10.2(a12.1(a) (other than Section 7.1 (Due Formation), Section 10.2(b) and Section 10.2(c) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i) or Section 10.2(b)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers) or (y) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 7.2 (Authority), Section 4.4 (Title) or Section 4.6 7.4 (Brokers);
, Section 7.7 (c) the Member Indemnitees shall not be entitled Title to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (AuthorityPurchased Assets), Section 5.6 7.10(b) (BrokersLitigation and Compliance with Laws) or and Section 5.10 7.19 (New CompanyTaxes);
(d) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A) until the aggregate amount which the Parent Indemnitees would recover under such sections of all Adverse Consequences thereunder exceeds One Hundred Thousand Dollars (as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.15) exceeds $5,000,000 (the “Threshold”100,000), in which case, event the Parent Sellers shall be obligated to indemnify the Purchaser Indemnitees shall only be entitled to recover Losses for the amount of Adverse Consequences in excess of such threshold.
(b) Sellers shall have no obligation to indemnify the Threshold; Purchaser Indemnitees with respect to Adverse Consequences arising under Section 12.1(a) (other than Section 7.1 (Due Formation), Section 7.2 (Authority) and Section 7.7 (Title to Purchased Assets)) in excess of Five Million Dollars ($5,000,000) (the "Cap").
(c) The amount of any Adverse Consequences incurred by the Purchasers will be reduced by the net amount either Purchaser actually recovers from any insurer or other party liable for such Adverse Consequences, provided, that nothing in the Threshold foregoing shall require Purchasers to take any action whatsoever to attempt to notify, file a claim with or collect any amount from, any insurer or other party with respect to any claim, loss or occurrence which shall arise prior to the Closing.
(d) Notwithstanding anything to the contrary in this Agreement, Purchaser Indemnitees' rights to indemnification with respect to Adverse Consequences arising under Section 12.1(b), (c), (d), (e), or (f), or based upon fraud, willful misconduct or intentional misrepresentation, shall not apply to any claim for indemnification pursuant to Section 10.2(a)(i) be subject to the extent such claim is based upon a breach of the representations and warranties limitations set forth in Section 3.2 (Capitalization of the Group CompaniesSections 12.5(a) or Section 3.3 (Authorityand 12.5(b);.
(e) the Member Indemnitees shall not be entitled to recover Losses Any indemnity payments made pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited this Article XII shall be treated for all income tax purposes by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) parties hereto as an adjustment to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(f) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;
(g) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Purchase Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) Notwithstanding the above, there shall be no liability for indemnification under Section 7.1(a), Section 7.2(a) or Section 7.3(a) or, as the case may be, unless the aggregate amount of Damages with respect to all Claims thereunder exceeds [***] Dollars ($[***]) (the “Deductible”), at which point the Indemnifying Party(ies) will only be obligated to indemnify the Indemnified Parties for the amount of any and all Losses recoverable pursuant to Damages described in Section 10.2(a7.1(a), Section 10.2(b7.2(a) or Section 7.3(a) (as applicable) exceeding the Deductible; provided that the Deductible shall not apply to the misrepresentation, breach or inaccuracy of any representation or warranty made by the Unitholders in Article III and any of the following Sections: Section 2.1 (due organization), Section 2.2 (authorization; no conflict), Section 2.3 (capitalization), Section 2.9 (assets), Section 2.10 (taxes), Section 2.16 (intellectual property), Section 2.19 (brokers and agents), Section 3.1 (due organization, authorization), Section 3.3 (ownership of units), Section 3.7 (brokers), Section 4.1 (organization and authorization), Section 4.2 (authorization; no conflict), and Section 4.3 (brokers and agents) (collectively, the “Fundamental Reps”). With respect to any claim as to which an Indemnified Party may be entitled to indemnification hereunder, the Indemnifying Party shall not be liable for any Damages arising out of any individual or related set of facts and circumstances that do not exceed thirty-seven thousand five hundred Dollars ($37,500) (which Damages shall not be counted towards the Deductible).
(b) The indemnification obligations of each of the parties under Section 7.1(a), Section 7.2(a) and Section 10.2(c) 7.3(a), respectively, shall not exceed on a cumulative basis for the Unitholders, on the one hand, or Buyer on the other hand, an amount equal to the Cap (as defined below), determined as of the date of assertion of any Claim for indemnification hereunder, provided, that the Cap shall not apply with respect to any misrepresentation, breach or inaccuracy of any Fundamental Rep, which shall be capped at an amount equal to the Total Purchase Consideration (determined net as of the date of assertion of any amounts recovered Claim for indemnification hereunder). For purposes of this Agreement, the “Cap” shall be equal to the Escrow Amount.
(c) The amount of Damages recoverable by the Parent Indemnitees Buyer and Buyer Indemnified Parties under this Article VII shall be reduced, on a dollar-for-dollar basis, by any amounts actually recovered (after deducting therefrom the full amount of costs, Taxes and expenses incurred in procuring such recovery, including any increase in premiums and any deductible or their Affiliates, or retention associated therewith) by the Member Indemnitees or their Affiliates, as applicable, Buyer and Buyer Indemnified Parties under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement). Buyer agrees to use commercially reasonable efforts to make a claim under any insurance policy, including the Tax Matters Agreements (or against any other collateral source, available to the extent includable in indemnifiable Losses), it with respect to the facts giving rise to the right to indemnification hereunder. For clarity, the making of any such Losses;claim shall not impact the timing or amount of any indemnification that may be due from the Unitholders to the Buyer Indemnified Parties. To the extent that any Buyer Indemnified Party receives a payment under any such insurance policy or collateral source corresponding to an indemnification payment made by the Unitholders with respect a Claim for indemnification hereunder, such Buyer Indemnified Parties shall reimburse the Unitholders for such indemnification payment up to the amount of such insurance policy or collateral source payment.
39881135.1 ACTIVE/118012393.3
(bd) The right to indemnification or other remedy based on the Parent Indemnitees representations, warranties, covenants and agreements herein shall not be entitled to recover in respect affected or deemed waived by reason of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(iinvestigation made or conducted by or on behalf of the party seeking indemnification (including by any of their advisors or representatives) or Section 10.2(b)(ii) unless by reason of the aggregate Losses relating to fact that the party seeking indemnification or arising out any of such claim (together with any related claims its advisors or other claims which arise from a substantially similar course of conduct representatives knew, or facts) equal or exceed $50,000; providedshould have known, that this Section 10.4(bsuch representation or warranty is or might be inaccurate or that any fact, event or circumstance had or had not occurred.
(e) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) Notwithstanding anything herein to the extent such claim is based upon contrary, for purposes of (i) determining whether a breach of the applicable representation or warranty has occurred and (ii) calculating Damages under this Section 7.4, the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies)Article II, Section 3.3 (Authority) or Section 3.15 (Brokers) or (y) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation Article III, and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers);
(c) the Member Indemnitees Article IV shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply read without regard to any claim for indemnification pursuant limitation as to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) materiality or Section 5.10 (New Company);
(d) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.15) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority);
(e) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(f) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;
(g) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;Material Adverse Effect contained therein.
Appears in 1 contract
Samples: Unit Purchase Agreement (Ultragenyx Pharmaceutical Inc.)
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 8.2 are subject to the following limitations:
(a) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b) and Section 10.2(c) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i) or Section 10.2(b)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers) or (y) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers);
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent Buyer Indemnitees shall not be entitled to recover Losses pursuant to clause (i) of Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A8.2(a) until the aggregate total amount which the Parent Buyer Indemnitees would be entitled to recover under such sections clause (i) of Section 8.2(a) (as limited by the other provisions of this Section 10.4(a) and Section 10.4(b) and Section 12.158.4) exceeds $5,000,000 650,000 (the “Threshold”), in which case, case the Parent Buyer Indemnitees shall only be entitled to recover Losses in excess of such amount, and in no event shall the Thresholdaggregate recovery of Losses by Buyer Indemnitees pursuant to clause (i) of Section 8.2(a) exceed $10,000,000, subject to the other limitations set forth in this Section 8.4; provided, provided that the Threshold this Section 8.4(a) shall not apply to Losses suffered or incurred as a result of or arising from or relating to any claim breach of, or inaccuracy in any Fundamental Representation. 72
(b) with respect to any Losses for which the Buyer Indemnitees may be entitled to indemnification pursuant to clause (i) of Section 10.2(a)(i8.2(a), Parent shall not be liable for any individual or series of related Losses which do not exceed $50,000 (which Losses shall not be counted towards the Threshold); provided that this Section 8.4(b) shall not apply to Losses suffered or incurred as a result of or arising from or relating to any breach of or inaccuracy in any Fundamental Representation.
(c) in no event shall the aggregate recovery of Losses by Buyer Indemnitees pursuant to clause (i) of Section 8.2(a) with respect to any breach of a Fundamental Representation, or pursuant to any of clauses (ii), (iii) or (iv) of Section 8.2(a), exceed the Purchase Price, in each case, subject to the extent such claim is based upon a breach of the representations and warranties other limitations set forth in this Section 3.2 8.4;
(Capitalization d) the amount of any Losses recoverable by Buyer Indemnitee pursuant to Section 8.2(a) shall be determined net of (i) the amount of any such Losses that were set forth on the Final Closing Statement and included in the calculation of the Group Final Cash Purchase Price pursuant to Section 2.5(c); (ii) the amount of any indemnification payment actually received by any Buyer Indemnitee from any third party in respect of such Losses; and (iii) the amount of any insurance proceeds actually received by any Buyer Indemnitee from any third party insurer with respect to such Losses, in each case of clause (ii) and (iii), net of any deductibles or other reasonable costs and expenses incurred by any Buyer Indemnitee in procuring such recovery; provided, however, that (A) if Parent or any Company pays to any Buyer Indemnitee an amount in respect of Losses and any Buyer Indemnitee thereafter receives from a third party a sum in respect of such Losses, then Buyer shall promptly tender to Parent an amount equal to the lesser of such sum and the amount that Parent or such Company paid in respect of such Losses; and (B) Buyer shall, and shall cause the other Buyer Indemnitees to, use commercially reasonable efforts to obtain available recoveries as contemplated by clauses (ii) and (iii) of this Section 8.4(d); provided that such commercially reasonable efforts shall not obligate Buyer or any Buyer Indemnitee to expend any amount of money other than de minimis amounts (unless such other amounts are advanced by Parent or the Companies) ), commence any Action, or Section 3.3 (Authority)otherwise take any action that could reasonably be expected to have an adverse impact on the Business;
(e) no party shall be liable for any punitive or exemplary damages (except to the Member extent paid in connection with a Third Party Claim or Fraud); and
(f) the Buyer Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(iclause (iii) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a8.2(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(f) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors Environmental Liability that is discovered through or during any intrusive or subsurface investigations or other sampling of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(iienvironmental media undertaken other than (i) in excess of the Aggregate Unit Value;
connection with any necessary or ordinary course maintenance or repairs, (gii) the aggregate liability of in connection with any Contributor improvement, remodel or LVP REIT pursuant to Section 10.2(b)(idevelopment activity at any Theatre, (iii) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received as required by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, Law or at the Parent Closing Pricedirection of a Governmental Entity, or (iv) less as deemed necessary or advisable by Buyer based on the amount advice of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;counsel.
Appears in 1 contract
Samples: Asset Purchase Agreement
Limitations on Indemnification Obligations. The rights of the Purchaser Indemnitees and Seller Indemnities to indemnification pursuant to the provisions provision of Section 10.2 8.2(a) or Section 8.2(b), as applicable, are subject to the following limitations:
(a) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b) and Section 10.2(c) shall be determined net of any amounts recovered by the Parent Purchaser Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), ) with respect to such Losses, in each case, net of costs of collection and any increase to premiums resulting from making any claim thereunder;
(b) the Parent Purchaser Indemnitees and Seller Indemnitees shall not be entitled to recover in respect of for any individual claim particular Loss pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i8.2(a) or Section 10.2(b)(ii) 8.2(b), as applicable, unless the aggregate Losses relating to such Loss equals or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed exceeds $50,000100,000; provided, that for all purposes of this Section 10.4(b) shall not apply Article 8, other than with respect to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies3.4(c)(ii) and Section 3.4(d), Section 3.3 (Authority) or Section 3.15 (Brokers) or (y) Section 10.2(b)(i) any qualification of any representations and warranties by reference to the extent such claim is based upon a materiality of or Company Material Adverse Effect relating to the matters stated therein, or words of similar effect, shall be disregarded in determining any breach thereof or the amount of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers)any Loss arising therefrom;
(c) the Member Purchaser Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent Seller Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii8.2(a) or Section 10.2(a)(iv)(A) 8.2(b), as applicable, until the aggregate total amount which the Parent Purchaser Indemnitees or Seller Indemnitees, as applicable, would recover under such sections Section 8.2(a) (as limited by the provisions of Section 10.4(aSections 8.4(a), (b) and 10.13), but for this Section 10.4(b) and Section 12.15) 8.4(c), exceeds $5,000,000 3,000,000 (the “Threshold”), in which casecase the Purchaser Indemnitees or Seller Indemnitees, the Parent Indemnitees as applicable, shall only be entitled to recover Losses in excess of such amount, subject to the other limitations herein (provided that recoveries made with respect to any breach that constitutes actual fraud (which for purposes of clarity, shall be intentional and knowing) shall neither be limited by, nor applied toward, the Threshold; provided, that );
(d) at any given time the Threshold remaining portion of the Indemnity Escrow Amount shall not apply be the sole source of recovery with respect to any claim for indemnification Losses indemnifiable pursuant to Section 10.2(a)(i8.2(a), and in no event shall the Purchaser Indemnitees be entitled to recover more than Indemnity Escrow Amount pursuant to Section 8.2(a) in the aggregate (provided that recoveries made with respect to the extent such claim is based upon a any breach of the representations a representation that constitutes actual fraud (which for purposes of clarity, shall be intentional and warranties set forth in Section 3.2 (Capitalization of the Group Companiesknowing) or Section 3.3 (Authority)shall not be so limited;
(e) the Member Purchaser Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i8.2(a) for any Loss to the extent that (i) prior to the date hereof the Group Companies recorded a reserve in their consolidated books and records with respect to such Loss, (ii) such Loss was taken into account in the Purchase Price as finally determined pursuant to Section 2.9(b), (iii) the Purchaser Indemnitees could have, with commercially reasonable efforts, mitigated or prevented such Loss and (iv) to the extent such claim is based upon a breach Loss was actually taken into account in calculation of the representations and warranties Consolidated EBITDA as set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);on the Consolidated EBITDA Certificate; and
(f) except in no event shall Sellers’ aggregate liability for Losses hereunder exceed the Purchase Price (including, for purposes of clarity, with respect to any claims resulting breach that constitutes actual fraud). For avoidance of doubt, any recoveries by the Purchaser Indemnitees from the failure to complete Escrow Funds shall be included in calculating whether the Financing pursuant aggregate Sellers’ aggregate liability for Losses hereunder exceeds the Purchase Price. Notwithstanding anything contained herein to the terms of this Agreement (including as a result of any waiver by contrary, after the Contributors of Section 8.3(c)Closing, on the date that the Escrow Funds are reduced to zero, the aggregate liability Purchaser Indemnitees shall have no further rights to indemnification under Section 8.2 (other than with respect to any breach of Parent REITa representation that constitutes actual fraud (which for purposes of clarity, Parent OP shall be intentional and Parent Sub knowing)) or payment under Section 2.9(c). In any case where a Purchaser Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Purchaser Indemnitee was indemnified pursuant to Section 10.2(c)(i8.2, such Purchaser Indemnitee shall promptly return to the Escrow Account or, if the Escrow Agreement has expired, promptly pay over to the Representative (on behalf of Sellers) and Section 10.2(c)(ii) shall the amount so recovered (after deducting therefrom the amount of the expenses incurred by such Purchaser Indemnitee in procuring such recovery), but not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;
(g) the aggregate liability any amount previously so paid to or on behalf of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, Purchaser Indemnitee in the case respect of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;matter.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Logan's Roadhouse of Kansas, Inc.)
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) the amount of any and all Losses recoverable pursuant to Notwithstanding Section 10.2(a)8.1, Section 10.2(b) and Section 10.2(c) there shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, no liability for indemnification under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i) or Section 10.2(b)(ii8.1(a) unless the aggregate amount of Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that under this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers) or (y) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers);
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.15) Agreement exceeds $5,000,000 1,400,000 (the “Seller Indemnification Threshold”), in at which case, xxxx Xxxxxx will be obligated to indemnify the Parent Indemnitees shall only be entitled Buyer Indemnified Parties with respect to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority);
(e) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover all Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth described in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(f) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii8.1(a) in excess of the Aggregate Unit Value;
(g) Seller Indemnification Threshold; provided that the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) Seller Indemnification Threshold shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, apply in the case of Parent OP Common Units(i) Fraud, or (ii) any breach of or inaccuracy in any representation or warranty made by Seller in any of the following Sections: 2.1 (due organization), 2.2 (authorization; no conflict), 2.5(a) (assets), 2.6 (taxes) and 2.18 (brokers and agents).
(b) Notwithstanding Section 8.2, there shall be no liability for indemnification under Section 8.2(a) unless the aggregate amount of Losses thereunder exceeds $1,400,000 (the “Buyer Indemnification Threshold”), at which time Buyer will be obligated to indemnify the Parent Closing Price) less Seller Indemnified Parties with respect to the aggregate amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover all Losses pursuant to described in Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii8.2(a) in excess of the Aggregate Consideration Value less Buyer Indemnification Threshold; provided that the amount Buyer Indemnification Threshold shall not apply in the case of Escrow Cash and Escrow Units allocated to such Person;(i) Fraud or (ii) any breach of or inaccuracy in any representation or warranty made by Buyer in any of the following Sections:
3.1 (due organization), 3.2 (authorization; no conflict), 3.4 (capitalization), 3.5 (buyer stock) and
Appears in 1 contract
Limitations on Indemnification Obligations. The rights to indemnification pursuant Notwithstanding anything to the provisions of Section 10.2 are subject to the following limitationscontrary contained herein:
(ai) With respect to the amount indemnification obligations of any and all Losses recoverable Sellers pursuant to Section 10.2(a7.1(a)(i)(A) or Section 7.1(a)(i)(B), no Seller shall be obligated to indemnify the Purchaser Indemnified Parties under Section 7.1(a)(i)(A) or under Section 7.1(a)(i)(B) unless the aggregate of all Losses for which Sellers would, but for this clause (i), be liable under Section 7.1(a)(i)(A) and Section 7.1(a)(i)(B) exceeds on a cumulative basis $10,000, at which point, subject to any other applicable limitations contained in this Section 7.1(e), the Purchaser Indemnified Parties shall be entitled to all indemnification amounts under Section 7.1(a)(i)(A) and Section 7.1(a)(i)(B) from Sellers, including the first full $10,000 of Losses (the “Threshold”); provided, however, that the limitations in this Section 7.1(e)(i) shall not apply (A) to any indemnification obligations arising from or relating to any of the Fundamental Representations, or (B) in the case of fraud or intentional breach with respect to this Agreement or the transactions contemplated hereby.
(ii) With respect to the indemnification obligations of Sellers pursuant to Section 7.1(a)(i)(A), Section 10.2(b7.1(a)(i)(C), and Section 7.1(a)(ii) through Section 7.1(a)(vi), each Seller’s indemnification obligations shall be joint and several.
(iii) With respect to the indemnification obligations of Sellers pursuant to Section 7.1(a)(i)(B) and Section 10.2(c7.1(a)(i)(D), each Seller shall only be obligated to indemnify the Purchaser Indemnified Parties with respect to (A) an inaccuracy or breach of a representation or warranty covered by Section 7.1(a)(i)(B) (that does not also relate to any inaccuracy or breach of a representation or warranty subject to Section 7.1(a)(i)(A)) to the extent that such inaccuracy or breach related to or involved such Seller, or (B) a breach of a covenant, understanding or agreement covered by Section 7.1(a)(i)(D) to the extent that such Seller or Sellers’ Representative breached or caused or permitted the breach of such covenant, understanding or agreement.
(iv) Any indemnification obligations of Sellers under this ARTICLE VII shall be determined net satisfied first by recourse to the Escrow Fund, and to the extent the Escrow Fund is no longer available or is insufficient to satisfy the indemnification obligation, and second by direct recourse to Sellers.
(v) With respect to the indemnification obligations of any Purchaser pursuant to Section 7.1(b)(i), Purchaser shall not be obligated to indemnify Sellers under Section 7.1(b)(i) unless the aggregate of all Losses for which Purchaser would, but for this clause (v), be liable under this Agreement exceeds on a cumulative basis the Threshold, at which point Sellers shall be entitled to all indemnification amounts recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this AgreementSection 7.1(b)(i), including the Tax Matters Agreements (to the extent includable in indemnifiable first full $10,000 of Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i) or Section 10.2(b)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, however, that the limitations in this Section 10.4(b7.1(e)(v) shall not apply (A) to any claim for indemnification obligations arising from the Fundamental Representations, or (B) in the case of fraud or intentional breach with respect to this Agreement or the transactions contemplated hereby.
(vi) With respect to the indemnification obligations of Purchaser pursuant to Section 7.1(b), Purchaser shall not be obligated to indemnify Sellers under Section 7.1(b) for any Losses for which Purchaser would, but for this clause (xvi), be obligated to indemnify Sellers under Section 7.1(b) Section 10.2(a)(iin excess of an amount equal to the Purchase Price; provided, however, that the limitations in this clause (vi) shall not apply (A) to the extent such claim is based upon a breach of any indemnification obligations arising from the representations and warranties set forth in Section 3.2 4.2 or Section 4.6, or (Capitalization B) in the case of fraud or intentional breach with respect to this Agreement or the transactions contemplated hereby.
(vii) The Parties acknowledge and agree that one of the Group Companies)purposes of the representations, Section 3.3 warranties, covenants, agreements, and indemnities made in this Agreement, the schedules and exhibits hereto, or in any certificate furnished in connection with the transactions contemplated hereby, is to shift the economic risk and responsibility for certain known and unknown Liabilities among the Parties. Accordingly, the right to indemnification, payment of Losses or other remedy based on breaches or inaccuracies of representations, warranties or compliance with the covenants and obligations granted pursuant to this ARTICLE VII, will not be affected by any investigation conducted with respect to, or any knowledge acquired (Authorityor capable of being acquired) at any time, whether before or Section 3.15 (Brokers) after the execution and delivery of this Agreement by the Claimant. All representations, warranties, covenants, agreements, and indemnities shall be deemed material and relied upon by the Claimant, regardless of any knowledge or (y) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers);investigation.
(cviii) the Member Indemnitees No Seller shall not be entitled to recover in respect contribution or any other payments from the Company or any of its subsidiaries for any individual claim Losses for which such Seller is obligated to make any payment to any Purchaser Indemnified Party pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.15) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority);
(e) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(f) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(cARTICLE VII), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;
(g) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;.
Appears in 1 contract
Samples: Stock Purchase Agreement (Elite Education Group International LTD)
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) the amount of any and all Losses recoverable pursuant to Notwithstanding Section 10.2(a)5.1, Section 10.2(b) and Section 10.2(c) there shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, no liability for indemnification under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i) or Section 10.2(b)(ii5.1(a) unless the aggregate amount of Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that under this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers) or (y) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers);
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.15) Agreement exceeds $5,000,000 50,000 (the “Threshold”), at which time the Seller Parties will be obligated to indemnify the Buyer Indemnified Parties with respect to the aggregate amount of all Losses described in which case, the Parent Indemnitees shall only be entitled to recover Losses Section 5.1(a) in excess of the Threshold; provided, provided that the Threshold shall not apply to the misrepresentation, breach or inaccuracy of any claim representation or warranty made by any Seller Party in any of the following Sections: 2.1 (due organization), 2.2(a) (authorization; validity), 2.3 (capitalization), 2.8 (assets)(and other provisions relating to title to the Acquired Assets), 2.21 (absence of claims; business relationships with affiliates), 2.22 (certain matters relating to the Holding Companies), and 2.24 (brokers and agents) (the “Seller Fundamental Representations”).
(b) Notwithstanding Section 5.2, there shall be no liability for indemnification pursuant to under Section 10.2(a)(i5.2(a) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority);
(e) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until unless the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) Losses thereunder exceeds the Threshold, at which time Buyer will be obligated to indemnify the Seller Indemnified Parties with respect to the aggregate amount of all Losses described in which case, the Member Indemnitees shall only be entitled to recover Losses Section 5.2(a) in excess of the Threshold; provided, provided that the Threshold shall not apply to the misrepresentation, breach or inaccuracy of any claim for representation or warranty made by Buyer in any of the following Sections: 3.1 (due organization), 3.2(a) (authorization; validity) and 3.3 (brokers and agents) (the “Buyer Fundamental Representations”).
(c) The indemnification pursuant obligations of the Seller Parties under Section 5.1(a) shall be limited to Section 10.2(c)(ian amount (the “Cap”) equal to the extent “Net Cash Surplus” reflected on the Funds Flow.
(d) The indemnification obligations of Buyer under Section 5.2(a) shall be limited to an amount equal to the Cap.
(e) Notwithstanding a Party’s knowledge of any breach by the other Party of any representation, warranty, covenant or agreement contained in this Agreement (and regardless of how the non-breaching Party shall have acquired such claim is based upon a breach knowledge), the non-breaching Party shall have the right to consummate the transactions provided for herein, and all of the representations non-breaching Party’s rights and warranties set forth remedies with respect to such breach shall be preserved without regard to its knowledge of such information, it being agreed that each Party, in Section 5.2 (Authority)entering into this Agreement, Section 5.6 (Brokers) or Section 5.10 (New Company);has bargained for the correctness of each representation, warranty, covenant and agreement of the other Parties contained herein.
(f) except with respect to No Claim shall be brought or maintained by any claims resulting from Buyer Indemnified Party or any of their respective successors or permitted assigns against any present or former officer, director, employee or Affiliate of any party hereto which is not otherwise expressly identified as a Party, and no recourse shall be brought or granted against any such present or former officer, director, employee or Affiliate, by virtue of or based upon any alleged misrepresentation or inaccuracy in or breach of any of the failure to complete representations, warranties, agreements or covenants of the Financing pursuant to the terms of Seller Parties contained in this Agreement (including as or any Transaction Document delivered by a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;Seller Party hereunder.
(g) Notwithstanding anything to the aggregate liability contrary in this Agreement, for purposes of determining (x) whether there has been a breach requiring the Seller Parties to indemnify as provided in Section 5.1 and (y) the Losses with respect thereto, each representation, warranty, covenant and agreement made by any Contributor or LVP REIT pursuant Seller Party, whether made herein (other than the last sentence of Section 2.4(c) (fraud relating to books and records), Section 10.2(b)(i2.5 (absence of certain changes), the last sentence of Section 2.12(a) (investigations relating to fraud), Section 2.16(a)(ix) (certain contracts) and Section 10.2(b)(ii2.23 (disclosure)) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valuedor in any other document, agreement or instrument delivered in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectivelyconnection herewith, shall not be entitled deemed to recover Losses pursuant have been made without any qualifications or limitations as to Section 10.2(amateriality (including any qualifications or limitations made by reference to a Material Adverse Change), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;.
Appears in 1 contract
Samples: Asset Purchase Agreement
Limitations on Indemnification Obligations. The rights of the Buyer Indemnitees to indemnification pursuant to the provisions of Section 10.2 9.2 are subject to the following limitations:
(a) other than with respect to Losses paid, directly or indirectly, as a result of, in connection with, or arising out of the Fundamental Representations, the Buyer Indemnitees shall not be entitled to recover Losses pursuant to Section 9.2(a)(i) or Section 9.2(a)(ii) until the total amount of Losses which the Buyer Indemnitees would recover under Section 9.2(a)(i) or Section 9.2(a)(ii), but for this Section 9.5(a), exceeds $2,450,000, in which case, the Buyer Indemnitees shall be entitled to recover the entire amount of such Losses (including such amounts previously restricted by this Section 9.5(a));
(b) other than with respect to Losses paid, directly or indirectly, as a result of, in connection with, or arising out of the Fundamental Representations, the Buyer Indemnitees shall not be entitled to recover for any particular Loss (including any series of related Losses) pursuant to Section 9.2(a)(i) or Section 9.2(a)(ii) unless such Loss (including any series of related Losses) equals or exceeds $50,000;
(c) except with respect to the representations and warranties set forth in Section 3.15(g), Losses with respect to which shall not count towards or be included in the maximum liability limits set forth in this Section 9.5(c) , the maximum liability of Seller with respect to Losses indemnifiable pursuant to Section 9.2(a) shall be an amount equal to the dollar value of the Indemnity Escrow Amount immediately after adjustment pursuant to Section 2.4(d)(ii); provided, that:
(i) on the First Release Date, the maximum liability of Seller with respect to Losses indemnifiable pursuant to Section 9.2(a) (other than with respect to the representations and warranties set forth in Section 3.15(g)) shall be adjusted and shall equal an amount equal to the lesser of (A) (1) $7,350,000 plus (2) the aggregate amount of payments made by Seller to the Buyer Indemnitees in accordance with this Agreement prior to the First Release Date (whether directly or from the Escrow Account) (other than with respect to the representations and warranties set forth in Section 3.15(g)), plus (3) the aggregate amount of claims for payment made by the Buyer Indemnitees in accordance with this Agreement and not fully resolved prior to the First Release Date (other than with respect to the representations and warranties set forth in Section 3.15(g)), and (B) the dollar value of the Indemnity Escrow Amount immediately after adjustment pursuant to Section 2.4(d)(ii);
(ii) on the Second Release Date, the maximum liability of Seller with respect to Losses indemnifiable pursuant to Section 9.2(a) (other than with respect to the representations and warranties set forth in Section 3.15(g)) shall be adjusted and shall equal the lesser of (A) (1) $3,675,000 plus (2) the aggregate amount of payments made by Seller to the Buyer Indemnitees in accordance with this Agreement prior to the Second Release Date (whether directly or from the Escrow Account) (other than with respect to the representations and warranties set forth in Section 3.15(g)), plus (3) the aggregate amount of claims for payment made by the Buyer Indemnitees in accordance with this Agreement and not fully resolved prior to the Second Release Date (other than with respect to the representations and warranties set forth in Section 3.15(g)), and (B) the dollar value of the Indemnity Escrow Amount immediately after adjustment pursuant to Section 2.4(d)(ii);
(iii) on the Third Release Date, except with respect to breaches of representations and warranties set forth in Section 3.15(g), the Buyer Indemnitees shall no longer be entitled to bring a claim for indemnification pursuant to Section 9.2(a), and the maximum liability of Seller with respect to Losses indemnifiable pursuant to Section 9.2(a) (other than with respect to the representations and warranties set forth in Section 3.15(g)) shall be fixed at the lesser of (A) (1) the aggregate amount of payments made by Seller to the Buyer Indemnitees in accordance with this Agreement prior to the Third Release Date (whether directly or from the Escrow Account) (other than with respect to the representations and warranties set forth in Section 3.15(g)), plus (2) the aggregate amount of claims for payment made by the Buyer Indemnitees in accordance with this Agreement and not fully resolved prior to the Third Release Date (other than with respect to the representations and warranties set forth in Section 3.15(g)), and (B) the dollar value of the Indemnity Escrow Amount immediately after adjustment pursuant to Section 2.4(d)(ii); and
(iv) if at any time following the First Release Date, if an amount claimed by the Buyer Indemnitees is resolved, in whole or part, in Seller’s favor, to the extent that following such resolution the maximum liability of Seller with respect to Losses indemnifiable pursuant to Section 9.2(a) (other than with respect to the representations and warranties set forth in Section 3.15(g)) as of the immediately prior Release Date would have been a lower amount than the calculation of such maximum liability as of such Release Date (calculating the amount of maximum liability as of such Release Date as though such amount had been resolved on such Release Date), then the maximum liability of Seller with respect to Losses indemnifiable pursuant to Section 9.2(a) (other than with respect to the representations and warranties set forth in Section 3.15(g)) shall immediately be re-adjusted to equal such lower amount;
(d) the maximum liability of Seller with respect to Losses indemnifiable pursuant to Section 9.2(a) arising out of any breach of the representation and warranties set forth in Section 3.15(g) shall be $35,000,000;
(e) each Party entitled to indemnification hereunder shall take all commercially reasonable steps to mitigate all Losses after becoming aware of any event which would reasonably be expected to give rise to any Losses that are indemnifiable or recoverable hereunder or in connection herewith; provided, that any failure to mitigate Losses in accordance with the foregoing shall not relieve the applicable indemnifying Party of its obligations hereunder, except with respect to that portion of a Loss directly resulting from a Party’s failure to mitigate;
(f) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b) and Section 10.2(c) shall be determined net of (i) any cash amounts actually recovered by the Parent Buyer Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, under insurance policies or from other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including ) with respect to such Losses (in each case net of expenses of recovery thereof) and (ii) the amount of any Tax Matters Agreements (to the extent includable in indemnifiable Losses), benefits actually realized with respect to such Losses;, as and to the extent such benefits are realized as a refund, credit or other reduction in Taxes (determined by comparing the Taxes that would have been payable taking into account any deductions attributable to the Loss with those Taxes that would have been payable in the absence of such deductions, assuming that such deductions are the last item of deduction on any Tax Return) in the tax year in which the Loss occurs or in either of the two immediately subsequent tax years; and
(bg) in calculating any Loss hereunder, the Parent Indemnitees amount of such Loss shall not be entitled reduced to recover the extent that (i) prior to the date hereof the Group Companies recorded a reserve in their books and records with respect to such Loss, or (ii) such Loss was taken into account in the determination of any individual claim the Final Purchase Price pursuant to Section 10.2(a)(i2.4(d).
(h) Seller shall have no obligation to indemnify any Buyer Indemnitee with respect to any environmental investigation, Section 10.2(a)(ii)monitoring, Section 10.2(a)(iv)(A)clean-up, Section 10.2(b)(i) or Section 10.2(b)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims containment, removal or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; providedcorrective action (collectively, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i“Response Actions”) to the extent that such claim Response Action (i) is not required under Environmental Law or by any Governmental Entity; (ii) is not tailored to attain compliance with minimum remedial standards applicable under Environmental Law employing where applicable risk-based upon a breach of remedial standards and institutional controls, where such standards or controls would not unreasonably interfere with ongoing commercial operations at the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) relevant property or Section 3.15 (Brokers) facility; or (yiii) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers);
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.15) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority);
(e) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(f) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including arises as a result of any waiver sampling or testing of environmental media or any disclosure or reporting to any third party by or on behalf of any Buyer Indemnitee or potential subsequent buyer of the Contributors business of the Group Companies, in each case which is not required under Environmental Laws or by any Governmental Entity in this Section 8.3(c9.8(e). In any case where a Buyer Indemnitee or a Group Company recovers, the aggregate liability under insurance policies or from other collateral sources, any amount in respect of Parent REIT, Parent OP and Parent Sub a matter for which such Buyer Indemnitee was indemnified pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) 9.2(a), such Buyer Indemnitee shall promptly pay over to Seller the amount so recovered (after deducting therefrom the amount of the expenses incurred by such Buyer Indemnitee or Group Company, as applicable, in procuring such recovery), but not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;
sum of (gi) the aggregate liability any amount previously so paid by Seller to or on behalf of such Buyer Indemnitee in respect of such matter and (ii) any Contributor amount expended by Seller in pursuing or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by defending any claim arising out of such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;matter.
Appears in 1 contract
Samples: Securities Purchase Agreement (Compass Diversified Holdings)
Limitations on Indemnification Obligations. (a) The rights of the Purchaser Indemnitees to indemnification pursuant to the provisions provision of Section 10.2 10.2(a)(i) are subject to the following limitations:
(ai) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b) and Section 10.2(c) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i) or Section 10.2(b)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers) or (y) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers);
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent Purchaser Indemnitees shall not be entitled to recover Losses for claims made with respect to breaches of the Non-Fundamental Representations (other than breaches of the Limitations Representations or the representations and warranties in Section 4.8, Losses with respect to which shall not be subject to the limitation in this Section 10.5(a)(i)) and the IP Representations pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A) until the aggregate total amount which the Parent Purchaser Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.1510.2(a)(i) exceeds $5,000,000 400,000 (the “ThresholdDeductible”), in which case, case the Parent Purchaser Indemnitees shall only be entitled to recover the aggregate amount of all such Losses in excess of the Deductible;
(ii) the Purchaser Indemnitees shall be entitled to recover Losses in excess for claims made with respect to breaches of (A) Non-Fundamental Representations (other than breaches of the Threshold; providedLimitations Representations, that the Threshold Losses with respect to which shall not apply be subject to the limitation in this Section 10.5(a)(ii)) pursuant to Section 10.2(a)(i) only up to the Escrow Amount; and (B) the IP Representations only up to thirty-five percent (35%) of the aggregate of the Final Consideration and any Contingent Payments, provided that with respect to claims made for breaches of the IP Representations after the Release Date, only with respect to an amount up to the Release Amount; and
(iii) in connection with any claim for indemnification pursuant to Section 10.2(a)(i), each Seller shall only be severally liable for his or its Pro Rata Share of any Losses (individually or in the aggregate), but not to exceed his or its Pro Rata Share of the Final Consideration and any Contingent Payments; provided, that (A) with respect to the Non-Fundamental Representations (other than the Limitations Representations), no Seller shall be responsible for aggregate Losses in excess of his or its Pro Rata Share of the Escrow Amount, and (B) with respect to the IP Representations, no Seller shall be responsible for aggregate Losses in excess of his or its Pro Rata Share of the amount equal to thirty-five percent (35%) of the aggregate of the Final Consideration and any Contingent Payments; provided that with respect to claims made after the Release Date for breaches of the IP Representations, no Seller shall be responsible for aggregate Losses in excess of his or its Pro Rata Share of the Release Amount; provided, further, that with respect to a breach of a representation or warranty contained in Article 5 (Representations and Warranties of the Sellers and the Representative) by a particular Seller, only such particular Seller shall be liable for Losses arising in connection with such breach, and the parties agree that no other Seller shall be liable hereunder for such breach.
(b) In connection with any claim for indemnification by a Purchaser Indemnitee pursuant to Section 10.2(a), other than pursuant to Section 10.2(a)(i), or any claim for fraud, intentional misrepresentation or willful breach with respect to a representation or warranty made by the Company (except to the extent such claim is based upon a breach Seller or the Representative had knowledge of or participated in such fraud, intentional misrepresentation or willful breach), the Sellers or the Representative pursuant to this Agreement, each Seller shall only be severally liable for his or its Pro Rata Share of any Losses (individually or in the aggregate), but not to exceed his or its Pro Rata Share of the representations Final Consideration and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority);any Contingent Payments.
(ec) the Member The Seller Indemnitees shall not be entitled to indemnification under Section 10.2(b)(i) to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii(i) until the aggregate total amount which of Losses the Member Seller Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by would exceed an amount equal to the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the ThresholdDeductible, in which case, case the Member Seller Indemnitees shall only be entitled only to recover Losses in excess of such amount; and (ii) in excess of an amount equal to the Threshold; provided, that the Threshold shall not apply to Escrow Amount.
(d) The amount of any claim Losses for which indemnification is sought pursuant to Section 10.2(c)(i10.2 shall be reduced by (i) to the extent such claim is based upon a breach amount of any insurance proceeds actually recovered by the representations and warranties set forth in Section 5.2 Indemnified Parties, (Authorityii) indemnity or contribution amounts actually recovered by any Indemnified Party from third parties (other than Purchaser or the Company), Section 5.6 (Brokers) or Section 5.10 (New Company);
(f) except in each case with respect to such Losses, and (iii) the value of any claims resulting from Tax benefit actually recognized by the failure to complete the Financing pursuant to the terms of this Agreement (including Indemnified Party as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;
(g) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;Losses.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(aA) the amount of Notwithstanding any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b) and Section 10.2(c) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside provision of this Agreement, the aggregate indemnification obligations of the Principal Shareholders, on the one hand, and Buyer, on the other hand, shall not exceed an amount equal to Thirty Seven Million Dollars ($37,000,000).
(B) Notwithstanding any other provision of this Agreement, including after the Tax Matters Agreements (Closing, the Principal Shareholders on the one hand, and Buyer, on the other hand, shall not have any obligation to indemnify the other party hereto for any Losses incurred by it or them unless, until and to the extent includable in indemnifiable Losses)the aggregate amount of such Losses equals or exceeds $250,000; provided, however, that the foregoing shall not apply to: (i) any obligations with respect to such Losses;
payments of, or adjustments to, the Base Amount (band the Series A or Series B Merger Consideration) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim under Article II above, (ii) claims made by Buyer pursuant to Section 10.2(a)(iSections 12.2(b), Section 10.2(a)(ii(c), Section 10.2(a)(iv)(A), Section 10.2(b)(i(d) or Section 10.2(b)(ii(f) unless the aggregate Losses relating to above, or (iii) claims arising out of any breaches of representations or warranties of any Principal Shareholder to the extent that such claim Principal Shareholder had actual knowledge that such representation or warranty was incorrect or inaccurate in any material respect at the time made, or (together with iv) claims arising out of any related claims or other claims which arise from a substantially similar course breach of conduct or facts) equal or exceed $50,000; provided, that the representations and warranties contained in Section 5.26. The limitation set forth in this Section 10.4(b12.6(b) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a obligations arising out of any breach of the representations and warranties set forth contained in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority5.11(g) or Section 3.15 5.21(b).
(BrokersC) Upon payment in full by an indemnifying party of any indemnification claim, whether such payment is effected by setoff or otherwise, or upon the payment in full by an indemnifying party of any judgment with respect to a third-party claim, the indemnifying party shall be subrogated (y) Section 10.2(b)(ito the extent permitted by applicable law) to the extent of such claim is based upon a breach payment to the rights of a representation the indemnified party against any landlords (other than Magnolia and warranty its subsidiaries), vendors, fee mortgagees, insurance carrier, workmens' compensation fund, attorneys, title insurance carrier, engineers, any Shareholder, surveyors, environmental inspectors, zoning experts and the other parties to the SCHM Agreements and the SV/South Florida Agreements. The foregoing shall not be deemed to require any Shareholder to reimburse the Company or any Subsidiary for any legal fees previously advanced or for any amounts accrued, in each case, to the extent set forth in Section 4.2 (Authority), Section 4.4 (Title) the Financial Statements or Section 4.6 (Brokers);
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.15) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority);
(e) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(f) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;
(g) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;Date Balance Sheet.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) the amount of any and all Losses recoverable pursuant to Notwithstanding Section 10.2(a)5.1, Section 10.2(b) and Section 10.2(c) there shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, no liability for indemnification under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i) or Section 10.2(b)(ii5.1(a) unless the aggregate amount of Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that under this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers) or (y) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers);
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.15) Agreement exceeds $5,000,000 50,000 (the “Threshold”), in at which case, time the Parent Indemnitees shall only Seller Parties will be entitled obligated to recover Losses indemnify the
(a) in excess of the Threshold; provided, provided that the Threshold shall not apply to the misrepresentation, breach or inaccuracy of any claim representation or warranty made by any Seller Party in any of the following Sections: 2.1 (due organization), 2.2(a) (authorization; validity), 2.3 (capitalization), 2.8 (assets)(and other provisions relating to title to the Acquired Assets), 2.21 (absence of claims; business relationships with affiliates), 2.22 (certain matters relating to the Holding Companies), and 2.24 (brokers and agents) (the “Seller Fundamental Representations”).
(b) Notwithstanding Section 5.2, there shall be no liability for indemnification pursuant to under Section 10.2(a)(i5.2(a) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority);
(e) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until unless the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) Losses thereunder exceeds the Threshold, at which time Buyer will be obligated to indemnify the Seller Indemnified Parties with respect to the aggregate amount of all Losses described in which case, the Member Indemnitees shall only be entitled to recover Losses Section 5.2(a) in excess of the Threshold; provided, provided that the Threshold shall not apply to the misrepresentation, breach or inaccuracy of any claim for representation or warranty made by Buyer in any of the following Sections: 3.1 (due organization), 3.2(a) (authorization; validity) and 3.3 (brokers and agents) (the “Buyer Fundamental Representations”).
(c) The indemnification pursuant obligations of the Seller Parties under Section 5.1(a) shall be limited to Section 10.2(c)(ian amount (the “Cap”) equal to the extent “Net Cash Surplus” reflected on the Funds Flow.
(d) The indemnification obligations of Buyer under Section 5.2(a) shall be limited to an amount equal to the Cap.
(e) Notwithstanding a Party’s knowledge of any breach by the other Party of any representation, warranty, covenant or agreement contained in this Agreement (and regardless of how the non-breaching Party shall have acquired such claim is based upon a breach knowledge), the non-breaching Party shall have the right to consummate the transactions provided for herein, and all of the representations non-breaching Party’s rights and warranties set forth remedies with respect to such breach shall be preserved without regard to its knowledge of such information, it being agreed that each Party, in Section 5.2 (Authority)entering into this Agreement, Section 5.6 (Brokers) or Section 5.10 (New Company);has bargained for the correctness of each representation, warranty, covenant and agreement of the other Parties contained herein.
(f) except with respect to No Claim shall be brought or maintained by any claims resulting from Buyer Indemnified Party or any of their respective successors or permitted assigns against any present or former officer, director, employee or Affiliate of any party hereto which is not otherwise expressly identified as a Party, and no recourse shall be brought or granted against any such present or former officer, director, employee or Affiliate, by virtue of or based upon any alleged misrepresentation or inaccuracy in or breach of any of the failure to complete representations, warranties, agreements or covenants of the Financing pursuant to the terms of Seller Parties contained in this Agreement (including as or any Transaction Document delivered by a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;Seller Party hereunder.
(g) Notwithstanding anything to the aggregate liability contrary in this Agreement, for purposes of determining (x) whether there has been a breach requiring the Seller Parties to indemnify as provided in Section 5.1 and (y) the Losses with respect thereto, each representation, warranty, covenant and agreement made by any Contributor or LVP REIT pursuant Seller Party, whether made herein (other than the last sentence of Section 2.4(c) (fraud relating to books and records), Section 10.2(b)(i2.5 (absence of certain changes), the last sentence of Section 2.12(a) (investigations relating to fraud), Section 2.16(a)(ix) (certain contracts) and Section 10.2(b)(ii2.23 (disclosure)) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valuedor in any other document, agreement or instrument delivered in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectivelyconnection herewith, shall not be entitled deemed to recover Losses pursuant have been made without any qualifications or limitations as to Section 10.2(amateriality (including any qualifications or limitations made by reference to a Material Adverse Change), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Buyer Indemnitees and the Seller Indemnitees to indemnification pursuant to the provisions of Section 10.2 9.2 are subject to the following limitations:
(a) the Buyer Indemnitees shall not be entitled to recover Losses pursuant to Section 9.2(a)(i)(1) or Section 9.2(a)(ii)(1) until the total amount of Losses which the Buyer Indemnitees would be entitled to recover under both Section 9.2(a)(i)(1) and Section 9.2(a)(ii)(1) taken together, but for this Section 9.4(a), exceeds one percent (1%) of the Aggregate Purchase Price, in which case, the Buyer Indemnitees shall only be entitled to recover Losses in excess of such amount; provided, however, that any Losses incurred by any Buyer Indemnitees as a result of a breach of the representations or warranties made by Sellers in Section 4.6(a) (Railcar Tape) or in Section 5(a) of any Subsequent Closing Certificate, in each case, solely to the extent that such breach relates to the information in clauses (viii), (ix) or (xi) of the definition of Railcar Information, shall not be subject to the limitations set forth in this Section 9.4(a);
(b) the Buyer Indemnitees shall not be entitled to recover for any particular Loss (including any series of related Losses) pursuant to Section 9.2(a)(i)(1) or Section 9.2(a)(ii)(1) unless such Loss (including any series of related Losses) equals or exceeds $100,000;
(c) the maximum liability of Sellers with respect to Losses indemnifiable pursuant to Section 9.2(a)(i)(1), Section 9.2(a)(ii)(1) and Section 10.1(a)(iv) shall not exceed ten percent (10%) of the Aggregate Purchase Price;
(d) the Seller Indemnitees shall not be entitled to recover Losses pursuant to Section 9.2(b)(i) until the total amount of Losses which the Seller Indemnitees would be entitled to recover under Section 9.2(b)(i), but for this Section 9.4(d), exceeds one percent (1%) of the Aggregate Purchase Price, in which case, the Seller Indemnitees shall only be entitled to recover Losses in excess of such amount;
(e) the Seller Indemnitees shall not be entitled to recover for any particular Loss (including any series of related Losses) pursuant to Section 9.2(b)(i) unless such Loss (including any series of related Losses) equals or exceeds $100,000;
(f) the maximum liability of Buyer with respect to Losses indemnifiable pursuant to Section 9.2(b)(i) shall not exceed ten percent (10%) of the Aggregate Purchase Price;
(g) in no event shall the Indemnified Party be required to first bring an Action against, or recover any amount from, any third party or under any applicable insurance policy as a precondition to the Indemnifying Party’s obligation to provide indemnification hereunder;
(h) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b) and Section 10.2(c) shall be determined net of any amounts actually recovered by the Parent Buyer Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, under insurance policies or from other collateral sources or third parties (net of any related deductible or expenses incurred by it in procuring such recovery) (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), ) with respect to such Losses;
(bi) for the Parent Indemnitees shall not be entitled to recover purposes of this Article IX, (1) any inaccuracy in respect or breach of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(irepresentation or warranty (other than (A) or Section 10.2(b)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the those representations and warranties set forth in Section 3.2 4.4(c) (Capitalization of the Group CompaniesFinancial Statements), Section 3.3 4.8(a) (AuthorityMaterial Contracts), Section 4.9(a) and Section 4.9(b)(vi)(Absence of Changes; Undisclosed Liabilities), Section 4.10(a) (Litigation), Section 4.11(a) (Permits) and Section 4.12(a) (Employee Plans) and (B) the Company’s Fundamental Representations (other than Section 4.1(c)) and the Subsequent Seller Fundamental Representations) shall be determined without regard to any Company Material Adverse Effect, materiality and similar qualifiers contained in or Section 3.15 otherwise applicable to such representation or warranty, and (Brokers2) any inaccuracy in or (y) Section 10.2(b)(i) to the extent such claim is based upon a breach of a any representation and or warranty set forth in the second sentence of Section 4.2 (Authority4.21(a), or in Section 4.4 (Title4.21(b) or Section 4.6 (Brokers);
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c4.21(f) shall not apply be determined without regard to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties qualification set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.15) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority);
(e) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(f) except therein with respect to any claims resulting from the failure to complete Knowledge of the Financing pursuant to the terms of Company; and
(j) nothing in this Agreement (including as a result limits the obligations of either Party under applicable law to mitigate any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;
(g) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;Losses.
Appears in 1 contract
Samples: Equity and Asset Purchase Agreement (Icahn Enterprises Holdings L.P.)
Limitations on Indemnification Obligations. (a) The rights to indemnification obligations of Parent, Seller and the Shareholders pursuant to the provisions of Section 10.2 8.1 are subject to the following limitations:
(ai) Seller and the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b) and Section 10.2(c) Members shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, required to indemnify and hold harmless under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), Section 8.1(a)(iii) with respect to such Losses;
Loss and Expense incurred by Buyer Group Members (bother than Loss and Expense incurred as a result of inaccuracies of the representations and warranties contained in Sections 5.1, 5.3, 5.7, 5.15, 5.17 and 5.27, as to which this subsection (i) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(ihave no effect) or Section 10.2(b)(ii) unless only if the aggregate Losses relating to or arising out amount of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed Loss and Expense exceeds $50,000; providedprovided that if the aggregate amount of Loss and Expense incurred by Buyer Group Members exceeds $50,000, that then this Section 10.4(bsubsection (i) shall not apply and Buyer Group Members shall be entitled to any claim indemnification for indemnification pursuant all Loss and Expense irrespective of this subsection (i);
(ii) the aggregate amount that Parent, Seller and the Shareholders shall be required to (xindemnify and hold harmless under Section 8.1(a)(iii) Section 10.2(a)(i) shall not exceed an amount equal to the extent Purchase Price;
(iii) the aggregate amount that any Shareholder shall be required to indemnify and hold harmless under Section 8.1(a)(iii) shall not exceed an amount equal to the portion of the Purchase Price received by such claim is based upon a breach of Shareholder as set forth on Schedule 8.5(a)(iii); and
(iv) the indemnification provided for in Section 8.1(a)(iii) shall terminate two (2) years after the Closing Date (and no claims shall be made by any Buyer Group Member under Section 8.1(a)(iii) thereafter), except that the indemnification by Parent, Seller and the Shareholders shall continue as to: (A) the representations and warranties set forth in Sections 5.1, 5.3, 5.7, 5.15, 5.17 and 5.27 as to all of which no time limitation shall apply and (B) any Loss or Expense of which any Buyer Group Member has notified Parent, Seller or the Shareholders in accordance with the requirements of Section 3.2 8.3 on or prior to the date such indemnification would otherwise terminate in accordance with this Section 8.5, as to which the obligation of Parent, Seller and the Shareholders shall continue until the liability of Parent, Seller and the Shareholders shall have been determined pursuant to this Article VIII, and Parent, Seller and the Shareholders shall have reimbursed all Buyer Group Members for the full amount of such Loss and Expense in accordance with this Article VIII.
(Capitalization b) The obligations of Buyer pursuant to the provisions of Section 8.2 are subject to the following limitations:
(i) Buyer shall be required to indemnify and hold harmless under Section 8.2(a)(iii) with respect to Loss and Expense incurred by Seller Group Members (other than Loss and Expense incurred as a result of inaccuracies of the Group Companies)representations and warranties contained in Sections 6.1, Section 3.3 6.2, 6.4 and 6.5, as to which this subsection (Authorityi) or Section 3.15 (Brokersshall have no effect) or (y) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers);
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless only if the aggregate Losses relating to or arising out amount of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to Loss and Expense exceeds the $50,000; provided, that if the aggregate amount of Loss and Expense incurred by Seller Group Members exceeds $50,000, then this Section 10.4(csubsection (i) shall not apply and Seller Group Members shall be entitled to any claim indemnification for indemnification pursuant all Loss and Expense irrespective of this subsection (i);
(ii) the aggregate amount that Buyer shall be required to (xindemnify and hold harmless under Section 8.3(a)(iii) Section 10.2(c)(i) shall not exceed an amount equal to the extent such claim is based upon a breach of Purchase Price; and
(iii) the indemnification provided for in Section 8.2(a)(iii) shall terminate two (2) years after the Closing Date (and no claims shall be made by any Seller Group Member under Section 8.2(a)(iii) thereafter), except that the indemnification by Buyer shall continue as to: (A) the representations and warranties set forth in Sections 6.1, 6.2, 6.4 and 6.5, as to which no time limitation shall apply and (B) any Loss or Expense of which any Seller Group Member has notified Buyer in accordance with the requirements of Section 5.2 (Authority)8.3 on or prior to the date such indemnification would otherwise terminate in accordance with this Section 8.5, Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) as to which the Parent Indemnitees obligation of Buyer shall not be entitled to recover Losses continue until the liability of Buyer shall have been determined pursuant to Section 10.2(a)(i)this Article VIII, Section 10.2(a)(ii) or Section 10.2(a)(iv)(A) until and Buyer shall have reimbursed all Seller Group Members for the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.15) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority);
(e) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(f) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;
(g) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the full amount of Escrow Cash such Loss and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) Expense in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;accordance with this Article VIII.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights Notwithstanding the foregoing, (a) the right of the Thin Crust Equityholders to indemnification pursuant under Section 9.2(a), (b) the right of the Deep Dish Post-Merger Equityholders to indemnification under Section 9.2(b) and (c) the provisions right of the Remaining Thin Crust Equityholders and the Deep Dish Post-Merger Equityholders to indemnification under Section 10.2 are 9.2(c) shall be subject to the following limitationsprovisions:
(a) the amount of any and all Losses recoverable No indemnification shall be available (i) pursuant to Section 10.2(a9.2(a)(i) or Section 9.2(a)(iii) above to Thin Crust Equityholders, (ii) pursuant to Section 9.2(b)(i) or Section 9.2(b)(iii) above to the Deep Dish Post-Merger Equityholders or (iii) pursuant to Section 9.2(c)(A) above to the Remaining Thin Crust Equityholders and the Deep Dish Post-Merger Equityholders, in each case unless the total of all claims for indemnification pursuant to the applicable Sections shall exceed Ten Million Dollars ($10,000,000) in the aggregate (the “Deductible”), Section 10.2(b) and Section 10.2(c) whereupon the full amount of Losses from the first dollar thereof shall be determined net recoverable in accordance with the terms hereof; provided, however, that (A) the Deductible shall not apply to any claims for indemnification pursuant to Section 9.2(a)(i) or Section 9.2(b)(i) in respect of a breach of any amounts recovered by of the Parent Indemnitees or their AffiliatesFundamental Representations the Capitalization Representations, or the Member Indemnitees representations and warranties contained in Section 5.2(g), or their Affiliatesin the case of any claim arising out of fraud or intentional misrepresentation committed by or on behalf of any other party hereto, and the Deep Dish Post-Merger Equityholders or the Thin Crust Equityholders, as applicable, under insurance policies or other collateral sources (such as contractual indemnities shall, subject to Section 9.3(b) below, be entitled to full recovery in seeking indemnification in respect of Losses incurred in connection with any breach of any Person which are Fundamental Representations, Capitalization Representations, the representations and warranties contained outside of this Agreementin Section 5.2(g), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), with respect to such Lossesor fraud or intentional misrepresentation;
(b) notwithstanding Section 9.3(a), no indemnification shall be available pursuant to Section 9.2(a)(i) above to the Parent Indemnitees shall not be entitled Thin Crust Equityholders or pursuant to recover Section 9.2(b)(i) above to the Deep Dish Post-Merger Equityholders, in each case solely in respect of any individual claim pursuant to Section 10.2(a)(i)breach of the Capitalization Representations, Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i) or Section 10.2(b)(ii) unless the aggregate Losses relating to or arising out total of such claim (together with any related all claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to the applicable Sections shall exceed Five Hundred Thousand Dollars (x$500,000) Section 10.2(a)(i) to in the extent such claim is based upon a breach aggregate, whereupon the full amount of Losses from the representations and warranties set forth first dollar thereof shall be recoverable in Section 3.2 (Capitalization of accordance with the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers) or (y) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers)terms hereof;
(c) the Member Indemnitees shall not be entitled maximum amount indemnifiable (i) by the Deep Dish Post-Merger Equityholders with respect to recover in respect of any individual claim claims asserted pursuant to Section 10.2(c)(i9.2(a)(i) or (ii) by the Thin Crust Equityholders with respect to claims asserted pursuant to Section 10.2(c)(ii9.2(b)(i) unless in each case shall be, in the aggregate Losses relating to or arising out of such claim aggregate, One Hundred Million Dollars (together with any related claims or other claims which arise from a substantially similar course of conduct or facts$100,000,000) equal or exceed an amount equal to $50,000(the “Indemnity Cap”); provided, however, that this Section 10.4(c) the Indemnity Cap shall not apply to any claim claims for indemnification pursuant to (xSection 9.2(a)(i) or Section 10.2(c)(i9.2(b)(i) to the extent such claim is based upon in respect of a breach of any of the representations Fundamental Representations or the Capitalization Representations or in the case of any claim arising out of fraud or intentional misrepresentation committed by or on behalf of any other party hereto, and warranties set forth the Deep Dish Post-Merger Equityholders or the Thin Crust Equityholders, as applicable, shall be entitled to full recovery in Section 5.2 (Authority)seeking indemnification in respect of Losses incurred in connection with any breach of any Fundamental Representations or Capitalization Representations, Section 5.6 (Brokers) or Section 5.10 (New Company)fraud or intentional misrepresentation;
(d) the Parent Indemnitees amount of any indemnifiable Losses payable under this ARTICLE IX by shall not be entitled to recover Losses pursuant to Section 10.2(a)(i)net of amounts actually recovered (i) under applicable insurance policies or (ii) from any other third party with indemnification or contribution obligations, Section 10.2(a)(ii) in each case, net of the costs of recovery of such amounts and net of any deductibles or Section 10.2(a)(iv)(A) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited co-payments paid by the provisions of Section 10.4(a) Indemnified Party and Section 10.4(b) and Section 12.15) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority);retro-premium adjustments.
(e) none of the Member Indemnitees Thin Crust Equityholders or the Deep Dish Post-Merger Equityholders shall not be entitled to recover Losses liable for any punitive or similar damages, except for those payable pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(f) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;
(g) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;Third-Party Claim.
Appears in 1 contract
Samples: Reorganization and Contribution Agreement (GrubHub Inc.)
Limitations on Indemnification Obligations. The rights of an Indemnified Party to indemnification pursuant to the provisions of under Section 10.2 7.2 are subject to the following limitations:
(a) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b) and Section 10.2(c) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees An Indemnified Party shall not be entitled to recover Damages under Section 7.2 until the cumulative amount of Damages claimed by the Indemnified Parties exceeds $500,000.00, in respect which case, such Indemnified Party shall be entitled to indemnification for all Damages in excess of (but not including) such amount subject to the limitations set forth herein. Notwithstanding the foregoing, the limitations contained in this Section 7.3(a) shall not apply to Excluded Damages, as defined below, and any individual claim pursuant to Excluded Damages shall not be included in determining the cumulative Damages under this Section 10.2(a)(i7.3(a), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i.
(b) or Section 10.2(b)(ii) unless the aggregate Losses Except for injunctive relief and similar equitable remedies and except for Damages relating to or arising out of:
(i) fraud by Confio,
(ii) any breach of such claim the Surviving Claims by Confio,
(together iii) any payment due SolarWinds under Section 6.5,
(iv) claims set forth in Section 7.2(a)(iii), (iv), (v) or (vi) above (collectively, subparts (i), (ii), (iii) and (iv), the “Excluded Damages”), and
(v) (A) breaches of Section 4.10(o) and all matters disclosed on Section 4.10(o) of the Confio Disclosure Schedule (if any disclosed); and (B) breaches of Sections 4.10(w)(iii), (iv) or (v) and all matters disclosed on Part II of Section 4.10(w)(iv) and Section 4.10(v) of the Confio Disclosure Schedule; (collectively, subparts (A) and (B), the “Customer Contract Damages”), recourse to the Escrow Fund in accordance with the provisions hereof shall be the Indemnified Parties’ sole and exclusive remedy available for any related claims or other claims which arise from a substantially similar course Damages under Section 7.2, subject to the below provisions of conduct or facts) equal or exceed $50,000this Section 7.3; provided, however, that this Section 10.4(bwith respect to Excluded Damages and Customer Contract Damages, the Indemnified Parties shall first seek to satisfy such Excluded Damages and Customer Contract Damages from the Escrow Fund and, if the Escrow Fund is insufficient to satisfy such Excluded Damages and Customer Contract Damages or has been released, then the Indemnified Parties shall be entitled to seek recourse from other sources.
(c) The Indemnifying Parties shall not apply be liable for any Damages to the extent that such Damages have been reserved for on the Closing Balance Sheet and taken into account in calculating the Closing Working Capital Amount or have been otherwise recovered by any Indemnified Party or satisfied by any other Person including, without limitation, as a result of any Indemnified Party receiving compensation for such Damages pursuant to any claim policy of insurance maintained by any Indemnified Party, taking into account any increase in insurance premiums of SolarWinds. In determining the amount of Damages under this Agreement, the amount of Damages shall be decreased to take into account any Tax benefit available to the Indemnified Party as a result of the matter giving rise to such Damages.
(d) The Indemnifying Parties shall not be liable for indemnification pursuant Customer Contract Damages related to items disclosed on Part II of Section 4.10(w)(iv) of the Confio Disclosure Schedule to the extent such Damages result from SolarWinds not continuing to perform consistent with Confio’s past practice.
(xe) Section 10.2(a)(iNotwithstanding anything to the contrary contained herein, the Indemnifying Parties shall not have any Liability under any provision of this Agreement for (i) any Damages consisting of any diminution in value, (ii) any punitive, incidental, consequential, special or indirect Damages or (iii) any Damages consisting of multiples of EBITDA, discounted cash flow or other multiples used to determine the Purchase Price hereunder, except, with respect to clauses (i), (ii) and (iii) to the extent such claim is based upon Damages are payable to a breach third party pursuant to a Third Party Claim; provided, however, that Confio will be liable for any Damages consisting of lost revenue, profits or earnings, or increased expenses.
(f) Notwithstanding anything to the contrary contained herein, in no event shall: (i) any Indemnifying Party’s aggregate liability with respect to Damages, other than Excluded Damages and Customer Contract Damages, arising out of or relating to this Agreement exceed such Confio Equity Holder’s Pro Rata Share of the representations and warranties set forth in Section 3.2 Escrow Cash; (Capitalization of the Group Companies), Section 3.3 (Authorityii) or Section 3.15 (Brokers) or (y) Section 10.2(b)(i) any Indemnifying Party’s liability with respect to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers);
(c) the Member Indemnitees shall not be entitled to recover Damages in respect of any individual indemnification claim pursuant hereunder exceed the product of (A) the amount of such Damages indemnified by all Indemnifying Parties in respect of any such indemnification claim multiplied by (B) such Indemnifying Party’s Pro Rata Share; (iii) any Indemnifying Party’s aggregate liability with respect to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or Damages arising out of or relating to this Agreement exceed such claim Indemnifying Party’s net proceeds received in connection with the Merger; or (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(div) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A) until the Indemnifying Parties’ collective aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.15) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority);
(e) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(f) except liability with respect to any claims resulting from the failure to complete the Financing pursuant to the terms Damages arising out of or relating this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;
(g) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Purchase Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;.
Appears in 1 contract
Samples: Merger Agreement (SolarWinds, Inc.)
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) Notwithstanding anything to the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b) and Section 10.2(c) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contrary contained outside of in this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees an Responsible Party shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i) or Section 10.2(b)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to liable for any claim for indemnification pursuant to Section 7.2(a)(i) or Section 7.1(b)(i), except in the case of liability resulting from fraud or breach of a Fundamental Representation, (x) with respect to any Loss having an aggregate value of less than $125,000 (“De Minimis Losses”) and (y) unless and until the aggregate amount of all such indemnifiable Losses (excluding any De Minimis Losses) equals or exceeds $5,000,000 (the “Threshold”); provided that once Losses equal or exceed the Threshold, the Responsible Party shall be liable for all Losses (excluding any De Minimis Losses) in excess of $2,500,000. The Threshold shall not apply to Losses claimed by the Buyer Indemnitees for (A) all Losses arising in connection with Section 10.2(a)(i6.3 (Fees and Expenses), (B) Losses relating to Section 2.15 (Taxes) and (C) all Losses arising in connection with Section 2.16 (Brokers).
(b) Except in the case of fraud by the Company or Seller or breach of a Fundamental Representation, and for equitable relief (including specific performance), the remedies set forth in this Article 7 (together with the Escrow Agreement) represent the sole source of recovery of any claims made by a Responsible Party after the Closing with respect to claims under this Agreement.
(c) Seller shall not be liable for cumulative aggregate claims for indemnification pursuant to Section 7.2(a) or Section 7.3 (except in the case of liability resulting from breach of a Fundamental Representation) in excess of amounts remaining in the Escrow Account and no Buyer Indemnitee will be entitled to recover such Losses from any source other than the Escrow Account.
(d) In no event shall Seller be liable for cumulative aggregate claims for indemnification pursuant to Section 7.2(a)(i) with respect to a breach of a Fundamental Representation in excess of the proceeds of the Purchase Price received by Seller.
(e) Notwithstanding the foregoing, the limitations on indemnification provided above in subparagraphs (a) and (b) of this Section 7.2 shall not apply to Taxes, which shall be governed by Section 7.5 below.
(f) No Buyer Indemnitee shall have any right to indemnification hereunder with respect to any environmental investigatory, corrective or Remedial Action (collectively, “Response Actions”) except to the extent such claim Response Action is based upon affirmatively required by Environmental Laws and is attributable to a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers) or (y) Section 10.2(b)(i) 2.11 and then only to the extent any such claim Response Action is conducted in a reasonably cost-effective manner and required to attain compliance with minimum remedial standards applicable under Environmental Laws based upon on existing industrial or commercial uses, employing risk based standards and institutional controls where available. Seller shall have no obligation to indemnify any Buyer Indemnitee or the Company with respect to any Response Action arising from (i) any conditions of contamination identified through any environmental sampling or analysis, or (ii) any report to any Governmental Entity, in either case which is not affirmatively required by Environmental Laws.
(g) The amount of any Loss for which indemnification is provided under this Article 7 shall be net of any amounts actually recovered by the indemnified party under insurance policies with respect to such Loss (net of any costs of recovery, deductibles and premium increases) and net of any tax benefits actually received by the indemnified party with respect to such Loss (if and when such indemnified party elects to receive such benefit). If an indemnified party has been indemnified for a breach Loss hereunder, and at any time thereafter such indemnified party recovers all or a portion of such Loss from a representation and warranty set forth in Section 4.2 third Person (Authorityincluding pursuant to any insurance policy), Section 4.4 the indemnified party which made such recovery shall promptly refund the amount previously paid to it with respect to such Loss (Title) or Section 4.6 (Brokersup to the amount recovered from the third Person);.
(ch) The amount of the Member Indemnitees Loss arising out of any item included as a liability in calculating the Closing Net Working Capital shall not be calculated net of the amount so included.
(i) In no event shall the amount of any Loss include any punitive, incidental, consequential, special or indirect damages, including business interruption, loss of future revenue, profits or income, or loss of business reputation, or opportunity, and in particular no “multiple of profits,” “multiple of cash flow,” diminution of value or similar valuation method shall be used in calculating the amount of any Loss.
(j) No party shall be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless hereunder for the aggregate same Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.15) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority);
(e) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(f) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;
(g) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;more than once.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Buyer Indemnitees and the Seller Indemnitees to indemnification pursuant to the provisions of Section 10.2 10.02 are subject to the following limitations:
(a) Notwithstanding anything in this Article X to the amount of any contrary and all Losses recoverable pursuant subject to Section 10.2(a), Section 10.2(b) and Section 10.2(c) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), with respect to such Losses;10.04(b):
(bi) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i) or Section 10.2(b)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers) or (y) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers);
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent The Buyer Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A10.02(a)(i) until the aggregate total amount which the Parent Buyer Indemnitees would recover under such sections this Article X exceeds the Basket (as limited by at which time the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.15) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Buyer Indemnitees shall only be entitled to recover full indemnification with respect to the amount of such Basket and the Losses in excess of the Thresholdthereof); provided, that notwithstanding the Threshold foregoing, the Basket shall not apply to any claim for indemnification recovery of Losses pursuant to Section 10.2(a)(i) to the extent such claim is based upon a breach Fundamental Representations which shall be exempt from the limitations of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority);Basket.
(eii) the Member The Seller Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii10.02(b)(i) until the aggregate total amount which the Member Seller Indemnitees would recover under such Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in Basket (at which case, time the Member Seller Indemnitees shall only be entitled to recover full indemnification with respect to the amount of such Basket and the Losses in excess of the Thresholdthereof); provided, that notwithstanding the Threshold foregoing, the Basket shall not apply to any claim for indemnification recovery of Losses pursuant to Section 10.2(c)(i) to Fundamental Representations which shall be exempt from the extent such claim is based upon a breach limitations of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);Basket.
(fb) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors The provisions of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii10.04(a) shall not exceed the Aggregate Unit Value and the Member Indemniteesapply to (i) Losses asserted under Sections 10.02(a)(ii) or (a)(iii) or Sections 10.02(b)(ii) or (b)(iii), collectively, shall not be entitled to recover (ii) Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess arising out of the Aggregate Unit Value;
fraud or intentional misrepresentation of a Party, or (giii) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;Liability for Taxes.
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Samples: Asset Purchase Agreement (Rhino Resource Partners LP)
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) Notwithstanding Section 8.1, there shall be no liability for indemnification under Section 8.1(a) unless the aggregate amount of Losses under this Agreement exceeds $[**] (the “Seller Indemnification Threshold”), at which xxxx Xxxxxx will be obligated to indemnify the Buyer Indemnified Parties with respect to the aggregate amount of all Losses described in Section 8.1(a) (i.e., from the first dollar); provided that the Seller Indemnification Threshold shall not apply in the case of fraud, intentional or knowing misrepresentation or willful breach or to the breach of or inaccuracy in any representation or warranty made by Seller in any of the following Sections: 2.1 (due organization), 2.2(a) (authorization; no conflict), 2.7 (assets) (and other provisions relating to title to the Acquired Assets), 2.8 (taxes), 2.9 (employee benefit plans), 2.15 (intellectual property), 2.18 (regulatory matters), 2.19 (affiliate transactions) and 2.24 (brokers and agents).
(b) Notwithstanding Section 8.2, there shall be no liability for indemnification under Section 8.2(a) unless the aggregate amount of Losses thereunder exceeds $[**] (the “Buyer Indemnification Threshold”), at which time Buyer will be obligated to indemnify the Seller Indemnified Parties with respect to the aggregate amount of all Losses described in Section 8.2(a) (i.e., from the first dollar); provided that the Buyer Indemnification Threshold shall not apply in the case of fraud, intentional or knowing misrepresentation or willful breach or to the breach of or inaccuracy in any representation or warranty made by Buyer in any of the following Sections: 3.1 (due organization) and 3.2 (authorization; no conflict).
(c) The indemnification obligations of Seller under Section 8.1(a) shall be limited to $[**] (the “Lower Cap”), provided, however, that the Lower Cap shall not apply in the case of fraud, intentional or knowing misrepresentation or willful breach or to (i) Seller’s indemnification obligations under Section 8.1(a) for breaches of or inaccuracies in any representation or warranty set forth in Sections 2.15 (intellectual property) and 2.18 (regulatory matters), which obligations (when aggregated with Seller’s other indemnification obligations under Section 8.1(a)) shall be limited to [**] percent ([**]%) of the Purchase Price, or (ii) Seller’s indemnification obligations under Section 8.1(a) for breaches of or inaccuracies in any representation or warranty set forth in Sections 2.1 (due organization), 2.2(a) (authorization; no conflict), 2.7 (assets) (and other provisions relating to title to the Acquired Assets), 2.8 (taxes), 2.9 (employee benefit plans), 2.19 (affiliate transactions) and 2.24 (brokers and agents), which obligations (when aggregated with Seller’s other indemnification obligations under Section 8.1(a)) shall be limited to an amount equal to the Purchase Price.
(d) The indemnification obligations of Buyer under Section 8.2(a) shall be limited to an amount equal to the Purchase Price; provided, however, that such limit shall not apply in the case of fraud, intentional or knowing misrepresentation or willful breach.
(e) Notwithstanding anything to the contrary in this Agreement: (i) Buyer shall have no obligations under Section 8.2 with respect to any matter for which any Buyer Indemnified Party is or would be entitled to indemnification under Section 8.1 (without giving effect to any limitations, including as to time, survival periods, deductibles, thresholds, caps, knowledge or materiality qualifiers); (ii) if a Party is entitled to bring a claim under more than one provision of Section 8.1 or 8.2, as the case may be, such Party may choose in its sole and absolute discretion the provision or provisions under which it seeks indemnification; and (iii) Seller shall be obligated to pay, by wire transfer of immediately available funds, any indemnification obligation owed to any Buyer Indemnified Party as set forth herein rather than such obligation being satisfied by disbursement from the Escrow Funds or by offset pursuant to Section 8.6, provided that Buyer shall proceed first against the Escrow Funds in the event of an indemnification claim under Section 8.1(a).
(f) Notwithstanding a Party’s knowledge of any breach by the other Party of any representation, warranty, covenant or agreement contained in this Agreement (and regardless of how the non-breaching Party shall have acquired such knowledge), the non-breaching Party shall have the right to consummate the transactions provided for herein, and all of the non-breaching Party’s rights and remedies with respect to such breach shall be preserved without regard to its knowledge of such information, it being agreed that each Party, in entering into this Agreement, has bargained for the correctness of each representation, warranty, covenant and agreement of the other Parties contained herein.
(g) The amount of Losses recoverable by the Indemnified Party under this Article VIII shall be reduced, on a dollar-for-dollar basis, by the amount of any insurance proceeds received by the Indemnified Party in connection with a Claim under this Article VIII under any insurance policies if and all only if such proceeds were paid or received under an insurance policy maintained by Seller prior to the Closing and the premiums for such insurance policies were paid by Seller.
(h) Notwithstanding anything to the contrary in this Agreement, for purposes of determining (i) whether there has been a breach requiring Seller to indemnify as provided in Section 8.1 and (ii) the Losses recoverable pursuant to with respect thereto, each representation, warranty, covenant and agreement made by Seller, whether made herein (other than Section 10.2(a2.4(b) (absence of changes)) or in any other document, Section 10.2(b) and Section 10.2(c) agreement or instrument delivered in connection herewith, shall be determined net of deemed to have been made without any amounts recovered by the Parent Indemnitees qualifications or their Affiliates, or the Member Indemnitees or their Affiliates, limitations as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements (to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(b)(i) or Section 10.2(b)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers) or (y) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers);
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii) or Section 10.2(a)(iv)(A) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a) and Section 10.4(b) and Section 12.15) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority);
(e) the Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or Section 10.2(c)(ii) until the aggregate amount which the Member Indemnitees would recover under Section 10.2(c)(i) and Section 10.2(c)(ii) (as limited by the provisions of Section 10.4(a) and Section 10.4(d) and Section 12.15) exceeds the Threshold, in which case, the Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(f) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement materiality (including as any qualifications or limitations made by reference to a result of any waiver by the Contributors of Section 8.3(cMaterial Adverse Change), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) and Section 10.2(c)(ii) in excess of the Aggregate Unit Value;
(g) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;.
Appears in 1 contract
