Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations: (a) The Sellers and the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation. (b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6. (c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded. (d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
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Limitations on Indemnification. The Subject to any limitations contained therein, all representations and warranties made by the parties herein or in any instrument or document furnished in connection herewith shall survive the Closing and any investigation at any time made by or on behalf of the parties hereto and shall expire twenty-four months after the Closing Date, except (i) as to any matter as to which a claim is submitted in writing to the indemnifying party prior to the applicable expiration date and identified as a claim for indemnification provided pursuant to this Agreement; (ii) as to any representation or warranty relating to ownership or title to the Shares or the Company's assets, including real or immovable property, which shall not expire; (iii) as to any matter which is based upon willful fraud by the indemnifying party, with respect to which the representations and warranties set forth in this Agreement shall expire only upon expiration of the applicable statute of limitations plus 60 days; (iv) as to any representation or warranty concerning tax or environmental matters, which shall expire only upon the expiration of the applicable statute of limitations plus 45 days; and (v) as to any representation or warranty concerning the authority to execute this Agreement or any of the other documents contemplated hereby, which shall not expire. No claim or action for in indemnity pursuant to Sections 8.1 and 8.2 6.1. or 6.2. hereof for breach of any representation or warranty shall be subject asserted or maintained by any party hereto after the expiration of such representation or warranty pursuant to the following limitations:
preceding sentence except for claims made in writing prior to such expiration and actions (awhether instituted before or after such expiration) The based on any claim made in writing prior to such expiration. Notwithstanding any other provisions contained in this Agreement, (i) neither Buyer nor Sellers and the Selling Shareholders shall be entitled to receive any amount under this Section 6. which exceeds $12,000,000.00; (ii) Buyer shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder payment under this Section 6. for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and a breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by Sellers contained in this Agreement except for the Buyeramount by which the aggregate of all breach of warranty or representation claims hereunder which have not theretofore been reimbursed to Buyer exceeds the sum of $180,000.00, and (iii) Sellers shall not be entitled to payment under this Section 6. except for the amount by which the aggregate of all claims hereunder which have not theretofore been reimbursed to Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreementexceeds $180,000.00. In the event such action the $180,000.00 threshold mentioned in clause (ii) or (iii) of the preceding sentence is broughtexceeded, Buyer or Sellers, as the case may be, shall then have the right to seek reimbursement of said threshold amount from Sellers or Buyer, as the case may be, under this Section 6. Notwithstanding anything contained in this Section 6.6., the prevailing party’s attorneys’ fees limits on indemnification contained in the preceding sentence shall exclude any obligations specifically assumed by any party in this Agreement, including without limitation, the obligations relating to Taxes and costs shall be paid by the nonprevailing partybrokers as described in Sections 3.21., 5.2., and 9.5. respectively .
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Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers and Notwithstanding anything herein to the Selling Shareholders contrary, Seller and/or Shareholder shall not be obligated to provide any such indemnification for Losses incurred indemnify Buyer under Section 8.1(a) this ARTICLE 10 unless the aggregate amount that of all Buyer Damages exceeds One Hundred Thousand Dollars ($100,000) (the "SELLER'S BASKET"), in which case the Buyer is shall be entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses Buyer Damages in excess of the Threshold; andSeller's Basket, but not in any event, the maximum aggregate obligation excess of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities $1,000,000 (the “Maximum”"SELLER'S INDEMNIFICATION CAP"); providedPROVIDED, that the limitations in this paragraph Seller's Indemnification Cap and the Seller's Basket shall not apply to Losses any Seller and/or Shareholder indemnification obligation (x) arising in respect of claims out of, relating to misrepresentations and or resulting from fraud or intentional misrepresentation by Seller; (y) arising out of, relating to or resulting under SECTION 10.2(B), (C) or (D) or from a breach of any of Seller's representations or warranties relating in SECTION 4.19.(TAX), SECTION 4.15(SELLER BENEFIT PLANS), SECTION 4.20 (BROKERS) or SECTION 4.18 (ENVIRONMENTAL MATTERS); or (z) if the Transaction does not close or novation of Government Contracts is not completed due to Section 3.1 hereof (relating to organization) willful and Section 3.3 hereof (relating to authority) which may be asserted without limitationintentional breach by the Seller.
(b) No claims for indemnification Notwithstanding anything herein to the contrary, Buyer shall not be obligated to indemnify Seller under this ARTICLE 10 unless the aggregate of all Seller Damages exceeds One Hundred Thousand Dollars ($100,000) (the "BUYER'S BASKET"), in respect of Sections 8.1(a) or 8.2(a)(i) which case Seller shall be made after entitled to recover all Seller Damages in excess of the dateBuyer's Basket, if anybut not in excess of $1,000,000 (the "BUYER'S INDEMNIFICATION CAP"); PROVIDED, on which that the applicable representation or warranty upon which such claim was based ceases Buyer's Indemnification Cap and the Buyer's Basket shall not apply to survive pursuant to Section 8.6.
any Buyer indemnification obligation (cx) Solely for purposes of calculating the amount of Losses incurred arising out of or of, relating to any or resulting from fraud or intentional misrepresentation by Buyer; (y) arising out of, relating to or resulting from the Assumed Liabilities or a breach by Buyer of a representation the representations contained in Sections 5.5 and 5.7; or warranty (z) if the Transaction does not close or novation of Government contracts in not completed due to willful and intentional breach by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
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Limitations on Indemnification. The Purchaser, the Company, Newco, the Surviving Corporation, and the other Persons or entities indemnified pursuant to Section 10.1 shall not assert any claim for indemnification provided for in Sections 8.1 and 8.2 hereunder against the Sellers until such time as, the aggregate of all claims which such persons may have against the Sellers shall exceed $15,000 (the "Indemnification Threshold"), whereupon such claims shall be subject to the following limitations:
(a) The indemnified in full. Sellers and the Selling Shareholders shall not be obligated to provide assert any claim for indemnification hereunder against Purchaser, Newco, the Surviving Corporation or the Company until such indemnification for Losses incurred under Section 8.1(a) unless time as the aggregate amount that the Buyer is entitled to recover in respect of all claims which Sellers may have against Purchaser or the Company shall exceed $15,000, whereupon such claims exceeds $75,000 (the “Threshold”) and then such shall be indemnified in full. The limitation of assertion of claims for indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations contained in this paragraph shall not apply only to Losses arising claims based upon inaccuracies in, or breaches of, representations and warranties contained in respect of claims relating this Agreement or any document, instrument, certificate or other item required to misrepresentations be furnished pursuant to this Agreement or in connection with the transaction contemplated by this Agreement.. No person shall be entitled to indemnification under this Article 10 if and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims the extent that such person's claim for indemnification is directly or indirectly related to a breach by such person of any representation, warranty, covenant or other agreement set forth in respect this Agreement. Notwithstanding any other term of Sections 8.1(a) this Agreement, no Seller shall be liable under this Article 10 or 8.2(a)(i) otherwise for an amount which exceeds the amount of proceeds received by such Seller in connection with the transactions contemplated herein. For purposes of the foregoing limitation, the DocuNet Common Stock shall be valued at the Initial Public Offering Price. No claim under this Article 10 shall be made after the dateunless an Indemnity Notice, if any, on which an Unliquidated Indemnity Notice or a Claim Notice (as applicable) has been given prior to the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6survival period.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
Appears in 1 contract
Samples: Merger Agreement (Imagemax Inc)
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers and Purchaser Indemnified Persons may not recover Losses from the Selling Shareholders shall not be obligated to provide Escrow Fund or from Seller in respect of any such claim for indemnification for Losses incurred under Section 8.1(a7.2(a)(i) unless the and until Losses claimed under Section 7.2(a)(i) have been incurred, paid or properly accrued in an aggregate amount that greater than $400,000 (the Buyer is “Indemnification Threshold”). The Seller Indemnified Persons may not recover Losses from Purchaser in respect of any claim for indemnification under Section 7.2(b)(i) unless and until Losses claimed under Section 7.2(b)(i) have been incurred, paid or properly accrued in an aggregate amount greater than the Indemnification Threshold. Notwithstanding the foregoing, the Purchaser Indemnified Persons shall be entitled to recover for, and the Indemnification Threshold shall not apply as a threshold to, any Losses with respect to any breach of or inaccuracy in respect any representation or warranty made by Seller in Sections 2.2, 2.16, 2A.1, 2A.2, or 2A.3 (each an “Excepted Representation”), and the Indemnified Persons shall be entitled to recover for, and the Indemnification Threshold shall not apply as a threshold to, any breach of or default in connection with any of the covenants or agreements contained in Section 4.2 or any of the covenants or agreements made by Seller or Purchaser for which performance may be called for after the Closing (“Post-Closing Covenants”), as the case may be, in this Agreement. Once the Indemnification Threshold has been exceeded, the Indemnified Persons shall be entitled to recover all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Indemnification Threshold; and.
(b) The aggregate liability of Seller and Purchaser shall be as follows:
(i) with respect to (A) fraud or intentional misconduct by Seller, and (B) breaches of or inaccuracies in any eventof the Excepted Representations, and (C) Losses claimed under Section 7.2(a)(ii) with respect to any covenants or agreements contained in Section 4.2 or any of the Post-Closing Covenants, the maximum aggregate obligation Purchaser Indemnified Persons may recover all of the Sellers and the Selling Shareholders hereunder for their Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted from Seller without limitation.
(bii) No claims for indemnification subject to clause (i) above, the aggregate liability of Seller to the Purchaser Indemnified Persons under this Article 7 shall not exceed $2,589,300.00.
(iii) with respect to (A) fraud or intentional misconduct by Purchaser, and (B) breach by Purchaser in the representations and warranties contained in Sections 3.1, 3.2 and 3.4, and (C) Losses claimed under Section 7.2(b)(ii) with respect to any covenants or agreements contained in Section 4.2 or any of Sections 8.1(a) or 8.2(a)(i) the Post-Closing Covenants, the Seller Indemnified Persons shall be made after entitled to recover all of their Losses from Purchaser without limitation. Subject to the dateforegoing, if any, on which the applicable representation or warranty upon which such claim was based ceases aggregate liability of Purchaser to survive pursuant to Section 8.6the Seller Indemnified Persons under this Article 7 shall not exceed $2,589,300.00.
(c) Solely for purposes Seller shall not have any right of calculating the amount contribution, right of Losses incurred arising out of indemnity or relating to any breach of a representation other right or warranty by the Buyerremedy against Purchaser, the Sellers, Company or any Subsidiary of the Selling Shareholders (and not for purposes of determining whether Company in connection with any indemnification obligation or not a breach has occurred), the references any other liability to “Material Adverse Effect” which Seller may become subject under or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregardedconnection with this Agreement.
(d) Notwithstanding anything Nothing in this Article VIII Agreement shall limit the liability of any party for any misrepresentation or breach of any limitation provided hereinrepresentation, nothing herein shall prevent any of warranty, covenant or agreement if the parties hereto from Acquisition is not consummated.
(ie) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their No Indemnified Person’s rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs Article 7 shall be paid adversely affected by any investigation conducted, or any knowledge acquired (or capable of being acquired), by such Indemnified Person at any time, whether before or after the execution or delivery of this Agreement or the Closing, or by the nonprevailing partywaiver of any condition to Closing.
(f) For the purpose of determining Losses subject to indemnification under this Article 7, any Losses shall be deemed reduced to the extent of insurance proceeds collected by (or for the benefit of) the respective Indemnified Person on account of such Losses.
Appears in 1 contract
Limitations on Indemnification. The rights of Purchaser Indemnitees and Seller Indemnitees to indemnification provided for in Sections 8.1 and 8.2 shall be pursuant to the provisions of this Article VIII are subject to the following limitations:
(a) The Sellers and the Selling Shareholders Purchaser Indemnitees shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in any Losses pursuant to Section 8.2(a)(i) until the total amount of Losses which the Purchaser Indemnitees would be entitled to recover under Section 8.2(a)(i) with respect of to any and all such claims for indemnification thereunder, but for this Section 8.4(a), exceeds $75,000 2,150,000 (the “ThresholdDeductible”) ), and then such indemnification once the Deductible has been exceeded, the Purchaser Indemnitees shall relate only be entitled to all such recover Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”)Deductible; provided, however, that the limitations in this paragraph Deductible shall not apply to Losses arising in respect suffered or paid by any Purchaser Indemnitee as a result of claims relating to misrepresentations and the breach of warranties relating any representation or warranty made by Seller in Section 3.2, Section 3.3, Section 3.5(a), Section 3.5(c), Section 3.12 or Section 3.21, it being agreed that in the case of a breach of any such representation or warranty, the applicable Purchaser Indemnitee shall, subject to Section 3.1 hereof (relating the other limitations set forth in this Article VIII, be entitled to organization) be indemnified and Section 3.3 hereof (relating to authority) which may be asserted without limitation.held harmless from the first dollar of such Losses;
(b) No the Seller Indemnitees shall not be entitled to recover any Losses pursuant to Section 8.2(b)(i) until the total amount of Losses which the Seller Indemnitees would be entitled to recover under Section 8.2(b)(i) with respect to any and all claims for indemnification thereunder, but for this Section 8.4(b), exceeds the Deductible, and once the Deductible has been exceeded, the Seller Indemnitees shall only be entitled to recover Losses in respect excess of Sections 8.1(a) the Deductible; provided, however, that the Deductible shall not apply to Losses suffered or 8.2(a)(i) shall be made after paid by any Seller Indemnitee as a result of the date, if any, on which the applicable breach of any representation or warranty upon which made by Purchaser in Section 4.2 or Section 4.8, it being agreed that in the case of a breach of any such claim was based ceases representation or warranty, the applicable Seller Indemnitee shall, subject to survive pursuant the other limitations set forth in this Article VIII, be entitled to Section 8.6.be indemnified and held harmless from the first dollar of such Losses;
(c) Solely neither the Purchaser Indemnitees nor Seller Indemnitees shall be entitled to recover for purposes any particular Loss (including any series of calculating the amount related Losses) pursuant to Section 8.2(a)(i) or Section 8.2(b)(i), respectively, unless such Loss (including any series of Losses incurred arising out related Losses) equals or exceeds $25,000, and any such Loss (including any series of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and related Losses) below such threshold shall not be counted for purposes of determining whether the Deductible has been exceeded, provided that if such Loss (including any series of related Losses) exceeds such threshold then the applicable Purchaser Indemnitees or not a breach has occurred)the Seller Indemnitees, as the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAPcase may be, shall be disregarded.entitled to recover the full amount of such Loss (including any series of related Losses), subject to (and limited by) the other terms set forth in this Article VIII;
(d) Notwithstanding anything the sole and exclusive source of recovery in respect of any indemnification claim made by any Purchaser Indemnitee pursuant to this Article VIII or any limitation provided hereinshall be the Escrow Amount, nothing herein and in no event shall prevent any of the parties hereto from (i) bringing an action based upon allegations Seller or any Affiliate thereof or any other Person have any direct liability or obligation in respect of fraud or other willful or intentional misconduct any such indemnification claim, or (ii) seeking injunctive the Purchaser Indemnitees be entitled to recover any Losses in respect of any indemnification claim made pursuant to this Article VIII from any source other than the Escrow Account or other equitable relief in an aggregate amount in excess of the Escrow Amount on deposit in the Escrow Account as of any applicable date of determination, it being agreed that on the date (if any) that the Escrow Amount is reduced to enforce their zero (0) for any reason (including due to the release of the Escrow Amount from the Escrow Account in accordance with the terms of the Escrow Agreement), the Purchaser Indemnitees shall have no further rights to indemnification pursuant to this Article VIII; provided, however, that Seller shall have direct liability to Purchaser over and above the Escrow Amount in respect of any indemnification claim arising as a result of the intentional fraud of Seller, as determined in a final and non-appealable judgment of a court of competent jurisdiction, it being agreed that in no event (including pursuant to the terms of this proviso) shall the liability of Seller in respect of any indemnification claim exceed an amount equal to the cash consideration actually paid to and received by Seller hereunder;
(e) notwithstanding anything to the contrary contained in this Agreement or otherwise, the Purchaser Indemnitees shall not be entitled to be indemnified or held harmless under this Agreement (including pursuant to a claim of breach of representation or warranty) for any Taxes (or Losses relating to Taxes) (i) incurred in any tax period other than any tax period ending on or before the Closing Date, (ii) attributable or relating to transactions outside of the ordinary course of business that occur on the Closing Date after the Closing and not contemplated by this Agreement or to actions related to debt incurred in connection with the transactions contemplated by this Agreement. In , (iii) which are Transfer Taxes for which Purchaser is responsible pursuant to Section 9.4, or (iv) for the event existence or non-existence of any Tax attribute;
(f) the maximum Losses indemnifiable pursuant to Section 8.2(b) shall be an amount equal to $12,900,000, except in the case of a breach of any of the covenants set forth in Sections 5.10, 5.11 and 5.16, with respect to which the limitation on liability set forth in this clause (f) shall not apply;
(g) the amount of any and all Losses shall be determined net of (i) any amounts recovered or reasonably expected to be recovered by the Purchaser Indemnitees or Seller Indemnitees, as applicable, under insurance policies or from other collateral sources (such action as contractual indemnities of any Person which are contained outside of this Agreement) with respect to such Losses, and (ii) any Tax benefits realizable with respect to such Losses;
(h) the Purchaser Indemnitees shall not be entitled to indemnification pursuant to this Article VIII for any Loss to the extent that (i) such Loss was taken into account in the determination of the Closing Consideration pursuant to Section 2.3, including in respect of any post-Closing adjustment thereto, or (ii) the Purchaser Indemnitees could have, with commercially reasonable efforts, mitigated or prevented such Loss; and
(i) 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 this Article VIII, such Purchaser Indemnitee shall promptly pay over to the Escrow Agent for re-inclusion in the Escrow Account the amount so recovered (after deducting therefrom the amount of any reasonable out-of-pocket, third-party expenses incurred by such Purchaser Indemnitee in procuring such recovery), but not in excess of the sum of (A) any amount previously so paid out of the Escrow Amount to or on behalf of such Purchaser Indemnitee in respect of such matter and (B) any amount expended by Seller or any Seller Indemnitee in pursuing or defending any claim arising out of such matter; provided, however, that if such recovery is broughtmade after the Release Date, the prevailing party’s attorneys’ fees and costs such amounts shall be paid by directly to Seller; provided further, however, that if, as of the nonprevailing partyRelease Date, there shall be claims pending against the Escrow Amount, then only the amount that is so recovered that is in excess of the aggregate amount of all such pending claims shall be paid to Seller and the balance shall promptly paid over to the Escrow Agent for re-inclusion in the Escrow Account in accordance with the terms set forth herein.
Appears in 1 contract
Samples: Membership Interest Purchase Agreement (United Maritime Group, LLC)
Limitations on Indemnification. The rights of Purchaser Indemnitees and Seller Indemnitees to indemnification provided for in Sections 8.1 and 8.2 shall be pursuant to the provisions of this Article VIII are subject to the following limitations:
(a) The Sellers and the Selling Shareholders Purchaser Indemnitees shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in any Losses pursuant to Section 8.2(a)(i) until the total amount of Losses which the Purchaser Indemnitees would be entitled to recover under Section 8.2(a)(i) with respect of to any and all such claims for indemnification thereunder, but for this Section 8.4(a), exceeds $75,000 2,218,420.00 (the “ThresholdDeductible”) ), and then such indemnification once the Deductible has been exceeded, the Purchaser Indemnitees shall relate only be entitled to all such recover Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”)Deductible; provided, however, that the limitations in this paragraph Deductible shall not apply to Losses arising in respect suffered or paid by any Purchaser Indemnitee as a result of claims relating to misrepresentations and the breach of warranties relating any representation or warranty made by Seller in Section 3.2, Section 3.3, Section 3.5(a) or Section 3.12, it being agreed that in the case of a breach of any such representation or warranty, the applicable Purchaser Indemnitee shall, subject to Section 3.1 hereof (relating the other limitations set forth in this Article VIII, be entitled to organization) be indemnified and Section 3.3 hereof (relating to authority) which may be asserted without limitation.held harmless from the first dollar of such Losses;
(b) No the Seller Indemnitees shall not be entitled to recover any Losses pursuant to Section 8.2(b)(i) until the total amount of Losses which the Seller Indemnitees would be entitled to recover under Section 8.2(b)(i) with respect to any and all claims for indemnification thereunder, but for this Section 8.4(b), exceeds the Deductible, and once the Deductible has been exceeded, the Seller Indemnitees shall only be entitled to recover Losses in respect excess of Sections 8.1(a) the Deductible; provided, however, that the Deductible shall not apply to Losses suffered or 8.2(a)(i) shall be made after paid by any Seller Indemnitee as a result of the date, if any, on which the applicable breach of any representation or warranty upon which made by Purchaser in Section 4.2, Section 4.5, or Section 4.9, it being agreed that in the case of a breach of any such claim was based ceases representation or warranty, the applicable Seller Indemnitee shall, subject to survive pursuant the other limitations set forth in this Article VIII, be entitled to Section 8.6.be indemnified and held harmless from the first dollar of such Losses;
(c) Solely neither the Purchaser Indemnitees nor Seller Indemnitees shall be entitled to recover for purposes any particular Loss (including any series of calculating the amount related Losses) pursuant to Section 8.2(a)(i) or Section 8.2(b)(i), respectively, unless such Loss (including any series of Losses incurred arising out related Losses) equals or exceeds $25,000, and any such Loss (including any series of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and related Losses) below such threshold shall not be counted for purposes of determining whether the Deductible has been exceeded, provided that if such Loss (including any series of related Losses) exceeds such threshold then the applicable Purchaser Indemnitees or not a breach has occurred)the Seller Indemnitees, as the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAPcase may be, shall be disregardedentitled to recover the full amount of such Loss (including any series of related Losses), subject to (and limited by) the other terms set forth in this Article VIII; provided, further, that this Section 8.4(c) shall not apply to Losses suffered or paid by any Purchaser Indemnitee as a result of the breach of any representation or warranty made by the Seller in Section 3.12, it being agreed that in the case of a breach of any such representation or warranty, the applicable Purchaser Indemnitee shall, subject to the other limitations set forth in this Article VIII, be entitled to be indemnified and held harmless form the first dollar of such Losses.
(d) Notwithstanding anything the sole and exclusive source of recovery in respect of any indemnification claim made by any Purchaser Indemnitee pursuant to this Article VIII or (other than any limitation provided herein, nothing herein shall prevent any claim arising from a breach of the parties hereto from terms set forth in Section 5.13) shall be the Escrow Amount, and in no event shall (i) bringing an action based upon allegations Seller or any Affiliate thereof or any other Person have any direct liability or obligation in respect of fraud or other willful or intentional misconduct any such indemnification claim, or (ii) seeking injunctive the Purchaser Indemnitees be entitled to recover any Losses in respect of any indemnification claim made pursuant to this Article VIII (other than any claim arising from a breach of the terms set forth in Section 5.13) from any source other than the Escrow Account or in an aggregate amount in excess of the Escrow Amount on deposit in the Escrow Account as of any applicable date of determination, it being agreed that on the date (if any) that the Escrow Amount is reduced to zero (0) for any reason (including due to the release of the Escrow Amount from the Escrow Account in accordance with the terms of the Escrow Agreement), the Purchaser Indemnitees shall have no further rights to indemnification pursuant to this Article VIII (other equitable relief than in respect of any claim arising from a breach of the terms set forth in Section 5.13);
(e) notwithstanding anything to enforce their rights the contrary contained in this Agreement or otherwise, the Purchaser Indemnitees shall not be entitled to be indemnified or held harmless under this Agreement (including pursuant to a claim of breach of representation or warranty) for any Taxes (or Losses relating to Taxes) (i) incurred in any tax period other than any tax period ending on or before the Closing Date, (ii) attributable or relating to transactions outside of the ordinary course of business that occur on the Closing Date after the Closing and not contemplated by this Agreement or to actions related to debt incurred in connection with the transactions contemplated by this Agreement. In , (iii) which are Transfer Taxes for which Purchaser is responsible pursuant to Section 9.4, or (iv) for the event existence or non-existence of any Tax attribute;
(f) the maximum Losses indemnifiable pursuant to Section 8.2(b) shall be an amount equal to $13,310,520.00, except in the case of Purchaser’s indemnification obligations hereunder relating to Sections 5.11, 5.15, 5.16 and 5.17, with respect to which the limitation on liability set forth in this clause (f) shall not apply;
(g) the amount of any and all Losses shall be determined net of (i) any amounts recovered or reasonably expected to be recovered by the Purchaser Indemnitees or Seller Indemnitees, as applicable, under insurance policies or from other collateral sources (such action as contractual indemnities of any Person which are contained outside of this Agreement) with respect to such Losses, and (ii) any Tax benefits realizable with respect to such Losses;
(h) the Purchaser Indemnitees shall not be entitled to indemnification pursuant to this Article VIII for any Loss to the extent that (i) such Loss was taken into account in the determination of the Closing Consideration pursuant to Section 2.3, including in respect of any post-Closing adjustment thereto, or (ii) the Purchaser Indemnitees could have, with commercially reasonable efforts, mitigated or prevented such Loss;
(i) 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 this Article VIII, such Purchaser Indemnitee shall promptly pay over to the Escrow Agent for re-inclusion in the Escrow Account the amount so recovered (after deducting therefrom the amount of any reasonable out-of-pocket, third-party expenses incurred by such Purchaser Indemnitee in procuring such recovery), but not in excess of the sum of (A) any amount previously so paid out of the Escrow Amount to or on behalf of such Purchaser Indemnitee in respect of such matter and (B) any amount expended by Seller or any Seller Indemnitee in pursuing or defending any claim arising out of such matter; provided, however, that if such recovery is broughtmade after the Release Date, the prevailing party’s attorneys’ fees and costs such amounts shall be paid directly to Seller; provided further, however, that if, as of the Release Date, there shall be claims pending against the Escrow Amount, then only the amount that is so recovered that is in excess of the aggregate amount of all such pending claims shall be paid to Seller and the balance shall promptly paid over to the Escrow Agent for re-inclusion in the Escrow Account in accordance with the terms set forth herein; and
(j) Purchaser, on its own behalf and on behalf of all Purchaser Indemnified Parties, agrees that no portion of the Retained Claimed Amount (as defined in the Escrow Agreement) may be used to satisfy any Claim (as defined in the Escrow Agreement) made by Purchaser or any other Purchaser Indemnified Party following the nonprevailing partyInitial Distribution Date (as defined in the Escrow Agreement), and Purchaser shall not, and shall not permit any other Purchaser Indemnitee to, request any payment from the Escrow Fund (as defined in the Escrow Agreement) that is attributable to, or that would be satisfied out of, the Retained Claimed Amount in respect of any Claim made following the Initial Distribution Date.
Appears in 1 contract
Samples: Membership Interest Purchase Agreement (United Maritime Group, LLC)
Limitations on Indemnification. The (a) No claim for indemnification provided for in Sections 8.1 with respect to a breach of a representation and 8.2 warranty shall be subject made by any Buyer Indemnitee or Seller Indemnitee, as the case may be, after the applicable Survival Date unless prior to such Survival Date the following limitations:Buyer Indemnitee or Seller Indemnitee, as the case may be, shall have given the Sellers or the Buyer, as the case may [***] These portions of this exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment. be, written notice of such claim for indemnification based upon actual loss sustained, or potential loss anticipated as a result of the existence of any claim, demand, suit, or cause of action against such Buyer Indemnitee or Seller Indemnitee, as the case may be. No claim for indemnification pursuant to Section 10.6(b)(iv) shall be made by any Buyer Indemnitee after the [***] anniversary of the Closing Date unless prior to such date the Buyer Indemnitee shall have given the Sellers written notice of such claim for indemnification based upon actual loss sustained, or potential loss anticipated as a result of the existence of any claim, demand, suit, or cause of action against such Buyer Indemnitee.
(ab) The Sellers and the Selling Shareholders Stockholder shall have no indemnification liability under this Agreement unless and until (and only to the extent that) all claims with respect to such Losses pursuant to this Agreement and for "Buyer's Damages" under the Xxxxxx Stock Purchase Agreement and the Arngar Stock Purchase Agreement (as defined on Exhibit A-1) exceed a cumulative aggregate ----------- total of [***] (the "Basket"); provided, however, the foregoing Basket ------ -------- ------- limitation shall not apply to (1) claims under Sections 10.6(b)(ii) or 10.6(b)(iv), (2) claims under Section 10.6(b)(iii), in so far as such claims relate to a breach of Section 10.9 below, (3) claims under Section 10.6(b)(viii), or (4) claims based upon fraud. With respect to any claim for indemnity under Section 10.6(b)(i) above, if the matter is also the basis for a claim for indemnity under any other provision of this Section 10.6 for which the Basket limitation is not applicable, the Basket limitation shall not be obligated applicable to provide any such indemnification for Losses incurred under Section 8.1(aclaim.
(c) unless Except in the case of claims based upon fraud, the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation liability of the Sellers and the Selling Shareholders Stockholder under this Agreement and the "Seller" under each of the Xxxxxx Stock Purchase Agreement and the Arngar Stock Purchase Agreement shall be [***], which amount is inclusive of indemnification obligations contemplated by the Environmental Indemnification Cap (as defined below). Notwithstanding the foregoing, the Sellers and the Stockholder shall have no indemnification obligations hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed with respect to indemnification obligations contemplated by the Purchase Price paid Environmental Indemnification Cap to the extent such indemnification obligations would require payments by the Sellers in excess of the Environmental Indemnification Cap. As used in this Agreement, the "Environmental Indemnification Cap" shall mean the obligations --------------------------------- under this Agreement and the Other Agreements to remediate environmental contamination, including, without limitation, pursuant to (A) Paragraph 7(e) of the respective Real Property Purchase Agreement, (B) Paragraph 5(e) of the "Owned Real Property Rider" under the Arngar Stock Purchase Agreement, (C) Section 10.9(b) below or (D) Section 9.6 of each of the Xxxxxx Stock Purchase Agreement and the Arngar Stock Purchase Agreement, and/or to indemnify for Environmental Liabilities or breaches of representations or warranties with respect to environmental matters, in either case with respect to the date of such Loss plus Owned Real Property and/or the cost associated with Leased Premises, and the assumption "Owned Real Property" and/or the "Leased Premises" under each of the Assumed Liabilities (Xxxxxx Stock Purchase Agreement and the “Maximum”); providedArngar Stock Purchase Agreement, that in the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the maximum aggregate amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded[***].
(d) Notwithstanding anything In connection with any claim for indemnification with respect to which the Buyer or the Sellers, as the case may be, have an enforceable claim against any third party (contractual or otherwise) on account of the item for which such claim for indemnification has been made, the Buyer or the Sellers, as the case may be, shall, at the time of payment by the [***] These portions of this exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment. indemnifying party of the claim for indemnification, assign to the other party such claim; provided, however, the assignee of such claim shall further protect -------- ------- and indemnify the assignor in connection with the pursuit by the assignee of such claim against such third party; provided, further, however, this clause (d) -------- ------- ------- shall not require the assignment of any claims under any insurance policy.
(e) No Buyer Indemnitee or Seller Indemnitee, as the case may be, shall be entitled to indemnification pursuant to this Article 10 to the extent of any insurance (including title insurance) proceeds received by the Buyer or the Sellers, as the case may be, in connection with the facts giving rise to such indemnification (and the Buyer or the Sellers shall seek full recovery under all insurance policies covering any Losses to the extent permitted), provided that this clause (e) shall not be applicable to the extent it would give the insurance company a basis to deny coverage with respect to the particular claim involved.
(f) The provisions of Sections 10.6 and 10.7 shall be effective upon consummation of the Closing, and prior to the Closing, shall have no force and effect. Following the Closing, except in the case of claims based upon fraud, the sole and exclusive remedy for the breach of any representation, warranty or covenant contained in, or otherwise relating to, this Agreement shall be indemnification provided for in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers and the Selling Shareholders Indemnifying Party shall not be obligated liable to provide the Indemnified Party with respect to any such indemnification for claim relating to an individual or series of related Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect of all indemnification under Section 6.02(a) or Section 6.03(a), as applicable, until the amount of such claims individual or series of related Losses exceeds Ten Thousand Dollars ($75,000 (10,000), in which event the “Threshold”) and then such indemnification Indemnifying Party shall relate be required to pay or be liable for all such Losses in excess of from the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.first dollar.
(b) No claims for indemnification Subject to Section 7.14 and except in respect the case of Sections 8.1(a) intentional fraud or 8.2(a)(i) shall be made after a Claim involving a breach of any Buyer Fundamental Representation, the date, if any, on which total aggregate Losses that the applicable Seller Indemnified Parties may suffer or sustain by reason of or arising out of any inaccuracy in any representation or warranty upon which such claim was based ceases contained in Article IV shall not exceed an amount equal to survive pursuant to Section 8.6Five Hundred Thousand and No/100 Dollars ($500,000.00).
(c) Solely for purposes Except in the case of calculating the amount of Losses incurred arising out of intentional fraud or relating to any a Claim involving a breach of a representation or warranty by the Buyerany Seller Fundamental Representation, the Sellers, or total aggregate Losses under the Selling Shareholders (Seller Indemnifiable Amount shall not exceed an amount equal to the Escrow Holdback amount and not all such Claims by Buyer for purposes of determining whether or not a breach has occurred), the references indemnification pursuant to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, this Article VI shall be disregardedmade solely initially against and result in the cancellation of escrowed Buyer Shares at a per share price equal to the Issuance Price and then subsequently against cash deposited in the Escrow Account; provided, that after Buyer cancels such escrowed Buyer Shares, Buyer shall issue a new original stock certificate for the remaining Buyer Shares (if any) at a per share price equal to the Issuance Price to be held for the purpose of securing any other potential indemnification obligations of Seller and the Company referenced this Article VI.
(d) Notwithstanding anything Except in the case of intentional fraud, with respect to a Claim involving a breach of any Seller Fundamental Representation or a breach of any Buyer Fundamental Representation, the total aggregate Losses under the Seller Indemnifiable Amount or the Buyer Indemnifiable Amount, respectively, shall not exceed an amount equal to Ten Million Dollars ($10,000,000). All such Claims by Buyer for indemnification pursuant to this Article VIII VI shall be made initially against and result in the cancellation of escrowed Buyer Shares at a per share price equal to the Issuance Price, subsequently against cash deposited in the Escrow Account and thereafter against the Seller; provided, that after Buyer cancels such escrowed Buyer Shares, it shall issue a new original stock certificate for the remaining Buyer Shares (if any) at a per share price equal to the Issuance Price to be held for the purpose of securing any other potential indemnification obligations of Seller and the Company referenced this Article VI.
(e) In no event shall any Indemnifying Party be liable to an Indemnified Party for any punitive, incidental, consequential, special or indirect damages, including loss of future revenue or income, loss of business reputation or opportunity relating to the breach or alleged breach of this Agreement, the transactions contemplated by this Agreement or diminution of value or any limitation provided hereindamages based on any type of multiple.
(f) Each Indemnified Party acknowledges and agrees that, nothing herein for purposes hereof, Losses (including any Losses from third-party claims) shall prevent be calculated based on the amount of Losses that remains after deducting any of the parties hereto from (i) bringing an action based upon allegations of fraud insurance proceeds, indemnity, contribution, reimbursement or other willful similar payment actually received by an Indemnified Party or intentional misconduct its Affiliates with respect thereto. If any Indemnified Party or (ii) seeking injunctive or other equitable relief its Affiliates recovers amounts from any third party with respect to enforce their rights under this Agreement. In such Losses after indemnification is made to it by the event such action is broughtIndemnifying Party, the prevailing party’s attorneys’ fees Indemnified Party shall promptly pay to the Indemnifying Party that made such indemnification payment the amount of such third-party recovery, net of any out-of-pocket costs associated with obtaining such third-party recovery, at such time or times as and costs shall be paid to the extent that such amount is actually received by the nonprevailing partyIndemnifying Party or its Affiliates. Each Indemnified Party shall use its commercially reasonable efforts to mitigate any Losses for which it is entitled to indemnification pursuant to this Article VI.
Appears in 1 contract
Samples: Membership Interest Purchase Agreement (Digital Brands Group, Inc.)
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers representations and warranties of the parties contained in this Agreement shall survive the Closing for a period of 18 months after the Closing Date, and the Selling covenants and payment obligations of the parties contained in this Agreement shall survive the Closing according to their terms; provided, however, that:
(i) the representations and warranties of the Shareholders shall not be obligated contained in Section 5.15 (relating to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”taxes) and then such Section 5.20 (relating to employee benefit plans), and the indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and Principal Shareholders with respect thereto, shall survive the Selling Shareholders hereunder Closing for Losses incurred under Section 8.1(athirty (30) hereof shall not exceed days after the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption period of the Assumed Liabilities applicable statute of limitations (the “Maximum”including any extension thereof); provided, that and
(ii) the limitations representations and warranties contained in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof 5.5 (relating to organizationcapital stock) and Section 3.3 hereof Sections 5.7 and 6.4 (relating to authority) which may be asserted without limitationownership of the Shares), and the indemnification obligations of the Shareholders with respect thereto, shall survive the Closing indefinitely.
(b) No claims for indemnification in respect The amount of Sections 8.1(a) or 8.2(a)(i) Losses suffered by the Buyer Indemnified Parties required to be paid pursuant to this ARTICLE XI shall be made after reduced to the date, if any, on which extent of any insurance proceeds actually received by the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6Buyer Indemnified Parties under insurance policies maintained by the Company and/or Buyer.
(c) Solely The indemnification provisions of the Shareholders and Buyer under this ARTICLE XI shall constitute the sole and exclusive remedies of the Shareholders and Buyer, respectively, after the Closing Date for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation any of the terms, conditions, covenants, representations or warranty warranties contained herein or any right, claim or action arising from the transactions contemplated by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregardedthis Agreement.
(d) Notwithstanding any other provision of this Agreement, Buyer shall have the right to payment by the Shareholders under Sections 11.2 and 11.3 only after the aggregate amount of all claims asserted under such provisions equals or exceeds $50,000 (the "Threshold"), and once the aggregate amount of all such claims exceeds such amount, Buyer shall be entitled to full indemnification of all such claims for any amount in excess of the Threshold. Notwithstanding the foregoing, the Threshold shall not apply to any misrepresentation or breach under or relating to Section 5.1 (relating to incorporation and power), Sections 5.2 and 6.1 (relating to execution, delivery and validity), Section 5.5 (relating to capital stock), Sections 5.7 and 6.4 (relating to ownership of the Shares), or Section 8.1 (relating to conduct of business).
(e) The aggregate indemnification obligation of the Principal Shareholders pursuant to Section 11.2 shall be limited to $1,600,000, other than with respect to any misrepresentation or breach under or relating to Section 5.1 (relating to incorporation and power), Section 5.2 (relating to execution, delivery and validity), Section 5.5 (relating to capital stock) and Section 5.7 (relating to ownership of the Shares), in which case the aggregate indemnification obligation of the Principal Shareholders pursuant to Section 11.2 shall be limited to the portion of the Purchase Price allocated to the Principal Shareholders. The aggregate indemnification obligation of each Option Shareholder pursuant to Section 11.3 shall be limited to the Escrow Shares to be issued to such Option Shareholder, other than with respect to any misrepresentation or breach under or relating to Section 6.1 (relating to execution, delivery and validity) and Section 6.4 (relating to ownership of the Shares), in which case the aggregate indemnification obligation of each Option Shareholder pursuant to Section 11.3 shall be limited to the portion of the Purchase Price allocated to such Option Shareholder. Notwithstanding anything to the contrary contained in this Article VIII or any limitation provided hereinAgreement, nothing herein shall prevent any all indemnifiable Losses of the parties hereto Buyer Indemnified Parties shall be satisfied first from the Escrow Shares held by the Escrow Agent pursuant to the Escrow Agreement.
(if) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief Notwithstanding any provision herein to enforce their rights the contrary, no party's right to indemnification under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs ARTICLE XI shall be paid limited whatsoever by Section 11.6(a), 11.6(b), 11.6(c), 11.6(d) or 11.6(e) with respect to any action, proceeding, Loss or Claim arising out of or brought on the nonprevailing partybasis of fraud.
Appears in 1 contract
Samples: Stock Purchase Agreement (Health Fitness Corp /MN/)
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers and the Selling Shareholders Purchaser Indemnified Persons shall not have the right to be obligated indemnified for breaches of representations and warranties pursuant to provide any such CLAUSE ------ (I) of the first sentence of SECTION 8.1(A) unless and until the Purchaser --- -------------- Indemnified Persons shall have incurred on a cumulative basis aggregate Losses in an amount exceeding $25,000, in which case the Purchaser Indemnified Persons shall be entitled to indemnification for all Losses incurred under Section 8.1(aby the Purchaser Indemnified Persons; provided, however, that (i) unless except as provided in CLAUSE -------- ------- ------ (II) of this proviso, the aggregate amount that the Buyer is entitled to recover in respect sum of all such claims exceeds $75,000 Losses pursuant to which indemnification is ---- payable by the Shareholder Indemnifying Persons pursuant to CLAUSE (the “Threshold”I) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, ---------- first sentence of SECTION 8.1(A) shall not exceed $750,000 and (ii) the maximum aggregate obligation sum of --------------- all Losses pursuant to which indemnification is payable by the Shareholder Indemnifying Persons pursuant to CLAUSE (I) of the Sellers first sentence of SECTION ---------- ------- 8.1
(A) with respect to the representations and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof warranties set forth in SECTIONS ------ -------- 3.1 and 4.4 shall not exceed the Purchase Price paid Aggregate Merger Consideration. --- --- Notwithstanding anything to the Sellers contrary stated above, any payment by the Shareholder Indemnifying Persons pursuant to SECTION 8.1(A)(I) hereof shall ----------------- reduce, dollar for dollar, the date of such Loss plus maximum dollar amount required to be paid by the cost associated with the assumption Shareholder Indemnifying Persons under CLAUSES (I) and (II) of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitationimmediately ----------- ---- preceding sentence.
(b) No claims The Shareholder Indemnified Persons shall not have the right to be indemnified for indemnification breaches of representations and warranties pursuant to CLAUSE ------ (I) of SECTION 8.1(B) unless and until the Shareholder Indemnified Persons have --- -------------- incurred on a cumulative basis aggregate Losses in respect of Sections 8.1(a) or 8.2(a)(i) an amount exceeding $25,000, in which case the Shareholder Indemnified Persons shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases entitled to survive pursuant to Section 8.6.
(c) Solely indemnification for purposes of calculating the amount of all Losses incurred arising out of or relating to any breach of a representation or warranty by the BuyerShareholder Indemnified Persons; provided, the Sellershowever, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from that (i) bringing an action based upon allegations except as provided in CLAUSE (II) of fraud or other willful or intentional misconduct or this proviso -------- ------- ----------- the sum of all Losses pursuant to which indemnification is payable by the Purchaser Indemnifying Persons pursuant to CLAUSE (I) of SECTION 8.1(B) shall ---------- -------------- not exceed $750,000 and (ii) seeking injunctive or other equitable relief the sum of all Losses pursuant to enforce their rights under this Agreementwhich indemnification is payable by the Purchaser Indemnifying Persons pursuant to SECTION 8.1(C)(I) with respect to the representations and warranties contained ----------------- in SECTIONS 5.7 and 5.8 shall not exceed $1,599,990. In Notwithstanding anything ------------ --- to the event such action is broughtcontrary stated above, any payment by the Purchaser Indemnifying Persons pursuant to any provision of SECTION 8.1(B)(I) shall reduce, dollar for dollar, the prevailing party’s attorneys’ fees and costs shall maximum ----------------- dollar amount required to be paid by the nonprevailing party.Purchaser Indemnifying Persons under the CLAUSES (I) and (II) of the immediately preceding sentence. ----------- ----
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 (i) No ATP Indemnified Person shall be subject entitled to indemnification pursuant to Section 11(a)(i), unless and until the following limitations:
(a) The Sellers and the Selling Shareholders shall not be obligated to provide any such indemnification for aggregate Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover by all ATP Indemnified Persons in respect of all such claims exceeds under Section 11(a) collectively exceed $75,000 50,000 whereupon ATP Indemnified Persons shall be entitled to indemnification hereunder (subject to the “Threshold”other provisions of this Section 11) and then such indemnification shall relate to from the Seller or Cxxxx for all such Losses incurred by ATP Indemnified Persons in excess of such $50,000 deductible. Notwithstanding the Threshold; andforegoing, the limitations set forth in this Section 11(c)(i) shall not apply to claims for indemnification pursuant to Section 11(a)(i) that relate to the representations and warranties contained in Section 4(n) or pursuant to Section 11(a)(i)(ii).
(ii) No Seller Indemnified Person shall be entitled to indemnification pursuant to Section 11(a)(ii), unless and until the aggregate Losses incurred by all Seller Indemnified Persons in respect of all claims under Section 11(a) collectively exceed $50,000 whereupon Seller Indemnified Persons shall be entitled to indemnification hereunder (subject to the other provisions of this Section 11) from ATP for all such Losses incurred by Seller Indemnified Persons in excess of such $50,000 deductible. Notwithstanding the foregoing, the limitations set forth in this Section 11(c)(ii) shall not apply to claims for indemnification pursuant to Section 11(a)(i) that relate to the representations and warranties contained in Section 5(f) or pursuant to Section 11(a)(ii)(ii).
(iii) No Party shall be entitled to indemnification pursuant to Section 11(a)(i)(i) or Section 11(a)(ii)(i), as the case may be, unless the party seeking indemnification notifies the other party of a claim specifying the factual basis of the claim in reasonable detail on or before the fifth (5th) anniversary of the initial Closing hereunder, in any eventwhich case, the survival period shall continue until such claim is fully resolved.
(iv) Except as set forth in (vi) and (vii) below, the maximum aggregate obligation liability of the Sellers Seller to ATP and the Selling Shareholders hereunder ATP Indemnified Persons for Losses incurred indemnification under Section 8.1(a11(a)(i)(i) hereof of this Agreement shall not exceed the sum of (A) the aggregate Base Purchase Price paid to for the Sellers to Assigned CDO Agreements, (B) the date amount of the Service Fees and (C) the aggregate of Losses that constitute out-of-pocket costs of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitationATP Indemnified Persons.
(bv) No claims Except as set forth in (vi) and (vii) below, the maximum aggregate liability of Cxxxx to ATP and ATP Indemnified Persons for indemnification in respect under Section 11(a)(i) of Sections 8.1(a) or 8.2(a)(i) this Agreement shall be made after not exceed the date, if any, on which the then applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6Cxxxx Indemnification Limit.
(cvi) Solely The maximum aggregate liability of the Seller and Cxxxx to ATP and ATP Indemnified Persons for purposes indemnification under (A) Section 11(a)(i)(ii) in connection with a breach of calculating Section 6(b) of this Agreement or (B) Section 11(a)(i)(iv) of this Agreement shall not exceed the amount then applicable Tax Indemnification Limit.
(vii) Each of Losses incurred arising the Seller, Cxxxx and ATP hereby agrees that the liability of the Seller and Cxxxx to ATP and ATP Indemnified Persons if this Agreement is terminated by ATP and the transactions contemplated hereby are abandoned as described in Section 10(a)(ii)(i) as a result of breach or failure by the Seller or Cxxxx of any of their respective representations or warranties prior to the initial Closing under this Agreement, be deemed to be equal to ATP’s out-of-pocket expenses.
(viii) ATP and ATP Indemnified Persons shall not be entitled to indemnification in connection with a claim under Section 11(a)(i)(iv) of this Agreement, if such Loss arises out of or relating relates to any breach a change, following a Closing Date, by ATP or in the business of managing the Assigned CDO Agreements or a representation change, following a Closing Date, by ATP in the United States federal income tax reporting positions heretofore taken by or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any on behalf of the parties hereto from (i) bringing an action based upon allegations of fraud Issuer or other willful Issuers, in question, but only to the extent such change in operations or intentional misconduct reporting is not required or (ii) seeking injunctive or other equitable relief to enforce their rights permitted under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing partyAssigned CDO Agreements.
Appears in 1 contract
Limitations on Indemnification. The Notwithstanding anything to the contrary contained in this Agreement, the obligations of Buyer and Seller ("Indemnifying Parties"), as defined below in Section 10.6.1, to provide indemnification provided for in Sections 8.1 and 8.2 under this Agreement shall be subject to the following limitations:
(a) The Sellers and the Selling Shareholders 10.5.1 Indemnifying Parties shall not have any liability, nor be obligated subject to provide any such indemnification for Losses incurred claim under Section 8.1(a) this Agreement, with respect to any Damages unless the amount of Damages exceeds $50,000. (The "Basket Amount") in the aggregate, whereupon the claiming Indemnified Party shall be entitled to receive indemnity payments for the amount of damages that exceeds the Basket Amount.
10.5.2 The aggregate amount that the Buyer is entitled to recover which may be recovered from Indemnifying Parties in respect of any claim and all claims made pursuant to this Agreement, whether by setoff, counterclaim or otherwise, shall not exceed such claims exceeds $75,000 (Indemnifying Party's respective pro rata interest in the “Threshold”) and then such indemnification shall relate to all such Losses in excess Fair Market Value of the Threshold; andShares or cash received in payment of the Purchase Price, with said shares being valued as of the date of this Agreement. For purposes of this Agreement, Fair Market Value shall mean the average of the closing bid prices of the Company's Common Stock for the five trading days immediately proceeding the date of this Agreement.
10.5.3 Indemnifying Parties shall not have any liability, or be subject to any claim under this Agreement, with respect to any inaccuracy in or incompleteness of or any breach of any representation, warranty, covenant or agreement contained in this Agreement if they shall have delivered written notice detailing such inaccuracy, incompleteness or breach to Buyer prior to the date hereof, Buyer shall actually have received such notices and Buyer shall have elected to proceed with the execution of the transactions contemplated hereunder notwithstanding such inaccuracy, incompleteness or breach.
10.5.4 At Seller's option, they may pay any amounts due Buyer (including indemnities to third parties) under this Agreement by delivering Shares to Buyer. In such event, the maximum aggregate obligation value of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof each Share so delivered shall not exceed the Purchase Price paid be deemed to be equal to the Sellers to Fair Market Value of such Share on the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); providedhereof computed as provided in Section 10.3.2, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitationabove.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
Appears in 1 contract
Samples: Asset Purchase and Development Agreement (Orca Technologies Inc)
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall (i) Any amounts which any party hereto may be subject obligated to the following limitations:
pay another party hereto pursuant to Section 10(d) will be reduced by an amount equal to: (a) The Sellers and the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the datetax benefit, if any, on which the applicable representation or warranty upon which realized as a result of such claim was based ceases to survive pursuant to Section 8.6.
losses (c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred)the "tax benefit", if any, the references reasonable joint determination by Purchaser's and Seller's outside accountants will be binding and conclusive as to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications all parties hereto); and (or correlative terms), including as expressed in accounting concepts b) any insurance recovery with respect to such as GAAP, shall be disregardedlosses received by the indemnified party.
(dii) Neither Purchaser nor Seller and Shareholders shall assert any Claims for indemnification pursuant to this Section 10 unless and until the aggregate amount of all Claims for indemnification asserted by such party exceeds Fifty Thousand Dollars ($50,000.00) in the aggregate, and upon such event and at such time the applicable indemnifying party or parties shall be responsible for and obligated to pay one hundred percent (100%) of all Claims in excess of Twenty-five Thousand Dollars ($25,000.00) in the aggregate.
(iii) Purchaser shall not assert Claims against Seller or the Shareholders which aggregate more than the Purchase Price, as specified and adjusted pursuant to Section 3(a) hereof.
(iv) Except for Claims pursuant to Section 10(a)(ii) hereof for breach of Seller and Shareholder's Warranties and Representations under Section 8(c) which shall not be limited as to time, the right of indemnification afforded to Purchaser, Seller and the Shareholders pursuant to this Section 10 shall be available for the following periods of time:
(A) With respect to any Claim asserted under Section 10(a)(ii), (except for Section 8(c) Representations and Warranties aforesaid), and/or under Section 10(b)(ii), a period of eighteen (18) months from and after the Asset Purchase Closing date.
(B) With respect to any and all other Claims asserted under Section 10(a) or Section 10(b), for a period of three (3) years from and after the Purchase Asset Closing date.
(C) Notwithstanding anything herein to the contrary, any specific Claim or action of which specific written notice is given to the party which has the indemnification obligation prior to the date on which such right of indemnification otherwise terminates as provided in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (iSection 10(e)(iv) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief may continue to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees be asserted and costs shall be paid by the nonprevailing partyindemnified against pursuant to this Section 10.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Valley National Gases Inc)
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers and the Selling Shareholders Seller shall not be obligated liable to provide any such Buyer from indemnification for Losses incurred under Section 8.1(a5.1(a) unless until the aggregate amount that the Buyer is entitled to recover in respect of all such claims Losses exceeds $75,000 (10,000, in which event the “Threshold”) and then such indemnification Seller shall relate only be required to all be liable for such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitationamount.
(b) No claims The aggregate amount of all Losses for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) which Seller shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive liable pursuant to Section 8.6this Article V shall not exceed an amount equal to 100% of the Purchase Price.
(c) Solely Notwithstanding anything herein to the contrary, Buyer’s first recourse for purposes of calculating the amount of any Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (properly due and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, owing hereunder shall be disregardedto offset the value of such Losses against outstanding Shares held by Seller (using the value of the Shares as of the date of offset).
(d) Notwithstanding anything Losses owing by Seller pursuant to this Article V shall be reduced by an amount equal to any Tax benefit realized or reasonably expected to be realized as a result of such Loss by Buyer. All indemnification payments made under this Agreement shall be treated by the parties as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.
(e) In no event shall Seller be liable to Buyer for any punitive, incidental, consequential, special or indirect damages, including loss of future revenue or income, loss of business reputation or opportunity relating to the breach or alleged breach of this Agreement, or diminution of value or any damages based on any type of multiple.
(f) Buyer shall take, and cause its Affiliates to take, all reasonable steps to mitigate any Loss upon becoming aware of any event or circumstance that would be reasonably expected to, or does, give rise thereto, including incurring costs only to the minimum extent necessary to remedy the breach that gives rise to such Loss.
(g) Buyer acknowledges and agrees that its sole and exclusive remedy with respect to any and all claims (other than claims arising from fraud for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement, shall be pursuant to the indemnification provisions set forth in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.V.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers representations, warranties and covenants of the Selling Shareholders Parties in this Agreement shall survive the Closing Date and continue in full force and effect for a period of twelve (12) months thereafter; provided that (i) claims related to breaches by Seller of the representations and warranties contained in Section 4.16(a) […***…], (ii) claims related to fraud or willful or intentional misconduct shall survive the Closing Date until the expiration of the date on which the statute of limitations otherwise applicable to such claims has expired, and (iii) any covenants or agreements contained in this Agreement that by their terms are to be performed after the Closing Date shall survive until fully discharged. For the avoidance of doubt, Retrophin’s obligations to make any Contingent Payment or Royalty payment contemplated by the covenants set forth in Sections 3.3 or 3.4, respectively, shall survive the Closing Date for so long as Retrophin has Net Revenues or Product is otherwise sold.
(b) The Seller shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims made under Section 8.1 unless and until the aggregate of the Losses exceeds $75,000 […***…] ([…***…]) (the “ThresholdBasket”) and then such indemnification ), after which point Seller shall relate to be liable for all such Losses dollar for dollar in excess of the Threshold; andBasket, in any event, but only to the maximum extent that such aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall do not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities […***…] ([…***…]) (the “MaximumCap Amount”); provided, however, that the limitations in this paragraph Basket and Cap Amount shall not apply apply, and all Losses of the Buyer Indemnitee Group shall be immediately subject to Losses arising indemnification, in respect of any Loss (but shall not exceed […***…] ([…***…]) in the aggregate with respect to (i) claims relating related to misrepresentations and any breach of warranties relating to Section 3.1 hereof (relating to organizationany representation and warranty contained in Sections 4.2, 4.10(a), 4.10(b), 4.16(a) and 4.16(b) (but solely to the extent that breaches by Seller of the representations and warranties contained in Section 3.3 hereof (relating to authority4.16(a) which may be asserted without limitation.
(b) No claims for indemnification […***…], such that any and all other breaches by Seller of the representations and warranties contained in respect of Sections 8.1(a) or 8.2(a)(iSection 4.16(a) shall be subject to the Basket and Cap Amount) (ii) claims related to fraud or willful or intentional misconduct, or (iii) claims made after under Section 8.1(c) or (d); provided, further, that any and all such Losses of the date, if any, on which Buyer Indemnitee Group described in the applicable representation or warranty upon which such claim was based ceases to survive pursuant to foregoing proviso shall be applied against the Cap for purposes of calculating the Seller’s aggregate liabilities under this Section 8.68.4(b). In no event shall the Seller be liable for Losses under this Agreement in an aggregate amount greater than […***…] ([…***…]).
(c) Solely for purposes of calculating the The amount of any and all Losses incurred arising out will be determined net of or relating to any breach of a representation or warranty amounts recovered by the BuyerBuyer Indemnitee Group under insurance policies (net of any deductible or self-insurance retention amounts and any increases in premiums resulting therefrom) and any indemnity, contribution or similar payment actually recovered by the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references Buyer Indemnitee Group thereof from any Third Party with respect to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, Losses. Each Indemnitee Group shall be disregardeduse commercially reasonable efforts to mitigate all Losses suffered by it which are subject to indemnification hereunder.
(d) Notwithstanding anything in No Indemnity Group shall be entitled to indemnification pursuant this Article VIII 8 for punitive damages, lost profits, consequential, exemplary or special damages. No Indemnitee Group shall be entitled to any limitation provided herein, nothing herein shall prevent any of duplicative recovery for the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights same Loss under this Agreement. In Article 8 to the event extent that any such action is brought, the prevailing party’s attorneys’ fees and costs member of such Indemnitee Group has been expressly compensated for such Loss.
(e) All indemnification payments made pursuant to this Article 8 shall be paid treated for tax purposes as adjustments to the Consideration unless otherwise required by the nonprevailing partyApplicable Law.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers Notwithstanding anything to the contrary contained herein, except as provided in this Section 7.3, no Indemnified Party shall be entitled to receive an indemnification payment with respect to any claim or claims for breach of the representations and the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(awarranties contained in this Agreement (i) unless such claim, or the aggregate amount that the Buyer is entitled to recover in respect of all such claims for Losses made by the Indemnified Party hereunder, equals or exceeds $75,000 100,000 (the “Threshold”) and then such indemnification shall relate to in which case all of such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid back to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organizationfirst dollar will be recoverable) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief for an aggregate amount exceeding the and claims with respect . Provided, however, any claim for indemnification under the Assumption of Samsung Litigation shall not be subject (i) to enforce their rights any $100,000 minimum and be fully recoverable from the Sellers from the first dollar and (ii) to the Indemnification Cap. For purposes of this Section 7.3(a), the “Indemnification Cap” shall mean one hundred percent (100%) of the Fair Market Value of the uSell Shares issued to the Sellers under this Agreement. In the event such action is broughtlieu of damages for any Losses, the prevailing party’s attorneys’ fees and costs Sellers shall be paid have the option but not the obligation, by notice delivered to the Buyer, of satisfying any indemnification claim made by the nonprevailing partyBuyer hereunder by returning to the Buyer such number of uSell Shares as may be required to reimburse the Buyer for its Losses, based on the Fair Market Value of the uSell Shares so returned. Each Seller shall also have the option of satisfying any indemnification claim made by the Buyer with cash or with any combination of uSell Shares and cash. The limitations set forth in this Section 7.3(a) shall not apply: (i) to inaccuracies in or breaches of any of the Specified Representations; or (ii) in the case of common law fraud. “Specified Representations” shall mean the representations and warranties set forth in Sections 3(a), 3(b), 3(d), 4(a), 5(a), 5(b), and 5(c).
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be Section 9.03 is subject to the following limitations:
(a) The Sellers the Buyer and the Selling Shareholders Seller shall not each be obligated to provide any responsible for 50% of such indemnification for Buyer Indemnitee’s Losses incurred under Section 8.1(a9.03(i) unless up to $5,000,000 in the aggregate with respect to claims made by such Buyer Indemnitee on or prior to the Representation Limitation Date(it being understood that the Buyer’s Insurance Policy shall be the sole and exclusive remedy of the Buyer Indemnitees to the extent their Losses exceed $5,000,000 in the aggregate prior to, on or after the Representation Limitation Date); provided that, for the avoidance of doubt, the aggregate amount required to be paid by the Seller pursuant to Section 9.03(i) shall not exceed $2,500,000; provided, further, that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred Seller’s obligations under Section 8.1(a9.03(i) hereof shall be satisfied solely from and shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.available Escrow Amount;
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) the Seller shall be made after liable for Losses under Section 9.03(i) only to the dateextent that the Buyer Indemnitee would have been entitled to indemnification for such Losses under the terms of the Buyer’s Insurance Policy in effect as of the date hereof (taking into account all limitations, if anyexclusions, on qualifications, rights of subrogation and covenants and agreements set forth therein), but for (x) Item 5 of the “Declarations” set forth in the Buyer’s Insurance Policy, (y) any exclusions related to or arising out of Buyer’s actual knowledge of breaches of any representations or warranties as of the Inception Date which breach the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.Buyer did not have actual knowledge of as of the date hereof and (z) Item 4(j) of the Buyer’s Insurance Policy;
(c) Solely for purposes the Seller shall have no obligations under Section 9.03(i) from and after the Representation Limitation Date; provided that, so long as a Buyer Indemnitee delivers written notice of calculating a claim to the Seller describing in reasonable detail the claim, the amount of Losses incurred arising out of or relating thereof (if known and quantifiable), and the basis thereof prior to any breach of a representation or warranty by the BuyerRepresentation Limitation Date, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, Seller shall be disregarded.required to indemnify such Buyer Indemnitee for all indemnifiable Losses (subject to the other limitations contained herein) which such Buyer Indemnitee may incur in respect to the matters which are the subject of such claim;
(d) Notwithstanding anything the Seller shall be liable to a Buyer Indemnitee with respect to indemnifiable Losses referred to in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or clause (ii) seeking injunctive or other equitable relief of Section 9.03 only if and to enforce their rights the extent the Buyer Indemnitee provides the Seller with written notice thereof with reasonable detail supporting such Losses prior to the Covenant Limitation Date;
(e) the Seller’s obligations under this Agreement. In clause (ii) of Section 9.03 shall be satisfied solely from and shall not exceed the available Escrow Amount; and
(f) in the event such action is broughtof a breach of Section 6.01, in no event shall the prevailing party’s attorneys’ fees and costs shall Buyer be paid entitled to any recovery thereunder for amounts already received by the nonprevailing partyBuyer pursuant to the adjustments contemplated by Section 1.03 hereof.
Appears in 1 contract
Limitations on Indemnification. The Purchaser, the Company, and the other Persons or entities indemnified pursuant to Section 10.1 shall not assert any claim for indemnification provided for in Sections 8.1 and 8.2 hereunder against the Seller until such time as, the aggregate of all claims which such persons may have against the Seller shall exceed $30,000 (the "Indemnification Threshold"), whereupon such claims shall be subject to the following limitations:
(a) The Sellers and the Selling Shareholders indemnified in full. Seller shall not be obligated to provide assert any claim for indemnification hereunder against Purchaser or the Company until such indemnification for Losses incurred under Section 8.1(a) unless time as the aggregate amount that the Buyer is entitled to recover in respect of all claims which Seller may have against Purchaser or the Company shall exceed $30,000, whereupon such claims exceeds $75,000 (the “Threshold”) and then such shall be indemnified in full. The limitation on assertion of claims for indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations contained in this paragraph shall not apply only to Losses arising claims based upon inaccuracies in, or breaches of, representations and warranties contained in respect of claims relating this Agreement or any document, instrument, certificate or other item required to misrepresentations be furnished pursuant to this Agreement or in connection with the transaction contemplated by this Agreement. No person shall be entitled to indemnification under this Article 10 if and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims the extent that such person's claim for indemnification is directly or indirectly related to a breach by such person of any representation, warranty, covenant or other agreement set forth in respect this Agreement. Notwithstanding any other term of Sections 8.1(a) this Agreement, the Seller shall not be liable under this Article 10 or 8.2(a)(i) otherwise for an amount which exceeds the amount of proceeds received by the Seller in connection with the transactions contemplated herein. For purposes of the foregoing limitation, the DocuNet Common Stock shall be valued at the Initial Public Offering Price. No claim under this Article 10 shall be made after unless an Indemnity Notice, an Unliquidated Indemnity Notice or a Claim Notice (as applicable) has been given prior to the dateapplicable survival period, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6applicable.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject (a) Notwithstanding any other provision of this Agreement to the following limitationscontrary, Buyer acknowledges and agrees as follows:
(ai) The Sellers and the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation liability of the Sellers Seller and WTOV Seller pursuant to this Agreement and the Selling Shareholders hereunder WTOV Agreement (taken as a whole) to Buyer for Losses any and all losses, liabilities or damages incurred under Section 8.1(aor suffered by Buyer (including losses, liabilities or damages with respect to claims of third parties) hereof shall not exceed the Purchase Price paid Indemnity Escrow Amount, regardless of whether the Buyer seeks indemnification pursuant to this Section 10 or Section 10 of the WTOV Agreement, regardless of the form of action, whether in contract or tort, including negligence, and regardless of whether or not Seller and WTOV Seller are notified of the possibility of damages to Buyer or any other third party, and (ii) the sole and exclusive recourse, remedy and source of funds available to satisfy any indemnification obligations of Seller pursuant to this Section 10 shall be solely payable from the funds held by the Indemnification Escrow Agent pursuant to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”)Indemnification Escrow Agreement; provided, however, that nothing herein shall limit the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which remedies Buyer may be asserted without limitationhave for losses, liabilities or damages based on fraud by the Seller.
(b) No claims Notwithstanding any other provision of this Agreement to the contrary, (i) in no event shall Buyer or Seller be liable for any punitive damages and (ii) in no event shall Seller be liable for any losses, liabilities or damages related to asbestos located at the Real Property (except to the extent set forth in Section 6.5). Each party hereto agrees to use reasonable efforts to mitigate any losses, liabilities or damages which form the basis for any claim for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6hereunder.
(c) Solely Whenever an Indemnifying Party is required to indemnify and hold harmless a Claimant from and against and hold a Claimant harmless from, or to reimburse a Claimant for purposes losses, liabilities or damages, such Indemnifying Party will, subject to the provisions of calculating this Section 10, pay the Claimant the amount of Losses incurred arising out of such losses, liabilities or relating to any breach of a representation or warranty damages reduced by the Buyernet proceeds of any insurance policy paid to the Claimant with respect to such losses, the Sellersliabilities or damages, or the Selling Shareholders (and not including, without limitation, insurance payments made to Buyer under Seller's insurance policies as provided for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregardedSection 6.18.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
Appears in 1 contract
Limitations on Indemnification. The Rights to indemnification provided for in Sections 8.1 and 8.2 shall be under this Article VIII are subject to the following limitations:
(a) The Sellers and the Selling Shareholders AERC shall not be obligated entitled to provide indemnification hereunder with respect to an Indemnifiable Claim arising out of a breach of a representation, warranty, covenant or agreement (or, if more than one such Indemnifiable Claim is asserted, with respect to all such Indemnifiable Claims), unless the aggregate amount of Damages with respect to such Indemnifiable Claim or Claims exceeds $500,000 (the "Basket"), in which event AERC shall be entitled to indemnification hereunder for Damages with respect to all Indemnifiable Claims in excess of the Basket; provided, however, that in no event shall AERC be entitled to indemnification hereunder, including without limitation Section 8.2(a)(i)(D), for Damages in an amount in excess of the difference between (i) the Adjusted Purchase Price and (ii) the aggregate value of the decreases to the number of AERC Common Shares receivable by the MIGRA Stockholders made pursuant to Sections 2.4, 2.5 and 5.4, such difference herein referred to as the "MIGRA Cap"; and further, provided, however, that notwithstanding the joint and several indemnification obligation of the MIGRA Stockholders, no MIGRA Stockholder at any time shall have to pay Damages in excess of the amount of the Purchase Price actually received by such MIGRA Stockholder at such time, it being understood that such excess shall become immediately due and payable on the immediately succeeding date when an installment of AERC Common Shares becomes payable pursuant to Section 2.1 (to the extent of the value of the AERC Common Shares receivable on such date), and any remaining excess and any additional subsequent Damages also shall become so immediately due and payable on the immediately succeeding date when such an installment becomes so payable (to the extent of the value of the AERC Common Shares receivable on such date); and further, provided, however, that no MIGRA Stockholder shall be liable for Damages in an amount in excess of his or her pro rata share, as determined by reference to the relative number of shares of MIGRA Conversion Stock held thereby, of the MIGRA Cap; and provided further, in the event that AERC has actual knowledge of a breach of this Agreement which entitles it to terminate this Agreement pursuant to Section 7.1(d) or 7.1(f) (whether or not it also has the right to terminate under Section 7.1(h)) and elects not to exercise any such indemnification for Losses incurred right of termination and to waive all (but not less than all) of such breaches (and the right to terminate under Section 8.1(a7.1(h)) solely for the purpose of effecting the Closing pursuant to Section 7.4, no MIGRA Stockholder shall be liable for Damages caused by the representations and warranties which are known to be not true and correct and (subject to the last sentence of this Section 8.3(a)) Claims under Section 8.2(a)(i)(D) relating to liabilities and potential liabilities, which to the actual knowledge of MIGRA or any MIGRA Stockholder or AERC, were in existence, at the Effective Time in excess of his or her pro rata share, determined as aforesaid, of either (i) if the price adjustment referred to in Section 5.2(l) shall occur, 10% of the sum of $10,000,000 plus the Adjusted Purchase Price, or (ii) if the price adjustment referred to in Section 5.2(l) shall not occur, 10% of the Adjusted Purchase Price. In the event the MIGRA Stockholders become liable for Damages pursuant to this Section, each MIGRA Stockholder shall have the right to elect, by written notice to AERC, to pay the amount of Damages in cash or by a reduction of the number of AERC Common Shares otherwise receivable thereby equal in value to the amount of Damages; provided, that in the event a MIGRA Stockholder exercises his or her rights pursuant to Section 8.5 as to the Indemnifiable Claim or Claims in question, such number of AERC Common Shares shall be placed in escrow pursuant to an escrow agreement, and with an escrow agent, mutually agreed upon by AERC and the applicable MIGRA Stockholder(s). For purposes of the preceding sentence, the value of the AERC Common Shares shall be determined in the following order of priority: (i) at the Effective Time, pursuant to Section 2.1(b); (ii) on the Second Issuance Date, (A) first, pursuant to Section 2.1(c) and (B) second, pursuant to Section 2.1(e) and (iii) on the Third Issuance Date, (A) first, pursuant to Section 2.1(d) and (B) second, pursuant to Section 2.1(f). The limits on indemnification contained in this subsection shall not apply in the event of a breach of the representations and warranties contained in Section 4.9(f) and the Basket shall not be applicable to any failure to pay any Claims relating to the MIGRA Stockholders Fixed Liabilities, or any Claims(s) under Section 8.2(a)(i)(D) relating to liabilities and potential liabilities of the MIGRA Companies or a MIGRA Company which, to the actual knowledge of MIGRA or any MIGRA Stockholder, were in existence at the Effective Time (whether or not the amount of such liability or potential liability was quantified or quantifiable at the Effective Time), including, without limitation, any such liabilities and obligations listed on the MIGRA Disclosure Schedule.
(b) Neither MIGRA nor the MIGRA Stockholders shall be entitled to indemnification hereunder with respect to an Indemnifiable Claim arising out of a breach of a representation, warranty, covenant or agreement (or, if more than one such Indemnifiable Claim is asserted, with respect to all such Indemnifiable Claims) unless the aggregate amount that of Damages with respect to such Indemnifiable Claim or Claims exceeds the Buyer is Basket, in which event MIGRA or the MIGRA Stockholders shall be entitled to recover in indemnification hereunder for Damages with respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses Indemnifiable Claims in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”)Basket; provided, however, that in no event shall MIGRA and the limitations MIGRA Stockholders be entitled to such indemnification for such Damages in this paragraph shall not apply to Losses arising an amount in respect excess of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6Adjusted Purchase Price.
(c) Solely for purposes The obligation of calculating indemnity (i) with respect to the amount of Losses incurred arising out of or representations and warranties set forth in Article III shall terminate two years after the Closing and (ii) with respect to any representations and warranties relating to any breach the Managed Properties shall terminate two years after the Closing unless, in either case, an Indemnifiable Claim has been brought with respect thereto prior to such termination; provided that with respect to the representations and warranties set forth in Sections 3.1 through 3.3, 4.1 through 4.4, and 4.9 and with respect to the MIGRA Stockholders Liabilities, the obligation of a representation or warranty indemnity shall extend to the expiration of the applicable statute of limitations, if later; and provided further, that nothing contained in the preceding portion of this Section 8.3(c) shall be construed to limit the survival of the representations and warranties in Article IV (other than those covered by the Buyer, the Sellers, preceding portion of this Section 8.3(c) or the Selling Shareholders (and not for purposes obligation of determining whether or not a breach has occurredindemnity contained in Section 8.2(a)(i)(D), which representations and warranties and obligation shall survive the references Closing and shall extend to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative termsthe expiration of the applicable statute of limitations), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in The foregoing provisions of this Article VIII or Section 8.3 notwithstanding, if, prior to the termination of any limitation provided hereinobligation to indemnify, nothing herein shall prevent any written notice of the parties hereto from (i) bringing an action based upon allegations of fraud a claimed breach or other willful occurrence or intentional misconduct matter giving rise to a claim of indemnification is given by the party seeking indemnification (the "Indemnified Party") to the party from whom indemnification is sought (the "Indemnifying Party"), or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In an Indemnifiable Claim is commenced against the event such action is broughtIndemnified Party, the prevailing party’s attorneys’ fees and costs Indemnified Party shall not be paid by precluded from seeking indemnification for such claimed breach, occurrence, other matter, or an Indemnified Claim from the nonprevailing partyIndemnifying Party in accordance with Section 8.4 or 8.5, as applicable.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Associated Estates Realty Corp)
Limitations on Indemnification. The indemnification provided Notwithstanding anything to the contrary contained in this Agreement:
9.4.1 In no event shall Seller be liable, or required to make any payment pursuant to Section 9.2, for any Seller Indemnifiable Damages suffered by any of the Purchaser Indemnified Parties unless and until the aggregate dollar amount of all such Seller Indemnifiable Damages exceeds Five Hundred Thousand Dollars ($500,000.00) (such amount, the “Basket Amount”), in Sections 8.1 and 8.2 which case Purchaser Indemnified Parties shall be subject to the following limitations:
(a) The Sellers and the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover from the first dollar of Seller Indemnifiable Damages; and (ii) the maximum aggregate liability of Seller in respect of all such claims exceeds $75,000 Seller Indemnifiable Damages shall be limited to, and not exceed, one and one-half percent (1.5%) of the Purchase Price (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “MaximumSeller Liability Cap”); provided, that in no event shall the limitations Seller Liability Cap apply with respect to any of the Fundamental Representations or the Tax Representations or any Seller Indemnifiable Damages relating thereto.
9.4.2 Following the Closing, except with respect to any Fundamental Representations or Tax Representations or any Seller Indemnifiable Damages relating thereto, none of the Purchaser Indemnified Parties shall (or shall have the right to) seek, pursue or enter any judgment or collect (or attempt to collect) an amount in this paragraph excess of the Seller Liability Cap. Purchaser shall not apply be required to Losses arising in respect notify Seller prior to the Outside Claim Date of claims relating to misrepresentations and any claim against Seller for a breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification or inaccuracy in respect any of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive Seller’s Representations pursuant to Section 8.6.
9.2 by the delivery of a written notice (ceach such notice, a “Notice of Claim” and each such claim identified therein a “Noticed Claim”) Solely for purposes setting forth: the dollar amount of calculating the Purchaser Indemnifiable Damages relating to the Noticed Claim (or a reasonable estimate of the amount of Losses incurred arising out such Noticed Claim). If Purchaser and Seller cannot mutually agree upon the settlement of or relating any Noticed Claim, Purchaser shall be deemed to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders have waived its right to pursue such Noticed Claim (and not for purposes of determining whether or not a breach has occurredany right to collect from Seller with respect to such Noticed Claim), unless Purchaser brings a court action with respect to such Noticed Claim on or prior to the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications date that is ninety (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded90) days after the Outside Claim Date.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
Appears in 1 contract
Samples: Purchase and Sale Agreement (New Senior Investment Group Inc.)
Limitations on Indemnification. The Subject to any limitations contained therein, all representations and warranties made by the parties herein or in any instrument or document furnished in connection herewith shall survive the Closing and any investigation at any time made by or on behalf of the parties hereto and shall expire on the earlier of eighteen (18) months after the Closing Date or the closing of the transactions contemplated by that certain Agreement and Plan of Merger between the Seller and the Buyer of even date herewith, except (i) as to any matter as to which a claim is submitted in writing to the indemnifying party prior to the applicable expiration date and identified as a claim for indemnification provided pursuant to this Agreement; (ii) as to any representation or warranty relating to ownership or title to the Shares or the Company's assets, including real or immovable property, which shall not expire; (iii) as to any matter which is based upon willful fraud by the indemnifying party, with respect to which the representations and warranties set forth in this Agreement shall expire only upon expiration of the applicable statute of limitations plus 60 days; (iv) as to any representation or warranty concerning tax or environmental matters, which shall expire only upon the expiration of the applicable statute of limitations plus 45 days; and (v) as to any representation or warranty concerning the authority to execute this Agreement or any of the other documents contemplated hereby, which shall not expire. No claim or action for indemnity pursuant to Sections 6.1. or 6.2. hereof for breach of any representation or warranty shall be asserted or maintained by any party hereto after the expiration of such representation or warranty pursuant to the preceding sentence except for claims made in writing prior to such expiration and actions (whether instituted before or after such expiration) based on any claim made in writing prior to such expiration. Notwithstanding any other provisions contained in this Agreement, neither Buyer nor Seller shall be entitled to receive any amount under this Section 6. which exceeds the Purchase Price; provided, however, the limit on indemnification shall exclude any obligations specifically assumed by any party in this Agreement, including without limitation, the obligations relating to Taxes and brokers as described in Sections 8.1 3.2.1., 5.2., and 8.2 shall be subject to the following limitations:
9.5. respectively. Further, notwithstanding any other provisions in this Agreement, (a) The Sellers and the Selling Shareholders Buyer shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder payment under this Section 6. for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and a breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything Sellers contained in this Article VIII Agreement except for the amount by which the aggregate of all breach of warranty or any limitation provided hereinrepresentation claims hereunder which have not theretofore been reimbursed to Buyer exceeds the sum of $300,000.00, nothing herein and (b) Seller shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief not be entitled to enforce their rights payment under this AgreementSection 6. except for the amount by which the aggregate of all claims hereunder which have not theretofore been reimbursed to Seller, exceeds $300,000.00. In the event such action the $300,000.00 threshold mentioned in clause (a) or (b) of the preceding sentence is broughtexceeded, Buyer or Seller, as the prevailing party’s attorneys’ fees and costs case may be, shall be paid by then have the nonprevailing partyright to seek reimbursement of said threshold amount from Seller or Buyer, as the case may be, under this Section 6.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for Notwithstanding anything contained in Sections 8.1 and 8.2 shall be subject to the following limitations:
Section 4.1 or 4.2 hereof or elsewhere in this Agreement: (a) The Sellers no Parent Shareholder shall be liable to the Purchaser under this Agreement except to the extent that the cumulative amount of indemnifiable Damages actually incurred by the Purchaser as a proximate result of all inaccuracies in the representations and warranties made by such Parent Shareholder in this Agreement actually exceeds the Selling Shareholders Unused Deductible Amount; and a Parent Shareholder shall only be required to pay, and shall only be liable for, the amount by which the cumulative amount of indemnifiable Damages actually incurred by the Purchaser as a proximate result of all such inaccuracies in the representations and warranties made by such Parent Shareholder in this Agreement actually exceeds the Unused Deductible Amount; and (b) no Parent Shareholder shall be liable under this Agreement with respect to any indemnification claim based on an inaccuracy in any representation or warranty of such Parent Shareholder if any of the Purchaser's officers or directors had actual knowledge of the inaccuracy in such representation or warranty (or of any facts or circumstances constituting or resulting in such inaccuracy) prior to the execution of this Agreement; provided, however, that the limitation provided by this clause "(b)" shall not be obligated available to provide any a Parent Shareholder if such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect of all Parent Shareholder also had such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess actual knowledge of the Threshold; and, inaccuracy in any event, such representation and warranty (or of such facts or circumstances constituting or resulting in such inaccuracy) prior to the maximum aggregate obligation execution of the Sellers and Purchase Agreement. For purposes of this Section 4.4, "Unused Deductible Amount" shall mean the Selling Shareholders hereunder for Losses incurred under $250,000 deductible amount referred to in Section 8.1(a) hereof shall not exceed 5.5 of the Purchase Price paid Agreement, to the Sellers extent such deductible amount has not been utilized under the Purchase Agreement to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating reduce the amount of Losses incurred arising out of or relating indemnification payments made to any breach of a representation or warranty the Purchaser by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregardedEscrow Agent.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 No Indemnitor shall be subject liable for an indemnification claim made under Section 8.2 or 8.3, as the case may be: (w) for which a claim for indemnification is not asserted hereunder on or before the applicable Survival Date; (x) to the following limitations:
extent Losses, in the aggregate, incurred by the Buyer Indemnified Parties or by the Seller Indemnified Parties, as applicable, exceed an amount equal to Two Hundred Thousand Dollars (a$200,000) The Sellers (the “Indemnification Cap”); and (y) unless and until the Selling Shareholders actual Losses of the Buyer Indemnified Parties, collectively, or the Seller Indemnified Parties, collectively, as applicable, exceed an aggregate amount equal to Fifty Thousand Dollars ($50,000) (the “Basket”), in which case the applicable Indemnitor(s) shall not be obligated to provide any such indemnification the Indemnitee(s) for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (Losses of the “Threshold”Indemnitee(s) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”)Basket; provided, however, that the limitations in this paragraph Basket and the Indemnification Cap shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing indemnification claims to the extent amounts are actually paid under insurance maintained by the Indemnitor (or any of its Affiliates) and (ii) indemnification claims based in whole or in part upon Fraud. Losses shall not include any exemplary or punitive damages, except in each case to the extent actually awarded to a third-party who is not a party to this Agreement or an action based Affiliate of a party to this Agreement. Indemnitee shall take commercially reasonable efforts to mitigate any of its Losses promptly upon allegations becoming aware of fraud any event that would reasonably be expected to, or other willful does, give rise to Losses that are indemnifiable hereunder, in each case, to the same extent as it would if such Losses were not subject to indemnification hereunder. Any Losses for which an Indemnitee is entitled to indemnification under this ARTICLE VIII shall be determined without duplication of recovery by reason of the state of facts giving rise to such Losses constituting a breach of more than one representation, warranty, covenant, agreement or intentional misconduct otherwise. In addition, notwithstanding anything to the contrary in this Agreement, the Sellers shall not be liable for (i) any Taxes of the Company incurred after the Closing or (ii) seeking injunctive any Taxes resulting from an election made under Code Section 338 or under any comparable provisions of any other equitable relief state, local or foreign laws with respect to enforce their rights under the purchase of the Purchased Shares pursuant to this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
Appears in 1 contract
Samples: Stock Purchase Agreement (Home Treasure Finders, Inc.)
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(ai) The Sellers and the Selling Shareholders Seller Indemnified Parties shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect assert any claim for indemnification under this Section 8 unless and until such time as all claims of all such claims exceeds the Seller Indemnified Parties for indemnification hereunder exceed $75,000 1,000,000 (the “Threshold”"Buyer's Basket") in the aggregate, at which time any and then such all claims of the Seller Indemnified Parties for indemnification shall relate to all such Losses in excess of the ThresholdBuyer's Basket may be asserted; andprovided, in however, that the Buyer's Basket shall not be applicable to any eventDamages attributable to (A) any breach by the Buyer of any of its obligations under Section 2(e) hereof, the maximum aggregate obligation or (B) any failure of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid Buyer to the Sellers to the date of such Loss plus the cost associated with the assumption pay or otherwise satisfy any part of the Assumed Liabilities or any other obligations or liabilities of the Sellers that the Buyer has agreed to assume and be responsible for under the terms of this Agreement.
(ii) Notwithstanding anything to the contrary contained in this Section 8, in no event will any Seller be liable to the Buyer or any Buyer Indemnified Party under this Section 8 or otherwise (A) in an amount in excess of the amounts shown on Schedule 8(e) of the Sellers' Disclosure Schedule with respect to each Seller individually, and $36,585,000 with respect to all of the Sellers in the aggregate, or (B) for any incidental, consequential or other special damages, including, without limitation, lost profits.
(iii) The Buyer Indemnified Parties shall not be entitled to assert any claim for indemnification under this Section 8 unless and until such time as all claims of the Buyer Indemnified Parties for indemnification hereunder exceed $1,000,000 (the “Maximum”)"Sellers' Basket") in the aggregate, at which time any and all claims of the Buyer Indemnified Parties for indemnification in excess of the Sellers' Basket may be asserted; provided, however, that the limitations in this paragraph Sellers' Basket shall not apply be applicable to Losses arising in respect any Damages attributable to any breach by the Sellers of claims relating to misrepresentations and breach any of warranties relating to their obligations under Section 3.1 hereof (relating to organization2(e) and Section 3.3 hereof (relating to authority) which may be asserted without limitationhereof.
(biv) No claims Notwithstanding anything to the contrary contained in this Section 8, in no event will the Buyer be liable to the Sellers or any Seller Indemnified Party under this Section 8 or otherwise (A) in an amount in excess of $15,000,000, or (B) for indemnification any incidental, consequential or other special damages, including, without limitation, lost profits.
(v) Notwithstanding any provision to the contrary contained in respect this Agreement, no Seller shall have any liability to the Buyer hereunder to the extent that the existence of Sections 8.1(a) such liability, breach, or 8.2(a)(i) shall be made after the date, if any, on which the applicable falsity of any representation or warranty upon which such claim was liability would be based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed is disclosed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief contracts, certificates and documents referred to enforce their rights under in this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by Exhibits attached hereto or in the nonprevailing partySellers' Disclosure Schedules accompanying herewith, or otherwise disclosed in a written notice to Buyer prior to the Closing Date.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 Section 7.2 hereof shall be subject to the following limitationslimitations and conditions:
(a) The Sellers and No Stockholder shall be liable for any Losses resulting from any inaccuracy in any representation or warranty of the Selling Shareholders shall Company or the Stockholders contained in this Agreement unless written notice of entitlement to make a claim (whether or not be obligated any monetary Losses have actually been suffered) with respect to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess is given by an Industrialex Indemnified Party on or prior to the expiration of the Threshold; and, in any event, the maximum aggregate obligation survival of the Sellers and the Selling Shareholders hereunder for Losses incurred under particular representation or warranty at issue, as set forth in Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation7.1 above.
(b) No claims Industrialex shall not be liable for indemnification any Losses resulting from any inaccuracy in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable any representation or warranty upon which of Industrialex contained in this Agreement unless written notice of entitlement to make a claim (whether or not any monetary Losses have actually been suffered) with respect to such claim was based ceases Losses is given by a Company Indemnified Party on or prior to survive pursuant to the expiration of the survival of the particular representation or warranty at issue, as set forth in Section 8.67.1 above.
(c) Solely for purposes In the event that a Stockholder is required to make any payment under this Agreement, such Stockholder shall promptly pay to the Industrialex Indemnified Party the amount so determined. If there should be a dispute as to the amount or manner of calculating determination of any indemnity obligation owed under this Agreement, the Stockholder shall nevertheless pay when due such portion, if any, of the obligation as shall not be subject to dispute. The difference, if any, between the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyerobligation ultimately determined as properly payable under this Agreement and the portion, the Sellersif any, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including theretofore paid shall bear interest as expressed provided in accounting concepts such as GAAP, shall be disregardedSection 7.6.
(d) Notwithstanding anything in this Article VIII or In the event that Industrialex is required to make any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights payment under this Agreement, Industrialex shall promptly pay to the Company Indemnified Party the amount so determined. In If there should be a dispute as to the event amount or manner of determination of any indemnity obligation owed under this Agreement, Industrialex shall nevertheless pay when due such action is broughtportion, if any, of the prevailing party’s attorneys’ fees obligation as shall not be subject to dispute. The difference, if any, between the amount of the obligation ultimately determined as properly payable under this Agreement and costs the portion, if any, theretofore paid shall be paid by the nonprevailing partybear interest as provided in Section 7.6.
Appears in 1 contract
Samples: Stock Purchase Agreement (Industrialex Manufacturing Corp)
Limitations on Indemnification. The (a) Subject to the following sentence, the Purchaser may not recover Losses from the Indemnitors in respect of any claim for indemnification provided under Section 7.2(a)(1), Section 7.2(a)(5), or Section 7.2(b)(1) (Indemnification) (i) unless and until Losses have been actually incurred in an aggregate amount greater than $100,000 (the “Indemnification Threshold”) after which, subject to the other limitations set forth in this Article 7, Purchaser will be entitled to recover for all Losses in Sections 8.1 excess of the Indemnification Threshold, or (ii) for an aggregate amount in excess of fifteen percent (15.0%) of the Purchase Price actually received by such Indemnitor (including any future consideration received in connection with the achievement of a subsequent Milestone Event and 8.2 calculated without deduction for any payment by such Indemnitor under this Article 7) (the “Cap”). Notwithstanding the foregoing sentence, (X) claims for breach or inaccuracy of any of the Fundamental Representations and/or the representations and warranties in Section 2.10 (Taxes) shall not be subject to the following limitationsforegoing limits and shall not be included in the determination of whether the limit in clause (ii) has been reached, and (Y) the Indemnification Threshold and Cap will not apply to any Losses to the extent due to fraud, intentional misrepresentation, bad faith or intentional misconduct by the Company or any of its directors or officers in their capacities as such or any Indemnitor, or to any claim for breach of any representation or warranty of the Company, any Subsidiary of the Company, including the UK Subsidiary, or any Securityholder which was actually known by the Company, the Subsidiary of the Company, including the UK Subsidiary, the Representative or any Securityholder to be inaccurate at Closing. For all purposes of this Article 7, when determining the amount of Loss resulting from a breach or inaccuracy of a representation or warranty of the Company, any Subsidiary of the Company, including the UK Subsidiary, or any Securityholder (but not whether such representation or warranty is inaccurate or has been breached), any material adverse effect or other materiality qualifier contained in any such representation or warranty will be disregarded. In no event shall any Indemnitor be liable to Purchaser for any Losses (including pursuant to Section 4.6) in the aggregate in excess of the Purchase Price actually received by such Indemnitor (including any future consideration received in connection with the achievement of a subsequent Milestone Event), except for Losses to the extent due to fraud.
(b) Notwithstanding Section 7.3(a) above, recovery of any indemnifiable Loss by Purchaser from an Indemnitor (or any recovery or payment to Purchaser under Section 4.6(a)) shall be limited to (i) the Purchase Price actually received by such Indemnitor prior to the resolution of such indemnification claim plus (ii) the Purchase Price actually receivable by such Indemnitor, if any, upon the occurrence of a Milestone Event subsequent to the resolution of such indemnification claim, which indemnifiable Loss may be offset by Purchaser against payment of the Purchase Price otherwise payable in respect of such future Milestone Event. For the avoidance of doubt, if, for example, Purchaser incurs an indemnifiable Loss in the amount of $2,000,000, to which the Cap applies, and that is finally resolved after the Closing but before a Milestone Event has occurred, Purchaser shall be entitled to recover $1,485,000 from the Closing Consideration previously paid to the Indemnitors (that is, 15.0% of the Closing Consideration, assuming no deduction for Indebtedness or Company Expenses), and the unrecovered balance of $515,000 only by way of offset from the Purchase Price payable with respect to a subsequent Milestone Event (but in no event in the aggregate to exceed the Cap); provided, however, that if a Milestone Event does not subsequently occur, Purchaser shall have no further recourse against any Indemnitor with respect to such unrecovered Loss to which the Cap applies. In the event that a Liability Claim is outstanding and unresolved at the time of payment of the Purchase Price upon occurrence of a Milestone Event, Purchaser may withhold payment of that portion of such Purchase Price as would be subject to this paragraph had the Liability Claim been finally resolved at such time until such time as the Liability Claim is finally resolved. Any settlement agreement between Purchaser or an Indemnitor and the Representative providing for the recovery of a Liability Claim by Purchaser shall contain provisions consistent with this paragraph.
(c) Except as otherwise required by applicable Law or as explicitly provided herein, the parties shall treat any indemnification payments made hereunder (including under Sections 4.6 and 4.10) as an adjustment to the Purchase Price for all purposes, including accounting and Tax.
(d) The Indemnitors shall not be liable under this Agreement in respect of:
(a1) The Sellers A liability which is contingent, unless and until such contingent liability becomes an actual liability and is due and payable, provided that the foregoing shall in no way restrict or prevent the Purchaser from making a Liability Claim with respect to a contingent liability in the amount of any potential Loss associated with a contingent liability;
(2) Any Loss, solely to the extent that such Loss results from, or is increased by the passing of, or any change in any Law after the date of this Agreement, including but not limited to any increases in the rate of Taxes or any imposition of Tax or any withdrawal or relief from Tax after the date of this Agreement, or any change in GAAP after the date of this Agreement.
(e) Payments by an Indemnitor pursuant this Article 7 in respect of any Loss shall be limited to the amount of any liability or damage that remains after deducting therefrom any insurance proceeds and any indemnity, contribution or other similar payment actually received by Purchaser in respect of any such claim, provided, that, recognizing the complexity of the business operations of Purchaser and the Selling Shareholders prospective implications to Purchaser of making an insurance claim or pursuing any indemnity, contribution or other similar payment, Purchaser shall not be obligated to provide make or pursue, directly or indirectly, any such indemnification claim for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; andinsurance coverage or any indemnity, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitationcontribution or other similar payment.
(bf) No claims Other than as paid in connection with a Third Party Claim, in no event shall any Indemnitor be liable to Purchaser, or shall Purchaser be liable to any Securityholder, for indemnification in respect any punitive, incidental, consequential, special or indirect damages, including loss of Sections 8.1(a) future revenue or 8.2(a)(i) shall be made after the dateincome, if any, on which the applicable representation loss of business reputation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or opportunity relating to any the breach or alleged breach of a representation or warranty by the Buyer, the Sellersthis Agreement, or the Selling Shareholders (and not for purposes diminution of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregardedvalue.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
Appears in 1 contract
Samples: Purchase Agreement (Agenus Inc)
Limitations on Indemnification. The Notwithstanding the foregoing provisions of Section 11.1, (a) Seller shall not be required to indemnify Buyer or any Buyer-Related Entities under this Agreement unless the aggregate of all amounts for which an indemnity would otherwise be payable by Seller under Section 11.1 exceeds the Basket Limitation, (b) in no event shall the liability of Seller with respect to the indemnification provided for in Sections 8.1 Section 11.1 exceed in the aggregate the Cap Limitation (provided that Seller’s obligations under Article X with respect to prorations and 8.2 adjustments and Seller’s obligations under Section 14.2 with respect to Brokers shall not be subject to the following limitations:
(a) The Sellers and Basket Limitation or the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; andCap Limitation), in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) in the event Buyer obtains actual knowledge of any inaccuracy or breach of any representation, warranty, or covenant of Seller contained in this Agreement (a “Buyer Waived Breach”) after the Effective Date but prior to the Closing, and nonetheless proceeds with and consummates the Closing, then Buyer and any Buyer-Related Entities shall be deemed to have waived and forever renounced any right to assert a claim for indemnification under this Article XI for, or any other claim or cause of action under this Agreement, at law or in equity on account of any such Buyer Waived Breach. In no event shall Buyer be entitled to seek or obtain consequential, special, punitive or exemplary damages against Seller. In no event shall Seller be entitled to seek or obtain consequential, special, punitive or exemplary damages against Buyer. Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyerthis Article 11, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effectactual knowledge” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, words of similar import shall be disregarded.
(d) Notwithstanding anything in this Article VIII deemed to refer solely to the actual knowledge of Xxxx Xxxxxx and Xxxx Xxxxxx on behalf of Buyer and shall not include any obligation of further inquiry or investigation, nor any knowledge which could or should have been obtained, or matter which might be deemed to be known to such person, by virtue of constructive notice, inquiry notice, or any limitation provided herein, nothing herein shall prevent any other form of the parties hereto from (i) bringing an action based upon allegations notice or duty of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing partyinvestigation.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Glimcher Realty Trust)
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject Notwithstanding anything herein to the following limitationscontrary, the right to indemnification under this Section 11 is limited as follows:
(a) The Sellers Buyer Indemnified Parties shall be entitled to indemnification pursuant to this Section 11 if and only if (i) the Selling Shareholders shall not be obligated to provide any such amount of the claim for indemnification for Losses incurred under or series of related claims based upon Section 8.1(a11 exceeds $10,000 and (ii) unless the aggregate amount that of all Losses suffered by the Buyer is Indemnified Parties under all claims for indemnification based upon Section 11 in excess of $10,000 exceeds $50,000 and, in such event, the Buyer Indemnified Parties will be entitled to recover in respect indemnification for the full amount of all such Losses suffered.
(b) The Seller Indemnified Parties shall be entitled to indemnification pursuant to this Section 11 if and only if (i) the amount of the claim for indemnification or series of related claims based upon Section 11 exceeds $75,000 10,000 and (ii) the “Threshold”aggregate amount of all Losses suffered by the Seller Indemnified parties under all claims for indemnification based upon Section 11 in excess of $10,000 exceeds $50,000 and, in such event, the Seller Indemnified Parties will be entitled to indemnification for the full amount of all Losses suffered.
(c) and then In the absence of fraud, all claims for Losses made by any Buyer Indemnified Party pursuant to this Section 11 shall be satisfied solely out of the Escrow Amount, subject to the terms of the Escrow Agreement. Claims or causes of action against Seller for fraud by any Buyer Indemnified Party may, in the sole discretion of such indemnification Buyer Indemnified Party, be satisfied out of the Escrow Amount subject to the terms of the Escrow Agreement or may be pursued directly against Seller. If a Buyer Indemnified Party seeks to have any claim or cause of action against Seller for fraud satisfied from the Escrow Amount, such election shall relate not limit or otherwise affect such Buyer Indemnified Party’s right to all indemnification, reimbursement or any other legal remedy that may be available with respect to such fraud claim, other than to the extent any such right or remedy would duplicate any amount paid from the Escrow Amount. In the absence of fraud, in no event shall Seller be liable for Losses in excess of the Threshold; andEscrow Amount. In the absence of fraud, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder no event shall Buyer be liable for Losses incurred under Section 8.1(a) hereof shall not exceed in excess of $1,000,000 in the Purchase Price paid aggregate. Notwithstanding anything contained herein to the Sellers contrary, after the Closing Date, in no event shall Seller be prohibited from making distributions to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities its members or creditors, or terminating its existence or otherwise liquidating, dissolving or in any manner winding up its affairs (the collectively, a “MaximumTermination Event”); provided, that if, at the limitations time of such Termination Event, there then exists an unresolved claim made by Buyer in this paragraph shall not apply to Losses arising writing against Seller alleging fraud by Seller in respect connection with the transactions contemplated hereby, Buyer may seek an injunction in a court of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof competent jurisdiction (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which Seller may oppose) to preclude Seller from (a)making any such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes distribution in excess of calculating the amount of Losses incurred arising out such unresolved claim, or (b)effecting any such Termination Event, until such time as such unresolved claim is resolved by mutual agreement of Buyer and Seller or relating to any breach by order of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes court of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregardedcompetent jurisdiction.
(d) Notwithstanding anything Except with respect to Losses actually awarded to a third party in an action brought against an Indemnified Party, an Indemnified Party shall not be entitled to indemnification for punitive damages, or for lost profits, consequential, incidental, exemplary or special damages.
(e) The Buyer Indemnified Parties’ right to indemnification pursuant to this Article VIII or Section 11 on account of any limitation provided herein, nothing herein Losses shall prevent any of the parties hereto from be (i) bringing an action based upon allegations reduced by the amount, if any, of fraud the present value of any Tax benefit (net of reasonable expenses and other costs incurred in obtaining said benefit) which the Buyer Indemnified Party shall, or other willful is reasonably expected to, receive or intentional misconduct or otherwise enjoy with respect to the event that triggered the Losses, and (ii) seeking injunctive increased by the amount of the present value of any Tax detriment that is, or is reasonably expected to be, incurred by the Buyer Indemnified Party as a consequence of the receipt of any indemnity payments hereunder (grossed up for such increase).
(f) The Seller Indemnified Parties’ right to indemnification pursuant to this Section 11 on account of any Losses shall be (i) reduced by the amount, if any, of the present value of any Tax benefit (net of reasonable expenses and other equitable relief costs incurred in obtaining said benefit) which the Seller Indemnified Party shall, or is reasonably expected to, receive or otherwise enjoy with respect to enforce their rights under this Agreement. In the event such action is broughtthat triggered the Losses, the prevailing party’s attorneys’ fees and costs shall be paid (ii) increased by the nonprevailing partyamount of the present value of any Tax detriment that is, or is reasonably expected to be, incurred by the Seller Indemnified Party as a consequence of the receipt of any indemnity payments hereunder (grossed up for such increase).
Appears in 1 contract
Samples: Asset Purchase Agreement (Ibf Vi Guaranteed Income Fund)
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(ai) The Sellers and the Selling Shareholders Members shall not be obligated required to provide indemnify any such indemnification for Losses incurred under BC Co Indemnified Party pursuant to, and shall not have any liability under, Section 8.1(a10.3(a) unless until the aggregate amount that the Buyer is entitled to recover in respect of all such claims Losses for which the Selling Members would be liable under Section 10.3(a) exceeds $75,000 on a cumulative basis an amount equal to USD$125,500 (the “ThresholdBasket”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and), in any event, the maximum aggregate obligation of the Sellers and which case the Selling Shareholders hereunder Members shall be obligated to indemnify the BC Co Indemnified Parties for all Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid relating back to the Sellers to first dollar (which for clarity includes the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”Basket amount); provided, however, that the limitations in this paragraph Basket shall not apply to any Losses arising related to and the Selling Members remain liable to indemnify any BC Co Indemnified Party for any Losses below the Basket in relation to any inaccuracy or breach of any Fundamental Representation or any claim based on willful misrepresentation, willful breach, willful misconduct or fraud.
(ii) BC Co, Surviving Co and Newco shall not be required to indemnify any Selling Member pursuant to, and shall not have any liability under, Section 10.3(b) until the aggregate amount of all Losses for which BC Co, Surviving Co and NewCo would be liable under Section 10.3(b) exceeds the Basket, in which case BC Co shall be obligated to indemnify the Selling Members for all Losses relating back to the first dollar (which for clarity includes the Basket amount); provided, however, that the Basket shall not apply to any Losses related to and BC Co remains liable to indemnify any Selling Member Indemnified Party for any Losses below the Basket in relation to any inaccuracy or breach of any Fundamental Representation or any claim based on willful misrepresentation, willful breach, willful misconduct or fraud.
(iii) The Selling Members shall not be required to indemnify any BC Co Indemnified Party pursuant to, and shall not have any further liability under, Section 10.3(a) once the aggregate amount of all payments made by or on behalf of the Selling Members in respect of claims relating the indemnification obligations under Section 10.3(a) equals USD$2,125,000 (the “Cap”); provided that this Section 10.3(c)(iii) shall not apply to misrepresentations and any Losses related to any inaccuracy or breach of warranties relating to Section 3.1 hereof (relating to organization) any Fundamental Representation or any claim based on willful misrepresentation, willful breach, willful misconduct or fraud, and Section 3.3 hereof (relating to authority) which may no such amounts shall be asserted without limitationcounted towards the Cap.
(biv) No claims for indemnification BC Co, Surviving Co and NewCo shall not be required to indemnify any Selling Member pursuant to, and shall not have any further liability under, Section 10.3(b) once the aggregate amount of all payments made by or on behalf of BC Co Co, Surviving Co and NewCo in respect of Sections 8.1(athe indemnification obligations under Section 10.3(b) or 8.2(a)(iequals the Cap; provided that this Section 10.3(c)(iv) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating not apply to any Losses related to any inaccuracy or breach of a representation any Fundamental Representation or warranty by the Buyerany claim based on willful misrepresentation, the Sellerswillful breach, willful misconduct or the Selling Shareholders (fraud, and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts no such as GAAP, amounts shall be disregardedcounted towards the Cap.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
Appears in 1 contract
Samples: Acquisition Agreement
Limitations on Indemnification. The Notwithstanding any other provision of this Agreement, the indemnification obligations provided for in Sections 8.1 and 8.2 this Agreement shall be subject to the following limitations:limitations and conditions set forth in this Section 9.3.
(a) The Sellers Any claim by a Buyer Indemnitee for indemnification pursuant to Section 9.1 shall be required to be made by delivering notice to Seller no later than the date which is fifteen (15) months following the Closing Date, except (i) any claim for indemnification resulting from or arising out of any breach of, or any misrepresentation with respect to, any representation or warranty in the Fundamental Representations may be made at any time; (ii) any claim for indemnification resulting from or arising out of any breach of, or any misrepresentation with respect to, any representation or warranty in Section 4.7 [Taxes] may be made no later than the applicable statute of limitations; (iii) any claim for indemnification relating to the Special Indemnity Items or resulting from or arising out of any breach of, or any misrepresentation with respect to, any representation or warranty in the Health Care Representations or in Section 4.9 [Employee Benefit Plans and Other Compensation Arrangements] may be made no later than the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(afive (5) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess year anniversary of the ThresholdClosing Date; and, (iv) all covenants and agreements that contemplate performance thereof following the Closing Date will survive the Closing Date in accordance with their respective terms; and (v) any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder claim for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which Taxes for any Pre-Closing Tax Period may be asserted without limitationmade at any time.
(b) No Except for claims for indemnification in with respect of Sections 8.1(ato any breach of, or any misrepresentation with respect to, any Fundamental Representations, (x) the Buyer Indemnitees shall not be entitled to indemnification for any Losses arising under clause (i) or 8.2(a)(i(iii) of Section 9.1 until the aggregate amount of all of the Buyer Indemnitees’ claims for indemnification exceeds on a cumulative basis the Indemnification Threshold and thereafter the Buyer Indemnitees shall be made after entitled to indemnification only for amounts in excess of the dateIndemnification Threshold, if anyand (y) no Buyer Indemnitee may make a claim for any Losses arising under clause (i) or (iii) of Section 9.1, on which the applicable representation or warranty upon which and no such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of Loss shall be included in calculating the aggregate amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether the Indemnification Threshold has been exceeded, until the Losses which result from a single claim or not a breach has occurredseries of related claims that arise out of the same facts, events or circumstances exceed Fifteen Thousand Dollars ($15,000)(the “Per Claim Threshold”), and then Buyer Indemnitees shall be entitled to recover the references to entire amount of such Losses beginning with the first dollar (i.e. a “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative termstipping basket”), including as expressed in accounting concepts such as GAAPit being understood that claims under clauses (ii), (iv) and (v) of Section 9.1 shall not be disregardedsubject to the Indemnification Threshold or Per Claim Threshold.
(di) Notwithstanding anything in this Article VIII except for claims for indemnification with respect to any breach of, or any limitation provided hereinmisrepresentation with respect to, nothing herein any Fundamental Representations or Health Care Representations, the Buyer Indemnitees shall prevent not be entitled to indemnification for any of the parties hereto from Losses arising under clause (i) bringing an action based upon allegations or (iii) of fraud or other willful or intentional misconduct or Section 9.1 in excess of the Indemnification Cap;
(ii) seeking injunctive or other equitable relief the maximum aggregate indemnification amount to enforce their rights which the Buyer Indemnitees may be entitled under this Agreement. In the event such action is broughtAgreement for any breach of, or any misrepresentation with respect to, the prevailing party’s attorneys’ fees and costs Fundamental Representations shall be paid by the nonprevailing party.Purchase Price;
Appears in 1 contract
Samples: Membership Interest Purchase Agreement (Invacare Corp)
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The representations and warranties entered into or made pursuant to this Agreement shall survive until the twelve (12) month anniversary of the date hereof; provided, however, that (i) Sections 3.1, 3.2, 3.4, 4.1, and 4.2 shall survive indefinitely (the representations and warranties identified in this clause (i) being the “Fundamental Representations”). The covenants and agreements requiring performance following the date hereof shall survive and continue in full force and effect until such covenants or agreements are fully performed in accordance with the terms of this Agreement; provided, however, that the covenant and agreement to indemnify against misrepresentations or breaches of certain representations and warranties shall survive only until the expiration of the underlying representation and warranty, except that if a claim for indemnification has been made with respect to a misrepresentation or breach of warranty prior to the expiration of the underlying representation and warranty, such covenant and agreement to indemnify shall survive with respect to such indemnification claim until it has been fully and finally resolved.
(b) Notwithstanding anything to the contrary in this Agreement, Sellers’ maximum aggregate liability to Purchaser Indemnified Persons for Losses for which the Purchaser Indemnified Persons are entitled to indemnification under Section 6.1(a) (including Losses arising from misrepresentations or breaches of the Fundamental Representations of Sellers and the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(ataking into account clause (i) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”hereof) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6Price.
(c) Solely No Purchaser Indemnified Person shall be entitled to indemnification pursuant to Section 6.1(a)(i) unless and until the aggregate Losses (excluding Losses with respect to any individual claim (or series of related claims) falling below the De-Minimis Threshold) incurred by all Purchaser Indemnified Persons in respect of all claims under Sections 6.1(a)(i) collectively exceed $100,000 (the “Basket”), whereupon the Purchaser Indemnified Persons shall only be entitled to indemnification hereunder (subject to the other provisions of this Article VI) from Sellers for purposes all such Losses incurred by Purchaser Indemnified Persons in excess of calculating the Basket, except that any claim relating to a misrepresentation or breach of the Fundamental Representations of Sellers shall not be subject to such limitation. Notwithstanding anything to the contrary in this Agreement, with respect to any individual claim (or series of related claims), no Purchaser Indemnified Persons shall be entitled to indemnification pursuant to Section 6.1(a)(i) unless and until the aggregate Losses incurred by all Purchaser Indemnified Persons in respect of such individual claim (or series of related claims) exceeds $50,000 (the “De-Minimis Threshold”), whereupon (i) the Purchaser Indemnified Persons shall be entitled to indemnification hereunder (subject to the other provisions of this Article VI, including the first sentence of this Section 6.3(c)) from Sellers for the full amount of Losses incurred arising out by Purchaser Indemnified Persons with respect to such individual claim (or series of related claims) without reduction for the De-Minimis Threshold and (ii) the full amount of such Losses with respect to such individual claim (or relating series of related claims) shall be taken into account in determining whether the Basket has been exceeded. For the avoidance of doubt, no claim for indemnification under any provision of Section 6.1(a) other than Section 6.1(a)(i) shall be subject to either the Basket or De-Minimis Threshold.
(d) The amount of any Losses for which indemnification is provided for under this Agreement shall be reduced by (i) any amounts received by the Indemnified Person as a result of any indemnification, contribution or other payment by any third party, and (ii) any insurance proceeds or other amounts received by the Indemnified Person from third parties with respect to such Losses. In the event any of the amounts or proceeds described in the foregoing sentence are received after the Indemnifying Person has indemnified or reimbursed the Indemnified Person for its applicable Losses as required pursuant to this Article VI, then the Indemnified Person shall promptly reimburse the Indemnifying Person by an amount equal to any breach of amounts or proceeds so received.
(e) The Indemnified Person agrees to take commercially reasonable actions to mitigate all Losses and to make timely and diligently pursue any claims for insurance and/or other payments available from third parties with respect to Losses for which it will seek indemnification hereunder.
(f) To the extent permitted by applicable Law and any applicable Contract, the Indemnifying Person shall be subrogated (on a non-recourse basis and without any representation or warranty by the BuyerIndemnified Person) to the Indemnified Person’s rights of recovery against any other unaffiliated Person with respect to any Losses to the extent any such Losses are satisfied by such Indemnifying Person. Subject to the foregoing, the SellersIndemnified Person shall execute and deliver such instruments and papers as are reasonably necessary to assign such rights to the Indemnifying Person and reasonably assist the Indemnifying Person in the exercise thereof. Any payment received by the Indemnifying Person in respect of such rights shall be distributed, or first, to the Selling Shareholders (and not for purposes Indemnifying Person in an amount equal to the aggregate payments made by the Indemnifying Person to the Indemnified Person in respect of determining whether or not a breach has occurred)such Losses and, second, the references balance, if any, to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregardedthe Indemnified Person.
(dg) Notwithstanding anything The limitations set forth in Sections 6.3(b) and 6.3(c) shall not apply to any Losses arising from actual fraud on the part of Sellers.
(h) Any Losses for which any Indemnified Person is entitled to indemnification under this Article VI shall be determined without duplication of recovery by reason of the state of facts giving rise to such Losses constituting a misrepresentation or breach of more than one representation, warranty, covenant or agreement.
(i) No claim for indemnification may be made by a Purchaser Indemnified Party and no indemnification shall be required (A) to the extent that such Losses are solely attributable to any action taken by Purchaser, any other Purchaser Indemnified Party or a Controlled Affiliate thereof or (B) to the extent a Purchaser Indemnified Party has previously been indemnified under the Asset Purchase Agreement for any Losses attributable to the same facts, matters or circumstances that are the subject of a claim for indemnification under this Agreement.
(j) Neither Sellers nor Purchaser shall have any obligation to indemnify any Indemnified Person from and against consequential damages, special damages, incidental damages, indirect damages, punitive damages, treble or other multiple damages, except to the extent such damages are included in any claim by an unaffiliated third party and actually paid by an Indemnified Person to such third party.
(k) From and after the date hereof, in the absence of fraud, the indemnification provided in this Article VIII VI (including all limitations contained herein) shall be the sole and exclusive remedy for all matters relating to this Agreement, the transactions contemplated hereby, the Remark Media Stock and the misrepresentation or breach of any representation, warranty, covenant or agreement contained herein; provided, however, that the foregoing limitation shall not limit the rights of the Parties to seek specific performance or injunctive relief. From and after date hereof, each Party expressly waives any and all claims (except with respect to fraud) which it may have under this Agreement or in connection with any matter contemplated hereby or in connection with the process by which the Remark Media Stock has been sold, other than any indemnification claims to the extent provided hereinfor in this Article VI provided, nothing herein however, that the foregoing limitation shall prevent not limit the rights of the Parties to seek specific performance or injunctive relief.
(l) None of the officers, employees, agents, owners, consultants, investment bankers, legal advisors or representatives (each solely in their capacity as such) of either Seller or Purchaser shall have any personal liability or obligation to any of the parties hereto from (i) bringing an action based upon allegations Purchaser Indemnified Persons or Seller Indemnified Persons, as applicable, in connection with this Agreement or any other document executed in connection herewith or the transactions contemplated hereby or thereby, or in respect of fraud any statement, representation, warranty or other willful assurance of any kind made by either Seller or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing partyPurchaser.
Appears in 1 contract
Limitations on Indemnification. The indemnification Except as provided for in Sections 8.1 and 8.2 below, no claim ------------------------------ or action shall be subject to brought under this Section 11 for breach of a representation ---------- or warranty after the lapse of eighteen (18) months following limitationsthe Closing:
(ai) The Sellers time limitation on claims on actions brought for breach of any representation or warranty made by the Seller or the Shareholders in or pursuant to Sections 4.1 and 4.2 shall be the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in -------------------- applicable statutory limitation periods with respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, thereto as finally determined in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of proceeding in which such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitationdefense is raised.
(bii) No claims Any claim or action brought for indemnification in respect breach of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable any representation or warranty upon which such claim was based ceases to survive made by the Seller or the Shareholders in or pursuant to Section 8.64.5 may be brought at any time until the ----------- underlying tax obligation is barred by the applicable period of limitation under federal and state laws relating thereto (as such period may be extended by waiver).
(ciii) Solely Any claim or action brought for purposes breach of calculating any representation or warranty made by the amount Seller or the Shareholders in or pursuant to Section 4.11 may be brought at any time until the ------------ underlying claim is barred by the applicable period of Losses incurred arising out limitation under federal and state laws relating thereto (as such period may be extended by waiver).
(iv) Any claim made by a party hereunder by filing a suit or action in a court of competent jurisdiction or relating a court reasonably believed to any be of competent jurisdiction for breach of a representation or warranty by prior to the Buyer, termination of the Sellers, or the Selling Shareholders (and not survival period for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, claim shall be disregardedpreserved despite the subsequent termination of such survival period.
(dv) Notwithstanding anything in this Article VIII If any act, omission, disclosure or any limitation provided hereinfailure to disclosure shall form the basis for a claim for breach of more than one representation or warranty, nothing herein shall prevent any and such claims have different periods of survival hereunder, the termination of the parties hereto from (i) bringing an action survival period of one claim shall not affect a party's right to make a claim based upon allegations on the breach of fraud representation or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing partywarranty still surviving.
Appears in 1 contract
Limitations on Indemnification. The Rights to indemnification provided for in Sections 8.1 and 8.2 shall be under ------------------------------ (S)4.2(a)(i) are subject to the following limitations:
(a) The Sellers obligation of indemnity with respect to the representations and warranties set forth in (S)B.10 of Exhibit B shall terminate on the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess expiration of the Threshold; andrespective periods of limitations applicable to assessment and collection of taxes under laws then applicable to such taxes, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid with respect to the Sellers representations and warranties as to the date absence of such Loss plus the cost associated with the assumption unpaid or undisclosed taxes (including any interest, penalties or expenses) of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitationSellers.
(b) No claims for indemnification The obligation of indemnity with respect to the representations and warranties set forth in respect (S)B.19 of Sections 8.1(a) or 8.2(a)(i) Exhibit B shall be made after terminate upon expiration of the date, if any, on which respective statutes of limitation applicable to the applicable representation or warranty upon which items addressed in such claim was based ceases to survive pursuant to Section 8.6section.
(c) Solely for purposes The obligation of calculating indemnity with respect to the amount representations and warranties contained in (S)(S)B.2, B.3, B.5, and B.11 of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and Exhibit B shall not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregardedexpire.
(d) Notwithstanding anything The obligation of indemnity with respect to the representations and warranties set forth in this Article VIII or any limitation provided hereinExhibit B other than those addressed in the immediately preceding subsections (a), nothing herein (b), and (c) shall prevent any terminate on the third anniversary of the parties hereto from Closing Date.
(ie) bringing an action The foregoing provisions of this (S)4.3 notwithstanding, if, prior to the termination of any obligation of indemnity, written notice of a claimed breach or other occurrence or matter giving rise to a claim of indemnification is given by ADP to any Seller or Owner, or a suit, action, or other proceeding based upon allegations a claimed breach is commenced against any Seller or Owner, ADP shall not be precluded from pursuing such claimed breach, occurrence, other matter, or suit or action, or from recovering from any Seller or Owner (whether through the courts or otherwise) on the claim, suit, action, or proceeding, by reason of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing partytermination otherwise provided for above.
Appears in 1 contract
Samples: Asset Purchase Agreement (American Dental Partners Inc)
Limitations on Indemnification. The indemnification provided for Notwithstanding anything in Sections 8.1 and 8.2 shall be subject this Agreement to the following limitationscontrary, the right to indemnification under this Article VI is limited as follows:
(a) The Sellers and Except in the Selling Shareholders case of fraud, the Stockholder Indemnitees shall not be obligated entitled to provide assert any such indemnification claims for Losses incurred under Section 8.1(a) unless pursuant to this Article VI until such time that the aggregate amount that of all such Losses suffered by the Buyer is Stockholder Indemnitees pursuant to this Article VI exceeds $1,000,000 (the “Deductible”), and in such event, the Stockholder Indemnitees shall be entitled to recover in respect the amount of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”)Deductible; provided, however, that the limitations aggregate amount required to be paid by the Company pursuant to its indemnification obligations under Section 6.3 or any other liability that might arise out of this Agreement shall in this paragraph no event exceed ten percent (10%) of the Face Amount and the Company shall not apply have no liability to any Stockholder Indemnitee for, and such Stockholder Indemnitee shall have no right to recover from the Company for, any amount of Losses arising in respect of claims relating to misrepresentations which exceeds (and breach of warranties relating to Section 3.1 hereof (relating to organizationfrom and after the time such Losses exceed) and Section 3.3 hereof (relating to authority) which may be asserted without limitationsuch amount.
(b) No claims Except in the case of fraud committed by a Stockholder (in which case, any claim for indemnification in respect Losses suffered as a result of Sections 8.1(a) or 8.2(a)(i) such fraud shall be made brought only against such Stockholder alleged to have committed such fraud), the aggregate amount required to be paid by the Stockholders pursuant to their respective indemnification obligations under Section 6.2 or any other liability that might arise out of this Agreement shall in no event exceed ten percent (10%) of the Face Amount and the Stockholders shall not have any liability to any Company Indemnitee for, and such Company Indemnitee shall have no right to recover from the Stockholders for, any amount of Losses which exceeds (and from and after the date, if any, on which the applicable representation or warranty upon which time such claim was based ceases to survive pursuant to Section 8.6Losses exceed) such amount.
(c) Solely for purposes For the purpose of calculating the amount of Losses incurred arising out of or relating to any under this Article VI after a breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders has occurred (and for the sake of clarity, not for purposes the purpose of determining whether or not a breach has occurred), the references to “(i) any and all materiality or Material Adverse Effect” or “Material Adverse Change” or other materiality Effect qualifications (or correlative terms)similar qualifications) in the representations, including as expressed in accounting concepts such as GAAPwarranties, covenants and agreements shall be disregardeddisregarded and (ii) any amounts actually received from insurers or third parties with respect to any contractual rights to indemnification, reimbursement, offset or recovery shall reduce the amount of Losses for determining the amount of the indemnity obligation under this Article VI.
(d) Notwithstanding anything in this Article VIII Anything herein to the contrary notwithstanding, no breach of any representation, warranty, covenant or agreement contained herein shall give rise to any right on the part of any Stockholder Indemnitee or any limitation provided hereinCompany Indemnitee, nothing herein shall prevent after the consummation of the transactions contemplated hereby, to rescind this Agreement or any of the parties hereto from transactions contemplated hereby.
(e) Any Loss for which any Stockholder Indemnitee is entitled to indemnification under this Section 6.5 shall be determined without duplication of recovery by reason of the state of facts giving rise to such Loss constituting a breach of more than one representation, warranty, covenant or agreement.
(f) In no event shall any Stockholder be obligated to indemnify any Company Indemnitee for any Losses pursuant to this Article VI that are (i) bringing an action based upon allegations attributable to a breach of fraud or this Agreement by any other willful or intentional misconduct Stockholder or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In in the event that more than one Stockholder is obligated to indemnify the Company for any Losses pursuant to this Article VI, in excess of such action is brought, Stockholder’s pro rata percentage of such Losses based on the prevailing party’s attorneys’ fees and costs shall be paid number of Shares held by the nonprevailing partysuch indemnifying Stockholders.
Appears in 1 contract
Samples: Backstop Securities Agreement (Rehabcare Group Inc)
Limitations on Indemnification. (a) The right of Indemnified Parties to indemnification provided for in Sections 8.1 and 8.2 under Section 6.2 shall be subject to the following limitationsprovisions:
(ai) Indemnification with respect to Warranty Claims shall expire on the earlier to occur of (A) a Qualified Public Offering or (B) thirty (30) days after receipt by the Company of the audited financial statements of the Company for the fiscal year ending December 31, 1996; provided, however, that the limitation of this clause (i) shall not apply to (x) Warranty Claims involving fraud, intentional misrepresentation or breach of Section 2.4 or 2.16, (y) Taxes, for which the period for making such claims shall expire on the date which is six (6) months after the termination of the applicable statute of limitations relating thereto and (z) claims arising from the defense or disposition of Data Dynamics, Inc. v. R&D Systems Company if such ------------------------------------------ lawsuit has not been finally adjudicated as of such date (in which event appropriate reserves for the estimated liabilities, losses and expenses arising from such lawsuit shall remain in escrow (which reserves will not, in any event exceed $650,000)). If prior to the relevant date of expiration a specific state of facts shall have become known which may constitute or give rise to any Warranty Claim as to which indemnity may be payable and an Indemnified Party shall have given notice of such facts to the Founders, then the right to indemnification with respect thereto shall remain in effect without regard to when such matter shall have been finally determined and disposed of, according to the date on which notice of the applicable claim is given.
(ii) No indemnification shall be payable with respect to Warranty Claims (other than those involving fraud, intentional misrepresentation, breach of Section 2.4 or 2.16 or Taxes) to Indemnified Parties unless the total of all Warranty Claims shall exceed $500,000 in the aggregate, whereupon only the amount of such excess claims shall be recoverable in accordance with the terms hereof; provided, however, that with respect to indemnification claims relating -------- ------- to Section 6.2(d) hereof, indemnification shall be available from the first dollar of loss or claim, notwithstanding anything herein to the contrary.
(iii) The Sellers and the Selling Shareholders Founders shall not be obligated to provide indemnify Indemnified Parties for Warranty Claims (other than any such indemnification for Losses incurred under claims involving fraud, intentional misrepresentations, or Taxes) after the cumulative amount of all amounts paid by the Founders to Indemnified Parties with respect thereto exceeds FOUR MILLION NINE HUNDRED THOUSAND DOLLARS ($4,900,000) and the sole remedy with respect to any such claim described in this Section 8.1(a6.3(a)(iii) unless shall be as provided in the aggregate amount Escrow Agreement; provided, further, that the Buyer is entitled Founders -------- ------- shall not be obligated to recover indemnify Indemnified Parties for indemnification claims relating to Section 6.2(d) in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses an amount in excess of Six Hundred and Fifty Thousand Dollars ($650,000).
(iv) The limitations herein with respect to certain Warranty Claims shall not limit the Threshold; andrights of any Indemnified Party with respect to any other claims arising under provisions of Section 6.2 and the Founders shall not have any right of contribution from, in any eventor claims against, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid Company with respect to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of their indemnification claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitationhereunder.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event any claim for indemnification hereunder arises under more than one provision of Section 6.2 and as such action is broughtmay be subject to limitations pursuant to this Section 6.3 if deemed to arise under a particular provision but not if deemed to arise under a different provision, then the prevailing party’s attorneys’ fees and costs claim shall be paid by deemed to arise under the nonprevailing partyprovision to which no restrictions or the least restrictive provisions apply.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers and Notwithstanding anything herein to the Selling Shareholders contrary, Seller shall not be obligated to provide any such indemnification for Losses incurred indemnify Purchaser under Section 8.1(a) unless this Article 9 to the extent that the aggregate amount that the Buyer is entitled to recover in respect of all such claims Purchaser Damages exceeds $75,000 the value of the Merger Consideration at Closing (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”"SELLER'S INDEMNIFICATION CAP"); providedPROVIDED, HOWEVER, that the limitations in this paragraph Seller's Indemnification Cap shall not apply to Losses any Seller indemnification obligation (x) arising in respect of claims out of, relating to misrepresentations and or resulting from fraud or intentional misrepresentation or breach of warranties warranty by Seller; (y) arising out of, relating to or resulting under Section 3.1 hereof 9.2(b), (relating to organizationc) and Section 3.3 hereof or (relating to authorityd), or from a breach of any of Seller's representations or warranties contained in Sections 2.15 or 2.16; or (z) which may be asserted without limitationif the Merger does not close.
(b) No claims for Notwithstanding anything herein to the contrary, Purchaser shall not be obligated to indemnify Seller under this Article 9 to the extent that the aggregate of all Seller Damages exceeds one-half of the value of the Merger Consideration at Closing (the "PURCHASER'S INDEMNIFICATION CAP"); PROVIDED, HOWEVER, that the Purchaser's Indemnification Cap shall not apply to any Purchaser indemnification in respect obligation (x) arising out of, relating to or resulting from fraud or intentional misrepresentation or breach of Sections 8.1(awarranty by Purchaser; (y) arising out of, relating to or resulting under Section 9.3(b) or 8.2(a)(i(c) shall be made after or from a breach of any of Purchaser's representations or warranties in Section 3.11; or (z) if the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6Merger does not close.
(c) Solely Purchaser will not be entitled to seek indemnification under Section 9.2 for purposes of calculating Purchaser Damages unless and until the aggregate amount of Losses incurred arising out all Purchaser Damages exceeds $35,000 (the "THRESHOLD AMOUNT"). In the event that the aggregate of or relating all Purchaser Damages for which Seller is obligated to any breach of a representation or warranty by provide indemnification under Section 9.2 exceeds the BuyerThreshold Amount, the SellersPurchaser will be entitled to seek indemnification in respect of all Purchaser Damages for which Seller is obligated to provide indemnification under Section 9.2 (subject to the other provisions hereof); PROVIDED, HOWEVER, that the Threshold Amount shall not apply (i) with respect to breaches of the representations and warranties contained in Sections 2.1, 2.2, 2.3, 2.5(f), 2.15, or the Selling Shareholders 2.16; and (and not for purposes ii) in cases of determining whether fraud or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregardedintentional misrepresentation.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any Seller will not be entitled to seek indemnification under Section 9.3 for Seller Damages unless and until the aggregate amount of all Seller Damages exceeds the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this AgreementThreshold Amount. In the event such action that the aggregate of all Seller Damages for which Purchaser is broughtobligated to provide indemnification under Section 9.3 exceeds the Threshold Amount, the prevailing party’s attorneys’ fees Seller will be entitled to seek indemnification in respect of all Seller Damages for which Purchaser is obligated to provide indemnification under Section 9.3 (subject to the other provisions hereof); PROVIDED, HOWEVER, that the Threshold Amount shall not apply (i) with respect to breaches of the representations and costs shall be paid by the nonprevailing partywarranties contained in Sections 3.1, 3.2, or 3.11; and (ii) in cases of fraud or intentional misrepresentation.
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Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers There shall be no liability for Damages for breaches of representations and the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) warranties unless and until the aggregate amount that the Buyer is entitled to recover in respect of all such Damages for all claims asserted by the Indemnified Parties exceeds $75,000 100,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “MaximumThreshold Amount”); provided, that that, after the aggregate amount of Damages exceeds the Threshold Amount, all Damages, except the first $50,000, shall be recoverable by the Indemnified Parties; provided that, the foregoing limitations in this paragraph shall not apply to Losses arising Fraud Claims or Excluded Claims, and Damages in respect of claims relating to misrepresentations connection with Fraud Claims and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may Excluded Claims shall not be asserted without limitationcounted towards the Threshold Amount.
(b) No claims The indemnification obligations of the Shareholders for indemnification in respect Damages for breaches of Sections 8.1(a) or 8.2(a)(i) representations and warranties shall be made after limited to an amount equal to the dateDeferred Payment (the “General Cap”); provided, if anythat, on the foregoing limitation shall not apply to (i) the Excluded Claims, which shall be limited to an amount equal to the applicable representation Merger Consideration or warranty upon which such claim was based ceases (ii) Fraud Claims. With respect to survive any of the items so excluded from the General Cap pursuant to the preceding sentence, in each case, no Damages incurred in connection with such items shall be counted in determining whether the General Cap in this Section 8.69.5(b) has been exceeded. No Shareholder shall have an indemnification obligation in excess of the aggregate amount of the Merger Consideration paid or payable to such Shareholder.
(c) Solely for For all purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders this Article IX (and not for including purposes of determining whether or not a breach of any representation or warranty has occurredoccurred and purposes of determining the amount of Damages arising from any such Breach), all representations and warranties shall be treated as if the references to words “materially,” “in all material respects,” “Material Adverse Effect” or “Material Adverse Change” similar words were omitted from such representations and warranties. The indemnification obligations of the Parties hereto and the rights and remedies that may be exercised by an Indemnified Party shall not be limited or other materiality qualifications (otherwise affected by or correlative terms)as a result of any information furnished to, including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent investigation made by or knowledge of any of the parties hereto from (i) bringing an action based upon allegations Indemnified Parties or any of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing partyRepresentatives.
Appears in 1 contract
Samples: Merger Agreement (Sourcefire Inc)
Limitations on Indemnification. Notwithstanding any provision in this Agreement to the contrary.
a) All claims for indemnification under this Agreement must be brought no later than two (2) years following the Closing Date.
b) Seller shall have no liability whatsoever for any claims resulting from or arising prior to the Seller Acquisition Date, and Buyer acknowledges and agrees that Buyer has had sufficient opportunity to inspect the business and affairs of the Bank pursuant to Section 4 hereof with respect to matters existing on or prior to the Seller Acquisition Date. Provided however, upon Buyer's request and at Buyer's sole cost and expense, Seller shall act as a nominal plaintiff in an action to enforce the terms, representations, warranties or covenants of the agreement pursuant to which Seller acquired the Bank. Seller will provide to Buyer a copy of such acquisition agreement within ten (10) days of the date of this Agreement.
c) The determination of the amount of any indemnifying losses for which indemnification provided for in Sections 8.1 may be claimed under this Section 12 shall take into account and 8.2 be offset by any tax benefit or benefit under any policy of insurance derived, accrued or received by the indemnified party as a result thereof.
d) No party otherwise entitled to indemnification under this Agreement shall be indemnified pursuant to this Agreement to the extent that such party's indemnifying losses are increased or extended by the gross negligence, willful misconduct, violation of law or bad faith of such party.
e) No indemnifying party shall have any obligation to indemnify any indemnified party until such indemnified party shall have suffered aggregate indemnifying losses, that would otherwise be subject to indemnification hereunder, in excess of Twenty Five Thousand Dollars ($25,000) (the following limitations:
(a) The Sellers and "Deductible"), at which point the Selling Shareholders shall not indemnifying party will be obligated to provide indemnify the indemnified party from and against any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect of and all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses indemnifying losses in excess of the Threshold; andDeductible. For purposes of this Section 12, any reference in this Agreement to "materiality", "material" or "materially" or other similar terms shall mean when indemnifying losses relating to such reference, in any eventthe aggregate, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); providedDeductible. Further, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyerthis Section 12, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references Deductible shall only have to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid satisfied once by the nonprevailing each indemnified party.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers No claim for indemnification with respect to a breach of a representation and warranty shall be made under this Agreement after the Selling Shareholders shall not be obligated applicable Survival Date unless prior to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that Survival Date the Buyer is entitled to recover in respect Indemnitee or the Seller Indemnitee, as the case may be, shall have given the Seller or the Buyer, as the case may be, written notice of all such claims exceeds $75,000 (the “Threshold”) and then such claim for indemnification shall relate to all such Losses in excess based upon actual loss sustained, or potential loss anticipated, as a result of the Threshold; and[***] These portions of this exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment. existence of any claim, in demand, suit, or cause of action against such Buyer Indemnitee or Seller Indemnitee, as the case may be. No claim for indemnification pursuant to Section 9.2(d) or Section 9.2(c) insofar as such claim relates to a breach of Section 9.6 below shall be made by any event, Buyer Indemnitee after the maximum aggregate obligation [***] anniversary of the Sellers and Closing Date unless prior to such date the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof Buyer Indemnitee shall not exceed the Purchase Price paid to have given the Sellers to the date written notice of such Loss plus the cost associated with the assumption claim for indemnification based upon actual loss sustained, or potential loss anticipated as a result of the Assumed Liabilities (the “Maximum”); providedexistence of any claim, that the limitations in this paragraph shall not apply to Losses arising in respect demand, suit, or cause of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitationaction against such Buyer Indmenitee.
(b) No The Seller shall have no indemnification liability under this Agreement unless and until (and only to the extent that) all claims with respect to such Buyer's Damages pursuant to this Agreement and for indemnification "Buyer's Damages" under the Xxxxxx Stock Purchase Agreement (as defined on Exhibit A-1) and ----------- "Losses" under the Xxxxxx Asset Purchase Agreement (as defined on Exhibit A-1) ----------- exceed a cumulative aggregate total of [***] (the "Basket"); provided, however, ------ -------- ------- the foregoing Basket limitation shall not apply to (1) claims under Sections 9.2(b), (2) claims under Section 9.2(c), in respect so far as such claims relate to a breach of Sections 8.1(aSection 9.6 below, (3) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive claims pursuant to Section 8.69.2(d) through (h), or (4) claims based upon fraud. With respect to any claim for indemnity under Section 9.2(a) above, if the matter is also the basis for a claim for indemnity under any other provision of Section 9.2 for which the Basket limitation is not applicable, the Basket limitation shall not be applicable to such claim.
(c) Solely Except in the case of claims based upon fraud, the aggregate indemnification liability of the Seller under this Agreement and the "Seller" under the Xxxxxx Stock Purchase Agreement and the "Sellers" and the "Stockholder" under the Xxxxxx Asset Purchase Agreement shall be [***], which amount is inclusive of indemnification obligations contemplated by the Environmental Indemnification Cap (as defined below). Notwithstanding the foregoing, the Seller shall have no indemnification obligations hereunder with respect to indemnification obligations contemplated by the Environmental Indemnification Cap to the extent such indemnification obligations would require payments by the Seller in excess of the Environmental Indemnification Cap. As used in this Agreement, the "Environmental Indemnification Cap" shall mean the --------------------------------- obligations under this Agreement and the Other Agreements to (i) remediate environmental contamination, including, without limitation, pursuant to (A) Paragraph 5(e) of the Owned Real Property Rider, (B) Paragraph 7(e) of the respective Real Property Purchase Agreements, (C) Section 9.6 below, (D) Section 9.6 of the Xxxxxx Stock Purchase Agreement or (E) Section 10.9 of the Xxxxxx Asset Purchase Agreement, and/or (ii) indemnify for purposes Environmental Liabilities or breaches of calculating representations or warranties with respect to environmental matters, in either case with respect to the Owned Real Property and/or the Leased Premises, and the "Owned Real Property" and/or the "Leased Premises" under each of the Xxxxxx Stock Purchase Agreement and the Xxxxxx Asset Purchase Agreement, in the maximum aggregate amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded[***].
(d) Notwithstanding anything In connection with any claim for indemnification with respect to which the Buyer or the Seller, as the case may be, have an enforceable claim against any third party (contractual or otherwise) on account of the item for which such claim for indemnification has been made, the Buyer or the Seller, the Buyer or the Seller, as the case may be, shall, at the time of payment by the indemnifying party of the claim for indemnification, assign to the other party such claim; provided, however, the assignee of such claim shall further protect -------- ------- and indemnify the [***] These portions of this exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment. assignor in connection with the pursuit by the assignee of such claim against such third party; provided, further, however, this clause (d) shall not require -------- ------- ------- the assignment of any claims under any insurance policy.
(e) No Buyer Indemnitee or Seller Indemnitee, as the case may be, shall be entitled to indemnification pursuant to this Article 9 to the extent of any insurance (including title insurance) proceeds received by the Buyer Indemnitee or Seller Indemnitee, as the case may be, in connection with the facts giving rise to such indemnification (and the Buyer Indemnitee or Seller Indemnitee shall seek full recovery under all insurance policies covering any Buyer's Damages or Seller's Damages, as the case may be, to the extent permitted), provided that this clause (e) shall not be applicable to the extent it would give the insurance company a basis to deny coverage with respect to the particular claim involved.
(f) No Buyer Indemnitee shall be entitled to indemnification pursuant to this Article 9 to the extent that an applicable reserve for such Buyer' Damages was included in the Closing Balance Sheet.
(g) With respect to the Seller's obligations to pay Buyer's Damages pursuant to Section 9.2 of this Agreement, the Buyer shall first make demand for payment under the Escrow Agreement.
(h) The provisions of this Article 9 shall be effective upon consummation of the Closing, and prior to the Closing, shall have no force and effect. Following the Closing, except in the case of claims based upon fraud, the sole and exclusive remedy for the breach of any representation, warranty or covenant contained in, or otherwise relating to, this Agreement shall be indemnification provided for in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers and the Selling Shareholders shall not be obligated to provide any such Seller’s indemnification for Losses incurred obligations under Section 8.1(a7.1(i) unless the aggregate amount that the Buyer is entitled and, with respect to recover in respect any failure of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate Seller to all such Losses in excess perform any of the Threshold; andcovenants contained in Section 4.3, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred Seller’s indemnification obligations under Section 8.1(a7.1(ii), and Buyer’s obligations under Section 7.2(i) hereof shall not exceed the Purchase Price paid an aggregate amount equal to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities $910,000 (the “Maximum”"Cap Amount"); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification Notwithstanding any other provision of this Article 7 to the contrary, any Losses incurred by any Indemnitee shall not be subject to the Cap Amount to the extent they arise from (i) in respect the case of Sections 8.1(aa Buyer Indemnitee, a breach of any of the representations and warranties contained in Section 2.2 (Authorization) or 8.2(a)(iSection 2.6(b) shall be made after (Title to Assets), or (ii) in the datecase of any Indemnitee, if any, on which the applicable a breach of any representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6given fraudulently.
(c) Solely At Buyer’s option, Buyer may offset any Losses owed by Seller to Buyer under this Agreement against the amounts owed under the Note; provided that prior to such offset, Buyer shall provide Seller with fifteen (15) days prior written notice of Buyer’s intention to offset the Note for purposes any Losses and prior to offsetting any amounts owed under the Note Buyer agrees to work in good faith with Seller for fifteen (15) days after delivery of calculating such notice to resolve any claim associated with such Losses. In the amount of event that Buyer offsets any Losses incurred arising out of or relating against the Note pursuant to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurredthis Section 7.5(c), the references Seller shall continue to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including have available all rights and remedies otherwise available to Seller under Article VII and Section 10.14 of this Agreement as expressed in accounting concepts if such as GAAP, shall be disregardedoffset had not occurred.
(d) Notwithstanding anything the terms of this Article 7, no Indemnitor shall be liable for the first $25,000 (the “Threshold Amount”) in aggregate Losses sustained by Indemnitees pursuant to Section 7.1(i) or 7.2(i), as applicable; provided Indemnitees shall be entitled to indemnification for Losses in excess of such Threshold Amount subject to the Cap Amount, in the event Losses to Indemnitees exceed such Threshold Amount.
(e) Except in the case of fraud or with respect to a breach of the terms and provisions of Sections 4.1, 4.2 or 4.4, Article VIII or Section 10.11, the rights contained in this Article VIII or any limitation provided herein, nothing herein shall prevent any 7 are the sole and exclusive rights of the parties hereto from (i) bringing an action based upon allegations with respect to any breach of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this AgreementAgreement by any party hereto. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party24.
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Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers and the Selling Shareholders Parent Indemnitees shall not be obligated entitled to provide any such indemnification for Losses incurred recover under Section 8.1(a8.2(a) unless and until the aggregate amount that of their Losses exceeds on a cumulative basis $900,000 (the Buyer is “Deductible”), in which event the Parent Indemnitees shall be entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in accordance with this Article VIII in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”)Deductible; provided, however, that the limitations in this paragraph Deductible shall not apply be applicable to Losses any indemnification claim arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of from or relating to any breach of a representation Company Fundamental Representation or warranty by based on Fraud.
(b) The Parent Indemnitees’ sole and exclusive recourse with respect to an indemnification claim under Section 8.2(a) shall be the BuyerIndemnity Escrow Amount and the R&W Insurance Policy; provided, however, that the Sellersforegoing limitation shall not apply to any claim for breach of any Company Fundamental Representation or based on Fraud.
(c) With respect to any claim for breach of any Company Fundamental Representation, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurredany indemnification claim under Sections 8.2(b)-(h), the references maximum aggregate liability of the Indemnifying Sellers with respect to “Material Adverse Effect” such breach or “Material Adverse Change” or other materiality qualifications (or correlative terms)indemnification claim shall not exceed $180,000,000; provided, including as expressed in accounting concepts such as GAAPhowever, no Indemnifying Seller shall be disregardedliable pursuant to this Agreement for more than such Indemnifying Seller’s Pro Rata Percentage of such Loss, not to exceed the amount of the Merger Consideration such Indemnifying Seller actually receives.
(d) Notwithstanding anything to the contrary contained in this Article VIII VIII:
(i) The Parent Indemnitees shall use commercially reasonable best efforts to pursue recovery for Losses under the R&W Insurance Policy; provided, that, in no event shall any Parent Indemnitee be required to contest any denial of coverage issued by R&W Insurer or to otherwise initiate a lawsuit or other proceeding against the R&W Insurer as part of such commercially reasonable efforts.
(ii) Any indemnification of any limitation provided hereinParent Indemnitees under Section 8.2(a) (other than with respect to any claim for breach of any Company Fundamental Representation or based on Fraud) shall be satisfied solely and exclusively by recovery (1) first, nothing herein from the Indemnity Escrow Amount (to the extent available) until the Indemnity Escrow Amount has been exhausted and (2) second, under the R&W Insurance Policy (to the extent available), and no further recourse shall be available against the Indemnifying Sellers.
(iii) Any indemnification of any Parent Indemnitees under Section 8.2(a) with respect to Company Fundamental Representations or under Section 8.2(b), Section 8.2(c), Section 8.2(d), Section 8.2(e), Section 8.2(f), Section 8.2(g) and Section 8.2(h) shall be satisfied by recovery (1) first, from the Indemnity Escrow Amount (to the extent available) until the Indemnity Escrow Amount has been exhausted, (2) second, to the extent retention under the R&W Insurance Policy is not fully satisfied, from the Indemnifying Sellers until the remaining retention is satisfied; (3) third, under the R&W Insurance Policy (to the extent available), and (4) fourth, from the Indemnifying Sellers, subject to the limitations set forth in this Section 8.5.
(e) Nothing in this Section 8.5 shall prevent any Parent Indemnitee from pursuing a claim for indemnification in accordance with this Article VIII against an Indemnifying Seller pursuant to Section 8.5(d)(iii) simultaneously with such Parent Indemnitee’s pursuit of a claim under the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing partyR&W Insurance Policy.
Appears in 1 contract
Samples: Merger Agreement (3d Systems Corp)
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers and the Selling Shareholders Seller shall not be obligated have no Liability for indemnification pursuant to provide any Section 11.02(a)(i) with respect to Covered Losses for which indemnification is provided thereunder unless such indemnification for Covered Losses incurred under Section 8.1(a) unless exceed in the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 2,000,000 (the “ThresholdBasket”) and then such indemnification ), in which case Seller shall relate to be liable for all such Covered Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”)Basket; provided, however, that, notwithstanding anything to the contrary herein, (i) in no event shall the aggregate amount to be paid by Seller hereunder exceed $18,750,000, and (ii) Seller shall only be liable for any individual Covered Loss or group of related Covered Losses in excess of $100,000; provided further, that for purposes of this Section 11.07(a), if any representation or warranty of Seller subject to indemnification hereunder is qualified or limited by the terms “material”, “materially”, “Material Adverse Effect”, “material adverse effect”, or similar qualification except for those appearing in all capitalized text, the term “Material Contract” or those contained in Section 2.05 and Section 2.06, but excluding any dollar amount, such qualification and/or limitation shall in all respects be ignored and given no effect for purposes of determining the amount of any such Covered Loss. Notwithstanding anything herein to the contrary, the limitations set forth in this paragraph Section 11.07(a) shall not apply to Covered Losses incurred by any Purchaser Indemnified Parties in connection with or arising in respect of claims relating to misrepresentations and from any breach of warranties relating to any representation or warranty of Seller in Section 3.1 hereof 2.01 (relating to organizationOrganization), Section 2.02 (Authorization; Enforceability), Section 2.19 (Sufficiency of Assets) and or Section 3.3 hereof 2.21 (relating to authority) which may be asserted without limitationFinders; Brokers).
(b) No claims for indemnification in respect The amount of Sections 8.1(aany and all Covered Losses under this Article 11 will be determined net of any amounts (after Taxes and any costs of investigation and collection) received by any party or 8.2(a)(i) shall be made after the dateany Affiliate of such party under or pursuant to any insurance policy, if anytitle insurance policy, on indemnity, reimbursement arrangement or Contract under which the applicable representation or warranty upon pursuant to which such claim was based ceases to survive pursuant to Section 8.6party or such party’s Affiliates is a party or has rights.
(c) Solely for purposes Notwithstanding any provision of calculating this Agreement to the amount of Losses incurred arising out of or relating contrary, no Purchaser Indemnified Party will be entitled to any breach of a representation or warranty by indemnification under this Article 11 with regard to any matter that (i) was reserved for in the Buyer, the SellersFinancial Statements, or (ii) is included in the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred)Final Working Capital, the references as finally determined pursuant to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregardedSection 1.07.
(d) Notwithstanding anything any provision of this Agreement to the contrary, no indemnified party shall be entitled to recover from an indemnifying party more than once in this Article VIII or any limitation provided herein, nothing herein shall prevent any respect of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing partysame Covered Loss.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to (a) Notwithstanding the following limitationsforegoing provisions of this Article VIII:
(ai) The Sellers and the Selling Shareholders Seller shall not be obligated responsible, pursuant to provide Section 8.02(i), for any indemnifiable Losses suffered by any Purchaser Indemnitee arising out of a breach of any representation or warranty of Parent or Seller included herein unless a claim therefor is asserted in writing prior to the close of business on the eighteenth month anniversary of the Closing Date, failing which such indemnification claim shall be waived and extinguished; provided, however, that a claim with respect to a breach of (A) the representations and warranties of Seller set forth in Sections 2.02 or 2.05 to the extent it relates to title to the Shares may be made if asserted in writing at any time after the Closing Date, (B) the representations and warranties of Seller set forth in Sections 2.11(a) through (g) may be made if asserted in writing at any time after the Closing Date until 30 days following the applicable statute of limitations and (C) the representations and warranties of Seller set forth in Sections 2.14(b) or 2.14(c) may be made if asserted in writing prior to the close of business on the fourth-year anniversary of the Closing Date, in each case failing which such claims shall be waived and extinguished;
(ii) Seller shall not be liable, pursuant to Section 8.02(i) or Section 8.02(xi), for (w) any Losses incurred under suffered by any Purchaser Indemnitee arising out of any breach of the representations and warranties of Parent or Seller (other than the representations and warranties of Seller set forth in Sections 2.14(b) or 2.14(c)) or pursuant to Section 8.1(a8.02(xi) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (Losses suffered by the “Threshold”) Purchaser Indemnitees exceeds, on a cumulative basis, an amount equal to €2,500,000, and then only to the extent of any such indemnification shall relate to excess, (x) any Losses suffered by any Purchaser Indemnitee arising out of any breach of the representations and warranties of Seller set forth in Sections 2.14(b) or 2.14(c) unless the aggregate of all such Losses in excess suffered by the Purchaser Indemnitees exceeds, on a cumulative basis, an amount equal to €7,199,025 or (y) any individual items where the Loss relating thereto is less than €7,500 and such items shall not be aggregated for purposes of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers immediately preceding clauses (w) and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”x); provided, however, that the limitations in this paragraph clause (ii) shall not apply be applicable to any Losses suffered by the Purchaser Indemnitees as a result of any breach of the representations and warranties of Seller set forth in Sections 2.02 or 2.05 to the extent it relates to title to the Shares;
(iii) the aggregate liability of Seller hereunder, pursuant to Section 8.02(i) (except for any breach of the representations and warranties of Seller set forth in Sections 2.02 or 2.05 to the extent it relates to title to the Shares) and pursuant to Section 8.02(xi), for Losses suffered by the Purchaser Indemnitees shall in no event exceed €84,726,990;
(iv) the aggregate liability of Seller hereunder, pursuant to Section 8.02(i) solely with respect to any breach of the representations and warranties of Seller set forth in Sections 2.02 or 2.05 to the extent it relates to title to the Shares for Losses suffered by the Purchaser Indemnitees shall in no event exceed €188,282,202;
(v) Seller shall have liability pursuant to Section 8.02(i) for Losses arising in respect of claims relating to misrepresentations and from any breach of the representations and warranties relating contained in Sections 2.14(b) or 2.14(c) only to Section 3.1 hereof (relating the extent such Losses were incurred to organization) and Section 3.3 hereof (relating comply with any applicable Environmental Laws or any order or directive arising thereunder; provided, however, that Seller shall not have liability for such Losses to authority) which may be asserted without limitation.the extent Purchaser or any other party after Closing contributed to the condition or circumstance forming the basis of such Losses; and
(bvi) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) no party hereto shall be made after liable to the dateothers for indirect, special, incidental, consequential or punitive damages claimed by such other parties under the terms of this Agreement. In no event shall Seller be obligated to indemnify Purchaser or any other person with respect to any matter to the extent that Purchaser received a benefit from the reflection of such matter in the result of the calculation of the adjustment to the Purchase Price, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.61.04(c).
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers and the Selling Shareholders Notwithstanding Section 11.1above, Seller shall not be obligated liable to provide any such indemnification ------------ indemnify Purchaser for Losses incurred under Purchaser's Damages, and notwithstanding Section 8.1(a) unless the aggregate amount that the Buyer is entitled 11.2 above, Purchaser shall not be liable to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; andindemnify Seller ------------ for Seller' Damages, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses either case arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of from or relating to any a breach of a representation or warranty by set forth in this Agreement unless the BuyerIndemnified Party notifies the Indemnifying Party in writing of its claim or potential claim for indemnification not later than the end of the survival period for such representations specified in Section 12.0 of this Agreement. To avoid any ambiguity, the Sellersforegoing periods and the periods reflected in Section 12.0 are notification periods only within which notice of a claim for indemnification must be given and specifically shall not be deemed or construed to be a limitations period in which the Indemnified Party shall be required to file a lawsuit or initiate an arbitration proceeding relating to such claim against the Indemnifying Party.
(b) Notwithstanding Section 11.1 and 11.2 above, Seller shall not be --------------------- liable to indemnify or have any other liability arising under this Agreement or otherwise to Purchaser for Purchaser's Damages, unless the Selling Shareholders aggregate of the Indemnified Party's Damages exceeds $100,000.00 and then only for the amount by which such aggregate exceeds $100,000.00 (and not for purposes of determining whether or not a breach has occurredthe "Basket"), provided that the references Basket shall not apply ------ ------------- to “Material Adverse Effect” any claims made by Purchaser for breach of the representations contained in Section 5.5 regarding title; and provided, further, that ----------- -------- ------- the Basket shall not apply to any claims made by Purchaser for breach of any representations or “Material Adverse Change” warranties qualified by "Seller's Knowledge" under the terms and provisions of this Agreement ("Seller's Knowledge Representations"). In the event that any adjustment of the Purchase Price occurs pursuant to Article 3 hereof, Purchaser shall not have any corresponding right to indemnification for Damages arising out of any breach of any representations, warranties, covenants or obligations contained herein which covers the same subject matter as, but only to the extent of, such adjustment of the Purchase Price. Furthermore, Seller shall not be liable to indemnify or have any other materiality qualifications liability arising under this Agreement or otherwise to Purchaser for Purchaser's Damages, and Purchaser shall not be liable to indemnify or have any other liability arising under this Agreement or otherwise to Seller for Seller's Damages, in excess of a total aggregate amount equal to twenty percent (20%) of the Purchase Price (the "Cap"). ---
(c) The limitations and provisions contained in Sections 11.3(a) and -------------------- 11.3(b) shall not apply to any claim by Purchaser for indemnification ------- based on any breach of the representations contained in Sections 5.5 ------------ regarding title or correlative terms5.9 regarding taxes and shall have no application to or effect on the Purchase Price adjustments required to be made pursuant to Sections 2.1.1, 3.3(b), including as expressed 3.3(c), and\or 3.4(b) hereof. Furthermore, the limitations contained in accounting concepts such as GAAP, Section 11.3(b) shall be disregardednot --------------- apply to breaches of any covenants or agreements contained in this Agreement.
(d) Notwithstanding anything the foregoing except as set forth in this Article VIII Section 2.2, neither Seller nor the Purchaser will be entitled to indemnification with respect to consequential damages or any limitation provided hereinwith respect to punitive damages, nothing herein except in the case of fraud or willful misconduct by the other party. Any indemnification amounts payable by an Indemnifying Party under Section 11.1 or 11.2 shall prevent any of the parties hereto from be calculated after giving -------------------- effect to (i) bringing any proceeds (net of retro-premium adjustments and other expenses) actually received by an action based upon allegations Indemnified Party from insurance policies covering the damage that is the subject of fraud or other willful or intentional misconduct or such claim for indemnity, and (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event actual realized tax benefit resulting from such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing partydamage.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Measurement Specialties Inc)
Limitations on Indemnification. The (i) Seller and Shareholder shall have no liability for indemnification provided with respect to any Loss or Expense under this Agreement until the aggregate of all Loss and Expense with respect to claims for in Sections 8.1 indemnification under this Agreement exceeds ___________ One Hundred Thousand Dollars ($_______) ($100,000) (the "Liability Threshold"), and 8.2 then after the Liability Threshold has been exceeded Seller and Shareholder shall be subject responsible for all Losses and Expenses based thereon from the first dollar, without regard to the following limitations:Liability Threshold. Anything to the contrary in this Agreement notwithstanding, Seller and Shareholder shall have no liability for indemnification under this Agreement for any amount in excess of _______ Four Million Eight Hundred Thousand Dollars (_______) $4,800,000) for claims made by Buyer during the first twelve (12) months from the date hereof ("Indemnification Limit 1") and, thereafter, shall have no liability for indemnification under this Agreement for any claims in excess of Three Million Nine Hundred Sixty Thousand Dollars ($3,960,000) ("Indemnification Limit 2"; Indemnification Limit 2 together with Indemnification Limit 1, the "Indemnification Limits") (for purposes of clarification, any indemnity claims made by Buyer during the first twelve (12) months from the date hereof and applied against Indemnification Limit 1 shall also be applied against Indemnification Limit 2). Notwithstanding the above, neither the Liability Threshold nor the Indemnification Limits shall apply to Seller's and Shareholder's obligations pursuant to Sections (85)(a)(v),(vi), (vii), and (viii), Seller Liabilities or fraud by Seller or Shareholder. or to Special Claims.
(aii) The Sellers and Buyer shall have no liability for indemnification with respect to any Loss or Expense under this Agreement until the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) Liability Threshold has been exceeded, and then such after the Liability Threshold has been exceeded Buyer shall be responsible for all Losses and Expenses based thereon from the first dollar without regard to the Liability Threshold. Anything to the contrary in this Agreement notwithstanding, Buyer shall have no liability for indemnification shall relate to all such Losses under this Agreement for any amount in excess of the Threshold; andIndemnification Limit. Notwithstanding the above, in any event, neither the maximum aggregate obligation of Liability Threshold nor the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof Indemnification Limit shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) any Loss or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Expense resulting from Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of 's fraud or other willful or intentional misconduct or (ii) seeking injunctive intentional concealment or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing partyAssumed Liabilities.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for obligations contained in Sections 8.1 and 8.2 this ARTICLE VIII shall be subject to the following limitations:
(a) The Sellers and No indemnification shall be payable pursuant to Section 8.2(a) or Section 8.3(a), other than with respect to (x) a breach of a Fundamental Representation (excluding the Selling Shareholders shall not be obligated to provide any such indemnification for Tax Representation) or (y) in the event of fraud or intentional misrepresentation, unless the total amount of all indemnifiable Losses incurred under Section 8.1(a) unless the aggregate amount that by the Buyer is entitled to recover in respect of all such claims Indemnitees exceeds $75,000 [***]; provided that such amount shall be reduced to $[***] immediately with no further action of the parties upon a DOH Denial Release (the “ThresholdBasket”) and then such ), whereupon indemnification shall relate to be payable for the amount of all such Losses in excess of the Threshold; andBasket. For purposes of clarity, in any event, the maximum aggregate obligation breaches of the Sellers Tax Representation shall be subject to and included in the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption calculation of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitationBasket.
(b) No claims The Sellers’ aggregate liability for all Losses for indemnification in under Section 8.2(a), other than with respect to (x) a breach of Sections 8.1(aa Fundamental Representation (excluding the Tax Representation) or 8.2(a)(i(y) in the event of fraud or intentional misrepresentation, shall not exceed $[***]; provided that such amount shall be made after reduced to $[***] immediately and with no further action of the dateparties upon a DOH Denial Release (the “Rep Cap”) and each Seller’s aggregate liability for all Losses for indemnification under Section 8.3(a), other than with respect to (x) a breach of a Fundamental Representation (excluding the Tax Representation) or (y) in the event of fraud or intentional misrepresentation, shall not exceed such Seller’s Pro Rata Portion of the then current Rep Cap (the “Seller Rep Cap”). Notwithstanding anything to the contrary herein, if anythe Rep Cap is decreased because of a DOH Denial Release and a Seller has paid Losses in excess of the then current Rep Cap or such Seller’s Seller Rep Cap, on then the Parent shall promptly return the portion of such Losses in excess of the Rep Cap or such Seller’s Seller Rep Cap which were paid in cash by such Seller. For purposes of clarity breaches of the applicable representation or warranty upon which such claim was based ceases Tax Representation shall be subject to survive pursuant to Section 8.6and included in the calculation of the Rep Cap.
(c) Solely The Sellers’ aggregate liability for purposes all indemnifiable Losses under Section 8.2 shall not exceed (i) the Merger Consideration (provided that for this purpose each Seller shall be deemed to have actually received its Pro Rata Portion of calculating the Escrow Shares); provided that in the event of a DOH Denial Release, such amount shall automatically be decreased without any further action of the parties to the Aggregate Cash Amount (the “Aggregate Cap”). Notwithstanding anything herein to the contrary, no Seller shall be responsible for any Losses (including, without limitation, pursuant to Section 8.2 or Section 8.3) which exceed the aggregate amount of Losses incurred arising out of or relating to any breach consideration actually received by such Seller in connection with the Merger (which the parties acknowledge will decrease in the event of a representation or warranty by DOH Denial Release) (the Buyer“Aggregate Seller Cap”). Notwithstanding anything herein to the contrary, (i) if the Sellers, Aggregate Cap or the Selling Shareholders Aggregate Seller Cap is decreased as set forth in this Section 8.6(c) and a Seller has paid Losses in excess of the then current Aggregate Cap or such Seller’s Aggregate Seller Cap, then the Parent shall promptly return the portion of such Losses in excess of the Aggregate Cap and the Aggregate Seller Cap which were paid in cash by such Seller and (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, ii) no Seller shall be disregardedresponsible to make a cash payment in the event that the Closing Shares were used to satisfy any indemnifiable Losses hereunder and a portion of Closing Shares are later released to the Parent in accordance with Section 2.13.
(d) No indemnification shall be payable pursuant to Section 8.4(a) (other than with respect to a breach of a Fundamental Representation or in the event of fraud or intentional misrepresentation) unless the total amount of all indemnifiable Losses incurred by the Sellers exceeds the Basket, whereupon the indemnification shall be payable for the amount of all such Losses in excess of the Basket.
(e) Buyer’s and Parent’s aggregate liability for all Losses for indemnification under Section 8.4(a) (other than with respect to a breach of a Fundamental Representation or in the event of fraud or intentional misrepresentation) shall not exceed the Rep Cap.
(f) The aggregate liability of Buyer and Parent for all Losses indemnifiable under Section 8.4 shall not exceed the Aggregate Cap.
(g) Notwithstanding anything to the contrary in this Article VIII or Agreement, and without limiting the effect of any other limitation provided hereincontained in this ARTICLE VIII, for purposes of computing the amount of any Losses incurred by any Indemnified Party under this ARTICLE VIII, the amount of any Losses recoverable hereunder shall be reduced by an amount equal to the amount of any insurance proceeds that have been actually received by any Indemnified Party in connection with such Losses which, had they been received prior to the recovery of Losses by the Indemnified Party from the Indemnifier would have reduced the amount of the indemnifiable Losses that would have been paid by the Indemnifier for such indemnification claim; provided, however, nothing herein shall prevent require any Indemnified Party to seek recovery for Losses from its insurance policies (or to maintain any such insurance policies). To the extent any such insurance proceeds are received by the Indemnified Party or its applicable Affiliate or designee after any indemnification claim has been paid by the Indemnifier, the Indemnified Party shall, within 10 days following its receipt thereof, pay to the Indemnifier the applicable portion of such insurance proceeds, if any, received in connection with such indemnification claim (not to exceed the amount of Losses from such indemnification claim). Nothing in this Agreement in any way restricts or limits the general obligation under existing Legal Requirement of an Indemnified Party to take reasonable measures to mitigate any loss which it may suffer or incur by reason of the parties hereto from (i) bringing breach by an action based upon allegations Indemnifier of fraud any representation, warranty, covenant, agreement or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights obligation under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Ascend Wellness Holdings, Inc.)
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers and Notwithstanding anything herein to the Selling Shareholders contrary, Seller shall not be obligated to provide any such indemnification for Losses incurred indemnify Purchaser under Section 8.1(a) unless this Article 9 to the extent that the aggregate amount that the Buyer is entitled to recover in respect of all such claims Purchaser Damages exceeds $75,000 the value of the Merger Consideration at Closing (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”"Seller's Indemnification Cap"); provided, however, that the limitations in this paragraph Seller's Indemnification Cap shall not apply to Losses any Seller indemnification obligation (x) arising in respect of claims out of, relating to misrepresentations and or resulting from fraud or intentional misrepresentation or breach of warranties warranty by Seller; (y) arising out of, relating to or resulting under Section 3.1 hereof 9.2(b), (relating to organizationc) and Section 3.3 hereof or (relating to authorityd), or from a breach of any of Seller's representations or warranties contained in Sections 2.15 or 2.16; or (z) which may be asserted without limitationif the Merger does not close.
(b) No claims for Notwithstanding anything herein to the contrary, Purchaser shall not be obligated to indemnify Seller under this Article 9 to the extent that the aggregate of all Seller Damages exceeds one-half of the value of the Merger Consideration at Closing (the "Purchaser's Indemnification Cap"); provided, however, that the Purchaser's Indemnification Cap shall not apply to any Purchaser indemnification in respect obligation (x) arising out of, relating to or resulting from fraud or intentional misrepresentation or breach of Sections 8.1(awarranty by Purchaser; (y) arising out of, relating to or resulting under Section 9.3(b) or 8.2(a)(i(c) shall be made after or from a breach of any of Purchaser's representations or warranties in Section 3.11; or (z) if the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6Merger does not close.
(c) Solely Purchaser will not be entitled to seek indemnification under Section 9.2 for purposes of calculating Purchaser Damages unless and until the aggregate amount of Losses incurred arising out all Purchaser Damages exceeds $35,000 (the "Threshold Amount"). In the event that the aggregate of or relating all Purchaser Damages for which Seller is obligated to any breach of a representation or warranty by provide indemnification under Section 9.2 exceeds the BuyerThreshold Amount, the SellersPurchaser will be entitled to seek indemnification in respect of all Purchaser Damages for which Seller is obligated to provide indemnification under Section 9.2 (subject to the other provisions hereof); provided, however, that the Threshold Amount shall not apply (i) with respect to breaches of the representations and warranties contained in Sections 2.1, 2.2, 2.3, 2.5(f), 2.15, or the Selling Shareholders 2.16; and (and not for purposes ii) in cases of determining whether fraud or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregardedintentional misrepresentation.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any Seller will not be entitled to seek indemnification under Section 9.3 for Seller Damages unless and until the aggregate amount of all Seller Damages exceeds the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this AgreementThreshold Amount. In the event such action that the aggregate of all Seller Damages for which Purchaser is broughtobligated to provide indemnification under Section 9.3 exceeds the Threshold Amount, the prevailing party’s attorneys’ fees Seller will be entitled to seek indemnification in respect of all Seller Damages for which Purchaser is obligated to provide indemnification under Section 9.3 (subject to the other provisions hereof); provided, however, that the Threshold Amount shall not apply (i) with respect to breaches of the representations and costs shall be paid by the nonprevailing partywarranties contained in Sections 3.1, 3.2, or 3.11; and (ii) in cases of fraud or intentional misrepresentation.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject Notwithstanding anything to the following limitations:
(a) The Sellers and the Selling Shareholders contrary in Section 11.1, Seller shall not be obligated have any obligation to provide indemnify Purchaser from and against any Adverse Consequences based upon, arising out of or otherwise in respect of (i) the breach of any representation or warranty of Seller contained in the Agreement or in any certificate, instrument or document delivered pursuant hereto, or (ii) any claim brought by any third party arising out of 50 or related to the alleged infringement of the intellectual property rights of such third party by any of the Intellectual Property Assets: (A) if Purchaser has suffered Adverse Consequences in respect of any such indemnification for Losses incurred under Section 8.1(aindividual breach or claim in an amount less than Six Thousand Dollars ($6,000), below which amount of Adverse Consequences with respect to any such individual breach Seller will have no obligation to indemnify Purchaser; (B) unless the aggregate amount that the Buyer is entitled to recover until Purchaser has suffered Adverse Consequences in respect of all such breaches or claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Thresholda Five Hundred Thousand Dollars ($500,000) aggregate deductible, above which amount of Adverse Consequences Seller will be obligated to indemnify Purchaser, or its assigns, from and against further such Adverse Consequences in excess of such deductible amount; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a(C) hereof shall not exceed the Purchase Price paid to the Sellers to extent the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising Adverse Consequences Purchaser has suffered in respect of claims relating all such breaches exceeds an aggregate ceiling equal to misrepresentations the Indemnification Escrow Amount, above which amount of Adverse Consequences Seller will have no obligation to indemnify Purchaser from and against further Adverse Consequences. However, any Adverse Consequences arising with respect to the UK Subsidiary are subject to clauses (A), (B) and (C) above. Notwithstanding anything to the contrary in Section 11.1, Purchaser shall not have any obligation to indemnify Seller from and against any Adverse Consequences caused by the breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable any representation or warranty upon of Purchaser contained in the Agreement: (A) until Seller has suffered Adverse Consequences by reason of all such breaches in excess of a Five Hundred Thousand Dollars ($500,000) aggregate deductible, above which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating Adverse Consequences Purchaser will be obligated to any breach of a representation or warranty by the Buyer, the Sellersindemnify Seller, or its assigns, from and against further such Adverse Consequences in excess of such deductible amount; and (B) to the Selling Shareholders (extent the Adverse Consequences Seller has suffered by reason of all such breaches exceeds an aggregate ceiling equal to the Indemnification Escrow Amount, above which amount of Adverse Consequences Purchaser will have no obligation to indemnify Seller from and not for purposes of determining whether or not a breach has occurred), the references to “Material against further Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Consequences. Notwithstanding anything to the contrary in this Article VIII Section 11.1, Seller shall not have any obligation to indemnify Purchaser or the UK Subsidiary from and against any limitation provided hereinAdverse Consequences based upon any Liability to the extent that it was reflected or provision, nothing herein shall prevent any reserve or allowance has been made for that Liability, in the calculation of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing partyUK Net Asset Value.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers representations, warranties and covenants of the Selling Shareholders Parties in this Agreement shall survive the Closing Date and continue in full force and effect for a period of twelve (12) months thereafter; provided that (i) claims related to breaches by Seller of the representations and warranties contained in Section 4.16(a) […***…], (ii) claims related to fraud or willful or intentional misconduct shall survive the Closing Date until the expiration of the date on which the statute of limitations otherwise applicable to such claims has expired, and (iii) any covenants or agreements contained in this Agreement that by their terms are to be performed after the Closing Date shall survive until fully discharged. For the avoidance of doubt, Retrophin’s obligations to make any Contingent Payment or Royalty payment ***Confidential Treatment Requested contemplated by the covenants set forth in Sections 3.3 or 3.4, respectively, shall survive the Closing Date for so long as Retrophin has Net Revenues or Product is otherwise sold.
(b) The Seller shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims made under Section 8.1 unless and until the aggregate of the Losses exceeds […***…] ($75,000 […***…]) (the “ThresholdBasket”) and then such indemnification ), after which point Seller shall relate to be liable for all such Losses dollar for dollar in excess of the Threshold; andBasket, in any event, but only to the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for extent that Losses incurred under Section 8.1(a) hereof shall do not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities […***…] ($[…***…]) (the “MaximumCap Amount”); provided, however, that the limitations in this paragraph Basket and Cap Amount shall not apply apply, and all Losses of the Buyer Indemnitee Group shall be immediately subject to Losses arising indemnification, in respect of any Loss (but shall not exceed […***…] ($[…***…]) in the aggregate with respect to (i) claims relating related to misrepresentations and any breach of warranties relating to Section 3.1 hereof (relating to organizationany representation and warranty contained in Sections 4.2, 4.7, 4.10(b), 4.11(b), 4.16(b) and 4.16(c), and 4.16(a) (but solely to the extent that breaches by Seller of the representations and warranties contained in Section 3.3 hereof (relating to authority4.16(a) which may be asserted without limitation.
(b) No claims for indemnification […***…], such that any and all other breaches by Seller of the representations and warranties contained in respect of Sections 8.1(a) or 8.2(a)(iSection 4.16(a) shall be subject to the Basket and Cap Amount) (ii) claims related to fraud or willful or intentional misconduct, or (iii) claims made after under Section 8.1(c) or (d); provided, further, that any and all such Losses of the date, if any, on which Buyer Indemnitee Group described in the applicable representation or warranty upon which such claim was based ceases to survive pursuant to foregoing proviso shall be applied against the Cap for purposes of calculating the Seller’s aggregate liabilities under this Section 8.68.4(b). In no event shall the Seller be liable for Losses under this Agreement in an aggregate amount greater than […***…] ($[…***…]) in the aggregate.
(c) Solely for purposes of calculating the The amount of any and all Losses incurred arising out will be determined net of or relating to any breach of a representation or warranty amounts recovered by the BuyerBuyer Indemnitee Group under insurance policies (net of any deductible or self-insurance retention amounts and any increases in premiums resulting therefrom) and any indemnity, contribution or similar payment actually recovered by the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references Buyer Indemnitee Group thereof from any Third Party with respect to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, Losses. Each Indemnitee Group shall be disregardeduse commercially reasonable efforts to mitigate all Losses suffered by it which are subject to indemnification hereunder.
(d) Notwithstanding anything in No Indemnity Group shall be entitled to indemnification pursuant this Article VIII 8 for punitive damages, lost profits, consequential, exemplary or special damages. No Indemnitee Group shall be entitled to any limitation provided herein, nothing herein duplicative recovery for the same Loss under this Article 8 to the extent that any such member of such Indemnitee Group has been expressly compensated for such Loss.
(e) All indemnification payments made pursuant to this Article 8 shall prevent be treated for tax purposes as adjustments to the Consideration unless otherwise required by Applicable Law.
(f) Buyer acknowledges and agrees that any and all Losses of the parties hereto Buyer Indemnitee Group in respect of any breach by Seller of the representations and warranties contained in Section 4.11(a) will be recoverable by Buyer solely from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement[…***…]. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.***Confidential Treatment Requested
Appears in 1 contract
Samples: Asset Purchase Agreement
Limitations on Indemnification. The Rights to indemnification provided for in Sections 8.1 and 8.2 shall be hereunder are subject to the following limitations:
(a) Buyer shall not be entitled to indemnification hereunder with respect to any Indemnifiable Claim (or, if more than one Indemnifiable Claim is asserted, with respect to all Indemnifiable Claims) unless the aggregate amount of Damages with respect to such Indemnifiable Claim or Claims exceeds Forty Thousand ($40,000) (the "Threshold"), whereupon Buyer shall be entitled to indemnification for Damages suffered in excess of the Threshold. Notwithstanding the foregoing, Buyer shall be entitled to indemnification hereunder with respect to the full amount of Damages resulting from a breach of the representations and warranties in Section 3.6 or 3.7 without deduction of the Threshold.
(b) Seller's maximum aggregate liability to Buyer for Indemnifiable Claims hereunder shall be Three Hundred Thousand ($300,000), plus reasonable attorneys' fees and reasonable out-of-pocket enforcement expenses.
(c) The Sellers and foregoing provisions of this Section notwithstanding, if, prior to the Selling Shareholders termination of any obligation to indemnify as provided for herein, written notice of a claimed breach (which describes the claimed breach in reasonable detail) is given (in good faith) by the party seeking indemnification (the "Indemnified Party") to the party from whom indemnification is sought (the "Indemnifying Party"), or a suit or action based upon a claimed breach is commenced against the Indemnifying Party by the Indemnified Party, the Indemnified Party shall not be precluded from pursuing such claimed breach or suit or action, or from recovering from the Indemnifying Party (whether through the courts or otherwise) on the claim, suit or action, by reason of the termination otherwise provided for above.
(d) Seller shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless indemnify Buyer hereunder if Seller can establish that Buyer or AL had actual knowledge of facts and circumstances that made the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitationrepresentation inaccurate.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
Appears in 1 contract
Samples: Stock Purchase Agreement (Sentex Sensing Technology Inc)
Limitations on Indemnification. The indemnification provided Except for in Sections 8.1 and 8.2 shall any willful or knowing breach or misrepresentation, as to which claims may be subject brought without limitation as to the following limitationstime or amount:
(a) The Sellers and No claim or action shall be brought by any Buyer Indemnified Party or a Parent Indemnified Party under this Article IX after the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(adate which is fourteen (14) unless months from the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess Closing. Regardless of the Threshold; andforegoing, in however, or any event, the maximum aggregate obligation other provision of the Sellers and the Selling Shareholders hereunder this Agreement:
(i) There shall be no time limitation on Claims on actions brought for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating any representation or warranty made by Parent and Company in or pursuant to Section 3.1 hereof 4.01(c) or Section 4.02, and Parent hereby waives all applicable statutory limitation periods with respect thereto.
(relating ii) Any Claim or action brought for breach of any representation or warranty made by Parent and Company in or pursuant to organization) and Section 3.3 hereof (relating to authority) which 4.05 may be asserted without limitationbrought at any time until the underlying Tax obligation is barred by the applicable period of limitation under federal and state laws relating thereto (as such period may be extended by waiver).
(iii) There shall be no time limitation on Claims brought pursuant to Section 9.01(c), and Parent hereby waives all applicable statutory limitation periods with respect thereto.
(b) No claims for Notwithstanding anything herein to the contrary, a Buyer Indemnified Party shall not be entitled to indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on hereunder related to matters as to which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Buyer has breached Section 8.66.10.
(c) Solely Notwithstanding anything herein to the contrary, for purposes of calculating the amount determining whether there is a right of Losses incurred arising out of or relating to any indemnification hereunder for a breach of a representation or warranty by the Buyer, the Sellerswarranty, or the Selling Shareholders (and not for purposes amount of determining whether or not a breach has occurred)the Claim related thereto, the references representations and warranties shall be considered without regard to “any materiality or Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregardedEffect qualification contained therein.
(d) Notwithstanding anything in herein to the contrary but subject to the introductory paragraph of this Section 9.04, no Buyer Indemnified Party shall be entitled to indemnification under this Article VIII or IX unless and until the aggregate of Parent’s indemnification obligations to all Buyer Indemnified Parties pursuant to this Article IX (but for this Section 9.04(d)) exceeds Four Million Five Hundred Thousand Dollars ($4,500,000) (the “Basket Amount”), and then only for the excess over the Basket Amount; provided, however, that in no event shall the Basket Amount be deemed to apply to (i) any limitation provided herein, nothing herein shall prevent Claims arising from breaches of any of the parties hereto Excluded Representations and Warranties or Excluded Covenants, (ii) any Claims pursuant to Section 9.01(c), and (iii) any Claims arising from breaches of Section 6.01(viii)(B).
(e) Notwithstanding anything herein to the contrary but subject to the introductory paragraph of this Section 9.04, the liability of Parent to indemnify under this Article IX in the aggregate shall not exceed an amount equal to ten percent (10%) of the Purchase Price (the “Cap”); provided, however, that in no event shall the Cap be deemed to apply to (i) bringing an action based upon allegations any Claims arising from breaches of fraud any of the Excluded Representations and Warranties or other willful or intentional misconduct Excluded Covenants, or (ii) seeking injunctive any Claims pursuant to Section 9.01(c).
(f) Indemnification of a Buyer Indemnified Party shall be limited to the amount of any liability or damage that remains after deducting therefrom (and the cumulative amount of all indemnification obligations for purposes of determining the Basket Amount above shall be reduced by the amount of) (i) any Tax benefit actually received by such Buyer Indemnified Party, and (ii) any insurance proceeds or any indemnity, contribution or other equitable relief similar payment actually recovered by a Buyer Indemnified Party from any third party with respect thereto, net of any (A) reasonable out-of-pocket costs of collection incurred by Buyer to enforce their rights obtain such recovery, (B) increased insurance premiums directly resulting from Buyer making a claim under its insurance policy, and (B) deductible applicable under Buyer’s insurance policy. The Buyer Indemnified Party shall in good faith pursue and attempt to collect all available insurance proceeds (or proceeds potentially available under then-existing insurance policies maintained by such Buyer Indemnified Party or its Affiliates) and claims against third parties that would reasonably be expected by Buyer to reduce the amount of any Claim for which the Buyer Indemnified Party seeks indemnification under this Article IX.
(g) Except as otherwise provided in this Agreement. In the event such , any dispute, claim or action is brought, the prevailing party’s attorneys’ fees and costs by either party to this Agreement shall be paid by brought and resolved pursuant to the nonprevailing partyprovisions of Section 10.09.
Appears in 1 contract
Samples: Stock Purchase Agreement (Journal Communications Inc)
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers and Notwithstanding anything herein to the Selling Shareholders contrary, Pfizer shall not be obligated to provide indemnify any such indemnification for Losses incurred NewCo Indemnified Person under Section 8.1(a14.1: (i) unless the aggregate amount that of all NewCo Damages exceeds $[***] (the Buyer is “Deductible”), in which case the NewCo Indemnified Persons shall be entitled to recover in respect all NewCo Damages only to the extent such NewCo Damages exceed the Deductible or (ii) to the extent that the aggregate of all such claims NewCo Damages exceeds $75,000 [***] (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “MaximumCap”); provided, that however, the limitations in this paragraph Cap and Deductible shall not apply to Losses nor count towards any Pfizer indemnification obligation (A) arising in respect of claims out of, relating to misrepresentations and or resulting from fraud by any Pfizer Party, or arising out of, relating to or resulting under Sections 14.1(b) or (c) or (B) arising out of, relating to or resulting from a breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitationor inaccuracy in any Pfizer Fundamental Representation.
(b) No claims for indemnification Notwithstanding anything herein to the contrary, NewCo shall not be obligated to indemnify any Pfizer Indemnified Person under Section 14.2: (i) unless the aggregate of all Pfizer Damages exceeds the Deductible, in respect of Sections 8.1(a) or 8.2(a)(i) which case the Pfizer Indemnified Persons shall be made after entitled to recover all Pfizer Damages only to the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.extent such
(c) Solely for purposes Pfizer Damages exceed the Deductible, which Pfizer Damages shall not be counted against the Deductible, or (ii) to the extent that the aggregate of calculating all Pfizer Damages exceeds the amount of Losses incurred Cap; provided, however, that the Cap and the Deductible shall not apply to nor count towards any NewCo indemnification obligation (A) arising out of, relating to or resulting from fraud by NewCo or arising out of, relating to or resulting under Sections 14.2(b), (c) or (d), or (B) arising out of, relating to or resulting from a breach of or relating to inaccuracy in any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregardedNewCo Fundamental Representation.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights All indemnification payments under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs Agreement shall be paid by treated as adjustments to the nonprevailing partyConsideration for all Tax purposes unless Laws require otherwise.
Appears in 1 contract
Samples: Asset Contribution Agreement (Allogene Therapeutics, Inc.)
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject Notwithstanding anything to the following limitationscontrary contained in this Agreement:
(a) The except for Losses in respect of (i) any indemnification claim based upon, arising out of, resulting from or because of fraud, criminal activity, intentional misconduct or intentional misrepresentation by Sellers in connection with this Agreement or any Ancillary Agreement, (ii) breaches of the representations and warranties set forth in Section 3.4 (Tax Matters) or (iii) the Selling Shareholders Seller Fundamental Representations (it being understood that Losses based upon, arising out of, resulting from or because of subclauses (i), (ii) and (iii) of this Section 8.4(a) shall not be obligated subject to provide the limitations of this Section 8.4(a) and shall not count towards the Deductible), no Buyer Indemnified Party may shall be entitled to recover for any such claim for indemnification for Losses incurred under pursuant to Section 8.1(a8.2(a) unless in respect of the Seller General Representations until the aggregate amount that of Losses recoverable under Section 8.2(a) equals or exceeds 0.75% of the Buyer is entitled to recover in respect of all such claims exceeds $75,000 Purchase Price (the “ThresholdDeductible”) and then such indemnification shall relate to all such ), after which the Buyer Indemnified Parties may seek recovery for Losses in excess of the ThresholdDeductible; andprovided, however, that no Losses may be claimed by any Buyer Indemnified Party or shall be reimbursable or shall be included in calculating the aggregate Losses for purposes of this clause (a) other than Losses in excess of $25,000 (the “Per-Claim Deductible”) resulting from any single claim or aggregated claims arising out of the same facts, events or circumstances;
(b) except for any Losses in respect of (i) any indemnification claim arising out of fraud, criminal activity, intentional misconduct or intentional misrepresentation by Sellers in connection with this Agreement or any Ancillary Agreement, (ii) breaches of the representations and warranties set forth in Section 3.4 (Tax Matters) or (iii) the Seller Fundamental Representations (it being understood that Losses arising from subclauses (i), (ii) and (iii) of this Section 8.4(b) shall not be subject to the limitations of this Section 8.4(b)), the funds held in the Indemnity Escrow Account shall be the sole source of recovery with respect to all indemnifiable Losses that may be recovered by a Buyer Indemnified Party pursuant to Section 8.2(a) in respect of the Seller General Representations (such amount, as of the Closing, the “Cap”);
(c) except for Losses in respect of any indemnification claim arising out of fraud, criminal activity, intentional misconduct or intentional misrepresentation by Sellers in connection with this Agreement or any Ancillary Agreement (it being understood that Losses shall not be subject to the limitations of this Section 8.4(c)), in no event shall the aggregate amount of Losses for which Sellers are obligated to indemnify the Buyer Indemnified Parties with respect to any eventmatter set forth in Section 8.2 exceed in the aggregate the Purchase Price;
(d) for purposes of determining the amount of Loss resulting from any inaccuracy in or breach of any representation or warranty, any breach or default in compliance with or performance of any covenant, agreement or other obligation, calculating Losses under this ARTICLE VIII, and satisfying the Deductible and Per-Claim Deductible, any materiality or Material Adverse Effect qualifications contained in the representations, warranties, covenants, agreements and other obligations shall be disregarded such that each representation, warranty, covenant, agreement and other obligation shall be deemed to be made or given without any such materiality qualifications;
(e) no Indemnified Party shall be entitled to recover any amount of Losses relating to any matter arising under one provision of this Agreement to the extent such Indemnified Party (or other Buyer Indemnified Parties in the event of a Buyer Indemnified Party, or other Seller Indemnified Parties in the event of a Seller Indemnified Party) has already recovered such amount with respect to such matter pursuant to such provision or any other provision of this Agreement, including to the extent such amount is included in the calculation of any adjustment to the Purchase Price, provided that nothing herein shall limit an Indemnified Party’s recovery for multiple occurrences of any inaccuracy or breach of any representation, warranty, covenant or agreement;
(f) except for Losses in respect of (i) any indemnification claim arising out of fraud, criminal activity, intentional misconduct or intentional misrepresentation by Buyers in connection with this Agreement or any Ancillary Agreement, (ii) breaches of the representations and warranties set forth in Section 3.4 (Tax Matters) or (iii) the Buyer Fundamental Representations (it being understood that Losses arising from subclauses (i), (ii) and (iii) of this Section 8.4(f) shall not be subject to the limitations of this Section 8.4(f) and shall not count towards the Deductible), no Seller Indemnified Party may shall be entitled to recover for any claim for indemnification pursuant to Section 8.3(a) in respect of the Buyer General Representations until the aggregate amount of Losses recoverable under Section 8.3(a) equals or exceeds the Deductible, after which the Seller Indemnified Parties may seek recovery only for Losses in excess of the Deductible; provided, however, that no Losses may be claimed by any Seller Indemnified Party or shall be reimbursable or shall be included in calculating the aggregate Losses for purposes of this clause (f) other than Losses in excess of the Per-Claim Deductible resulting from any single claim or aggregated claims arising out of the same facts, events or circumstances;
(g) except for Losses in respect of (i) any indemnification claim arising out of fraud, criminal activity, intentional misconduct or intentional misrepresentation by Buyers in connection with this Agreement or any Ancillary Agreement, (ii) breaches of the representations and warranties set forth in Section 3.4 (Tax Matters) or (iii) the Buyer Fundamental Representations (it being understood that Losses arising from subclauses (i), (ii) and (iii) of this Section 8.4(g) shall not be subject to the limitations of this Section 8.4(g)), the maximum aggregate obligation amount of Losses for which Buyers are obligated to indemnify the Seller Indemnified Parties under Section 8.3(a) in respect of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof Buyer General Representations shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities Cap;
(the “Maximum”); provided, that the limitations in this paragraph shall not apply to h) except for Losses arising in respect of claims relating any indemnification claim arising out of fraud, criminal activity, intentional misconduct or intentional misrepresentation by Buyers in connection with this Agreement or any Ancillary Agreement (it being understood that Losses shall not be subject to misrepresentations and breach the limitations of warranties relating this Section 8.4(h)), in no event shall the aggregate amount of Losses for which Buyers are obligated to indemnify the Seller Indemnified Parties with respect to any matter set forth in Section 3.1 hereof 8.3 exceed in the aggregate the Purchase Price; and
(relating to organizationi) and Section 3.3 hereof NO PARTY SHALL BE LIABLE TO ANY INDEMNIFIED PARTY FOR CLAIMS FOR PUNITIVE DAMAGES ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, REGARDLESS OF WHETHER A CLAIM IS BASED ON CONTRACT, TORT (relating to authorityINCLUDING NEGLIGENCE), STRICT LIABILITY, VIOLATION OF ANY APPLICABLE DECEPTIVE TRADE PRACTICES ACT OR SIMILAR LAW OR ANY OTHER LEGAL OR EQUITABLE PRINCIPLE, EXCEPT TO THE EXTENT SUCH DAMAGES ARE INCLUDED IN AND AWARDED (AND ACTUALLY PAID) which may be asserted without limitationTO A GOVERNMENTAL ENTITY OR OTHER THIRD PARTY AS PART OF A CLAIM AGAINST THE INDEMNIFIED PARTY THAT IS OTHERWISE INDEMNIFIABLE PURSUANT TO THIS ARTICLE VIII, AND EACH PARTY (AND BY ACCEPTANCE OF THE BENEFITS OF THE PROVISIONS OF THIS ARTICLE VIII EACH INDEMNIFIED PARTY) RELEASES THE INDEMNIFYING PARTY FROM LIABILITY FOR ANY SUCH DAMAGES.
(bj) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the dateWITH RESPECT TO CLAIMS ARISING UNDER ENVIRONMENTAL LAWS, if anyINCLUDING CERCLA, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6THE INDEMNIFICATION PROVISIONS OF THIS ARTICLE VIII ARE INTENDED TO ALLOCATE, WITHOUT LIMITATION, STATUTORY AND COMMON LAW NEGLIGENCE AND STRICT LIABILITY CLAIMS AS WELL AS NEGLIGENCE, STRICT LIABILITY, AND ALL OTHER CLAIMS ARISING UNDER ENVIRONMENTAL LAWS, INCLUDING CERCLA.
(ck) Solely If any Buyer Indemnified Party is entitled to assert a claim for purposes indemnification either under Section 8.2(a) or Section 8.2(b) on the basis of calculating the amount of Losses incurred arising out of Sellers’ breach or relating to any breach of a representation or warranty by the Buyer, the Sellersdefault in, or failure to carry out, perform, satisfy and discharge their obligations under Section 5.3, then the Selling Shareholders Buyer Indemnified Party shall assert the claim (and i) under Section 8.2(a) if the change, event, circumstance, development, condition, occurrence or effect that was not for purposes of determining whether or disclosed would not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed have resulted in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct conditions set forth in Article VII not being satisfied if it had been disclosed or (ii) seeking injunctive under Section 8.2(b) if the change, event, circumstance, development, condition, occurrence or other equitable relief effect that was not disclosed would have resulted in any of the conditions set forth in Article VII not being satisfied if it had been disclosed. If any Seller Indemnified Party is entitled to enforce assert a claim for indemnification either under Section 8.3(a) or Section 8.3(b) on the basis of Buyers’ breach or default in, or failure to carry out, perform, satisfy and discharge their rights obligations under this Agreement. In Section 5.3, then the event such action is broughtSeller Indemnified Party shall assert the claim (i) under Section 8.3(a) if the change, event, circumstance, development, condition, occurrence or effect that was not disclosed would not have resulted in any of the prevailing party’s attorneys’ fees and costs shall be paid by conditions set forth in Article VII not being satisfied if it had been disclosed or (ii) under Section 8.3(b) if the nonprevailing partychange, event, circumstance, development, condition, occurrence or effect that was not disclosed would have resulted in any of the conditions set forth in Article VII not being satisfied if it had been disclosed.
Appears in 1 contract
Limitations on Indemnification. The (a) Notwithstanding anything to the contrary in this Agreement, the right of Buyer Indemnitees to indemnification provided for in Sections 8.1 and 8.2 respect of Buyer Losses under this Article VIII shall be subject to the following limitations:
(ai) The Sellers and the Selling Shareholders Buyer Indemnitees shall not be obligated entitled to provide assert any such indemnification Claim for Losses incurred under Section 8.1(aIndemnification pursuant to Sections 8.2(a) unless or 8.2(b) in respect of any Buyer Losses, or series of related Buyer Losses, until the aggregate amount that the Buyer is entitled to recover in respect of all such claims Buyer Losses actually incurred by Buyer Indemnitees exceeds an amount equal to $75,000 165,000 (the “ThresholdDeductible Amount”) and then such ), in which case Buyer Indemnitees shall have the right to seek indemnification shall relate to all such for the amount of Buyer Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”)Deductible Amount; provided, however, that the limitations limitation set forth in this paragraph Section 8.6(a)(i) shall not apply to Buyer Losses based upon, arising in respect out of claims relating to misrepresentations and or resulting, directly or indirectly, from (i) a breach of warranties relating Fundamental Representations, or (ii) fraud, criminal activity or willful misconduct; and
(ii) the aggregate maximum amount available to Section 3.1 hereof (relating Buyer Indemnitees for Claims for Indemnification pursuant to organizationSections 8.2(a) and (b) shall be limited to $3,000,000; provided, however, that the limitation set forth in this Section 3.3 hereof 8.6(a)(ii) shall not apply to Buyer Losses based upon, arising out of or resulting, directly or indirectly, from (relating to authorityA) which may be asserted without limitationa breach of Fundamental Representations, or (B) fraud, criminal activity or willful misconduct.
(b) No claims for indemnification in respect The amount of Sections 8.1(a) or 8.2(a)(i) any and all Buyer Losses shall be made after the datedetermined net of: (i) any amounts actually recovered by Buyer Indemnitees or Seller Indemnitees, if anyas applicable, on under insurance policies or from other collateral sources (such as contribution agreements or contractual indemnities of any Person which are contained outside of this Agreement) with respect to such Buyer Losses; and (ii) any Tax Benefit realized by a Buyer Indemnitee or a Seller Indemnitee, as applicable, provided that such Tax Benefit is deductible currently (not a deferred tax benefit) and does not place the applicable representation Buyer Indemnitee or warranty upon Seller Indemnitee, in the opinion of such indemnitee’s independent accounting firm, in an uncertain adverse tax position (i.e., doesn’t have substantial authority supporting such position or for which such claim was based ceases Buyer Indemnitee’s or Seller Indemnitee’s accounting firm or tax counsel, as applicable, does not believe satisfies the “more likely than not” standard). If an Indemnified Party recovers any amount under insurance policies or other collateral sources within two years after an indemnification payment is made to survive him or it pursuant to Section 8.6this Article VIII, the Indemnified Party shall promptly pay to the Indemnifying Party that made such indemnification payment the recovered amount; provided that in no event shall the amount of such payment to the Indemnifying Party exceed the amount of such indemnification payment. Any reduction of Losses under this paragraph shall be net of any related costs and expenses, including the aggregate cost of pursuing any related insurance claims and any related increases in insurance premiums or other chargebacks (it being agreed that neither party shall have any obligations to seek to recover any insurance proceeds in connection with making a claim under this Article VIII).
(c) Solely for purposes The representations, warranties and covenants of calculating Holding Company, and a Buyer Indemnitee’s right to indemnification with respect thereto, shall not be affected or deemed waived by reason of any investigation made by or on behalf of Buyer Indemnitee (including by any of its Representatives) or by reason of the amount fact that Buyer Indemnitee or any of Losses incurred arising out of its Representatives know or relating to should have known at any breach of a time that any such representation or warranty is, was or might be inaccurate or by reason of Buyer Indemnitee’s waiver of any condition set forth in Article VIII.
(d) The indemnification rights of the BuyerSeller Indemnitees under this Article VIII shall be subject to the same limitations on indemnification applicable to Buyer Indemnitees under this Article VIII.
(e) Notwithstanding anything to the contrary in this Agreement, the Sellers, or the Selling Shareholders all materiality qualifications (and not for purposes of determining whether or not a breach has occurred), the references by reference to “Material Adverse Effect” or material”, “all material respects”, “Material Adverse Change” or other “Material Adverse Effect”) contained in the representations and warranties set forth in this Agreement shall be disregarded solely for purposes of determining, under this Article VIII, the amount of any Losses arising out of or resulting from a breach of any such representation or warranty; provided that none of such materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregardeddisregarded for purposes of determining whether any such representation or warranty has been breached.
(df) Notwithstanding anything to the contrary in this Article VIII or any limitation provided hereinAgreement, nothing herein all references to “Acquisition Date” contained in the representations and warranties set forth in this Agreement shall prevent any be disregarded solely for purposes of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights determining, under this Agreement. In Article VIII, whether any representation and warranty set forth in this Agreement has been breached and the event amount of any Losses arising out of or resulting from a breach of any such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing partyrepresentation or warranty.
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Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers and the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII Sections 9.1 or 9.2, or any limitation provided hereinother term or condition of this Agreement, nothing herein or otherwise, which is or may appear to be to the contrary, Seller's and the Seller Shareholders' sole liability for any and all Section 9.2(a) Escrow Events and Section 9.2(b) Escrow Events shall prevent any be limited to, respectively, the Initial Escrow Period and the Secondary Escrow Period, as the case may be, and to Buyer's setting off the amount of the parties hereto claim arising from (ithe Section 9.2(a) bringing an action based upon allegations Escrow Event or Section 9.2(b) Escrow Event, as the case may be, against, and the recovery of fraud such amount from the forfeiture and cancellation of, the corresponding number of Initial Escrow Shares subject to the Initial Escrow Agreement or other willful Secondary Escrow Shares subject to the Secondary Escrow Agreement, as the case may be. For purposes of Section 9.1 and this section and for determining the number of Initial Escrow Shares or intentional misconduct Secondary Escrow Shares, as the case may be, which are subject to indemnification and forfeiture to Buyer and Acquisition Sub for any Section 9.2(a) Escrow Event, Section 9.2(b) Escrow Event or (iiSection 9.2(c) seeking injunctive Escrow Event, as the case may be, the Initial Escrow Shares or other equitable relief Secondary Escrow Shares, as the case may be, shall be valued at a per share price equal to enforce their rights under the average reported last sales price for the common stock of Buyer for the ten trading days ending on the Friday prior to the date the claim for indemnification is made by Buyer or Acquisition Sub in accordance with Section 9.5 of this Agreement. In Notwithstanding the event such action is broughtforegoing, however, if a Control Event occurs at any time during the prevailing party’s attorneys’ fees and costs Initial Escrow Period, there shall be paid by the nonprevailing party.no Secondary Escrow Agreement or Secondary Escrow Shares, and Seller and Seller Shareholders shall have no liability for any Section 9.2(b)
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Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers and Indemnitors shall only be required to indemnify the Selling Shareholders shall not be obligated Indemnitees under Section 1.2 with respect to provide any Indemnified Claims for which the Indemnitees have provided written notice to the Indemnitors, setting forth therein in reasonable detail the basis for such Indemnified Claims, on or prior to the twelve (12)-month anniversary of the Closing; provided, however, that, in the event that the Indemnitees notify the Indemnitors with respect to any Indemnified Claim on or prior to the twelve (12)-month anniversary of the Closing, then any such Indemnified Claim shall survive until resolved in accordance with the terms and conditions of this Agreement (the “Indemnification Period”).
(b) Notwithstanding anything to the contrary contained herein, no Indemnitee shall be entitled to receive indemnification for Losses incurred under Section 8.1(a) hereunder unless the aggregate amount of all Damages for all Indemnified Claims exceeds $500,000 (in which case all such Damages from the first dollar, together with all other Damages for Indemnified Claims shall then be recoverable (subject to the other limitations set forth in this Agreement, including Section 1.3(c)).
(c) In no event shall the aggregate amount of Damages for which each of the Indemnitors is liable pursuant to this Agreement exceed an amount equal to the product obtained by multiplying (i) ten percent (10%), by (ii) the aggregate number of shares of MAMP Common Stock and OP Units actually received by each such individual Indemnitor pursuant to the terms of the Merger Agreements (the resulting amount, such Indemnitor’s, the “Max Equity Pledge”). Notwithstanding anything contained herein to the contrary, the MAMP Indemnified Parties shall look first to available insurance proceeds (including, without limitation, any title insurance proceeds, if applicable), and then to the OP Units and/or shares of MAMP Common Stock held by the Indemnitors for indemnification under this Article 1. Following the Closing and the issuance of shares of MAMP Common Stock and the OP Units to the applicable Indemnitors, no Indemnitee shall have recourse to any other assets of the Indemnitors other than the shares of Common Stock and OP Units of the Indemnitors constituting each such Indemnitor’s Max Equity Pledge. The Parties acknowledge and agree that the Buyer shares of MAMP Common Stock and OP Units underlying the Max Equity Pledge shall be released to satisfy the obligations under this Agreement on a pro rata basis from each Indemnitor based on each such Indemnitor’s then-applicable Pro Rata Share. For purposes of the foregoing, each Indemnitor’s “Pro Rata Share” is entitled determined, at the applicable time of determination, by dividing (i) the then-current value of such Indemnitor’s portion of the Max Equity Pledge that has not already been released to recover obligations under this Agreement, by (ii) the then-current aggregate value of all Max Equity Pledge of all Indemnitors that has not already been released to satisfy obligations under this Agreement. In addition, for purposes of this Agreement, each share of MAMP Common Stock and each OP Unit constituting a portion of an Indemnitor’s Max Equity Pledge shall be valued at $3.44 per share of MAMP Common Stock and $3.44 per OP Unit, as applicable. In the event of any reclassification, recapitalization, stock split, stock dividend (including any dividend or distribution of securities convertible into MAMP Common Stock or OP Units) or subdivision with respect to MAMP Common Stock or OP Units, any change or conversion of MAMP Common Stock or OP Units into other securities, any non-cash extraordinary dividend or distribution with respect to the MAMP Common Stock or OP Units (or if a record date with respect to any of the foregoing should occur), after the date of this Agreement, equitable, appropriate and proportionate adjustments shall be made to the number of shares of MAMP Common Stock and OP Units subject to the Max Equity Pledge and to the deemed value thereof.
(d) The Indemnitors shall not have any obligation or liability under this Agreement or otherwise with respect to any Damages that are caused by the actions of any Indemnitee. If the amount of any Damages suffered by any Indemnitee is reduced at any time subsequent to any payment by an Indemnitor of any amounts in respect thereof, including as a result of all such claims exceeds $75,000 Damages being recovered from any other third party (including any insurer), then, in such event, an amount equal to the “Threshold”) and then amount of such indemnification shall relate reduction (not to all such Losses in excess of the Threshold; andexceed, in any event, the maximum aggregate obligation of amount so previously paid in respect thereof by any Indemnitor) shall promptly be repaid by the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid applicable Indemnitee to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitationapplicable Indemnitor.
(be) No claims If any fact, circumstance or condition forming a basis for indemnification in respect any Indemnified Claim under this Agreement shall overlap with any fact, circumstance, condition, agreement or event forming the basis of Sections 8.1(a) or 8.2(a)(i) any other Indemnified Claim under this Agreement, then there shall be made after no duplication in the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes calculation of calculating the amount of Losses incurred arising out the Damages. For the avoidance of or relating doubt, any Damages subject to any breach indemnification under this Agreement shall be determined without duplication of a representation or warranty by recovery due to the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not facts giving rise to such Damages constituting a breach has occurred)or inaccuracy of more than one representation, the references to “Material Adverse Effect” warranty, covenant or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregardedagreement.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
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Samples: Representation and Warranty Indemnification Agreement (MedAmerica Properties Inc.)
Limitations on Indemnification. The indemnification provided (i) Notwithstanding anything to the contrary set forth in this Agreement, nothing set forth in this Article 7 shall limit the liability of (A) any party if the Stock Purchase is not consummated, (B) the Selling Stockholders for any claims or causes of action arising out of fraud or intentional misrepresentation under applicable law by the Companies (or any of their respective agents) (prior to the Effective Time) or the Selling Stockholders (prior to the Effective Time) in Sections 8.1 connection with this Agreement, any other Company Document or the transactions contemplated hereby and 8.2 shall be thereby, or (C) the Purchaser for any claims or causes of action arising out of fraud or intentional misrepresentation under applicable law by the Purchaser (or any of its agents) (prior to the Effective Time) in connection with this Agreement, any other Company Document or the transactions contemplated hereby and thereby.
(ii) If the Stock Purchase is consummated, subject to the following limitations:
(a) The Sellers and the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect Article 7, including those of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization7.2(b)(iii) and through Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred7.2(b)(v), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, total Purchase Price shall be disregarded.
(d) Notwithstanding anything in this Article VIII or available to compensate the Purchaser Indemnified Parties for any limitation provided herein, nothing herein Indemnification Claims made by the Purchaser Indemnified Parties and the Purchaser shall prevent satisfy any indemnification obligations of the parties hereto Selling Stockholders first from the reduction of any unpaid principal and accrued interest outstanding under the Notes (i) bringing an action on a pro-rata basis based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreementthe Selling Stockholder’s Pro-Rata Portion). In the event that the amount of such action is broughtindemnification obligations exceeds the amount of unpaid principal and accrued interest outstanding under the Notes, the prevailing party’s attorneysSelling Stockholders shall satisfy the remaining portion of the indemnification obligation by (at the Selling Stockholders’ fees option) either (A) paying to Purchaser an amount of cash equal to such remaining portion of the indemnification obligation, or (B) the forfeiture of Purchaser Shares with a value equal to such remaining portion of the indemnified obligation (assuming a price per share for the Purchaser Shares of $3.85).
(iii) If the Stock Purchase is consummated, the Purchaser Indemnified Parties shall not be entitled to recover any Damages from the Selling Stockholders in respect of any Indemnification Claims under or pursuant to Section 7.2(a) in excess of an amount equal to the Maximum Indemnification Amount; provided, however, that notwithstanding the foregoing or anything to the contrary in this Agreement, (A) the preceding restrictions set forth in this Section 7.2(b)(iii) shall not in any way limit or otherwise restrict any right in respect of (x) any Indemnification Claims under or pursuant to Section 7.2(a)(ii), Section 7.2(a)(iv), Section 7.2(a)(v), Section 7.2(a)(vi), Section 7.2(a)(vii), Section 7.2(a)(viii) or Section 7.2(a)(ix) (y) any Indemnification Claims under Section 7.2(a)(i) to the extent brought with respect to Section 2.14 (Intellectual Property), or (z) any other claims or causes of action arising out of fraud or intentional misrepresentation under applicable law by the Company (or any of its agents) (prior to the Effective Time) or the Selling Stockholders; and costs (B) the Indemnified Parties shall not be precluded, restricted or otherwise limited in respect of bringing or participating in any claims or causes of action arising out of fraud or intentional misrepresentation or with respect to amounts recoverable against any Person arising out of the fraud or intentional misrepresentation by such Person.
(iv) If the Stock Purchase is consummated, the Purchaser Indemnified Parties shall not be entitled to recover any Damages from the Selling Stockholders in respect of any Indemnification Claims under or pursuant to Section 7.2(a) in excess of an amount equal to the total Purchase Price; provided, however, that notwithstanding the foregoing or anything to the contrary in this Agreement, (A) the preceding restrictions set forth in this Section 7.2(b)(iv) shall not in any way limit or otherwise restrict any right in respect of (x) any Indemnification Claims under or pursuant to Section 7.2(a)(iv), Section 7.2(a)(v), Section 7.2(a)(vi), Section 7.2(a)(vii), Section 7.2(a)(viii) or Section 7.2(a)(ix) or (y) any other claims or causes of action arising out of fraud or intentional misrepresentation under applicable law by the Company (or any of its agents) (prior to the Effective Time) or the Selling Stockholders; and (B) the Indemnified Parties shall not be precluded, restricted or otherwise limited in respect of bringing or participating in any claims or causes of action arising out of fraud or intentional misrepresentation or with respect to amounts recoverable against any Person arising out of the fraud or intentional misrepresentation by such Person.
(v) The Purchaser Indemnified Parties shall not be entitled to recover any Indemnification Claims under or pursuant to Section 7.2(a) unless and until all Damages for which the Purchaser Indemnified Parties would be entitled to indemnification under this Article 7 which are paid, sustained or incurred by the Purchaser Indemnified Parties (or any of them) exceeds $100,000 (the “Basket Amount”) in the aggregate, and if the aggregate of all such Damages paid, sustained or incurred by the Indemnified Parties (or any of them) exceeds the Basket Amount then the Purchaser Indemnified Parties shall be paid by entitled to indemnification for all such Damages from the nonprevailing partyfirst dollar of such Damages without regard to the Basket Amount; provided, however, that, notwithstanding the foregoing, the preceding restriction set forth in this Section 7.2(b)(v) shall not in any way limit or otherwise restrict any right in respect of (A) Indemnification Claims pursuant to Section 7.2(a)(iv), Section 7.2(a)(v), or Section 7.2(a)(vii), or Section 7.2(a)(viii), (B) Indemnification Claims pursuant to Section 7.2(a)(iii) to the extent relating to Post-Closing Covenants, (C) Indemnification Claims pursuant to Section 7.2(a)(vi) to the extent relating to income Taxes, or (D) any other claims or causes of action arising out of fraud or intentional misrepresentation under applicable law.
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Limitations on Indemnification. The indemnification provided for Notwithstanding anything in Sections 8.1 and 8.2 shall be subject this Section 6 to the following limitationscontrary:
(a) The Sellers and the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that Recourse by the Buyer is entitled to recover Indemnified Parties against the proceeds then remaining in the Indemnification Escrow Deposit shall be the Buyer Indemnified Parties’ sole and exclusive remedy in respect of all such claims exceeds $75,000 (the “Threshold”) and then such Stockholders’ indemnification shall relate obligations for the matters referred to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”6.2(a); provided, however, that the limitations limitation contained in this paragraph sentence shall not apply to Losses arising claims under Section 6.2(a) in respect of claims relating to misrepresentations and any breach or inaccuracy of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.a Fundamental Representation; and
(b) No claims for indemnification To the extent that the Buyer Indemnified Parties are entitled to recovery under Section 6 in excess of proceeds then remaining in the Indemnification Escrow Deposit, (i) the Buyer Indemnified Parties shall not be entitled to recover amounts directly from the Stockholders under this Section 6 in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the dateStockholders’ indemnification obligations until such time as the Indemnification Escrow Deposit has been fully exhausted; provided, if anyhowever, on which unless the applicable representation or warranty upon which Stockholders’ Representative has satisfied such claim was based ceases to survive Losses from the Stockholders’ Representative Expense Holdback Amount pursuant to Section 8.61.19, Buyer shall not be required to first proceed against the Indemnification Escrow Deposit prior to seeking from any Stockholder, and shall be permitted to proceed against any Stockholder without proceeding against the Indemnification Escrow Deposit, if any Buyer Indemnified Party incurs Losses arising out of Section 6.2(f) by virtue, and to the extent, of any undue benefit received by such specific Stockholder pursuant to the Closing Allocation Schedule or Section 6.2(g) by virtue, and to the extent, of the intentional fraud, willful breach or intentional misrepresentation of such specific Stockholder; (ii) for each such Loss a Stockholder shall only be liable for its Pro Rata Share of such Loss; and (iii) in no event shall the aggregate indemnification obligations of any Stockholder exceed the amount actually received by such Stockholder as Merger consideration hereunder (inclusive of its share of the Net Asset Escrow Deposit, Indemnification Escrow Deposit and Stockholders’ Representative Expense Holdback Amount actually received), except solely in the case of fraud, willful breach or intentional misrepresentation committed by such Stockholder.
(c) Solely The amount of the Indemnification Escrow Deposit then remaining on deposit with the Escrow Agent pursuant to the Escrow Agreement (after taking into account any amounts to be released to the Stockholders’ Representative pursuant to Section 1.19) shall be released to the Stockholders, based on their respective Pro Rata Share, no later than eighteen (18) months after the Closing Date in accordance with the terms of the Escrow Agreement; provided, however, if any claim or claims for purposes of calculating indemnification are pending on such date that is eighteen (18) months after the Closing Date, the amount released from the Indemnification Escrow Deposit to the Stockholders shall be reduced by the amount of Losses incurred arising out any such pending claim or claims, and any such amount so retained by the Escrow Agent shall be released upon final resolution of any such claim or claims; provided further, however, on the date that is twelve (12) months after the Closing, the amount of the Indemnification Escrow Deposit then remaining on deposit with the Escrow Agent pursuant to the Escrow Agreement in excess of the sum of (i) $5,000,000 (after taking into account any amounts to be released to the Stockholders’ Representative pursuant to Section 1.19) plus (ii) the amount of any unresolved claims, shall be released to the Stockholders, based on their respective Pro Rata Share in accordance with the terms of the Escrow Agreement.
(d) The right to indemnification, compensation or reimbursement or any other remedy based on representations, warranties, covenants and agreements in this Agreement or any other Transaction Document shall not be affected by any investigation conducted at any time, or any knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement or the Closing Date, with respect to the accuracy or inaccuracy of or relating to compliance with any breach of a representation such representation, warranty, covenant or warranty by the Buyer, the Sellers, or the Selling Shareholders agreement.
(and not for e) For purposes of determining whether an inaccuracy in any representations or not a breach has occurred)warranties, the references breach of or failure to “perform any covenants or agreement and calculating Losses under this Section 6 only, materiality, material adverse effect (including Material Adverse Effect” ) or “Material Adverse Change” similar qualifications limiting the scope of such representations, warranties, covenants or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, agreements shall be disregarded.
(df) Notwithstanding anything Subject to Section 6.5(g) and without limiting the effect of any other limitation contained in this Article VIII or any limitation provided hereinAgreement, nothing herein shall prevent any the indemnification obligations of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief Stockholders provided for in Section 6.2 will not apply, and the Indemnified Parties will not be entitled to enforce their exercise any indemnification rights under this Agreement. In , unless and until the event aggregate amount of Losses against which such action is broughtIndemnified Parties would otherwise be entitled to be indemnified under Section 6.2 exceeds $650,000 (the “Deductible”), after which the prevailing party’s attorneys’ fees and costs Indemnified Parties shall be paid entitled to indemnification for all of their Losses in excess of the Deductible; provided, however, that this Section 6.5(f) and the Deductible will not apply to any Excluded Matters.
(g) Any claim for Losses will be calculated (i) without regard to incidental, special, speculative, indirect or consequential damages, in each case that are not reasonably foreseeable (unless such damages are actually awarded to a third party by the nonprevailing party.a Governmental
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Limitations on Indemnification. The rights of Purchaser Indemnitees and Seller Indemnitees to indemnification provided for in Sections 8.1 and 8.2 shall be pursuant to the provisions of this Article VIII are subject to the following limitations:
(a) The Sellers and the Selling Shareholders Purchaser Indemnitees shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in any Losses pursuant to Section 8.2(a)(i) until the total amount of Losses which the Purchaser Indemnitees would be entitled to recover under Section 8.2(a)(i) with respect of to any and all such claims for indemnification thereunder, but for this Section 8.4(a), exceeds $75,000 800,000 (the “ThresholdDeductible”) ), and then such indemnification once the Deductible has been exceeded, the Purchaser Indemnitees shall relate only be entitled to all such recover Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”)Deductible; provided, however, that the limitations in this paragraph Deductible shall not apply to Losses arising in respect suffered or paid by any Purchaser Indemnitee as a result of claims relating to misrepresentations and the breach of warranties relating any representation or warranty made by Seller in Section 3.2, Section 3.3, Section 3.5(a) or Section 3.12, it being agreed that, in such circumstances, the applicable Purchaser Indemnitee shall, subject to Section 3.1 hereof (relating the other limitations set forth in this Article VIII, be entitled to organization) be indemnified and Section 3.3 hereof (relating to authority) which may be asserted without limitation.held harmless from the first dollar of such Losses;
(b) No the Seller Indemnitees shall not be entitled to recover any Losses pursuant to Section 8.2(b)(i) until the total amount of Losses which the Seller Indemnitees would be entitled to recover under Section 8.2(b)(i) with respect to any and all claims for indemnification thereunder, but for this Section 8.4(b), exceeds the Deductible, and once the Deductible has been exceeded, the Seller Indemnitees shall only be entitled to recover Losses in respect excess of Sections 8.1(a) the Deductible, provided, however, that the Deductible shall not apply to Losses suffered or 8.2(a)(i) shall be made after paid by any Seller Indemnitee as a result of the date, if any, on which the applicable breach of any representation or warranty upon which made by Purchaser in Section 4.2, Section 4.6, Section 4.7 or Section 4.8, it being agreed that, in such claim was based ceases circumstances, the applicable Seller Indemnitee shall, subject to survive pursuant the other limitations set forth in this Article VIII, be entitled to Section 8.6.be indemnified and held harmless from the first dollar of such Losses;
(c) Solely neither the Purchaser Indemnitees nor Seller Indemnitees shall be entitled to recover for purposes any particular Loss (including any series of calculating the amount related Losses) pursuant to Section 8.2(a)(i) or Section 8.2(b)(i), respectively, unless such Loss (including any series of Losses incurred arising out related Losses) equals or exceeds $10,000, and any such Loss (including any series of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and related Losses) below such threshold shall not be counted for purposes of determining whether the Deductible has been exceeded, provided that if such Loss (including any series of related Losses) exceeds such threshold then the applicable Purchaser Indemnitees or not a breach has occurred)the Seller Indemnitees, as the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAPcase may be, shall be disregarded.entitled to recover the full amount of such Loss (including any series of related Losses), subject to (and limited by) the other terms set forth in this Article VIII;
(d) Notwithstanding anything except in case of fraud, the sole and exclusive source of recovery in respect of any indemnification claim made by any Purchaser Indemnitee pursuant to this Article VIII or any limitation provided hereinshall be the Closing Escrow Amount, nothing herein and in no event shall prevent any of the parties hereto from (i) bringing an action based upon allegations Seller or any Affiliate thereof or any other Person have any direct liability or obligation in respect of fraud or other willful or intentional misconduct any such indemnification claim, or (ii) seeking injunctive the Purchaser Indemnitees be entitled to recover any Losses in respect of any indemnification claim made pursuant to this Article VIII from any source other than the Closing Escrow Account or other equitable relief in an aggregate amount in excess of the Closing Escrow Amount on deposit in the Closing Escrow Account as of any applicable date of determination, it being agreed that on the date (if any) that the Closing Escrow Amount is reduced to enforce their zero (0) for any reason (including due to the release of the Closing Escrow Amount from the Closing Escrow Account in accordance with the terms of the Closing Escrow Agreement), the Purchaser Indemnitees shall have no further rights to indemnification pursuant to this Article VIII;
(e) notwithstanding anything to the contrary contained in this Agreement or otherwise, the Purchaser Indemnitees shall not be entitled to be indemnified or held harmless under this Agreement (including pursuant to a claim of breach of representation or warranty) for any Taxes (or Losses relating to Taxes) (i) incurred in any tax period other than any tax period ending on or before the Closing Date, (ii) attributable or relating to transactions outside of the ordinary course of business that occur on the Closing Date after the Closing and not contemplated by this Agreement or to actions related to debt incurred in connection with the transactions contemplated by this Agreement. In , (iii) which are Transfer Taxes for which Purchaser is responsible pursuant to Section 9.4, or (iv) for the event existence or non-existence of any Tax attribute;
(f) the maximum Losses indemnifiable pursuant to Section 8.2(b) shall be an amount equal to $6,660,000, except in the case of a breach of any of the covenants set forth in Sections 5.10, 5.11 and 5.12, with respect to which the limitation on liability set forth in this clause (f) shall not apply;
(g) the amount of any and all Losses shall be determined net of (i) any amounts recovered by the Purchaser Indemnitees or Seller Indemnitees, as applicable, under insurance policies or from other collateral sources (such action as contractual indemnities of any Person which are contained outside of this Agreement) with respect to such Losses, and (ii) any Tax benefits realizable with respect to such Losses;
(h) the Purchaser Indemnitees shall not be entitled to indemnification pursuant to this Article VIII for any Loss to the extent that such Loss was included in the computation of Net Working Capital; and
(i) 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 this Article VIII, such Purchaser Indemnitee shall promptly pay over to the Escrow Agent for re-inclusion in the Closing Escrow Account the amount so recovered (after deducting therefrom the amount of any reasonable out-of-pocket, third-party expenses incurred by such Purchaser Indemnitee in procuring such recovery), but not in excess of the sum of (A) any amount previously so paid out of the Closing Escrow Amount to or on behalf of such Purchaser Indemnitee in respect of such matter and (B) any amount expended by Seller or any Seller Indemnitee in pursuing or defending any claim arising out of such matter; provided, however, that if such recovery is broughtmade after the Release Date, the prevailing party’s attorneys’ fees and costs such amounts shall be paid by directly to Seller; provided further, however, that if, as of the nonprevailing partyRelease Date, there shall be claims pending against the Escrow Amount, then only the amount that is so recovered that is in excess of the aggregate amount of all such pending claims shall be paid to Seller and the balance shall promptly paid over to the Escrow Agent for re-inclusion in the Closing Escrow Account in accordance with the terms set forth herein.
Appears in 1 contract
Samples: Membership Interest Purchase Agreement (International Shipholding Corp)
Limitations on Indemnification. The No Indemnified Party shall assert any claim (other than a Third Party Claim) for indemnification provided for in Sections 8.1 and 8.2 hereunder until such time as the aggregate of all claims which such Indemnified Party may have against an Indemnifying Party shall exceed $800,000 (the "Basket Amount"), at which time an Indemnified Party shall be subject entitled to seek indemnification pursuant to this Article 12, but only to the following limitations:
(a) The Sellers extent that such claims, in the aggregate, exceed the Basket Amount. For purposes of this Section 12.5, the Stockholders shall 57 be considered to be a single Indemnifying and the Selling Shareholders Indemnified Party and UniCapital and Newco shall not be obligated considered to provide be a single Indemnifying and Indemnified Party. Notwithstanding any such indemnification other term of this Agreement, in no event shall any Stockholder be liable under this Article 12 for Losses incurred under Section 8.1(a) unless an amount which exceeds the aggregate amount that value (determined at the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”Merger Effective Date) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, Merger Consideration received by such Stockholder under this Agreement. Notwithstanding anything to the contrary contained in any eventthis Agreement, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations upon indemnification contained in this paragraph Section 12.5 shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to (i) any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (representations and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any warranties of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct Individual Stockholders contained in Sections 6.4, 6.5, 6.14, 6.25, 6.27 and 6.33 hereof or (ii) seeking injunctive or other equitable relief to enforce their rights any breach by UniCapital of any of its covenants under this Agreement. In Notwithstanding the event such action is broughtforegoing, the prevailing party’s attorneys’ fees Basket Amount shall automatically increase by an amount (such amount is referred to as the "Basket Adjustment") equal to one percent of any Earn-Out Consideration that is finally determined to be due to the Stockholders pursuant to Section 2.5 hereof. If the Basket Amount is adjusted pursuant to the preceding sentence after such time as any Indemnified Party, pursuant to this Article 12, has collected an amount in excess (such excess amount is referred to as the "Excess Indemnity") of the Basket Amount (prior to giving effect to the applicable Basket Adjustment), then such Indemnified Party, within 10 business days after the final determination of such Earn-Out Consideration, shall pay to the Indemnifying Party an amount equal to the lesser of applicable Basket Adjustment or the Excess Indemnity. In addition, notwithstanding any provision of this Agreement to the contrary, for the purposes of preventing a double recovery the Stockholders shall not be obligated to indemnify UniCapital or any other indemnified party pursuant to Section 12.1 or 12.2 with respect to any particular act, omission, condition or event if and costs shall be paid by to the nonprevailing partyextent that the loss resulting or arising from such act, omission, condition or event has, directly or indirectly, been taken into account in the computation of any Net Worth Deficiency provided for in Section 3.1.
Appears in 1 contract
Samples: Agreement and Plan of Contribution (Unicapital Corp)
Limitations on Indemnification. The Notwithstanding any other provision of this Agreement, the indemnification obligations provided for in Sections 8.1 and 8.2 this Agreement shall be subject to the following limitations:limitations and conditions set forth in this Section 10.3.
(a) The Any claim by a Buyer Indemnitee for indemnification pursuant to Section 10.1(a) shall be required to be made by delivering written notice to Sellers and no later than the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(atwelve (12) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess month anniversary of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”)Closing Date; provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating that, any claim by a Buyer Indemnitee for indemnification pursuant to Section 3.1 hereof (relating 10.1(a) with respect to organization) and Section 3.3 hereof (relating to authority) which any of the Fundamental Representations may be asserted without limitationmade at any time. Any covenants made by any Seller, or the Company herein which by their terms are to be performed following the Closing shall survive the Closing in accordance with their respective terms.
(b) No The Buyer Indemnitees will make no individual claims unless in excess of Ten Thousand Dollars ($10,000) and shall not be entitled to indemnification for any Losses arising under Section 10.1(a) until the aggregate amount of the Buyer Indemnitees’ claims for indemnification in respect of Sections 8.1(aunder Section 10.1(a) or 8.2(a)(i) exceeds the Indemnification Threshold and thereafter the Buyer Indemnitees shall be made after entitled to indemnification under Section 10.1(a) only for amounts in excess of the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6Indemnification Threshold.
(c) Solely for purposes The maximum aggregate indemnification amount to which the Buyer Indemnitees may be entitled under Sections 10.1(a) as of calculating any given date shall be the amount of Losses incurred arising out of or relating to any breach of a representation or warranty then-remaining Indemnity Cap Amount which shall be supported in part by the BuyerHoldback Amount; provided, that (i) the Sellersmaximum aggregate indemnification amount to which the Buyer Indemnitees may be entitled under Sections 10.1(a) with respect to the Fundamental Representations shall not be limited, or and (ii) the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, Buyer Indemnitees shall be disregardedentitled to seek recovery for any Losses for which the Buyer Indemnitees are entitled to indemnification in excess of the Holdback Amount as offsets against any 2022 True-Up Payment, 2023 Accelerated True-Up Payment, and/or 2023 True-Up Payment or from Sellers directly.
(d) Notwithstanding anything in The Buyer Indemnitees shall not be entitled to indemnification under this Agreement if, and to the extent that, the Losses are reflected on the Final Adjustment Statement.
(e) The Buyer Indemnitees and the Seller Indemnitees shall take commercially reasonable steps to mitigate any Loss subject to Section 10.1 or Section 10.2, as the case may be, upon becoming aware of any event which would reasonably be expected to, or does give rise thereto.
(f) The amount of Losses payable by an indemnitor under this Article VIII or any limitation provided herein, nothing herein 10 shall prevent any of the parties hereto from be (i) bringing reduced by any insurance proceeds received with respect to the claim for which indemnification is sought, less any fees and costs associated with recovering such proceeds, and (ii) reduced by any amounts recovered from any third parties, by way of indemnification or otherwise, with respect to the claim for which indemnification is sought, less any fees and costs associated with recovering such proceeds. If any payment is made to an indemnitee in respect of Losses after such Losses have been recovered from the indemnitor, the indemnitee shall promptly reimburse the indemnitor upon receipt of such payment.
(g) The parties hereto acknowledge and agree that with respect to any claims for indemnification permitted pursuant to this Agreement, the survival periods set forth in Section 10.3(a) shall govern when any such claim may be brought and shall replace and supersede any statute of limitations that may otherwise be applicable.
(h) Notwithstanding the fact that any indemnitee may have the right to assert claims for indemnification under or in respect of more than one provision of this Agreement in respect of any fact, event, condition or circumstance, no indemnitee shall be entitled to recover the amount of any Loss suffered by such indemnitee more than once, regardless of whether such Loss may be as a result of a breach of more than one representation, warranty, obligation or covenant or otherwise. In addition, any liability for indemnification hereunder shall be determined without duplication of recovery by reason of the state of facts giving rise to such liability, or a breach of more than one representation, warranty, covenant or agreement, as applicable.
(i) The limitations set forth in this Section 10.3 shall in no way limit the rights of the Buyer Indemnitees with respect to (i) any claims of, or causes of action based upon allegations of arising from, fraud or other willful claims of, or intentional misconduct causes of action for which the sole remedy sought is equitable relief or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreementany claims of action arising from Section 10.1(b). In the event such action is brought, the prevailing party’s attorneys’ fees and costs Buyer Indemnitees shall be paid by entitled to seek recovery for any Losses for which the nonprevailing partyBuyer Indemnitees are entitled to indemnification arising from Section 10.1(b) in excess of the Holdback Amount as offsets against any 2022 True-Up Payment, 2023 Accelerated True-Up Payment, and/or 2023 True-Up Payment or from Sellers directly.
Appears in 1 contract
Samples: Membership Interest Purchase Agreement (DecisionPoint Systems, Inc.)
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers and the Selling Shareholders shall Parent will not be obligated entitled to provide any such indemnification be indemnified for Losses incurred under with respect to the matters described in Section 8.1(a) unless 7.02 for any Loss except to the aggregate amount that extent the Buyer is entitled to recover in respect total of all Losses with respect to such claims matters, in the aggregate, exceeds $75,000 400,000 (the “ThresholdBasket”) and then such indemnification ), at which time Parent shall relate have the right to all set-off only the full amount of such Losses (i.e., and not just the excess over the Basket) in excess of the Threshold; andBasket against the Milestone Consideration in compliance with Section 7.06 in the order such Milestone Consideration becomes due, until the full amount of Parent’s indemnifiable Losses shall have been so set-off against the Milestone Consideration in any eventcompliance with Section 7.06. Notwithstanding the foregoing, Appraisal Rights Payments shall not be subject to or counted towards such Basket and may be set-off against the Milestone Consideration in compliance with Section 7.06. Notwithstanding anything to the contrary herein, the maximum aggregate obligation amount of Losses that may be set-off against and reduce the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid Milestone Consideration pursuant to the Sellers this Article VII is limited to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities $5,000,000 (the “MaximumIndemnity Cap”); provided. For the avoidance of doubt, in no event shall any Losses or other amounts be set-off against or reduce the Merger Consideration pursuant to this Article VII (individually or together with all previous amounts that were set-off against or reduced the limitations Milestone Consideration) by an aggregate amount in this paragraph excess of the Indemnity Cap. Notwithstanding the foregoing, neither the Basket nor the Indemnity Cap shall not apply to any Losses arising in respect of claims relating to misrepresentations and resulting from (1) fraud, (2) any breach of warranties relating the Fundamental Representations, (3) the adjustments set forth in Section 1.13 with respect to Section 3.1 hereof Closing Cash and Estimated Closing Cash, (relating to organization4) and Section 3.3 hereof Indemnified Taxes or (relating to authority5) which may be asserted without limitationConsideration Spreadsheet Losses.
(b) No In addition to the foregoing limits, except in the case of fraud, Parent acknowledges that, from and after the Closing, the sole and exclusive remedy of Parent with respect to claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) indemnifiable Losses pursuant to this Article VII shall be made after to set-off the dateamount of such Losses (subject to the Indemnity Cap, if any, on applicable) against the Milestone Consideration not yet paid to the Exchange Agent for the benefit of the Stockholders (but not against Milestone Consideration for which payment to the Exchange Agent for further distribution to the applicable representation or warranty upon Stockholders is past due), in the order in which such claim was based ceases Milestone Consideration becomes due, all in compliance with Section 7.06. Except in the case of fraud, no amount previously paid or delivered by the Parent or Surviving Company hereunder shall be subject to survive pursuant to Section 8.6recovery by Parent, Merger Sub, Merger Sub II, Surviving Company, any Affiliate of Parent or Merger Sub or Merger Sub II or Surviving Company, or any Person claiming by or through Parent, Merger Sub, Merger Sub II, Surviving Company or any Affiliate of Parent or Merger Sub or Merger Sub II or Surviving Company.
(c) Solely for purposes Parent shall take, and cause its Affiliates to take, all commercially reasonable steps to mitigate any Loss upon becoming aware of calculating any event or circumstance that would be reasonably expected to, or does, give rise thereto. Notwithstanding anything contained herein to the contrary, the amount of Losses subject to indemnification under this Article VII shall be calculated after giving effect to (i) any insurance proceeds actually received by Parent (or any of its Affiliates) with respect to such Losses, less costs incurred arising out to obtain such insurance proceeds, (ii) any recoveries which are obtained by Parent (or any of or relating its Affiliates) from any other third party, less costs to any breach of a representation or warranty by the Buyer, the Sellersobtain such recoveries, or (iii) any Tax refunds or actual reductions in Taxes realized by Parent in the Selling Shareholders (and not for purposes tax year in which the Loss was incurred or in the immediately succeeding tax year as a result of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts incurring such as GAAP, shall be disregardedLoss.
(d) Notwithstanding anything The right of Parent to recover for indemnifiable Losses pursuant to this Article VII shall not be affected by any investigation conducted or any knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement or the Closing Date, with respect to the accuracy or inaccuracy of or compliance with any representation, warranty, covenant or obligation of Company herein.
(e) For purposes of determining the amount of Losses subject to indemnification under this Article VII, but not for determining whether a breach of any representation or warranty has occurred, the representations and warranties of the Parties in this Article VIII Agreement shall not be deemed to be qualified by any references to materiality or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing partyMaterial Adverse Effect.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 Indemnification under this Article 11 shall be subject to the following limitationslimited as follows:
(a) The Sellers and the Selling Shareholders No indemnification shall not be obligated to provide any such indemnification made for Losses incurred under unless a written claim for indemnification is made (identifying and describing such claim with reasonable specificity) not later than the applicable survival periods set forth in Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation11.4.
(b) No claims Neither Seller nor Parent shall be responsible for the indemnification of the Purchaser Indemnified Parties for any Losses under this Article 11 (except for indemnification for any Losses under Section 11.1(b) in respect of Sections 8.1(a) or 8.2(a)(iwhich case the limitation in this Section 11.5(b) shall not apply), unless and until (i) the aggregate amount of all indemnifiable Losses of the Purchaser Indemnified Parties hereunder, plus (ii) the aggregate amount of all indemnifiable Losses of the Buyer Indemnitees (as defined in the Stock Purchase Agreement) under Article 8 of the Stock Purchase Agreement (with the third sentence in Section 8.4(b) of the Stock Purchase Agreement being incorporated herein by reference), plus (iii) the aggregate amount of all indemnifiable Losses with respect to Environmental Claims of the Tenant Indemnitees (as defined in the Rollover Lease) under Section 27(a)(ii) of the Rollover Lease, in the aggregate exceeds Two Hundred Fifty Thousand Dollars ($250,000) (the "Seller's Threshold Amount"), in which case, Seller and Parent together shall only be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6liable for indemnifiable Losses in excess of Seller's Threshold Amount. Claims thereafter may be asserted regardless of amount.
(c) Solely The total liability of Seller and Parent and/or any of their Affiliates (or permitted assignees hereunder or under the Stock Purchase Agreement) for purposes indemnification under this Article 11, and under Article 8 of calculating the Stock Purchase Agreement, and for indemnification for all indemnifiable Losses with respect to Environmental Claims of the Tenant Indemnitees (as defined in the Rollover Lease) under Section 27(a)(ii) of the Rollover Lease, shall in no event exceed an aggregate amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders Twenty Million Dollars (and not for purposes of determining whether or not a breach has occurred$20,000,000), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative termsexcept for indemnification for any Losses under Section 11.1(b), including as expressed in accounting concepts such as GAAP, which case there shall be disregardedno limitations on the total liability of Seller and Parent, and except for those items referred to in clauses (i) and (ii) of Section 8.4(c) of the Stock Purchase Agreement to the extent provided in the Stock Purchase Agreement.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein Purchaser shall prevent any not be responsible for the indemnification of the parties hereto from (iSeller Indemnified Parties for any indemnifiable Losses under Section 11.2(a) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees unless and costs shall be paid by the nonprevailing party.until the
Appears in 1 contract
Samples: Real Estate Purchase Agreement (Scott Technologies Inc)
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers Company and the Selling Shareholders SCC shall not be obligated required to provide make any indemnification payment pursuant to Section 5.2 for any Breach of any of their representations and warranties until such indemnification for Losses time as the total amount of all Damages (including the Damages arising from such Breach and all other Damages arising from any other Breaches of any representations or warranties) that have been suffered or incurred under Section 8.1(a) unless by any one or more of the aggregate amount that Purchaser Indemnitees, or to which any one or more of the Buyer is Purchaser Indemnitees has or have otherwise become subject, exceeds $50,000 in the aggregate, at which time such Indemnitees shall be entitled to recover in respect be indemnified against only the amount of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses Damages in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation$50,000.
(b) No claims for Purchaser shall not be required to make any indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive payment pursuant to Section 8.65.3 for any Breach of any of its representations and warranties until such time as the total amount of all) Damages (including the Damages arising from such Breach and all other Damages arising from any other Breaches of any representations or warranties) that have been suffered or incurred by any one or more of the Seller Indemnitees, or to which any one or more of the Seller Indemnitees has or have otherwise become subject, exceeds $50,000 in the aggregate, at which time such Indemnitees shall be entitled to be indemnified against only the amount of such Damages in excess of $50,000.
(c) Solely for purposes The obligations of calculating the amount of Losses incurred arising out of or relating parties hereto to indemnify and hold harmless a Person, pursuant to Section 5.2(a)(i) and 5.3(a) above, shall terminate when the applicable representation and warranty terminates pursuant to Section 5.1(a) above; provided however, such obligation to indemnify and hold harmless shall not terminate with respect to any breach matter about which an Indemnitee shall have, before the expiration of the applicable time period, delivered written notice alleging the existence of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (Breach of any of such representations and not warranties and asserting a claim for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregardedrecovery under Section 5.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any The obligations of the parties hereto from Company and SCC to indemnify and hold harmless any Purchaser Indemnitee pursuant to Section 5.2(f)(i) shall be limited to the minimum extent required to satisfy and discharge, in full, any such claim or Proceeding contemplated by Section 5.2(f) up to fifty percent (i50%) bringing an action based upon allegations of fraud or other willful or intentional misconduct or the first Two Hundred Thousand Dollars ($200,000) of Damages and (ii) seeking injunctive or other equitable relief shall terminate one year after the Closing; provided, however, such obligations shall not terminate with respect to enforce their rights any matter contemplated by Section 5.2(f) about which an Indemnitee shall have, before the expiration of such one-year period, delivered written notice of such Liability asserting a claim for recovery under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing partySection 5.2(f).
Appears in 1 contract
Limitations on Indemnification. The Purchaser, and the other Persons or entities indemnified hereunder shall not assert any claim or be entitled to indemnification provided for in Sections 8.1 and 8.2 against the Seller or the Members until such time as the aggregate of all claims which such persons may have against the Seller or the Members shall exceed $10,000 (the "Indemnification Threshold"), whereupon such claims shall be subject to the following limitations:
(a) The Sellers and the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses indemnified in excess of the Indemnification Threshold; and. Neither the Seller nor the Members shall assert any claim for indemnification against the Purchaser until such time as the aggregate of all claims which the Seller or the Members may have against the Purchaser shall exceed the Indemnification Threshold, whereupon such claims shall be indemnified in any event, the maximum aggregate obligation excess of the Sellers and Indemnification Threshold. The limitation on the Selling Shareholders hereunder assertion of claims for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations indemnification contained in this paragraph shall not apply only to Losses arising claims based upon inaccuracies in, or breaches of, representations and warranties contained in respect of claims relating this Agreement or any document, instrument, certificate or other item required to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive furnished pursuant to Section 8.6.
(c) Solely for purposes of calculating this Agreement or in connection with the amount of Losses incurred arising out of or relating to any breach of a representation or warranty transaction contemplated by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is broughtaddition, the prevailing party’s attorneys’ fees and costs Indemnification Threshold shall be paid separate and apart from the Rework Threshold and any claims in connection with the Rework Expenses shall not apply to the Indemnification Threshold. No person shall be entitled to indemnification under this Article 10 if and to the extent that such person's claim for indemnification is directly or indirectly related to a breach by such person of any representation, warranty, covenant or other agreement set forth in this Agreement. Notwithstanding any other term of this Agreement, the Seller and the Members on the one hand, and the Purchaser on the other hand, shall not be liable under this Article 10 for an amount which exceeds $625,000. No claim under this Article 10 shall be made unless an Indemnity Notice, or a Claim Notice (as applicable) has been given prior to the applicable survival period. In computing the amount of any Indemnifiable Loss which is sustained, suffered or incurred by the nonprevailing Indemnified Party, the Indemnifying Party shall be given the benefit of insurance proceeds, if any (up to a maximum equal to the amount of the Indemnifiable Loss), actually received by the Indemnified Party, reduced by any and all out-of-pocket costs, legal or otherwise, incurred by the Indemnified Party in the collection of such insurance proceeds; it being understood that the other party shall at no time be deemed to be a third-party beneficiary of any such insurance. Further, the parties acknowledge that due to the uncertainties of collection of any such insurance proceeds, the potential availability of insurance proceeds will not abrogate a party's responsibility to reimburse the Indemnified Party for any Indemnifiable Loss sustained, suffered or incurred, as and when such Indemnifiable Loss is sustained, suffered or incurred; it being understood that if insurance proceeds are thereafter received by the Indemnified Party with respect to such Indemnifiable Loss, the proceeds of such insurance will be utilized to reimburse the Indemnifying Party for any payments made on account of such Indemnifiable Loss, with the remainder of any such insurance proceeds to be retained by the Indemnified Party. Purchaser shall use commercially reasonable efforts to obtain insurance proceeds which may be available to cover an Indemnifiable Loss on behalf of Seller and the Members. The Indemnifying Party shall have no obligation to indemnify the Indemnified Party for consequential damages, special damages, incidental damages, indirect damages, lost profits or similar items. The Indemnified Party shall not bring a claim or be entitled to indemnification with respect to any facts or circumstances resulting in a breach of any representation, warranty, covenant or agreement of which the Indemnified Party had actual knowledge on or before the Closing Date. To the extent that an Indemnifying Party discharges any claim for indemnification hereunder, such Indemnifying Party shall be subrogated to all rights of the Indemnified Party against third parties. The indemnification rights of the parties under this Article 10 are exclusive of other rights and remedies that the parties may have under this Agreement (but for this provision), at law or in equity or otherwise with respect to the transactions provided for herein, except as to rights which may be exercised against a party on account of such party's fraud.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers No claim for indemnification with respect to a breach of a representation and warranty shall be made under this Agreement after the Selling Shareholders shall not be obligated applicable Survival Date unless prior to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that Survival Date the Buyer is entitled to recover in respect Indemnitee or the Seller Indemnitee, as the case may be, shall have given the Seller or the Buyer, as the case may be, written notice of all such claims exceeds $75,000 (the “Threshold”) and then such claim for indemnification shall relate to all such Losses in excess based upon actual loss sustained, or potential loss anticipated, as a result of the Threshold; andexistence of any claim, in demand, suit, or cause of action against such Buyer Indemnitee or Seller Indemnitee, as the case may be. No claim for indemnification pursuant to Section 9.2(d) or Section 9.2(c) insofar as such claim relates to a breach of Section 9.6 below shall be made by any event, Buyer Indemnitee after the maximum aggregate obligation [***] anniversary of the Sellers and Closing Date unless prior to such date the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof Buyer Indemnitee shall not exceed the Purchase Price paid to have given the Sellers to the date written notice of such Loss plus the cost associated with the assumption claim for indemnification based upon actual loss sustained, or potential loss anticipated as a result of the Assumed Liabilities (the “Maximum”); providedexistence of any claim, that the limitations in this paragraph shall not apply to Losses arising in respect demand, suit, or cause of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitationaction against such Buyer Indmenitee.
(b) No The Sellers shall have no indemnification liability under this Agreement unless and until (and only to the extent that) all claims with respect to such Buyer's Damages pursuant to this Agreement and for indemnification "Buyer's Damages" under the Arngar Stock Purchase Agreement (as defined on Exhibit A-2) ----------- and "Losses" under the Xxxxxx Asset Purchase Agreement (as defined on Exhibit ------- A-2) exceed a cumulative aggregate total of [***] (the "Basket"); provided, --- ------ -------- however, the foregoing Basket limitation shall not apply to (1) claims under ------- Sections 9.2(b), (2) claims under Section 9.2(c), in respect so far as such claims relate to a breach of Sections 8.1(aSection 9.6 below, (3) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive claims pursuant to Section 8.69.2(d) through (f), or (4) claims based upon fraud. With respect to any claim for indemnity under Section 9.2(a) above, if the matter is also the basis for a claim for indemnity under any other provision of Section 9.2 for which the Basket limitation is not applicable, the Basket limitation shall not be applicable to such claim.
(c) Solely Except in the case of claims based upon fraud, the aggregate indemnification liability of the Seller under this Agreement and the "Seller" under the Arngar Stock Purchase Agreement and the "Sellers" and the "Stockholder" under the Xxxxxx Asset Purchase Agreement shall be [***], which amount is inclusive of indemnification obligations contemplated by the Environmental Indemnification Cap (as defined below). Notwithstanding the foregoing, the Seller shall have no indemnification obligations hereunder with respect to indemnification obligations contemplated by the Environmental Indemnification Cap to the extent such indemnification obligations would require payments by the Seller in [***] These portions of this exhibit have been omitted and filed separately with the Commission pursuant to a request for purposes confidential treatment. excess of calculating the Environmental Indemnification Cap. As used in this Agreement, the "Environmental Indemnification Cap" shall mean the obligations under this --------------------------------- Agreement and the Other Agreements to (i) remediate environmental contamination, including, without limitation, pursuant to (A) Paragraph 5(e) of the "Owned Real Property Rider" under the Arngar Stock Purchase Agreement, (B) Paragraph 7(e) of the respective Real Property Purchase Agreements, (C) Section 9.6 below, (D) Section 9.6 of the Arngar Stock Purchase Agreement or (E) Section 10.9 of the Xxxxxx Asset Purchase Agreement, and/or (ii) to indemnify for Environmental Liabilities or breaches of representations or warranties with respect to environmental matters, in either case with respect to the Owned Real Property and/or the Leased Premises, and the "Owned Real Property" and/or the "Leased Premises" under each of the Arngar Stock Purchase Agreement and the Xxxxxx Asset Purchase Agreement, in the maximum aggregate amount of [***].
(d) In connection with any claim for indemnification with respect to which the Buyer or the Seller, as the case may be, have an enforceable claim against any third party (contractual or otherwise) on account of the item for which such claim for indemnification has been made, the Buyer or the Seller, as the case may be, shall, at the time of payment by the indemnifying party of the claim for indemnification, assign to the other party such claim; provided, however, the assignee of such claim shall further protect -------- ------- and indemnify the assignor in connection with the pursuit by the assignee of such claim against such third party; provided, further, however, this clause (d) -------- ------- ------- shall not require the assignment of any claims under any insurance policy.
(e) No Buyer Indemnitee or Seller Indemnitee, as the case may be, shall be entitled to indemnification pursuant to this Article 9 to the extent of any insurance (including title insurance) proceeds received by the Buyer Indemnitee or Seller Indemnitee, as the case may be, in connection with the facts giving rise to such indemnification (and the Buyer Indemnitee or Seller Indemnitee shall seek full recovery under all insurance policies covering any Buyer's Damages or Seller's Damages, as the case may be, to the extent permitted), provided that this clause (e) shall not be applicable to the extent it would give the insurance company a basis to deny coverage with respect to the particular claim involved.
(f) No Buyer Indemnitee shall be entitled to indemnification pursuant to this Article 9 to the extent that an applicable reserve for such Buyer' Damages was included in the Closing Balance Sheet.
(g) With respect to the Seller's obligations to pay Buyer's Damages pursuant to Section 9.2 of this Agreement, to the extent that the Escrow Shares remain held pursuant to the terms of the Escrow Agreement, the Buyer shall first make demand under the Escrow Agreement for delivery of that number of Escrow Shares, up to all of the Escrow Shares, obtained by dividing the amount of Losses incurred arising out the Buyer's Damages by the Market Price as of the date of delivery, rounded to the next whole share, or relating substituted cash as provided in Section 5(j) of the Escrow Agreement. To the extent that the Buyer's Damages exceed the value of the Escrow Shares delivered to any breach the Buyer, determined based upon the Market Price of such shares as of the date of delivery, or such substituted cash, or the Escrow Shares no longer remain held pursuant to the terms of the Escrow Agreement, the Seller shall be obligated to return promptly to the Buyer Registered Common Shares having a representation value, determined as aforesaid, equal to the unpaid portion of such Buyer's Damages and, failing to do so, to pay promptly to the Buyer, in cash or warranty [***] These portions of this exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment. by wire transfer to an account or accounts designated by the Buyer, the Sellers, or amount of the Selling Shareholders (and not for purposes unpaid portion of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregardedBuyer's Damages.
(dh) Notwithstanding anything The provisions of this Article 9 shall be effective upon consummation of the Closing, and prior to the Closing, shall have no force and effect. Following the Closing, except in the case of claims based upon fraud, the sole and exclusive remedy for the breach of any representation, warranty or covenant contained in, or otherwise relating to, this Agreement shall be indemnification provided for in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers and maximum aggregate indemnification liability of the Selling Shareholders Transferor under this Agreement shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(aas follows:
(i) unless sixty million French Francs (FRF 60,000,000) in the aggregate amount that for (a) all breaches of representations and warranties pursuant to this Agreement, and (b) Remedial Actions or Environmental Indemnifiable Losses pertaining to the Buyer is entitled Release of Contaminants related to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess conduct of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid Gallium Business prior to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”)Transfer Date; provided, however, that in no event shall the limitations Transferor's liability under this Agreement for Remedial Actions or Environmental Indemnifiable Losses pertaining to the Release of Contaminants related to the Gallium Business exceed the following maximum amounts: Year 1 FRF 60 million Year 2 FRF 54 million Year 3 FRF 48 million Year 4 FRF 42 million Year 5 FRF 36 million Year 6 FRF 30 million Year 7 FRF 24 million Year 8 FRF 18 million Year 9 FRF 12 million Year 10 FRF 6 million Year 11 FRF 0
(ii) unlimited for Environmental Indemnifiable Losses pertaining to the Release, prior to the Transfer Date, of Contaminants not related to the Gallium Business; provided, however, that in the event the Environmental Indemnifiable Loss results from a spill, an accident, a permanent or temporary cessation (other than a cessation of the Gallium Business brought about as a direct result of the Transferor's or its affiliates actions hereunder or under any of the Related Agreements) of the Gallium Business or any material change in the conduct of the Gallium Business, after the Transfer Date, the Transferor's liability pursuant to this paragraph clause (ii), shall not apply be limited to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof sixty million French Francs (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitationFRF 60,000,000).
(b) No claims for indemnification in respect The maximum aggregate liability of Sections 8.1(a) or 8.2(a)(i) GEO and the Buyer under this Agreement shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases equal to survive pursuant to Section 8.6sixty million French Francs (FRF 60,000,000).
(c) Solely Subject to the last sentence of this Section 9.3(c), neither the Buyer or GEO, nor the Transferor shall be entitled to indemnification for purposes breach of calculating representations and warranties under SECTION 9.1 of this Agreement unless the amount of Losses (as defined in SECTION 9.1(a)) or, the Environmental Indemnifiable Losses incurred arising out of by the Transferor, or relating to any breach of a representation or warranty by the Buyer, as the Sellerscase may be, exceed two million French Francs (FRF 2,000,000) (the "THRESHOLD") on the understanding that the unit amount of Loss (or the Selling Shareholders aggregate Loss, when related to the same matter) to be indemnified shall not be less than fifty thousand French Francs (and not for purposes FRF 50,000). If the aggregate amount of determining whether such Losses or not a breach has occurred)the Environmental Indemnifiable Losses exceeds the threshold, the references Indemnitor will be required to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed pay only the amount in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any excess of the parties hereto from (i) bringing an action based upon allegations threshold. No threshold or minimum unit amount of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief Loss shall apply in relation to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid any claim made by the nonprevailing partyBuyer in respect of the Rhodia Inc. Inventories or the indemnity set forth in Section 9.1(a)(iii).
Appears in 1 contract
Samples: Stock Purchase Agreement (Geo Specialty Chemicals Inc)
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject Notwithstanding anything to the following limitationscontrary herein:
(a) The Sellers and the Selling Shareholders Seller shall not be obligated to provide any such indemnification for Losses incurred liable under Section 8.1(a12.2(a) unless and until the aggregate amount that the Buyer is entitled of Losses with respect to recover in respect of all such claims its breaches hereunder exceeds Two Hundred Fifty Thousand Dollars ($75,000 250,000) (the “Threshold”) and then such indemnification ), at which xxxx Xxxxxx shall relate be obligated to indemnify the Buyer Indemnified Persons for all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed by all the Purchase Price paid to Buyer Indemnified Persons from the Sellers to the date first dollar of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); Losses, provided, however, that the limitations in this paragraph foregoing shall not apply to Losses arising in respect out of claims relating or related to misrepresentations and the breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable any representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of made in any Seller Core Representation, or relating to any breach of a representation misrepresentation or warranty by in the Buyerevent of fraud, the Sellersintentional misrepresentation or intentional breach; provided, or the Selling Shareholders (and further that such Losses shall not be counted for purposes of determining whether the Threshold has been met or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.exceeded;
(db) Notwithstanding anything the maximum liability of Seller under Section 12.2(a) shall not exceed the Cap; provided, however, that the foregoing shall not apply to Losses arising out of or related to the breach of any representation or warranty made in this Article VIII any Seller Core Representation, or to any limitation provided hereinmisrepresentation or warranty in the event of fraud, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful intentional misrepresentation or intentional misconduct breach; provided, further that such Losses shall not be counted for purposes of determining whether the Cap has been met or exceeded; and
(iic) seeking injunctive the maximum liability of Buyer and Parent under Section 12.3(a) shall not exceed the Cap; provided, however, that the foregoing shall not apply to Losses arising out of or other equitable relief related to enforce their rights under this Agreement. In the breach of any representation or warranty made in any Buyer Core Representation, Parent Core Representation or to any misrepresentation or warranty in the event of fraud, intentional misrepresentation or intentional breach; provided, further that such action is brought, Losses shall not be counted for purposes of determining whether the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing partyCap has been met or exceeded.
Appears in 1 contract
Samples: Asset Purchase Agreement (Meta Financial Group Inc)
Limitations on Indemnification. The indemnification provided for (i) Notwithstanding anything to the contrary in Sections 8.1 and 8.2 this Article XI, neither Seller nor Liberty shall be subject required to the following limitations:
(a) The Sellers and the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that indemnify the Buyer is entitled to recover Indemnified Parties in respect of any Losses for which indemnity is claimed under Section 11.2(a)(i) and (iii) unless and until the aggregate of all such claims Losses exceeds $75,000 one percent (1%) of Purchase Price (the “Threshold”) ); provided, that if the aggregate of such Losses claimed exceeds the Threshold then Seller and then such indemnification Liberty shall relate be obligated to all indemnify the Buyer Indemnified Parties for only the amount of such Losses in excess of the Threshold; andprovided, in any eventfurther, that the maximum aggregate obligation Threshold shall not limit indemnification with respect to Losses relating to breaches of the Sellers and Seller’s Fundamental Representations or any facts or circumstances which constitute fraud, or intentional misrepresentation. Notwithstanding anything to the Selling Shareholders hereunder contrary in this Article XI, Buyer shall not be required to indemnify the Seller Indemnified Parties in respect of any Losses for Losses incurred which indemnity is claimed under Section 8.1(a11.2(b)(i) hereof shall not exceed and (iv) unless and until the Purchase Price paid to aggregate of all such Losses exceeds the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”)Threshold; provided, that if the limitations aggregate of such Losses claimed exceeds the Threshold then Buyer shall be obligated to indemnify the Seller Indemnified Parties for only the amount of such Losses in this paragraph excess of the Threshold; provided, further, that the Threshold shall not apply limit indemnification with respect to Losses arising in respect of claims relating to misrepresentations and breach breaches of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) the Buyer’s Fundamental Representations or any facts or circumstances which may be asserted without limitationconstitute fraud, or intentional misrepresentation.
(bii) No claims for indemnification Notwithstanding anything to the contrary in respect this Article XI, the maximum amount of Sections 8.1(a) or 8.2(a)(i) shall Losses that the Buyer Indemnified Parties will be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases entitled to survive recover pursuant to Section 8.6.
11.2(a)(i) and (ciii) Solely for purposes of calculating (to the amount of extent that such Losses incurred arising out of or relating under Section 11.2(a)(iii) relate solely to any a breach of a representation or warranty by the Buyer, the Sellers, and do not relate in whole or the Selling Shareholders (and not for purposes of determining whether or not in part to a breach has occurred)of a covenant) for breaches of representations and warranties is twelve and one-half percent (12.5%) of the Purchase Price, provided that such limitation shall not apply to breaches of the references Seller’s Fundamental Representations and/or to “Material Adverse Effect” any facts or “Material Adverse Change” circumstances which constitute fraud or other materiality qualifications (intentional breach or correlative terms)omission with respect to any representation or warranty of the Company, including as expressed in accounting concepts such as GAAPits Subsidiaries, shall be disregarded.
(d) Seller and Liberty. Notwithstanding anything to the contrary in this Article VIII XI, the maximum amount of Losses that the Seller Indemnified Parties will be entitled to recover pursuant to Section 11.2(b)(i) and (iv) (to the extent that such Losses under Section 11.2(b)(iv) relate solely to a breach of a representation or any limitation provided herein, nothing herein shall prevent any warranty and do not relate in whole or in part to a breach of a covenant) for breaches of representations and warranties is twelve and one-half percent (12.5%) of the parties hereto from (i) bringing an action based upon allegations Purchase Price, provided that such limitation shall not apply to breaches of the Buyer’s Fundamental Representations and/or to any facts or circumstances which constitute fraud or other willful intentional breach or intentional misconduct omission with respect to any representation or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In warranty of the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing partyBuyer.
Appears in 1 contract
Samples: Stock Purchase Agreement (Lodgenet Entertainment Corp)
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject Notwithstanding anything to the following limitationscontrary contained in this Agreement:
(a) The Sellers and the Selling Shareholders no Purchaser Indemnitee shall not be obligated entitled to provide any such indemnification for Losses incurred under any claim for indemnification pursuant to Section 8.1(a9.02(a) unless the aggregate amount that liability for Losses suffered by the Buyer is Purchaser Indemnitees thereunder exceeds $[***] (the “Deductible”), at which point the Purchaser Indemnitees shall be entitled to recover only such Losses to the extent that the amount of such Losses exceed the Deductible; provided, that any individual claims (or in the case of claims arising out of the same facts, events, or circumstances, such claims in the aggregate) where the Losses relating thereto are less than $[***] (the “Mini-Basket”) shall be excluded and shall not be subject to indemnification under Section 9.02(a) and shall not be taken into account in determining whether the Deductible has been met or exceeded; and provided, further, that the Deductible and the Mini-Basket shall not apply to claims for indemnification based upon Fraud or in respect of all such breaches of, or inaccuracies in, any of the Seller Specified Representations, Company Specified Representations, or Company Tax Representations;
(b) other than with respect to claims exceeds $75,000 (based upon Fraud, no Purchaser Indemnitee shall be entitled to any indemnification pursuant to Section 9.02(a) to the “Threshold”) and then such indemnification shall relate to all extent such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid Escrow Fund, plus an amount equal to the Sellers to the date [***]% of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”)any Milestone Payments earned under this Agreement; provided, that the limitations in this paragraph foregoing limitation shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) breaches of, or 8.2(a)(i) shall be made after inaccuracies in, any of the dateSeller Specified Representations, if anyCompany Specified Representations, on which the applicable representation Company Tax Representations, or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.Company IP Representations;
(c) Solely for purposes of calculating the amount of Losses incurred other than with respect to claims arising out of or relating to Section 9.02(g), no Purchaser Indemnitee shall be entitled to any indemnification for any claim for indemnification pursuant to Section 9.02(a) with respect to Company IP Representations to the extent that such Losses exceed the Escrow Fund, plus an amount equal to [***]% of the Milestone Payments earned under this Agreement;
(d) other than with respect to claims based upon Seller’s breach of a its obligations under Section 6.03 or claims arising out of or relating to Section 9.02(g), no Purchaser Indemnitee shall be entitled to any indemnification hereunder to the extent that such Losses exceed the aggregate amount of the Closing Payment, plus an amount equal to [***]% of the Milestone Payments earned under this Agreement;
(e) no Seller Indemnitee shall be entitled to any indemnification for any claim for indemnification pursuant to Section 9.03 to the extent that such Losses exceed the aggregate amount of the Closing Payment and, if applicable, any Contingent Payments earned under this Agreement;
(f) no Party shall have any liability for an otherwise indemnifiable Loss that is contingent unless and until such contingent Loss becomes an actual Loss of the Indemnified Party and is due and payable;
(g) in determining the amount of any indemnifiable Losses in respect of the inaccuracy in or breach of any representation or warranty by as of any particular date (but not the Buyer, the Sellers, inaccuracy in or the Selling Shareholders (and not for purposes breach of determining whether such representation or not a breach has occurredwarranty), the references to “material,” “Material Adverse Effect” or “Material Adverse Change” similar materiality qualifiers limiting the scope of such representation or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, warranty shall be disregarded.;
(dh) Notwithstanding no Purchaser Indemnitee or Seller Indemnitee shall be entitled to double recovery for any indemnifiable Losses even though such Losses may be recoverable under more than one provision of this Agreement, and, notwithstanding anything herein to the contrary, no Purchaser Indemnitee shall have any right to indemnification for any matter to the extent (i) the amount of such matter was included in the Closing Indebtedness, the Closing Transaction Expenses, or the Closing Current Liabilities, and (ii) such amount was deducted for purposes of calculating the Closing Payment, each as finally determined pursuant to Section 2.05;
(i) the rights to indemnification provided under this Article VIII IX shall not be affected by any knowledge acquired (or capable of being acquired) by Purchaser at any limitation provided hereintime (whether before or after the Closing), nothing herein shall prevent with respect to any breach of or inaccuracy in, or compliance with, any of the parties hereto representations, warranties, or covenants of Seller or the Company contained in this Agreement (as qualified by the Company Disclosure Schedule);
(j) no Party shall be entitled to any claim for indemnification pursuant to Section 9.02(a) or Section 9.03(a) to the extent arising from (i) bringing an action based upon allegations of fraud a change in accounting or taxation Law, policy, or practice made after the Closing, other willful than a change required to comply with any Law, policy, or intentional misconduct practice in effect on the date hereof, or (ii) seeking injunctive any Law not in force on the date hereof or any change in Law which takes effect retroactively or occurs as a result of any increase in the rates of taxation in force on the date hereof;
(k) the waiver of any condition to the Closing based on the accuracy of any representation or warranty or on the performance of or compliance with any covenant or agreement shall not be deemed a waiver of the right to indemnification under this Article IX with respect to such representation or warranty, covenant, agreement or obligation; and
(l) no Purchaser Indemnitees, nor any of their Affiliates, shall have any right to indemnification under this Agreement with respect to, or based on, Taxes to the extent such Taxes (i) are attributable to any Tax period other than a Tax period (or portion of a Straddle Period) ending on or before the Closing Date, excluding the representations and warranties made in Section 4.11(e), Section 4.11(h), Section 4.11(i), or Section 4.11(j), but only for as long as the statute of limitations for any Pre-Closing Taxes are open, (ii) are due to the unavailability in any Tax period (or portions thereof) beginning after the Closing Date of any net operating losses, credits, or other equitable relief to enforce Tax attributes from a Tax period (or portion thereof) ending on or before the Closing Date, (iii) result from any transactions or actions taken by the Purchaser Indemnitees or any of their rights Affiliates after the Closing on the Closing Date, or (iv) were already taken into account in the calculation of any payment by Seller under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing partyincluding Indebtedness or Transaction Expenses, in each case as finally determined hereunder.
Appears in 1 contract
Samples: Stock Purchase Agreement (Travere Therapeutics, Inc.)
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers Notwithstanding any provision of this Agreement to the contrary, an Indemnified Party may not recover any Losses under this Article 7 unless and the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless until the aggregate amount that Losses for which such Indemnified Parties would otherwise be entitled to receive indemnification hereunder exceed $17,500 (the Buyer is “Threshold Amount”), in which case the Indemnified Parties shall be entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid so identified without regard to the Sellers to Threshold Amount from the date first dollar of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitationLosses.
(b) No From the Closing until the Escrow Release Date, the MGT Indemnitees shall first seek recovery for Losses for which the Escrow Participants have agreed to indemnify the MGT Indemnitees pursuant to Sections 7.2(a), (b) and (c) from the Escrow Fund, and only once there are no amounts remaining in the Escrow Fund, then for such claims through a setoff against the Total Milestone Shares or the Secondary Milestone Shares, as applicable. After the release of amounts in the Escrow Fund pursuant to the terms of this Agreement and the Escrow Agreement, the sole source of recovery for indemnification any Losses for which the Escrow Participants have agreed to indemnify the MGT Indemnitees pursuant to Sections 7.2(a), (b) and (c) shall be through setoffs against the Total Milestone Shares or Secondary Milestone Shares, as applicable. If, however, neither the Earn Out Milestone nor the Secondary Earn Out Milestone are achieved, then the MGT Indemnities shall have no right to recovery for any Losses for which the Escrow Participants have agreed to indemnify the MGT Indemnitees pursuant to Sections 7.2(a), (b) and (c), outside of the Escrow Fund. If, at any time on or before the Survival Date the Escrow Fund shall be depleted or disbursed, the MGT Indemnitees deliver to the Seller Representative a notice pursuant to Section 7.4, and subject to the provisions of Sections 7.5 and 7.6, it is determined that the MGT Indemnitees are entitled to indemnification, then the Total Milestone Shares or the Secondary Milestone Shares, as applicable, shall be reduced by an amount equal to any Losses, with such amount not to exceed $1,000,000. Notwithstanding anything herein to the contrary, nothing in this Agreement shall limit the liability of any party in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of any fraud or intentional misrepresentation or relating to any breach of matter subject to a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregardedSubsequent Survival Date.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (MGT Capital Investments Inc)
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 No Indemnitor shall be subject to the following limitations:
liable for an indemnification claim made under clause (a) The Sellers and of Section 6.2 or 6.3, as the Selling Shareholders shall case may be: (x) for which a claim for indemnification is not be obligated asserted hereunder on or before the applicable Survival Date; (y) to provide any such indemnification for the extent Losses incurred under Section 8.1(a) unless by the Buyer Indemnified Parties in the aggregate under clause (a) of Section 6.2 or by the Seller Indemnified Parties in the aggregate under clause (a) of Section 6.3, as applicable, exceed an amount that equal to ten percent (10%) of the Buyer is entitled to recover in respect of all such claims exceeds $75,000 Purchase Consideration (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”"Indemnification Cap"); provided, that with respect to any claims for breaches of any Special Reps, the limitations Indemnification Cap shall be equal to the Purchase Consideration; and (z) unless and until the Losses of the Buyer Indemnified Parties, collectively, or the Seller Indemnified Parties, collectively, as applicable, exceed an aggregate amount equal to $5,000 (the "Basket"), in this paragraph which case the applicable Indemnitor(s) shall be obligated to the Indemnitee(s) for the amount of all Losses of the Indemnitee(s) (including the first dollar of Losses of the Buyer Indemnified Parties or the Seller Indemnified Parties, as applicable, required to reach the Basket); provided, however, that the Basket and the Indemnification Cap shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations indemnification claims to the extent amounts are actually paid under insurance maintained by the Indemnitor (or any of fraud or other willful or intentional misconduct or its Affiliates) and (ii) seeking injunctive indemnification claims based in whole or in part upon fraud, willful misconduct or intentional misrepresentation. The Basket and the Indemnification Cap shall apply only to indemnification claims made under clause (a) of Section 6.2 or 6.3 and shall not affect or apply to any other equitable relief indemnification claim made pursuant to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing partyincluding those asserted under any other clause of Section 6.2 or 6.3.
Appears in 1 contract
Limitations on Indemnification. The rights of the Buyer Indemnitees to indemnification provided for in Sections 8.1 and 8.2 shall be pursuant to the provisions of Section 8.2(a) are subject to the following limitations:
(a) The Sellers and Notwithstanding anything to the Selling Shareholders contrary, the Buyer Indemnitees shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect any Losses under Section 8.2(a)(i), other than Losses resulting from a breach of all such claims exceeds Seller Fundamental Representations or fraud, unless and until the aggregate Losses for which the Buyer Indemnitees would otherwise be entitled to indemnification under Section 8.2(a)(i) exceed $75,000 2,400,000 (the “ThresholdDeductible”) and then such indemnification ), at which point the Buyer Indemnitees shall relate become entitled to all be indemnified only for such Losses under Section 8.2(a)(i) in excess of the Threshold; and, in Deductible. Buyer’s payment of any event, retention under the maximum aggregate obligation R&W Insurance Policy shall count towards the satisfaction of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitationDeductible.
(b) No claims After satisfaction of the Deductible, for any Losses for which a Buyer Indemnitee is entitled to indemnification under Section 8.2(a)(i), other than Losses resulting from breach of a Seller Fundamental Representation or fraud:
(i) First, the Buyer Indemnitee shall recover such Losses from the Indemnity Escrow Fund; and
(ii) If the then-remaining amount held in respect the Indemnity Escrow Fund is insufficient to satisfy in full any amount owing to the Buyer Indemnitee for such Losses, the Buyer Indemnitee shall use commercially reasonable efforts to pursue recovery for such Losses under the R&W Insurance Policy to the fullest extent of Sections 8.1(a) the limits under the R&W Insurance Policy (including using commercially reasonable efforts to cause any denial of coverage to be reversed or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6rescinded).
(c) Solely The parties hereto acknowledge and agree that the Buyer Indemnitees’ sole and exclusive remedy and source of recovery for purposes of calculating the amount of Losses incurred arising out of or relating to any under Section 8.2(a)(i) (other than Losses resulting from breach of a representation Seller Fundamental Representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, fraud) shall be disregardedthe then-remaining amount held in the Indemnity Escrow Fund and recovery under the R&W Insurance Policy.
(d) Notwithstanding anything to the contrary contained herein, but subject to the limitations in this Article VIII Section 8.3 (including specifically the last sentence of this Section 8.3(d)), prior to proceeding directly against any Seller for Losses arising out of or any limitation provided hereinresulting from breach of a Seller Fundamental Representation or under Section 8.2(a)(iii) (to the extent relating to enforcement of Section 8.2(a)(i)), nothing herein such Losses shall prevent any first be satisfied out of the parties hereto from Indemnity Escrow Fund, to the extent available, and second, if the entire retention under the R&W Insurance Policy has been exhausted and such Loss is coverable under the R&W Insurance Policy, by submission of claims by such Buyer Indemnitee for recovery pursuant to the R&W Insurance Policy. Subject to the foregoing, if the policy limit under the R&W Insurance Policy is exhausted or the R&W Insurance Policy either does not cover such type of claim or is not responsive to the claim after the Buyer Indemnitee has used commercially reasonable efforts to recover thereunder, unsatisfied Losses arising out of claims based on a breach of a Seller Fundamental Representation or under Section 8.2(a)(iii) (to the extent relating to enforcement of Section 8.2(a)(i)) shall be paid directly by the applicable Seller(s) as provided in Section 8.2(a). For Losses arising under Section 8.2(a)(ii), Section 8.2(a)(iii) (to the extent relating to enforcement of Section 8.2(a)(ii)) and/or Section 8.2(a)(iv), or arising out of fraud, such Losses shall be satisfied directly by the applicable Seller.
(e) Buyer, on behalf of itself and each other Buyer Indemnitee, further acknowledges and agrees that the provisions of Sections 8.3(b) – (d) shall apply regardless of whether (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or Buyer maintains the R&W Insurance Policy following the Closing, (ii) seeking injunctive the R&W Insurance Policy expires, is revoked, cancelled or modified in any manner after issuance, or (iii) a claim is denied by the insurer under such R&W Insurance Policy as a result of a false Buyer no claims declaration delivered pursuant to the R&W Insurance Policy, in each case subject to Section 5.8 of this Agreement.
(f) Notwithstanding anything to the contrary, the aggregate liability of any Seller in respect of his or her indemnity obligations under Section 8.2 shall not exceed such Seller’s pro rata share of the Purchase Price actually received by such Seller at the Closing (the “Individual Liability Cap”). Notwithstanding anything to the contrary herein, the Individual Liability Cap shall not apply to the extent such Seller’s indemnity obligations result from fraud by or on behalf of such Seller.
(g) Notwithstanding anything to the contrary in this Agreement, nothing contained herein is intended to, or shall, limit any rights or remedies of any Buyer Indemnitee under, pursuant to or in respect of the R&W Insurance Policy.
(h) Any amounts owed to the Buyer Indemnitees under Section 8.3(d) shall be satisfied by the applicable indemnifying Party (“Indemnifying Party”) by delivering to the applicable indemnitee the amount of such Agreed Claim in cash or by wire transfer of other immediately available funds.
(i) Neither the Seller Indemnitees nor the Buyer Indemnitees may recover Losses more than once for any specific facts, omissions or circumstances notwithstanding the fact that such facts, omissions or circumstances may constitute the breach of more than one representation or warranty.
(j) Each Indemnitee shall use commercially reasonable efforts to mitigate all Losses as required by Law and use commercially reasonable efforts to make and pursue any claims for insurance (including under the R&W Insurance Policy). The amount of any Losses that are subject to indemnification under this Section 8 shall be calculated net of the amount of any insurance proceeds (including the R&W Insurance Policy), indemnification proceeds or other equitable relief to enforce their rights under this Agreementamounts actually received by the Indemnitees in respect of such Losses (net of any costs or expenses incurred in obtaining such insurance, including any increases in insurance premiums resulting from any insurance recovery). In the event that any insurance (including the R&W Insurance Policy) is actually received by an Indemnitee with respect to any Losses for which such action is broughtIndemnitee has been indemnified hereunder, then a refund equal to the prevailing party’s attorneys’ fees and net aggregate amount of the recovery (after taking into account of any costs or expenses incurred in obtaining such 57 insurance (other than the R&W Insurance Policy), including any increases in insurance premiums resulting from any insurance recovery) shall be made promptly to the Indemnifying Parties (on a pro rata basis based on the portion of the Loss paid by the nonprevailing partyor on behalf of each Indemnifying Party in respect of which such recovery is made).
Appears in 1 contract
Samples: Unit Purchase Agreement (Victory Capital Holdings, Inc.)
Limitations on Indemnification. (a) The Indemnified Persons may not recover Losses from the Escrow Fund or the Indemnitors in respect of any claim for indemnification under Section 6.3(a)(1) unless and until the total amount of all Losses arising out of or resulting from the matters described in Section 6.3(a)(1) that have been incurred or paid by the Indemnified Persons exceeds €100,000 (the “Indemnification Threshold”), it being understood that if the total amount of such Losses exceeds the Indemnification Threshold, then the Indemnified Persons shall be entitled to be indemnified for the entire amount of such Losses; provided for that the Indemnified Persons will be entitled to recover for, and the Indemnification Threshold will not apply to, any Losses with respect to any breach of or inaccuracy in Sections 8.1 and 8.2 shall any representation or warranty made in the Fundamental Representations or pursuant to fraud by the Company in connection with this Agreement.
(b) Recovery by Indemnified Persons of their Losses will be subject to the following limitations:
(a1) The Sellers Except as otherwise set forth in this Section 6.4 and with respect to Losses claimed under Section 6.3(a)(1) an Indemnified Person may recover its Losses only and exclusively from the Selling Shareholders Escrow Fund (it being understood and agreed that the amount then available in the Escrow Fund shall be the sole and exclusive source of recovery with respect to such Losses).
(2) With respect to Losses in connection with fraud by the Company in this Agreement, any other Transaction Document or any certificates or other instruments delivered by or on behalf of the Company pursuant to this Agreement or claimed under Section 6.3(a)(1) as a result of breaches of or inaccuracies directly related to, and in connection with, the Fundamental Representations or claimed under Section Error! Reference source not found., an Indemnified Person may recover its Losses (A) from the Escrow Fund and (B) to the extent such Losses exceed the amount recovered from the Escrow Fund, directly from the Indemnitors.
(c) An Indemnified Person may recover all of its Losses suffered or incurred by such Indemnified Person to the extent arising out of, related to or resulting from any of the matters described in Section 6.3(b) only from the Indemnitor making the applicable representation, warranty, covenant or agreement, or from the Escrow Payment that is to be otherwise released to Indemnitor at the time such release would otherwise be made (and Indemnitor and Seller shall cooperate in facilitating the payment of such amounts to Purchaser).
(d) Except as otherwise required by applicable Law, the Parties shall treat any indemnification payments made under this Agreement as an adjustment to the purchase price paid under this Agreement for accounting and Tax purposes.
(e) Indemnitor will not have any right of contribution, right of indemnity or other right or remedy against Purchaser, any member of the Company Group or any other Indemnified Person for any indemnification payments made by Indemnitor (whether directly or out of the Escrow Fund) pursuant to this Article 6, except and to the extent that any of the Indemnified Persons has also caused such Losses by any contributory act or omission.
(g) No Indemnified Person’s rights under this Article 6 will be adversely affected by any investigation conducted, or any knowledge acquired or capable of being acquired, by such Indemnified Person at any time, whether before or after the Agreement Date, or by the waiver of any condition to Closing. No Indemnified Person shall be required to show reliance on any representation, warranty, certificate or other agreement in order for such Indemnified Person to be entitled to indemnification hereunder.
(h) No Indemnified Person shall be entitled to indemnification pursuant to this Article 6 for any express component of the Cash Consideration or any item expressly included in the determination of the Final Cash Consideration (it being understood that Indemnitor shall not be obligated to provide indemnify, defend or hold harmless any such indemnification for Indemnified Person from and against any Losses incurred under Section 8.1(a) unless to the aggregate amount that extent an item was resolved in connection with the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess final determination of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”Final Cash Consideration); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(bi) No claims All Losses for which any Indemnified Person would otherwise be entitled to indemnification in respect of Sections 8.1(a) or 8.2(a)(i) under this Article 6 shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating reduced by the amount of any insurance proceeds, or other third-party indemnification, contribution or reimbursement payments that are actually received by such Person in connection with such Losses incurred arising out of or relating the circumstances giving rise thereto; provided that the Indemnified Persons shall have no obligation to seek recovery pursuant to any breach of a representation insurance policy or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts from any such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreementthird-party. In the event that any such action is broughtinsurance proceeds, or other third-party indemnification, contribution or reimbursement payments are realized by an Indemnified Person subsequent to receipt by such Indemnified Person of any indemnification payment under this Agreement in respect of the claims to which such insurance proceeds, or other third-party indemnification, contribution or reimbursement payments relate, appropriate refunds shall be made promptly by the relevant Indemnified Person of all or the relevant portion of such insurance proceeds, or other third-party indemnification, contribution or reimbursement payments.
(j) From and after the Closing, the prevailing partyremedies contained in this Article 6 and in Section 1.3 are intended to provide the sole and exclusive remedy of each Indemnified Person for matters arising out of this Agreement; provided, however, that nothing in this Article 6 or elsewhere in this Agreement shall affect the Parties’ rights to specific performance, injunction or other equitable remedies to enforce the Parties’ obligations under this Agreement), or limit recovery against an Indemnitor for such Indemnitor’s attorneys’ fees and costs shall be paid by fraud or such Indemnitor’s willful breach of any of the nonprevailing partycovenants or agreements contained Section 4.4 (Release of Claims).
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers and the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess obligations of the Threshold; andparties hereto will expire on the Indemnity Expiration Date, in any eventprovided that such obligations will survive with respect to, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers extent of, any claim for which a Certificate will have been delivered to the date of Indemnifying Party prior to such Loss plus the cost associated Indemnity Expiration Date until such claim will have been finally resolved in accordance with the assumption terms of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitationArticle 9.
(b) No claims Neither Magellan nor any of its Affiliates' review of any matters related to the transactions contemplated by this Agreement, including any review of the business, assets, employees or the financial and other condition of the Stockholders or the Company conducted by the officers, employees, lawyers, accountants, consultants and other representatives or agents of Magellan or any of its Affiliates, nor the knowledge of Magellan or any of its Affiliates, or of any of such officers, employees, lawyers, accountants, consultants and other representatives or agents, with respect to any such matters, whether or not resulting from any such review, will affect (i) the representations and warranties made by the Stockholders and the Company in this Agreement, the agreements related thereto or any schedule, exhibit, agreement, certificate or other document attached hereto or thereto or delivered in accordance with the terms hereof or thereof, or (ii) the remedies of Magellan or any of the other Magellan Indemnified Parties for indemnification in respect breaches of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6representations and warranties.
(c) Solely Notwithstanding anything to the contrary in the foregoing, no Stockholder shall be liable in respect of any indemnification obligation pursuant to this Article 9 unless and until the aggregate cumulative amount of Losses for which a Claim for indemnification pursuant to this Article 9 have been made against all Stockholders under this Agreement exceeds the Stockholder Basket, in which case the Stockholders shall be liable only for such excess over the Stockholder Basket, provided that for purposes of calculating determining the amount of claims for which Losses incurred arising out of may be applied to the Stockholder Basket, the representations and warranties contained herein shall be deemed not to include any qualifications based on materiality or relating to any knowledge, and provided, further, that (i) the aggregate indemnification obligations for the Stockholders for a breach of a representation or warranty by shall not exceed an amount equal to the BuyerPurchase Price, the Sellers, or the Selling Shareholders (and not ii) each Stockholder's aggregate indemnification obligations hereunder for purposes of determining whether or not a breach has occurred), of a representation or warranty shall not exceed an amount equal to the references portion of the Purchase Price to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts which such as GAAP, shall be disregardedStockholder is entitled pursuant to this Agreement.
(d) Notwithstanding anything to the contrary in the foregoing, Magellan shall not be liable in respect of any indemnification obligation pursuant to this Article VIII or any limitation 9 unless and until the aggregate cumulative amount of Losses for which a claim for indemnification pursuant to this Article 9 have been made against Magellan under this Agreement exceeds the Magellan Basket, in which case Magellan shall be liable only for such excess over the Magellan Basket, provided hereinthat for purposes of determining the claims for which Losses may be applied to the Magellan Basket, nothing the representations and warranties contained herein shall prevent be deemed not to include any of qualifications based on materiality or knowledge, and provided, further, that the parties hereto from (i) bringing aggregate indemnification obligations for Magellan shall not exceed an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief amount equal to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing partyPurchase Price.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers Company and Shareholder have no obligation to make any payment for Damages for indemnification or otherwise with respect to the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless matters described in Article XI until the aggregate amount that the Buyer is entitled to recover in respect total of all Damages with respect to such claims matters exceeds $75,000 U.S.$300,000 (the “Threshold”) ), and then only for the amount by which such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not Damages exceed the Purchase Price paid Threshold up to the Sellers a maximum amount of U.S.$15,000,000, such recovery to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating be made exclusively to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation11.04(h).
(b) No claims for indemnification Section 11.04(a) will not apply to: (i) any breach or inaccuracy of the representations and warranties given by the Shareholder in respect Section 3.24; (ii) any breach or inaccuracy of Sections 8.1(a) any of the Company’s or 8.2(a)(i) shall be made after Shareholder’s representations and warranties of which the date, if any, Company and Shareholder had respective knowledge at any time prior to the date on which such representation and warranty was made; (iii) any fraudulent act or fraudulent misrepresentation of the applicable Company or Shareholder with respect to any representation or warranty upon which such claim was based ceases given by the Company and Shareholder contained in this Agreement or the certificate to survive be delivered pursuant to Section 8.67.02(c) or (iv) any intentional breach by the Company or Shareholder of any covenant or obligation under this Agreement, and the Shareholder shall be liable for all Damages with respect to such matters.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for For purposes of determining whether or not a breach threshold in Section 11.04(a) has occurred)been met, the references aggregate amount of Damages in respect of claims by Company and/or Shareholder against Parent or Merger Sub for indemnification or otherwise hereunder for which no actual remedy is available to “Material Adverse Effect” Company or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts the Shareholder will be deemed to increase the Threshold for indemnification claims made against the Company by the actual amount of such as GAAP, shall be disregardedDamages.
(d) The amount of any and all Damages will be determined net of any amounts recovered, or reasonably expected to be recovered, by the Indemnified Person under insurance policies with respect to such Damages, and Indemnified Person shall use commercially reasonable efforts to maximize all such insurance recoveries.
(e) An Indemnified Person shall not be entitled to recover for any particular Damage pursuant to this Article XI, or to count any particular Damage toward the Threshold, unless such Damage equals or exceeds $5,000.00.
(f) The determination of Damages shall be reduced (including, without limitation, retroactively) by the amount of any Tax benefit of, or increase in the amount of Tax refund received by, an Indemnified Person.
(g) If an Indemnified Person has been indemnified for a Damage hereunder, and at any time thereafter an Indemnified Person recovers all or a portion of such Damage from a third person, the Indemnified Person who made such recovery shall promptly refund the amount paid with respect to such Damage (up to the amount recovered from the third person).
(h) Notwithstanding anything to the contrary set forth in this Article VIII or any limitation provided hereinAgreement, nothing herein an Indemnified Person, seeking to recover Damages from Shareholder, shall prevent any have as its sole and exclusive remedy against Shareholder, the return and cancellation of such number of shares of Parent Common Stock received by Shareholder pursuant to the terms of this Agreement, equal in value to the amount of the parties hereto Damages as finally determine in accordance with the provisions of this Article, however to the extent that sufficient shares are not available to satisfy such Damages up to the maximum amount set forth in Section 11.4(a), such Indemnified Person shall be entitled to recover the short fall in Damages from Shareholder in cash. Parent acknowledges and agrees that the shares of Parent Common Stock payable to Company’s investment banker by the Company shall not be subject to any Damages for which Shareholder may be responsible.
(i) bringing Notwithstanding anything else contained in this Agreement to the contrary, after the Closing, indemnification pursuant to the provisions of this Article XI shall be the exclusive remedy for an action based upon allegations Indemnified Person for any misrepresentation or breach of fraud any warranty, covenant or other willful provision contained in this Agreement or intentional misconduct in any certificate delivered pursuant hereto; provided, however, that the foregoing shall not apply to claims based on fraud and shall not prevent an Indemnified Person from seeking or (ii) seeking obtaining injunctive or other equitable relief to prevent breaches or violations of this Agreement and to enforce their rights under specifically the provisions of this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers representations and warranties of Buyer and each Seller (including without limitation each Majority Shareholder) contained in this Agreement, the Buyer Disclosure Schedule, the Majority Shareholders Disclosure Schedule, the Seller Disclosure Schedule or in any certificate, instrument, agreement or other writing delivered by or on behalf of Buyer or any Seller pursuant to this Agreement or in connection with the transactions contemplated herein shall survive any investigation heretofore or hereafter made by or on behalf of the Buyer or the Seller, as applicable (subject to the provisions of this Article 9), and the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless consummation of the aggregate amount that the Buyer is entitled to recover in respect of transactions contemplated herein, and all such claims exceeds $75,000 (the “Threshold”) representations and then such indemnification warranties shall relate to all such Losses in excess be of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers no further force and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to effect after two years from the date of such Loss plus the cost associated with Closing, except for matters set forth in Sections 3.11, 3.12, 3.13, 3.14, 3.15, 4.1, 4.2, 4.3, 4.4, 5.2, 5.3, 5.12, 5.13, 5.14, 5.15 and 5.16, for which the assumption survival period shall extend until the expiration of the Assumed Liabilities applicable statutory limitations period (as applicable, the “Maximum”"Survival Period"); provided. Anything to the contrary notwithstanding, that a claim for indemnification which is made in writing but not resolved prior to the limitations in this paragraph shall not apply to Losses arising in respect expiration of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which the Survival Period may be asserted without limitationpursued and resolved after such expiration.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) An Indemnitee shall be made after the dateobligated to prosecute diligently and in good faith any claim for Indemnified Losses with any applicable insurer prior to collecting any indemnification payment hereunder, provided that an Indemnitee shall be entitled to collect an indemnification payment otherwise due to it hereunder if any, on which such Indemnitee has not received reimbursement from the applicable representation or warranty upon which insurer(s) within twelve (12) months after it has given such claim was based ceases to survive pursuant to Section 8.6insurer(s) appropriate written notice of its claim.
(c) Solely for purposes In the case where an Indemnitee recovers from third parties all or any part of calculating any amount previously paid to it by any Seller hereunder, such Indemnitee shall promptly pay over to such Seller the amount so recovered (net of Losses any expenses actually incurred arising out by it in procuring such recovery), but not in excess of or relating to any breach of a representation or warranty amount previously so paid by the BuyerIndemnifying Party. No amount shall become payable by an Indemnifying Party to an Indemnity in respect of any third party claim unless and to the extent that the Indemnity shall have become required to pay after exhausting all available remedies, and shall actually have paid, the Sellers, or relevant Indemnified Losses to the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregardedrelevant third party.
(d) Notwithstanding anything The amount of any claim made hereunder shall be reduced by taking into account (i) any amount payable to the Buyer or the Company by any insurer or other third party in respect of the relevant Indemnified Losses, and (ii) any offsetting benefit (including any tax reduction) to the relevant Company or to any Affiliate thereof, either in the year in which the Indemnified Losses are sustained or in any other year.
(e) For purposes of computing the amount of any Indemnified Losses, only the loss actually sustained shall be taken into account, to the exclusion of any price/earnings or similar multiplier implicit in the Purchase Price, and in no event shall any Indemnifying Party be liable for unforeseen or consequential damages.
(f) The Indemnitees shall not be entitled to any indemnification payments if they have not timely notified the Indemnifying Parties and otherwise complied in all material respects with all the other provisions of this Article VIII 9.
(g) The Indemnitees shall not be entitled to any indemnification in connection with Indemnified Losses resulting from facts of which the Indemnitees were aware at the time of executing this Agreement.
(h) Sellers shall have no liability under any provision of this Agreement for Indemnified Losses which arise as a result of (i) actions taken by the Buyer or the Company after the Closing Date, or (ii) the passing of, or any limitation provided hereinchange in, nothing herein after the date hereof, any law or administrative practice of any government, governmental department, agency or regulatory body in any such case not actually in force at the date of this Agreement.
(i) The Indemnitees shall prevent use their best efforts, and the Buyer Indemnitees shall cause the Company to use its best efforts, to mitigate any Indemnified Losses which any of them may suffer as a result of any matters giving rise to a claim for indemnification hereunder.
(j) The provisions of this Article 9 shall constitute the sole remedy of all of the parties hereto from (i) bringing an action based upon allegations for any misrepresentation or breach of fraud representation or warranty contained in this Agreement, any Disclosure Schedule, or any certificate, instrument, agreement or other willful writing delivered by or intentional misconduct on behalf of any such party pursuant to this Agreement or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In in connection with the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.transactions contemplated herein
Appears in 1 contract
Samples: Stock Purchase Agreement (Lineo Inc)
Limitations on Indemnification. The Purchaser, the Company, Newco, the Surviving Corporation, and the other Persons or entities indemnified pursuant to Section 10.1 shall not assert any claim for indemnification provided for in Sections 8.1 and 8.2 hereunder against the Sellers until such time as, the aggregate of all claims which such persons may have against the Sellers shall exceed $15,000 (the "Indemnification Threshold"), whereupon such claims shall be subject to the following limitations:
(a) The indemnified in full. Sellers and the Selling Shareholders shall not be obligated to provide assert any claim for indemnification hereunder against Purchaser, Newco, the Surviving Corporation or the Company until such indemnification for Losses incurred under Section 8.1(a) unless time as the aggregate amount that the Buyer is entitled to recover in respect of all claims which Sellers may have against Purchaser or the Company shall exceed $15,000, whereupon such claims exceeds $75,000 (the “Threshold”) and then such shall be indemnified in full. The limitation of assertion of claims for indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations contained in this paragraph shall not apply only to Losses arising claims based upon inaccuracies in, or breaches of, representations and warranties contained in respect of claims relating this Agreement or any document, instrument, certificate or other item required to misrepresentations be furnished pursuant to this Agreement or in connection with the transaction contemplated by this Agreement. No person shall be entitled to indemnification under this Article 10 if and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims the extent that such person's claim for indemnification is directly or indirectly related to a breach by such person of any representation, warranty, covenant or other agreement set forth in respect this Agreement. Notwithstanding any other term of Sections 8.1(a) this Agreement, no Seller shall be liable under this Article 10 or 8.2(a)(i) otherwise for an amount which exceeds the amount of proceeds received by such Seller in connection with the transactions contemplated herein. For purposes of the foregoing limitation, the DocuNet Common Stock shall be valued at the Initial Public Offering Price. No claim under this Article 10 shall be made after the dateunless an Indemnity Notice, if any, on which an Unliquidated Indemnity Notice or a Claim Notice (as applicable) has been given prior to the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6survival period.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
Appears in 1 contract
Samples: Merger Agreement (Imagemax Inc)
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(ai) (x) The Sellers and the Selling Shareholders Parent Indemnified Parties shall not be obligated entitled to provide indemnification in respect of any such indemnification Losses for Losses incurred which indemnity is claimed under Section 8.1(a11.3(a) above, unless and until the aggregate amount that the Buyer is entitled to recover in respect of all such claims Losses exceeds $75,000 4,000,000 (the “Deductible Amount”), provided, that if the aggregate amount of Losses claimed exceeds the Deductible Amount, then a Parent Indemnified Party shall be entitled to claim the total amount of all Losses that exceed the Deductible Amount; (y) for purposes of computing the Deductible Amount there shall be a threshold of $50,000 for each separate claim for indemnification (the “Per Claim Threshold”) and a threshold of $100,000 for series of claims arising from the same or substantially related circumstances for indemnification (the “Series Claims Threshold”), provided, that if any claims exceed the Per Claim Threshold or the Series Claims Threshold, as applicable, then all of such claims, regardless of the Per Claim Threshold and the Series Claims Threshold, will be included in computing the Deductible Amount; and (z) the maximum amount of Losses that the Purchaser Indemnified Parties will be entitled to recover pursuant to Section 11.3(a) above is the Escrow Amount. Without limiting the foregoing, the Parent Indemnified Parties shall not be entitled to indemnification under Section 11.3(a) above with respect to any Losses relating to Hazardous Substance contamination at any Real Property, which contamination was present at such Real Property prior to the date the Target or any of its Subsidiaries acquired or commenced operations at such Real Property (“Legacy Environmental Conditions”), except to the extent that such Losses arise as a result of any Action, Order or other claim by any third party (including any Governmental Entity) with respect to such Legacy Environmental Conditions. Parent agrees that, during the applicable survival period set forth in Section 11.1, Parent shall relate not perform or allow any “Phase II” investigation or other invasive sampling of soil or groundwater conditions at any Real Property (“Environmental Sampling”) which has the purpose of, or where the reasonably foreseeable result thereof is, the discovery of Hazardous Substance contamination with respect to which Target would be required to provide indemnification pursuant to this Agreement, except (i) as required by a demand, complaint, order or directive of a Governmental Entity, (ii) as required in connection with a written demand by a third party asserting or alleging liability of the Target or its Subsidiaries with respect to a release of Hazardous Substances at the Real Property (iii) as affirmatively required under any Environmental Law, provided that Parent shall not conduct prophylactic Environmental Sampling in the absence of information indicating a material cleanup liability at any Real Property, (iv) as required for construction, maintenance, repair or operation of the Real Property which is performed for a bona fide business purpose, and (v) as reasonably required by any third party in connection with transactions involving the Real Property including without limitation any sale or financing transaction. The Parent Indemnified Parties shall in any event not be entitled to any indemnification for Losses relating to Hazardous Substance contamination at any Real Property was disclosed with particularity in the Target Disclosure Schedule.
(ii) (x) The Parent shall not be required to indemnify the Stockholder Indemnified Parties in respect of any Losses for which indemnity is claimed under Section 11.3(b) above, unless and until the aggregate amount of all such Losses in excess of exceeds the Threshold; andDeductible Amount, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that if the limitations in this paragraph shall not apply to aggregate amount of Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) claimed exceeds the Deductible Amount, then a Stockholder Indemnified Party shall be made after entitled to claim, and the dateParent shall be obligated to indemnify such Stockholder Indemnified Party, for the total amount of all Losses that exceed the Deductible Amount; (y) for purposes of computing the Deductible Amount there shall be a Per Claim Threshold and a Series Claims Threshold, provided, that if anyany claims exceed the Per Claim Threshold or the Series Claims Threshold, on which as applicable, then all of such claims, regardless of the applicable representation or warranty upon which such claim was based ceases Per Claim Threshold and the Series Claims Threshold, will be included in computing the Deductible Amount; and (z) the maximum amount of Losses that the Stockholder Indemnified Parties will be entitled to survive recover pursuant to Section 8.611.3(b) or Section 6.7(a) above is $25,000,000.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
Appears in 1 contract
Limitations on Indemnification. The Subject to any limitations contained therein, all representations and warranties made by the parties herein or in any instrument or document furnished in connection herewith shall survive the Closing and any investigation at any time made by or on behalf of the parties hereto and shall expire twenty-four months after the Closing Date, except (i) as to any matter as to which a claim is submitted in writing to the indemnifying party prior to the applicable expiration date and identified as a claim for indemnification provided pursuant to this Agreement; (ii) as to any representation or warranty relating to ownership or title to the Shares or the Company's assets, including real or immovable property, which shall not expire; (iii) as to any matter which is based upon willful fraud by the indemnifying party, with respect to which the representations and warranties set forth in this Agreement shall expire only upon expiration of the applicable statute of limitations plus 60 days; (iv) as to any representation or warranty concerning tax or environmental matters, which shall expire only upon the expiration of the applicable statute of limitations plus 45 days; and (v) as to any representation or warranty concerning the authority to execute this Agreement or any of the other documents contemplated hereby, which shall not expire. No claim or action for in indemnity pursuant to Sections 8.1 and 8.2 6.1. or 6.2. hereof for breach of any representation or warranty shall be subject asserted or maintained by any party hereto after the expiration of such representation or warranty pursuant to the following limitations:
preceding sentence except for claims made in writing prior to such expiration and actions (awhether instituted before or after such expiration) The based on any claim made in writing prior to such expiration. Notwithstanding any other provisions contained in this Agreement, (i) neither Buyer nor Sellers and shall be entitled to receive any amount under this Section 6. which exceeds the Selling Shareholders Purchase Price; (ii) Buyer shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder payment under this Section 6. for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and a breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by Sellers contained in this Agreement except for the Buyeramount by which the aggregate of all breach of warranty or representation claims hereunder which have not theretofore been reimbursed to Buyer exceeds the sum of $180,000.00, and (iii) Sellers shall not be entitled to payment under this Section 6. except for the amount by which the aggregate of all claims hereunder which have not theretofore been reimbursed to Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreementexceeds $180,000.00. In the event such action the $180,000.00 threshold mentioned in clause (ii) or (iii) of the preceding sentence is broughtexceeded, Buyer or Sellers, as the case may be, shall then have the right to seek reimbursement of said threshold amount from Sellers or Buyer, as the case may be, under this Section 6. Notwithstanding anything contained in this Section 6.6., the prevailing party’s attorneys’ fees limits on indemnification contained in the preceding sentence shall exclude any obligations specifically assumed by any party in this Agreement, including without limitation, the obligations relating to Taxes and costs shall be paid by the nonprevailing partybrokers as described in Sections 3.2.1., 5.2., and 9.5. respectively.
Appears in 1 contract
Limitations on Indemnification. (a) The indemnification provided for in Sections 8.1 and 8.2 Section 9.1 shall be subject --- to the following limitations:
(ai) The Sellers and the Selling Shareholders Seller shall not be obligated to provide pay any such amounts for indemnification for Losses incurred under Section 8.1(a9.1(a) unless and (c) until the aggregate amount that the Losses actually ------ --- incurred by Buyer is entitled to recover in respect (net of all such claims exceeds insurance recoveries thereunder) equals $75,000 25,000 (the “Threshold”) and then such indemnification ------- "Basket"), whereupon Seller shall relate be obligated to all such pay only the additional amounts of Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses Basket actually incurred by Buyer under Section 8.1(a9.1(a) hereof and (c) in full, subject to the limits set forth in clauses (ii) ------ --- and (iv) below.
(ii) Seller shall not exceed be obligated to pay an aggregate amount for indemnification under Sections 9.1(a) in excess of $2,000,000. ------ -----------
(iii) Seller shall be obligated to pay any and all amounts for indemnification under Sections 9.1(b) in full up to the Purchase Price paid without ------ regard to the Sellers Basket.
(iv) Seller shall be obligated to pay any and all amounts for indemnification under Sections 9.1(c) in full without regard to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.Basket. ------
(b) No claims The indemnification provided for in Section 9.2 shall be subject --- to the following limitations:
(i) Buyer shall not be obligated to pay any amounts for indemnification in respect of Sections 8.1(aunder Section 9.2(a) until the aggregate Losses actually ------ incurred by Seller (either individually or 8.2(a)(icollectively) meets the Basket, whereupon Buyer shall be made after obligated to pay only the dateadditional amounts of Losses in excess of the Basket actually incurred by Seller under Section 9.2(a) in ------ full, if any, on which subject to the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6limits set forth in clauses (ii) and (iv) below.
(ii) Buyer shall not be obligated to pay an aggregate amount for indemnification under Section 9.2(a) in excess of $2,000,000. ------ ----------
(iii) Buyer shall be obligated to pay any and all amounts for indemnification under Sections 9.2(b) and (c) Solely for purposes of calculating in full up to the amount of Losses incurred arising out of or relating Purchase Price ------ --- without regard to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregardedBasket.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
Appears in 1 contract
Limitations on Indemnification. The 7.6.1 Notwithstanding anything to the contrary in this Section 7, no claim by the Buyer against the Sellers for indemnification provided for in Sections 8.1 and 8.2 arising under this Agreement shall be subject to the following limitations:
(a) The Sellers valid and the Selling Shareholders shall not be obligated to provide any assertible unless and until such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the datetime, if any, on which as the applicable representation aggregate Adverse Consequences in respect of any individual event or warranty upon which occurrence giving rise to such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty Adverse Consequences suffered by the Buyer, the SellersTarget, or the Selling Shareholders (and not for purposes any of determining whether their Affiliates or not a breach has occurred)to which any of them becomes subject, the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications after tax effect of which shall exceed one hundred thousand French Francs (or correlative termsFRF. 100,000) ("DEDUCTIBLE"). Furthermore, including as expressed in accounting concepts the first claim by the Buyer for indemnification arising hereunder shall not be made until the aggregate amount of all such as GAAPvalid and assertible claims exceeds the amount of five hundred thousand French Francs (FRF. 500,000) (the "BASKET"). In such event, the Buyer shall be disregarded.
(d) entitled to assert claims only for amounts in excess of the Basket. Notwithstanding anything to the contrary contained in this Article VIII Section 7, any Adverse Consequences suffered by the Buyer or any limitation provided herein, nothing herein shall prevent any the Target arising out of the parties hereto from or in connection with (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct VAT, business tax (taxe professionnelle) or (ii) seeking injunctive Section 7.3.3, shall not be subject to the Deductible and Basket requirements.
7.6.2 The Sellers' maximum liability for all Adverse Consequences under Section 7 shall not exceed the amount of the Purchase Price actually paid in cash and Common Stock. Claims based on proven fraud or other equitable relief deceit or intentional wrongdoing (dol) on the part of Sellers shall be excluded from the foregoing limitation of liability and Sellers will be liable for all Adverse Consequences with respect to enforce their rights under this Agreementsuch claims.
7.6.3 Any amount due by the Sellers with respect to any claim will be reduced by any amount received from a third party with respect to such claim. If the amount due by the Sellers has already been paid to the Buyer, the Buyer shall repay to the Sellers the lesser of the amount so recovered from the third party or the indemnification made. Any indemnification due by the Sellers hereunder shall be calculated taking into account the effect of any Tax savings realized by the Target or the Subsidiaries as a result of the Tax deductibility of the relevant Adverse Consequence. In addition, any claim related to Taxes which merely constitutes a timing difference in the event deductibility of the corresponding charge (reintegration of depreciation, reintegration of reserves, etc.) shall only be taken into account to the extent of the costs of any surcharges, penalties, late payment interest or fines. The Buyer shall use its best efforts to ensure that the Group takes reasonable steps to pursue any claim against a third party arising out of the same fact, matter or thing as may give rise to a claim against the Sellers hereunder provided that such action is brought, steps are in the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing partyGroup's best interests.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers and Notwithstanding anything herein to the Selling Shareholders shall contrary, Seller will not be obligated to provide indemnify any such indemnification for Losses incurred Purchaser Indemnified Person under Section 8.1(a9.1(a) (Indemnification by Seller): (i) for any individual item where Purchaser Damages relating thereto is less than $[***] (“Seller’s Claim Threshold”), (ii) unless the aggregate amount that of all Purchaser Damages exceeds $[***] (“Seller’s Indemnification Tipping Basket”), in which case the Buyer is Purchaser Indemnified Persons will be entitled to recover in respect all Purchaser Damages or (iii) to the extent that the aggregate of all such claims Purchaser Damages exceeds $75,000 [***] (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “MaximumSeller’s Indemnification Cap”); provided, however, that the limitations in this paragraph shall Seller’s Claim Threshold, Seller’s Indemnification Cap and Seller’s Indemnification Tipping Basket will not apply to Losses nor count towards any Seller indemnification obligation (A) arising in respect of claims out of, relating to misrepresentations and or resulting from Fraud by Seller or arising out of, relating to or resulting under Sections 9.1(b), (c) or (d) (Indemnification by Seller), (B) arising out of, relating to or resulting from a breach of or inaccuracy in any of the representations or warranties set forth in Section 4.17 (Sufficiency of Assets) or (C) arising out of, relating to or resulting from a breach of or inaccuracy in any of Seller’s Fundamental Representations. Notwithstanding anything herein to the contrary, Seller will not be obligated to indemnify any Purchaser Indemnified Person under this ARTICLE 9 (Indemnification) with respect to Purchaser Damages (x) in excess of the consideration actually paid to Seller pursuant to Sections 2.1(a) (Fixed Consideration) and 2.1(b) (Post-Closing Consideration) (net of any setoff against such payments taken pursuant to Section 3.1 hereof 6.12 (Connecticut Transfer Act)) (the “Proceeds Limitation”) other than Damages arising out of, relating to organizationor resulting from (1) Fraud by Seller or (2) any Excluded Liability; provided, however, that if any recovery by Purchaser is limited in whole or in part by applicability of the Proceeds Limitation, such portion of the claim that was limited by such Proceeds Limitation may be recovered by set-off as against any future payments pursuant to Section 2.1 (Purchase Price and Assumption of Assumed Liabilities) and Section 3.3 hereof (y) to the extent that the aggregate of all Purchaser Damages, other than Damages arising out of, relating to authorityor resulting from (1) which may be asserted without limitationFraud by Seller or (2) any Excluded Liability, exceeds $[***]; provided, that, if Seller is obligated to indemnify any Purchaser Indemnified Person under this ARTICLE 9 (Indemnification) with respect to Purchaser Damages after the total amount of Purchaser Damages has exceeded the Proceeds Limitation, Seller may, at its election, forfeit and transfer Equity Consideration (to the extent owned by Seller and transferable free and clear of all Encumbrances) to Purchaser at a valuation equal to the Next Integral Equity Financing Price or the Integral Series A Price, as applicable, in lieu of such payment obligation.
(b) No claims Notwithstanding anything herein to the contrary, Purchaser will not be obligated to indemnify any Seller Indemnified Person under Section 9.2(a) (Indemnification by Purchaser): (i) for any individual item where Seller Damages relating thereto is less than $[***] (“Purchaser’s Claim Threshold”), (ii) unless the aggregate of all Seller Damages exceeds $[***] (the “Purchaser’s Indemnification Tipping Basket”), in which case Seller Indemnified Persons will be entitled to recover all Seller Damages or (iii) to the extent that the aggregate of all Seller Damages exceeds $[***] (the “Purchaser’s Indemnification Cap”): provided, however, that Purchaser’s Claim Threshold, Purchaser’s Indemnification Cap and Purchaser’s Indemnification Tipping Basket will not apply to nor count towards any Purchaser indemnification in respect of obligation (A) arising out of, relating to or resulting from Fraud by Purchaser or arising out of, relating to or resulting under Sections 8.1(a9.2(b) or 8.2(a)(i(c) shall be made after the date(Indemnification by Purchaser), if anyor (B) arising out of, on which the applicable representation relating to or warranty upon which such claim was based ceases to survive pursuant to Section 8.6resulting from a breach of or inaccuracy in any of Purchaser’s Fundamental Representations.
(c) Solely for purposes Each Party will, and will cause its respective Affiliates to, take all reasonable steps required by a Legal Requirement to mitigate any Damage upon becoming aware of calculating the amount of Losses incurred arising out of any event or relating to any breach of a representation or warranty by the Buyer, the Sellerscircumstance that would be reasonably expected to, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred)does, the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms)give rise thereto, including as expressed in accounting concepts incurring costs only to the minimum extent necessary to remedy the breach that gives rise to such as GAAP, shall be disregardedDamage.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
Appears in 1 contract
Samples: Asset Purchase Agreement (Forma Therapeutics Holdings, Inc.,)
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject Notwithstanding anything to the following limitationscontrary herein:
(ai) The Sellers No Owner will be liable for indemnification under either Section 7.2(b)(i) and the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a7.2(b)(ii) unless the aggregate amount that the Buyer is entitled to recover in respect of all Losses under such claims Sections exceeds Thirty-Seven Thousand and Five Hundred Dollars ($75,000 37,500) (the “Threshold”) and then such indemnification shall relate ), at which time the Owner or Owners, as applicable, will be obligated to indemnify the Buyer Indemnified Parties, with respect to the aggregate amount of all such Losses in excess under such Sections from the first dollar. Notwithstanding the foregoing, the Threshold will not apply to any claim arising out of a breach of a Fundamental Rep, a SOL Rep or fraud or intentional misrepresentation.
(ii) The total amount of indemnification payments that an Owner can be required to make to the Buyer Indemnified Parties pursuant to this Agreement shall not exceed, at any time, the amount of fifty percent (50%) of the Threshold; and, value of any unpaid Milestone Payments which then become due and payable by Buyer to such Owner in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated accordance with the assumption terms of the Assumed Liabilities this Agreement (the “MaximumCap”); provided. For purposes of the preceding sentence, the value of any cash payments to such Owner shall be the dollar amount thereof, and the value of a share of Buyer Common Stock issued to such Owner shall be the Fair Market Value of one share of Buyer Common Stock with respect to the business day on which the Milestone that resulted in the limitations in this paragraph shall obligation to issue such Buyer Common Stock to such Owner is achieved (or the next succeeding business day, if such Milestone is achieved other than on a business day). Notwithstanding the foregoing, the Cap will not apply to any claim arising out of fraud or intentional misrepresentation.
(iii) An Indemnified Party's ability to seek indemnity will not be affected by any investigation, inquiry, knowledge, or examination (whether actual, - . constructive or imputed) by the Party seeking indemnification with respect to the accuracy or inaccuracy of or compliance with or performance of, any representation, warranty, covenant, agreement or obligation.
(iv) The amount of any Losses arising for which indemnification is provided for under this Agreement shall be reduced by (i) any amounts actually received by an Indemnified Party as a result of any indemnification, contribution or other payment by any third party, (ii) Tax benefits actually realized by an Indemnified Party in respect of claims relating the Losses giving rise to misrepresentations such indemnification, and breach of warranties relating (iii) any insurance proceeds or other amounts actually recovered or received by the Indemnified Party from third parties with respect to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in such Losses. If an Indemnified Party recovers any amount with respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty Loss that was previously satisfied by an Indemnifying Party such Indemnified Party shall promptly pay such amount to the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregardedIndemnifying Party.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
Appears in 1 contract
Limitations on Indemnification. The Notwithstanding any other provision of this Agreement, the indemnification obligations provided for in Sections 8.1 and 8.2 this Agreement shall be subject to the following limitations:limitations and conditions set forth in this Section 10.3.
(a) Any claim by a Buyer Indemnitee for indemnification pursuant to Section 10.1(a) shall be required to be made by delivering written notice to Sellers’ Representative no later than the twelve (12) month anniversary of the Closing Date; provided, that, any claim by a Buyer Indemnitee for indemnification pursuant to Section 10.1(a) with respect to any of the Fundamental Representations may be made at any time. Any covenants made by any Seller, or the Company herein which by their terms are to be performed following the Closing shall survive the Closing in accordance with their respective terms.
(b) The Sellers Buyer Indemnitees will make no individual claims unless in excess of Ten Thousand Dollars ($10,000) and the Selling Shareholders shall not be obligated entitled to provide any such indemnification for any Losses incurred arising under Section 8.1(a10.1(a) unless until the aggregate amount that of the Buyer is Indemnitees’ claims for indemnification under Section 10.1(a) exceeds the Indemnification Threshold and thereafter the Buyer Indemnitees shall be entitled to recover indemnification under Section 10.1(a) only for amounts in excess of the Indemnification Threshold.
(c) The maximum aggregate indemnification amount to which the Buyer Indemnitees may be entitled under Section 10.1(a) as of any given date shall be the then-remaining Escrow Amount held by the Escrow Agent pursuant to the Escrow Agreement, which funds shall serve as the sole and exclusive source of payment and recovery for such Losses and the Sellers will have no liability with respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all any such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”)remaining amount; provided, that (i) the limitations in this paragraph maximum aggregate indemnification amount to which the Buyer Indemnitees may be entitled under Section 10.1(a) with respect to the Fundamental Representations shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof be limited, (relating to organizationii) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) the Buyer Indemnitees shall be made after the date, if any, on entitled to seek recovery for any Losses for which the applicable representation or warranty upon which such claim was based ceases Buyer Indemnitees are entitled to survive indemnification pursuant to Section 8.6.
(c) Solely for purposes 10.1(a), in excess of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the SellersEscrow Amount, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurredpursuant to Section 10.1(b), as offsets against any Year 1 Earnout Payment, Year 1 Earnout make-up amount, and/or Year 2 Earnout Payment, and (iii) the references Buyer Indemnitees shall be entitled to “Material Adverse Effect” seek recovery for any Losses for which the Buyer Indemnitees are entitled to indemnification pursuant to Section 10.1(a) in excess of the Escrow Amount, with respect to the Fundamental Representations, or “Material Adverse Change” or other materiality qualifications (or correlative termspursuant to Section 10.1(b), including as expressed in accounting concepts such as GAAPthereafter, shall be disregardedfrom the Sellers directly.
(d) Notwithstanding anything in The Buyer Indemnitees shall not be entitled to indemnification under this Agreement if, and to the extent that, the Losses are reflected on the Final Adjustment Statement.
(e) The Buyer Indemnitees and the Seller Indemnitees shall take commercially reasonable steps to mitigate any Loss subject to Section 10.1 or Section 10.2, as the case may be, upon becoming aware of any event which would reasonably be expected to, or does give rise thereto.
(f) The amount of Losses payable by an indemnitor under this Article VIII or any limitation provided herein, nothing herein 10 shall prevent any of the parties hereto from be (i) bringing an action based upon allegations of fraud or reduced by any insurance proceeds (other willful or intentional misconduct or than proceeds from any representation and warranty insurance policy that Buyer may obtain) received with respect to the claim for which indemnification is sought, less any fees and costs associated with recovering such proceeds, and (ii) seeking injunctive reduced by any amounts recovered from any third parties, by way of indemnification or other equitable relief otherwise, with respect to enforce their rights under this Agreement. In the event such action claim for which indemnification is broughtsought, the prevailing party’s attorneys’ less any fees and costs associated with recovering such proceeds. If any payment is made to an indemnitee in respect of Losses after such Losses have been recovered from the indemnitor, the indemnitee shall promptly reimburse the indemnitor upon receipt of such payment.
(g) The parties hereto acknowledge and agree that with respect to any claims for indemnification permitted pursuant to this Agreement, the survival periods set forth in Section 10.3(a) shall govern when any such claim may be brought and shall replace and supersede any statute of limitations that may otherwise be applicable.
(h) Notwithstanding the fact that any indemnitee may have the right to assert claims for indemnification under or in respect of more than one provision of this Agreement in respect of any fact, event, condition or circumstance, no indemnitee shall be paid entitled to recover the amount of any Loss suffered by such indemnitee more than once, regardless of whether such Loss may be as a result of a breach of more than one representation, warranty, obligation or covenant or otherwise. In addition, any liability for indemnification hereunder shall be determined without duplication of recovery by reason of the nonprevailing partystate of facts giving rise to such liability, or a breach of more than one representation, warranty, covenant or agreement, as applicable.
(i) The limitations set forth in this Section 10.3 shall in no way limit the rights of the Buyer Indemnitees with respect to any claims of, or causes of action arising from, willful misconduct, fraud or claims of, or causes of action for which the sole remedy sought is equitable relief.
Appears in 1 contract
Samples: Membership Unit Purchase Agreement (DecisionPoint Systems, Inc.)
Limitations on Indemnification. The Purchaser, Newco, the Surviving Corporation, the Company, and the other Persons or entities indemnified pursuant to Section 10.1 shall not assert any claim for indemnification provided for in Sections 8.1 and 8.2 hereunder against the Sellers until such time as, the aggregate of all claims which such persons may have against the Sellers shall exceed (the "Indemnification Threshold"), whereupon such claims shall be subject to the following limitations:
(a) The indemnified in full. Sellers and the Selling Shareholders shall not be obligated to provide assert any claim for indemnification hereunder against Purchaser, Newco, the Surviving Corporation or the Company until such indemnification for Losses incurred under Section 8.1(a) unless time as the aggregate amount that the Buyer is entitled to recover in respect of all claims which Sellers may have against Purchaser or the Company shall exceed $30,000, whereupon such claims exceeds $75,000 (the “Threshold”) and then such shall be indemnified in full. The limitation or assertion of claims for indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations contained in this paragraph shall not apply only to Losses arising claims based upon inaccuracies in, or breaches of, representations and warranties contained in respect of claims relating this Agreement or any document, instrument, certificate or other item required to misrepresentations be furnished pursuant to this Agreement or in connection with the transaction contemplated by this Agreement. No person shall be entitled to indemnification under this Article 10 if and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims the extent that such person's claim for indemnification is directly or indirectly related to a breach by such person of any representation, warranty, covenant or other agreement set forth in respect this Agreement. Notwithstanding any other term of Sections 8.1(a) this Agreement, no Seller shall be liable under this Article 10 or 8.2(a)(i) otherwise for an amount which exceeds the amount of proceeds received by such Seller in connection with the transactions contemplated herein. For purposes of the foregoing limitation, the DocuNet Common Stock shall be valued at the Initial Public Offering Price. No claim under this Article 10 shall be made after the dateunless an Indemnity Notice, if any, on which an Unliquidated Indemnity Notice or a Claim Notice (as applicable) has been given prior to the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6survival period.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers and the Selling Shareholders Seller Group shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless indemnify or hold harmless the aggregate amount that the Buyer is entitled to recover Parent Indemnitees in respect of all any Losses suffered, incurred or sustained by the Parent Indemnitees under Section 7.02(a)(i), until such claims exceeds Losses equal or exceed $75,000 25,000 in the aggregate (the “Threshold”) and then such indemnification shall relate (at which point the Seller Group will be obligated to all indemnify the Parent Indemnitees for the amount of such Losses from the first dollar) and the Seller Group shall not be obligated to indemnify the Parent Indemnitees for the amount of any Losses as a result of any breach or breaches under Section 7.02(a) in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities $800,000 (the “MaximumCap”); provided, however, that the limitations in this paragraph Threshold and Cap shall not apply to any Losses arising in resulting from (i) fraud on the part of the any member of the Seller Group with respect of claims relating to misrepresentations and which the Seller Group’s obligation to indemnify the Parent Indemnitees shall not be limited, or (ii) any breach of warranties relating or inaccuracy in any of the Fundamental Representations, with respect to Section 3.1 hereof (relating which the Seller Group’s obligation to organization) and Section 3.3 hereof (relating indemnify the Parent Indemnitees shall be limited to authority) which may be asserted without limitationthe Purchase Price.
(b) No claims for indemnification The Parent shall not be obligated to indemnify or hold harmless the Seller Group Indemnitees in respect of Sections 8.1(aany Losses suffered, incurred or sustained by all the Seller Group Indemnitees under Section 7.03(a) or 8.2(a)(i) in excess of the Cap; provided, however, that the Cap shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating not apply to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto Losses resulting from (i) bringing an action based upon allegations fraud on the part of fraud the Parent or other willful or intentional misconduct the Buyer with respect to which the Parent’s and Buyer’s obligation to indemnify the Seller Group Indemnitees shall not be limited or (ii) seeking injunctive any breach of or other equitable relief inaccuracy in any of the Parent Fundamental Representations, with respect to enforce their rights under this Agreement. In which the event such action is brought, Parent’s and the prevailing partyBuyer’s attorneys’ fees and costs obligations to indemnify the Seller Group Indemnitees shall not be paid by the nonprevailing partylimited.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be Section 9.03 is subject to the following limitations:
(a) The Sellers the Buyer and the Selling Shareholders Seller shall not each be obligated to provide any responsible for 50% of such indemnification for Buyer Indemnitee’s Losses incurred under Section 8.1(a9.03(i) unless up to $5,000,000 in the aggregate with respect to claims made by such Buyer Indemnitee on or prior to the Representation Limitation Date(it being understood that the Buyer’s Insurance Policy shall be the sole and exclusive remedy of the Buyer Indemnitees to the extent their Losses exceed $5,000,000 in the aggregate prior to, on or after the Representation Limitation Date); provided that, for the avoidance of doubt, the aggregate amount required to be paid by the Seller pursuant to Section 9.03(i) shall not exceed $2,500,000; provided, further, that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred Seller’s obligations under Section 8.1(a9.03(i) hereof shall be satisfied solely from and shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.available Escrow Amount;
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) the Seller shall be made after liable for Losses under Section 9.03(i) only to the dateextent that the Buyer Indemnitee would have been entitled to indemnification for such Losses under the terms of the Buyer’s Insurance Policy in effect as of the date hereof (taking into account all limitations, if anyexclusions, on qualifications, rights of subrogation and covenants and agreements set forth therein), but for (x) Item 5 of the “Declarations” set forth in the Buyer’s Insurance Policy, (y) any exclusions related to or arising out of Buyer’s actual knowledge of breaches of any representations or warranties as of the Inception Date which breach the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.Buyer did not have actual knowledge of as of the date hereof and (z) Item 4(j) of the Buyer’s Insurance Policy;
(c) Solely for purposes the Seller shall have no obligations under Section 9.03(i) from and after the Representation Limitation Date; provided that, so long as a Buyer Indemnitee delivers written notice of calculating a claim to the Seller describing in reasonable detail the claim, the amount of Losses incurred arising out of or relating thereof (if known and quantifiable), and the basis thereof prior to any breach of a representation or warranty by the BuyerRepresentation Limitation Date, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, Seller shall be disregarded.
required to indemnify such Buyer Indemnitee for all indemnifiable Losses (dsubject to the other limitations contained herein) Notwithstanding anything which such Buyer Indemnitee may incur in this Article VIII or any limitation provided herein, nothing herein shall prevent any respect to the matters which are the subject of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.claim;
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The representations and warranties entered into or made pursuant to this Agreement shall survive until the twelve (12) month anniversary of the date hereof; provided, however, that (i) Sections 3.1, 3.2, 3.4, 4.1, and 4.2 shall survive indefinitely (the representations and warranties identified in this clause (i) being the “Fundamental Representations”). The covenants and agreements requiring performance following the date hereof shall survive and continue in full force and effect until such covenants or agreements are fully performed in accordance with the terms of this Agreement; provided, however, that the covenant and agreement to indemnify against misrepresentations or breaches of certain representations and warranties shall survive only until the expiration of the underlying representation and warranty, except that if a claim for indemnification has been made with respect to a misrepresentation or breach of warranty prior to the expiration of the underlying representation and warranty, such covenant and agreement to indemnify shall survive with respect to such indemnification claim until it has been fully and finally resolved.
(b) Notwithstanding anything to the contrary in this Agreement, Sellers’ maximum aggregate liability to Purchaser Indemnified Persons for Losses for which the Purchaser Indemnified Persons are entitled to indemnification under Section 6.1(a) (including Losses arising from misrepresentations or breaches of the Fundamental Representations of Sellers and the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(ataking into account clause (i) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”hereof) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6Price.
(c) Solely No Purchaser Indemnified Person shall be entitled to indemnification pursuant to Section 6.1(a)(i) unless and until the aggregate Losses (excluding Losses with respect to any individual claim (or series of related claims) falling below the De-Minimis Threshold) incurred by all Purchaser Indemnified Persons in respect of all claims under Sections 6.1(a)(i) collectively exceed $100,000 (the “Basket”), whereupon the Purchaser Indemnified Persons shall only be entitled to indemnification hereunder (subject to the other provisions of this Article VI) from Sellers for purposes all such Losses incurred by Purchaser Indemnified Persons in excess of calculating the Basket, except that any claim relating to a misrepresentation or breach of the Fundamental Representations of Sellers shall not be subject to such limitation. Notwithstanding anything to the contrary in this Agreement, with respect to any individual claim (or series of related claims), no Purchaser Indemnified Persons shall be entitled to indemnification pursuant to Section 6.1(a)(i) unless and until the aggregate Losses incurred by all Purchaser Indemnified Persons in respect of such individual claim (or series of related claims) exceeds $50,000 (the “De-Minimis Threshold”), whereupon (i) the Purchaser Indemnified Persons shall be entitled to indemnification hereunder (subject to the other provisions of this Article VI, including the first sentence of this Section 6.3(c)) from Sellers for the full amount of Losses incurred arising out by Purchaser
(a) other than Section 6.1(a)(i) shall be subject to either the Basket or De-Minimis Threshold.
(d) The amount of any Losses for which indemnification is provided for under this Agreement shall be reduced by (i) any amounts received by the Indemnified Person as a result of any indemnification, contribution or relating other payment by any third party, and (ii) any insurance proceeds or other amounts received by the Indemnified Person from third parties with respect to such Losses. In the event any of the amounts or proceeds described in the foregoing sentence are received after the Indemnifying Person has indemnified or reimbursed the Indemnified Person for its applicable Losses as required pursuant to this Article VI, then the Indemnified Person shall promptly reimburse the Indemnifying Person by an amount equal to any breach of amounts or proceeds so received.
(e) The Indemnified Person agrees to take commercially reasonable actions to mitigate all Losses and to make timely and diligently pursue any claims for insurance and/or other payments available from third parties with respect to Losses for which it will seek indemnification hereunder.
(f) To the extent permitted by applicable Law and any applicable Contract, the Indemnifying Person shall be subrogated (on a non-recourse basis and without any representation or warranty by the BuyerIndemnified Person) to the Indemnified Person’s rights of recovery against any other unaffiliated Person with respect to any Losses to the extent any such Losses are satisfied by such Indemnifying Person. Subject to the foregoing, the SellersIndemnified Person shall execute and deliver such instruments and papers as are reasonably necessary to assign such rights to the Indemnifying Person and reasonably assist the Indemnifying Person in the exercise thereof. Any payment received by the Indemnifying Person in respect of such rights shall be distributed, or first, to the Selling Shareholders (and not for purposes Indemnifying Person in an amount equal to the aggregate payments made by the Indemnifying Person to the Indemnified Person in respect of determining whether or not a breach has occurred)such Losses and, second, the references balance, if any, to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregardedthe Indemnified Person.
(dg) Notwithstanding anything The limitations set forth in Sections 6.3(b) and 6.3(c) shall not apply to any Losses arising from actual fraud on the part of Sellers.
(h) Any Losses for which any Indemnified Person is entitled to indemnification under this Article VI shall be determined without duplication of recovery by reason of the state of facts giving rise to such Losses constituting a misrepresentation or breach of more than one representation, warranty, covenant or agreement.
(i) No claim for indemnification may be made by a Purchaser Indemnified Party and no indemnification shall be required (A) to the extent that such Losses are solely attributable to any action taken by Purchaser, any other Purchaser Indemnified Party or a Controlled Affiliate thereof or (B) to the extent a Purchaser Indemnified Party has previously been indemnified under the Asset Purchase Agreement for any Losses attributable to the same facts, matters or circumstances that are the subject of a claim for indemnification under this Agreement.
(j) Neither Sellers nor Purchaser shall have any obligation to indemnify any Indemnified Person from and against consequential damages, special damages, incidental damages, indirect damages, punitive damages, treble or other multiple damages, except to the extent such damages are included in any claim by an unaffiliated third party and actually paid by an Indemnified Person to such third party.
(k) From and after the date hereof, in the absence of fraud, the indemnification provided in this Article VIII VI (including all limitations contained herein) shall be the sole and exclusive remedy for all matters relating to this Agreement, the transactions contemplated hereby, the Remark Media Stock and the misrepresentation or breach of any representation, warranty, covenant or agreement contained herein; provided, however, that the foregoing limitation shall not limit the rights of the Parties to seek specific performance or injunctive relief. From and after date hereof, each Party expressly waives any and all claims (except with respect to fraud) which it may have under this Agreement or in connection with any matter contemplated hereby or in connection with the process by which the Remark Media Stock has been sold, other than any indemnification claims to the extent provided hereinfor in this Article VI provided, nothing herein however, that the foregoing limitation shall prevent not limit the rights of the Parties to seek specific performance or injunctive relief.
(l) None of the officers, employees, agents, owners, consultants, investment bankers, legal advisors or representatives (each solely in their capacity as such) of either Seller or Purchaser shall have any personal liability or obligation to any of the parties hereto from (i) bringing an action based upon allegations Purchaser Indemnified Persons or Seller Indemnified Persons, as applicable, in connection with this Agreement or any other document executed in connection herewith or the transactions contemplated hereby or thereby, or in respect of fraud any statement, representation, warranty or other willful assurance of any kind made by either Seller or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing partyPurchaser.
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Limitations on Indemnification. Notwithstanding any provision in this Agreement to the contrary:
12.6.1 If the Closing occurs, Seller will have no liability for indemnification hereunder for inaccuracy in, or breach of, any representations and warranties of Seller made in this Agreement or for breach of any covenant or agreement of Seller contained in this Agreement to be performed by Seller prior to the Closing Date unless Buyer notifies Seller of a claim therefor no later than 18 months following the Closing Date with the exception of (a) representations and warranties of Seller set forth in Sections 4.5 and 4.24, notice of a claim must be given no later than thirty (30) days following the expiration of the statute of limitation applicable to matters contained in such representations and warranties, and (b) representations and warranties of Seller relating to title to the Assets, including those set forth in Sections 4.2 and 4.13, for which claims may be made at any time; provided, however, that if notice of a matter which reasonably could give rise to such a claim for indemnification is provided prior to the expiration of the applicable period, which identifies a matter for which indemnification is sought, then a claim for indemnification shall be allowed, even though the claim itself for such matter is not made until after the expiration of the applicable period.
12.6.2 Seller will have no liability for indemnification with respect to (a) any inaccuracy in, or breach of, any representation or warranty of Seller contained in this Agreement, and (b) any claim for indemnification under Section 12.2.4 with respect to any Assigned 35 43 Contract listed on Schedule 2.3.3, until the aggregate amount of all amounts for which such indemnity under (a) and (b) of this Section 12.6.2 would otherwise be due therefor exceeds $250,000, and then only for the amount by which such indemnification liability exceeds $250,000, and the Seller's maximum liability for indemnification with respect to any inaccuracy in, or breach of, any representation or warranty of Seller contained in this Agreement shall be $3,500,000.
12.6.3 The indemnification provided for in Sections 8.1 and 8.2 this Article XII shall be subject to the following limitations:
(a) The Sellers sole and the Selling Shareholders shall not be obligated to provide exclusive remedy and recourse for any such indemnification for Losses incurred under Section 8.1(a) unless the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims claim relating to misrepresentations and or arising out of any breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitation.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after the date, if any, on which the applicable any representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes of calculating contained in this Agreement by any party or the amount of Losses incurred arising out of or relating to any breach of a representation any covenant or warranty by agreement to be performed on or prior to the BuyerClosing Date, except to the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a extent such breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto results from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing a party.
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Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers and the Selling Shareholders shall not be obligated to provide total aggregate amount of any such Seller indemnification for Losses incurred obligations under Section 8.1(a7.2(i) unless may not exceed 25% of the sum of the applicable Purchase Price paid by Buyer at the Call Closing plus the aggregate amount that the Buyer is entitled to recover in respect of all such claims exceeds $75,000 Annual Option Payments paid by Buyer in cash hereunder (the “Threshold”) and then such indemnification shall relate to all such Losses in excess including any payments of the Threshold; and, in principal under any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”Promissory Note); provided, that the . The limitations set forth in this paragraph Section 7.5(a) shall not apply to Losses arising breaches of the Fundamental Representations and the representations contained in respect the second and third sentences of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organizationSections 2.1(a) and the second sentence of 2.2(b)(i), in each case, subject to the limitations on survival, if any, set forth in Section 3.3 hereof (relating to authority) which may be asserted without limitation7.1.
(b) No claims for indemnification in respect The amount of Sections 8.1(a) damages required to be paid by any party to indemnify any other party pursuant to this Article VII pursuant to any Buyer Claims or 8.2(a)(i) Seller Claims hereunder shall be made after reduced (i) to the dateextent of any amounts actually received by such other party pursuant to the terms of any insurance policies covering such Buyer Claim or Seller Claim, if anyas the case may be, on which and (ii) by the applicable representation amount of any net tax benefit actually realized by the Indemnified Party arising from the occurrence or warranty upon payment of any such damages in the taxable year in which such claim was based ceases to survive pursuant to Section 8.6damages are incurred.
(c) Solely Seller makes no other representations or warranties to Buyer Indemnified Parties in respect of the transactions contemplated hereby, including by the prior delivery of any information, documents, projections, forecasts, business plans or other material provided or made available in any “data room,” any confidential information memoranda or any management presentations in expectation of the transactions contemplated by this Agreement, except as expressly set forth in a representation or warranty contained in Article II.
(d) If this Agreement is terminated by either party as a result of the willful failure of the other party to fulfill a condition to the performance of the obligations of another party set forth in Article VI hereto, or to perform a covenant or agreement of this Agreement, or from a willful breach of any representation or warranty set forth in Article II and Article III hereto, such party shall be fully liable for purposes any and all Buyer Claims or Seller Claims, as the case may be, incurred or suffered by the other party as a result of calculating such breach.
(e) Each of Buyer and Seller acknowledge that, except for Buyer Claims and Seller Claims based on fraud or otherwise seeking an equitable remedy, the amount of Losses incurred arising out remedies provided in this Article VII shall be the exclusive remedy for damages (whether at law or in equity) as a result of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (Buyer Claims and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregardedSeller Claims.
(df) Notwithstanding anything in this Article VIII VII to the contrary, with respect to any claim of or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of involving fraud or other willful intentional misrepresentation, neither a party’s good faith judgment as to whether a matter meets a “materiality” or Seller Material Adverse Effect threshold, as the case may be, under a representation or warranty qualified by materiality, Seller Material Adverse Effect, nor a party’s good faith estimates and assumptions used in preparation of financial statements shall be considered fraud or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under misrepresentation for purposes of this Agreement unless manifestly and materially unreasonable. Also, for purposes of this Agreement. In , no party shall make a claim for fraud or intentional misrepresentation unless such party, at the event such action time the claim is broughtmade, can demonstrate by citing specific facts that the prevailing party’s attorneys’ fees and costs shall be paid party making the representation or warranty in question had actual knowledge that the representation or warranty was false at the time it was made; claims for fraud or intentional misrepresentation based on general allegations that are not supported by specific facts cited by the nonprevailing partyclaiming party when the claim is made shall not be permitted.
Appears in 1 contract
Samples: Call Agreement (FX Real Estate & Entertainment Inc.)
Limitations on Indemnification. The indemnification provided for Notwithstanding anything in Sections 8.1 and 8.2 shall be subject this Agreement to the following limitationscontrary, the right to indemnification under this Article VIII is limited as follows:
(a) The Sellers and the Selling Shareholders Parent Indemnitees shall not be obligated entitled to provide assert any such indemnification claims for Losses incurred under pursuant to Section 8.1(a8.3(a)(i) unless until such time that the aggregate amount that of all such Losses suffered by the Buyer is Parent Indemnitees pursuant to Section 8.3(a)(i) exceeds $2,000,000 (the “Deductible”), and in such event, the Parent Indemnitees shall be entitled to recover in respect the amount of all such claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate to all such Losses in excess of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption of the Assumed Liabilities (the “Maximum”); provided, that the limitations in this paragraph shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitationDeductible.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) shall be made after For the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive pursuant to Section 8.6.
(c) Solely for purposes purpose of calculating Losses under this Article VIII after a breach has occurred (and, for the amount sake of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyerclarity, the Sellers, or the Selling Shareholders (and not for purposes the purpose of determining whether or not a breach has occurred), the references to “(i) any and all materiality or Material Adverse Effect” or “Material Adverse Change” or other materiality Effect qualifications (or correlative terms)similar qualifications) in the representations, including as expressed in accounting concepts such as GAAPwarranties, covenants and agreements shall be disregardeddisregarded and (ii) any amounts actually received from insurers or third parties with respect to any contractual rights to indemnification, reimbursement, offset or recovery shall reduce the amount of Losses for determining the amount of the indemnity obligation under this Article VIII.
(c) Anything herein to the contrary notwithstanding, no breach of any representation, warranty, covenant or agreement contained herein shall give rise to any right on the part of Parent, Merger Sub, any Parent Indemnitee or any Seller Indemnitee, after the consummation of the transactions contemplated hereby, to rescind this Agreement or any of the transactions contemplated hereby.
(d) Notwithstanding anything in Any Loss for which any Parent Indemnitee is entitled to indemnification under this Article VIII Section 8.5 shall be determined without duplication of recovery by reason of the state of facts giving rise to such Loss constituting a breach of more than one representation, warranty, covenant or agreement.
(e) From and after the Closing, no Securityholder shall have any right of contribution, indemnification or other recourse against the Surviving Corporation or any limitation provided herein, nothing herein shall prevent of its Subsidiaries or any of their respective Representatives, successors and permitted assigns with respect to any breach of this Agreement by the parties hereto from Company.
(if) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs No Parent Indemnitee shall be paid entitled to indemnification hereunder for any Loss arising from a breach of any representation, warranty or covenant set forth herein (and the amount of any Loss incurred with respect of such breach shall not be included in the calculation of any limitations on indemnification set forth herein) to the extent any liability, matter or item is included in the calculation of Final Net Working Capital.
(g) No Parent Indemnitee shall be entitled to recover or make a claim for Losses with respect to any claim by a third party, including any Governmental Entity, if such third party claim was instigated or encouraged by the nonprevailing partyactions of Parent, Merger Sub or one of its Affiliates, including the Company and its Subsidiaries after the Effective Time, except for such actions that are required by applicable Law.
(h) A Parent Indemnitee’s right to indemnification for Losses with respect to Taxes (relating to a breach of a representation in Section 4.19 or otherwise) shall be limited to Taxes attributable to Pre-Closing Tax Periods.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers indemnification obligations of the parties in this Article 11 shall survive the Closing for a period of eighteen (18) months thereafter, except that (i) indemnification claims relating to Seller’s title to and ownership of the Assets and the Selling Shareholders respective responsibilities of the parties for the Retained Liabilities and the Assumed Liabilities shall not be obligated survive the Closing for a period of six (6) years thereafter; (ii) indemnification claims relating to provide any such Taxes and Benefit Plans shall survive the Closing for the period of the applicable statute of limitations, (iii) indemnification for Losses incurred claims relating to environmental matters shall survive the Closing until (A) in the case of indemnification claims asserted under Section 8.1(a11.3 hereof with respect to any parcel of Seller Property or Shareholder Property purchased by Buyer pursuant to Article 14 hereof, the closing date for Buyer’s purchase of such parcel, (B) unless in the aggregate amount that case of indemnification claims asserted under Section 11.3 hereof with respect to any parcel of Seller Lease Property or Shareholder Lease Property for which Buyer has elected to waive its option to reject such parcel pursuant to Section 14.3(b) hereof, the date on which Buyer is entitled to recover has given notice of such election, and (C) in respect the case of all such other indemnification claims exceeds $75,000 (the “Threshold”) and then such indemnification shall relate relating to all such Losses in excess of the Threshold; and, in any eventenvironmental matters, the maximum aggregate obligation earlier of the Sellers and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to the date of such Loss plus the cost associated with the assumption expiration of the Assumed Liabilities applicable statute of limitations for such matters or the expiration of a period of six (6) years after the “Maximum”)Closing; provided, that and (iv) any indemnification claim asserted during the limitations applicable survival period shall continue in this paragraph effect with respect to such claim until such claim shall not apply to Losses arising in respect of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which may be asserted without limitationhave been finally resolved or settled.
(b) No claims for indemnification Notwithstanding anything to the contrary contained or implied in this Agreement, (i) no party will be required to indemnify any other party hereto in respect of Sections 8.1(aany Damages suffered by such party unless and until the aggregate dollar amount of such Damages shall have exceeded $530,000, and then only to the extent that such amount of Damages exceeds such amount, and (ii) the aggregate Damages for which an Indemnifying Party will be obligated to indemnify an Indemnified Party under this Article 11 shall not exceed $10,600,000; provided, however, the limitations contained in this Section 11.6(b) shall not apply to (A) any failure of Buyer to pay the Purchase Price as provided herein, (B) any failure of Seller to sell and transfer the Assets to Buyer free and clear of all Liens, (C) any failure of Seller to perform its obligations under Section 8.5, (D) any breach of Sellers’ obligations with respect to Retained Liabilities (excluding any Contracts and rights contemplated by Section 2.3 hereof) or 8.2(a)(iof Buyer’s obligations with respect to the Assumed Liabilities, and (E) any breach by Seller or of Buyer of their respective obligations in Article 13 hereof; and provided further, however, the limitation contained in Section 11.6(b)(i) shall not apply to (1) any Damages suffered by Buyer with respect to environmental matters or conditions associated with any parcel of Seller Property or Shareholder Property and which relate to conditions existing or events occurring prior to the closing date for Buyer’s purchase of such parcel pursuant to Article 14 hereof, (2) any Damages suffered by Buyer with respect to environmental matters or conditions associated with any parcel of Seller Lease Property or Shareholder Lease Property and which relate to conditions existing or events occurring prior to the date on which Buyer has given notice of its election to waive its option to reject such parcel pursuant to Section 14.3(b) hereof, and (3) any Damages suffered by Buyer with respect to environmental matters or conditions associated with any parcel of Third Party Property and which relate to conditions existing or events occurring prior to the expiration of Buyer’s option to reassign the applicable Third Party Lease back to Seller pursuant to the related Assignment and Assumption of Lease; and provided further, however, the limitation contained in Section 11.6(b)(ii) shall be reduced, dollar for dollar, to the extent of any costs incurred by Seller in effecting any remedy required to be made after the date, if any, on which the applicable representation or warranty upon which such claim was based ceases to survive by Seller pursuant to Section 8.614.2, up to a maximum reduction of $5,980,000.
(c) Solely for purposes of calculating the amount of Losses incurred arising out of or relating to any breach of a representation or warranty by the Buyer, the Sellers, or the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregarded.
(d) Notwithstanding anything in this Article VIII or any limitation provided herein, nothing herein shall prevent any of the parties hereto from (i) bringing an action based upon allegations of fraud or other willful or intentional misconduct or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing party.
Appears in 1 contract
Limitations on Indemnification. The indemnification provided for in Sections 8.1 and 8.2 shall be subject to the following limitations:
(a) The Sellers representations and warranties of Buyer and each Seller (including without limitation each Indemnifying Seller) contained in this Agreement, the Buyer Disclosure Schedule, the Corporation Disclosure Schedule, the Seller Disclosure Schedule or in any certificate, instrument, agreement or other writing delivered by or on behalf of Buyer or any Seller pursuant to this Agreement or in connection with the transactions contemplated herein shall survive any investigation heretofore or hereafter made by or on behalf of the Buyer or the Seller, as applicable (subject to the provisions of this Article 9), and the Selling Shareholders shall not be obligated to provide any such indemnification for Losses incurred under Section 8.1(a) unless consummation of the aggregate amount that the Buyer is entitled to recover in respect of transactions contemplated herein, and all such claims exceeds $75,000 (the “Threshold”) representations and then such indemnification warranties shall relate to all such Losses in excess be of the Threshold; and, in any event, the maximum aggregate obligation of the Sellers no further force and the Selling Shareholders hereunder for Losses incurred under Section 8.1(a) hereof shall not exceed the Purchase Price paid to the Sellers to effect after two years from the date of such Loss plus the cost associated with Closing, except for matters set forth in Sections 3.14, 3.17, 3.18, 4.1, 4.2, 4.3, 4.4, 5.10, 5.12 and 5.16, for which the assumption survival period shall extend until the expiration of the Assumed Liabilities applicable statutory limitations period (as applicable, the “Maximum”"Survival Period"); provided. Anything to the contrary notwithstanding, that a claim for indemnification which is made in writing but not resolved prior to the limitations in this paragraph shall not apply to Losses arising in respect expiration of claims relating to misrepresentations and breach of warranties relating to Section 3.1 hereof (relating to organization) and Section 3.3 hereof (relating to authority) which the Survival Period may be asserted without limitationpursued and resolved after such expiration.
(b) No claims for indemnification in respect of Sections 8.1(a) or 8.2(a)(i) An Indemnitee shall be made after the dateobligated to prosecute diligently and in good faith any claim for Indemnified Losses with any applicable insurer prior to collecting any indemnification payment hereunder, provided that an Indemnitee shall be entitled to collect an indemnification payment otherwise due to it hereunder if any, on which such Indemnitee has not received reimbursement from the applicable representation or warranty upon which insurer(s) within twelve (12) months after it has given such claim was based ceases to survive pursuant to Section 8.6insurer(s) appropriate written notice of its claim.
(c) Solely for purposes In the case where an Indemnitee recovers from third parties all or any part of calculating any amount previously paid to it by any Seller hereunder, such Indemnitee shall promptly pay over to such Seller the amount so recovered (net of Losses any expenses actually incurred arising out by it in procuring such recovery), but not in excess of or relating to any breach of a representation or warranty amount previously so paid by the BuyerIndemnifying Party. No amount shall become payable by an Indemnifying Party to an Indemnity in respect of any third party claim unless and to the extent that the Indemnity shall have become required to pay after exhausting all available remedies, and shall actually have paid, the Sellers, or relevant Indemnified Losses to the Selling Shareholders (and not for purposes of determining whether or not a breach has occurred), the references to “Material Adverse Effect” or “Material Adverse Change” or other materiality qualifications (or correlative terms), including as expressed in accounting concepts such as GAAP, shall be disregardedrelevant third party.
(d) Notwithstanding anything The amount of any claim made hereunder shall be reduced by taking into account (i) any amount payable to the Buyer or the Corporation by any insurer or other third party in respect of the relevant Indemnified Losses, and (ii) any offsetting benefit (including any tax reduction) to the relevant Corporation or to any Affiliate thereof, either in the year in which the Indemnified Losses are sustained or in any other year.
(e) For purposes of computing the amount of any Indemnified Losses, only the loss actually sustained shall be taken into account, to the exclusion of any price/earnings or similar multiplier implicit in the Purchase Price, and in no event shall any Indemnifying Party be liable for unforeseen or consequential damages.
(f) The Indemnitees shall not be entitled to any indemnification payments if they have not timely notified the Indemnifying Parties and otherwise complied in all material respects with all the other provisions of this Article VIII 9.
(g) The Indemnitees shall not be entitled to any indemnification in connection with Indemnified Losses resulting from facts of which the Indemnitees were aware at the time of executing this Agreement.
(h) Sellers shall have no liability under any provision of this Agreement for Indemnified Losses which arise as a result of (i) actions taken by the Buyer or the Corporation after the Closing Date, or (ii) the passing of, or any limitation provided hereinchange in, nothing herein after the date hereof, any law or administrative practice of any government, governmental department, agency or regulatory body in any such case not actually in force at the date of this Agreement.
(i) The Indemnitees shall prevent use their best efforts, and the Buyer Indemnitees shall cause the Corporation to use its best efforts, to mitigate any Indemnified Losses which any of them may suffer as a result of any matters giving rise to a claim for indemnification hereunder.
(j) The provisions of this Article 9 shall constitute the sole remedy of all of the parties hereto from (i) bringing an action based upon allegations for any misrepresentation or breach of fraud representation or warranty contained in this Agreement, any Disclosure Schedule, or any certificate, instrument, agreement or other willful writing delivered by or intentional misconduct on behalf of any such party pursuant to this Agreement or (ii) seeking injunctive or other equitable relief to enforce their rights under this Agreement. In in connection with the event such action is brought, the prevailing party’s attorneys’ fees and costs shall be paid by the nonprevailing partytransactions contemplated herein.
Appears in 1 contract
Samples: Stock Purchase Agreement (Lineo Inc)
