Limitations on Rights of Indemnitees. (i) Seller shall not be required to indemnify Purchaser Indemnitees with respect to any Losses unless and until the aggregate amount of all such Losses exceeds $500,000, in which event Purchaser Indemnitees will be entitled to recover Losses arising out of or relating to such matters only to the extent in excess thereof (the “Deductible”). Seller’s maximum liability to Purchaser Indemnitees with respect to any claim for indemnification arising out of or relating to matters described in Section 16.2(b) shall not exceed $30,000,000 in the aggregate (the “Cap”). (ii) Seller shall not be required to indemnify Purchaser Indemnitees with respect to any claim for indemnification arising out of or relating to matters described in Section 16.2(b) made by any Purchaser Indemnitee after Closing if the facts and circumstances giving rise to such claim are known to the Purchaser Indemnitee prior to the Closing or if, as the result of exercise of reasonable diligence and review, determined with due regard for Seller’s desire to close by December 31, 2015, should have been known to the Purchaser Indemnitee prior to the Closing. (iii) Purchaser shall not be required to indemnify Seller Indemnitees with respect to any Losses unless and until the aggregate of all such Losses exceeds the Deductible, in which event Seller Indemnitees will be entitled to recover Losses arising out of or relating to such matters only to the extent in excess thereof and only up to the Cap. (iv) Neither party shall have any obligation to indemnify the other to the extent the Loss arises from the fraud, willful misconduct, or the material breach of this Agreement by the indemnified party. (v) Without limiting the generality of the foregoing, any indemnification claim involving Losses of less than $50,000 (the “De Minimus Amount”) shall not be entitled to indemnification under this Section 16.2 and shall not be counted toward satisfaction of the Deductible. No Losses shall be included in determining whether the Deductible has been reached unless a notice seeking indemnification for such Losses has been given by the indemnified parties in accordance with Section 16.2(d). The Deductible shall not apply to Seller’s obligation to indemnify Purchaser Indemnitees under Section 16.2(b)(iii). In addition, neither the Deductible nor the De Minimus Amount exception shall apply to either (A) Purchaser’s obligations under Section 2.4 with respect to Transfer Taxes or (B) Seller’s obligations under Section 6.6 with respect to Taxes attributable to a Pre-Closing Tax Period or that portion of a Straddle Tax Period ending at the end of business on the Closing Date.
Appears in 1 contract
Limitations on Rights of Indemnitees. Notwithstanding anything herein to the contrary:
(i) Seller (A) the Securityholders shall not be required to indemnify Purchaser Indemnitees with respect to any Losses unless and until the aggregate amount of all such Losses exceeds $500,000, in which event Purchaser Indemnitees will be entitled to recover Losses arising out of or relating to such matters only to the extent in excess thereof (the “Deductible”). Seller’s maximum liability to Purchaser Parent Indemnitees with respect to any claim for indemnification arising out of or relating to matters described in Section 16.2(b8.2(a)(i) shall not exceed $30,000,000 in unless and until the aggregate amount of all such claims for such matters exceeds an amount equal to Two Hundred Fifty Thousand Dollars ($250,000) (the “CapDeductible”).
, in which event the Parent Indemnitees shall be entitled to recover Losses only in excess thereof; provided, that the foregoing limitation shall not apply to a claim for indemnification to the extent such claim is based upon fraud or a breach of any of the Fundamental Representations of the Company, and (iiB) Seller Parent shall not be required to indemnify Purchaser the Securityholder Indemnitees with respect to any claim for indemnification arising out of or relating to matters described in Section 16.2(b8.2(b)(i) made by any Purchaser Indemnitee after Closing if the facts and circumstances giving rise to such claim are known to the Purchaser Indemnitee prior to the Closing or if, as the result of exercise of reasonable diligence and review, determined with due regard for Seller’s desire to close by December 31, 2015, should have been known to the Purchaser Indemnitee prior to the Closing.
(iii) Purchaser shall not be required to indemnify Seller Indemnitees with respect to any Losses unless and until the aggregate amount of all such Losses claims for such matters exceeds the Deductible, in which event Seller the Securityholder Indemnitees will shall be entitled to recover Losses only in excess thereof; provided, that the foregoing limitation shall not apply to a claim for indemnification to the extent such claim is based upon fraud or a breach of any of the Fundamental Representations of Parent and Merger Sub;
(ii) (A) in no event shall the aggregate Liability of the Securityholders (x) arising out of or relating to Section 8.2(a)(i) exceed an amount equal to the Indemnity Escrow Amount (the “Cap”); provided, however, that the limitation set forth in this clause (x) shall not apply to indemnification for Losses arising out of or resulting from a claim for indemnification to the extent such claim is based upon fraud or a breach of any of the Fundamental Representations of the Company or (y) arising out of or relating to this Article VIII exceed the Merger Consideration; provided that the limitation set forth in this clause (y) shall not apply to indemnification for Losses arising out of or resulting from a claim for indemnification to the extent such claim is based upon fraud, which shall be uncapped, and (B) in no event shall the aggregate Liability of Parent (x) arising out of or relating to Section 8.2(b)(i) exceed the Cap; provided, however, that the limitation set forth in this clause (x) shall not apply to indemnification for Losses arising out of or resulting from a claim for indemnification to the extent such claim is based upon fraud or a breach of any of the Fundamental Representations of Parent and Merger Sub or (y) arising out of or relating to this Article VIII exceed the Merger Consideration; provided that the limitation set forth in this clause (y) shall not apply to indemnification for Losses arising out of or resulting from a claim for indemnification to the extent such claim is based upon fraud, which shall be uncapped;
(iii) to the extent required by applicable Law, each Indemnitee shall use commercially reasonable efforts to mitigate any Losses arising out of or relating to this Agreement or the Contemplated Transactions upon becoming aware of any event that would be reasonably expected to give rise to Losses; provided that costs incurred in connection with such matters only to the extent in excess thereof and only up to the Cap.efforts shall be included as Losses;
(iv) Neither the amount of any Losses for which an Indemnitee claims indemnification under this Agreement shall be reduced by the amount of any insurance proceeds and any indemnification, contribution, offset or reimbursement payments actually received from a third party shall have any obligation with respect to indemnify such Losses (net of (x) documented out-of-pocket expenses incurred in connection with such recovery, (y) deductibles, premiums and retentions paid pursuant to the other insurance policies under which such recovery is made to the extent arising out of or in connection with such claims and (z) the Loss arises net present value of any increase in premiums paid and retentions for such policies to the extent arising out of or in connection with such claim); provided that if an Indemnitee actually receives insurance proceeds or indemnification, contribution, offset or reimbursement payments from third party insurers with respect to such Losses, in each case, at any time subsequent to any indemnification payment pursuant to this Article VIII, then such Indemnitee shall promptly reimburse the fraudapplicable Indemnitor for the lesser of (A) the amount of such proceeds and/or payments actually received by such Indemnitee in respect of such Losses (net of (x) documented out-of-pocket expenses incurred in connection with such recovery, willful misconduct(y) deductibles, premiums and retentions paid pursuant to the insurance policies under which such recovery is made to the extent arising out of or in connection with such claims, and (z) the material breach net present value of this Agreement any increase in premiums paid and retentions for such policies to the extent arising out of or in connection with such claim) and (B) the aggregate amount of the payment made by the indemnified party.such Indemnitor in respect of such Losses; and
(v) Without limiting the generality of the foregoing, any indemnification claim involving Losses of less than $50,000 (the “De Minimus Amount”) provided hereunder shall not be so applied as to avoid any double counting and no Indemnitee shall be entitled to obtain indemnification under this Section 16.2 and shall not be counted toward satisfaction (x) to the extent that such Losses are taken into account in the determination of the Deductible. No Losses shall be included Closing Consideration set forth in determining whether the Deductible has been reached unless a notice seeking indemnification for such Losses has been given by the indemnified parties in accordance with Section 16.2(d). The Deductible shall not apply to Seller’s obligation to indemnify Purchaser Indemnitees under Section 16.2(b)(iii). In addition, neither the Deductible nor the De Minimus Amount exception shall apply to either (A) Purchaser’s obligations under Section 2.4 with respect to Transfer Taxes Final Statement or (By) Seller’s obligations under Section 6.6 with respect to Taxes attributable to a Pre-Closing Tax Period more than once for the same matter or that portion of a Straddle Tax Period ending at the end of business on the Closing DateLosses.
Appears in 1 contract
Samples: Merger Agreement (Ideanomics, Inc.)
Limitations on Rights of Indemnitees. Notwithstanding anything herein to the contrary:
(i) Seller (A) the Stockholders shall not be required to indemnify Purchaser Indemnitees with respect to any Losses unless and until the aggregate amount of all such Losses exceeds $500,000, in which event Purchaser Indemnitees will be entitled to recover Losses arising out of or relating to such matters only to the extent in excess thereof (the “Deductible”). Seller’s maximum liability to Purchaser Parent Indemnitees with respect to any claim for indemnification arising out of or relating to matters described in Section 16.2(b8.2(a)(i) shall not exceed $30,000,000 in unless and until the aggregate amount of all such claims for such matters exceeds an amount equal to One Hundred Thousand Dollars ($100,000) (the “CapDeductible”).
, in which event the Parent Indemnitees shall be entitled to recover Losses only in excess thereof; provided, that the foregoing limitation shall not apply to a claim for indemnification to the extent such claim is based upon fraud or a breach of any of the Fundamental Representations of the Group Companies, and (iiB) Seller Parent shall not be required to indemnify Purchaser the Stockholder Indemnitees with respect to any claim for indemnification arising out of or relating to matters described in Section 16.2(b8.2(b)(i) made by any Purchaser Indemnitee after Closing if the facts and circumstances giving rise to such claim are known to the Purchaser Indemnitee prior to the Closing or if, as the result of exercise of reasonable diligence and review, determined with due regard for Seller’s desire to close by December 31, 2015, should have been known to the Purchaser Indemnitee prior to the Closing.
(iii) Purchaser shall not be required to indemnify Seller Indemnitees with respect to any Losses unless and until the aggregate amount of all such Losses claims for such matters exceeds the Deductible, in which event Seller the Stockholder Indemnitees will shall be entitled to recover Losses only in excess thereof; provided, that the foregoing limitation shall not apply to a claim for indemnification to the extent such claim is based upon fraud or a breach of any of the Fundamental Representations of Parent and Merger Sub;
(ii) (A) in no event shall the aggregate Liability of the Stockholders (x) arising out of or relating to Section 8.2(a)(i) exceed an amount equal to Twenty-Five Million Dollars ($25,000,000) (the “Cap”); provided, however, that the limitation set forth in this clause (x) shall not apply to indemnification for Losses arising out of or resulting from a claim for indemnification to the extent such claim is based upon fraud or a breach of any of the Fundamental Representations of any of the Group Companies or (y) arising out of or relating to this Article VIII exceed the Merger Consideration; provided that the limitation set forth in this clause (y) shall not apply to indemnification for Losses arising out of or resulting from a claim for indemnification to the extent such claim is based upon fraud or relating to, arising under or in any way connected with, the Pending Litigation Matter, which each such claim shall be uncapped, and (B) in no event shall the aggregate Liability of Parent (x) arising out of or relating to Section 8.2(b)(i) exceed the Cap; provided, however, that the limitation set forth in this clause (x) shall not apply to indemnification for Losses arising out of or resulting from a claim for indemnification to the extent such claim is based upon fraud or a breach of any of the Fundamental Representations of Parent and Merger Sub or (y) arising out of or relating to this Article VIII exceed the Merger Consideration; provided that the limitation set forth in this clause (y) shall not apply to indemnification for Losses arising out of or resulting from a claim for indemnification to the extent such claim is based upon fraud, which shall be uncapped; For the avoidance of doubt, any recoveries by a Parent Indemnitee on account of indemnification for Losses related to, arising out of, pursuant to, or in connection with (i) fraud, (ii) a breach of the Fundamental Representations of the Stockholders or any of the Group Companies or (iii) Sections 8.2(a)(ii) through and including (xiv), regardless of whether such claim could also be classified as the breach of a non-Fundamental Representation of the Stockholders or any of the Group Companies under Section 8.2(a)(i) and regardless of whether any such Losses were satisfied from any or all of the Indemnity Escrow Shares held in the Indemnity Escrow Account, shall not reduce the Cap.
(iii) to the extent required by applicable Law, each Indemnitee shall use commercially reasonable efforts to mitigate any Losses arising out of or relating to this Agreement or the Contemplated Transactions upon becoming aware of any Event that would be reasonably expected to give rise to Losses; provided that costs incurred in connection with such matters only to the extent in excess thereof and only up to the Cap.efforts shall be included as Losses;
(iv) Neither the amount of any Losses for which an Indemnitee claims indemnification under this Agreement shall be reduced by the amount of any insurance proceeds and any indemnification, contribution, offset or reimbursement payments actually received from a third party shall have any obligation with respect to indemnify such Losses (net of (x) documented out-of-pocket expenses incurred in connection with such recovery, (y) deductibles, premiums and retentions paid pursuant to the other insurance policies under which such recovery is made to the extent arising out of or in connection with such claims and (z) the Loss arises net present value of any increase in premiums paid and retentions for such policies to the extent arising out of or in connection with such claim); provided that if an Indemnitee actually receives insurance proceeds or indemnification, contribution, offset or reimbursement payments from third party insurers with respect to such Losses, in each case, at any time subsequent to any indemnification payment pursuant to this Article VIII, then such Indemnitee shall promptly reimburse the fraudapplicable Indemnitor for the lesser of (A) the amount of such proceeds and/or payments actually received by such Indemnitee in respect of such Losses (net of (x) documented out-of-pocket expenses incurred in connection with such recovery, willful misconduct(y) deductibles, premiums and retentions paid pursuant to the insurance policies under which such recovery is made to the extent arising out of or in connection with such claims, and (z) the material breach net present value of this Agreement any increase in premiums paid and retentions for such policies to the extent arising out of or in connection with such claim) and (B) the aggregate amount of the payment made by the indemnified party.such Indemnitor in respect of such Losses;
(v) Without limiting The amount of any Losses for which an Indemnitee claims indemnification under this Agreement shall be reduced by the generality amount by which the Tax liability of the foregoingIndemnitee, with respect to a taxable period, is actually reduced as a result of such Losses (net of any Tax cost actually incurred by the Indemnitee arising from the receipt of the indemnity payments hereunder), calculated by computing the amount of Taxes before and after inclusion of any Tax items attributable to such Losses for which indemnification was made and treating such Tax items attributable to such Losses as the last items claimed for such taxable period; and
(vi) any indemnification claim involving Losses of less than $50,000 (the “De Minimus Amount”) provided under this Agreement shall not be so applied as to avoid any double counting and no Indemnitee shall be entitled to obtain indemnification under this Section 16.2 and shall not be counted toward satisfaction (x) to the extent that such Losses are taken into account in the determination of the Deductible. No Losses shall be included Closing Consideration set forth in determining whether the Deductible has been reached unless a notice seeking indemnification for such Losses has been given by the indemnified parties in accordance with Section 16.2(d). The Deductible shall not apply to Seller’s obligation to indemnify Purchaser Indemnitees under Section 16.2(b)(iii). In addition, neither the Deductible nor the De Minimus Amount exception shall apply to either (A) Purchaser’s obligations under Section 2.4 with respect to Transfer Taxes Final Statement or (By) Seller’s obligations under Section 6.6 with respect to Taxes attributable to a Pre-Closing Tax Period more than once for the same matter or that portion of a Straddle Tax Period ending at the end of business on the Closing DateLosses.
Appears in 1 contract
Samples: Merger Agreement (Ideanomics, Inc.)
Limitations on Rights of Indemnitees. (i) Seller Parent shall not be required to indemnify Purchaser the Stockholder Indemnitees with respect to any Losses Claim under Section 8.2(b)(i) unless and until the aggregate amount of all Losses for such Losses Claims exceeds an amount equal to two million two hundred fifty thousand dollars ($500,0002,250,000), in which event Purchaser the Stockholder Indemnitees will shall be entitled to recover Losses only in excess thereof; provided, that the foregoing limitation shall not apply to a claim for indemnification to the extent such claim is based upon Fraud or a breach of any of the Fundamental Representations of Parent and Merger Sub.
(ii) In no event shall Buyer’s aggregate Liability for Losses based upon, arising out of, or related to this Agreement or the Contemplated Transaction exceed ten million dollars ($10,000,000); provided that such limitation shall not apply to indemnification for Losses arising out of or resulting from any breach of any Fundamental Representation or claims of Fraud.
(iii) Stockholders shall not be required to indemnify the Parent Indemnitees with respect to any Claim under Section 8.2(a)(i) unless and until the aggregate amount of all Losses for such Claims exceeds an amount equal to $three million two hundred fifty thousand dollars ($2,250,000), in which event the Parent Indemnitees shall be entitled to recover Losses only in excess thereof; provided, that the foregoing limitation shall not apply to a claim for indemnification to the extent such claim is based upon Fraud or a breach of any of the Fundamental Representations of Parent and Merger Sub.
(iv) Except as set forth in Sections 8.2(c)(v) and (vi), the sole and exclusive remedy of the Parent Indemnitees with respect to any and all Losses based upon, arising out of, or related to this Agreement or the Contemplated Transactions, shall be first, from the Retention Escrow Shares then remaining in the Retention Escrow Account in accordance with the disbursement provisions of Section 8.4 and second, if there are no funds remaining in the Retention Escrow Account, from the RWI Insurance Policy; provided, that after each of the Retention Escrow Fund and the RWI Insurance Policy (to the extent the RWI Insurance Policy covers such a Loss) have been exhausted, to the extent such Claim is based upon breach of Fundamental Representations of the Company, Fraud or the matters in Section 8.2(a)(ii)-(iv), Parent Indemnitees may seek recovery directly from the Stockholders pursuant to Section 8.2(a).
(v) The sole and exclusive remedy of the Parent Indemnitees with respect to any and all Losses based upon, arising out of, or related to Claims made pursuant to the Section 8.2(a)(vi)-(vii), shall be first, from the Retention Escrow Shares then remaining in the Retention Escrow Account in accordance with the disbursement provisions of Section 8.4 and second, from the Special Indemnity Escrow Shares then remaining in the Special Indemnity Escrow Account, in accordance with the disbursement provisions of Section 8.4.
(vi) The sole and exclusive remedy of the Parent Indemnitees with respect to any and all Losses based upon, arising out of, or related to Claims made pursuant to Section 8.2(a)(v), shall be first, from the Retention Escrow Shares then remaining in the Retention Escrow Account in accordance with the disbursement provisions of Section 8.4 and second, from the Special Indemnity Escrow Shares (Open Source) then remaining in the Special Indemnity Escrow Account (Open Source), in accordance with the disbursement provisions of Section 8.4.
(vii) To the extent required by applicable Law, the Parent Indemnitee shall use commercially reasonable efforts to mitigate any Losses arising out of or relating to this Agreement or the Contemplated Transactions upon becoming aware of any Event that would be reasonably expected to give rise to Losses; provided that costs incurred in connection with such matters only efforts shall be included as Losses.
(viii) The amount of any Losses for which an Indemnitee claims indemnification under this Agreement shall be reduced by the amount by which the Tax liability of the Indemnitee, with respect to a taxable period, is actually reduced as a result of such Losses (net of any Tax cost actually incurred by the Indemnitee arising from the receipt of the indemnity payments hereunder), calculated by computing the amount of Taxes before and after inclusion of any Tax items attributable to such Losses for which indemnification was made and treating such Tax items attributable to such Losses as the last items claimed for such taxable period.
(ix) Any indemnification provided under this Agreement shall be so applied as to avoid any double counting and no Indemnitee shall be entitled to obtain indemnification (A) to the extent in excess thereof (the “Deductible”). Seller’s maximum liability to Purchaser Indemnitees with respect to any claim for indemnification arising out of or relating to matters described in Section 16.2(b) shall not exceed $30,000,000 that such Losses are taken into account in the aggregate (the “Cap”).
(ii) Seller shall not be required to indemnify Purchaser Indemnitees with respect to any claim for indemnification arising out determination of or relating to matters described in Section 16.2(b) made by any Purchaser Indemnitee after Closing if the facts and circumstances giving rise to such claim are known to the Purchaser Indemnitee prior to the Closing or if, as Consideration set forth in the result of exercise of reasonable diligence and review, determined with due regard for Seller’s desire to close by December 31, 2015, should have been known to the Purchaser Indemnitee prior to the Closing.
(iii) Purchaser shall not be required to indemnify Seller Indemnitees with respect to any Losses unless and until the aggregate of all such Losses exceeds the Deductible, in which event Seller Indemnitees will be entitled to recover Losses arising out of or relating to such matters only to the extent in excess thereof and only up to the Cap.
(iv) Neither party shall have any obligation to indemnify the other to the extent the Loss arises from the fraud, willful misconduct, or the material breach of this Agreement by the indemnified party.
(v) Without limiting the generality of the foregoing, any indemnification claim involving Losses of less than $50,000 (the “De Minimus Amount”) shall not be entitled to indemnification under this Section 16.2 and shall not be counted toward satisfaction of the Deductible. No Losses shall be included in determining whether the Deductible has been reached unless a notice seeking indemnification for such Losses has been given by the indemnified parties in accordance with Section 16.2(d). The Deductible shall not apply to Seller’s obligation to indemnify Purchaser Indemnitees under Section 16.2(b)(iii). In addition, neither the Deductible nor the De Minimus Amount exception shall apply to either (A) Purchaser’s obligations under Section 2.4 with respect to Transfer Taxes Final Statement or (B) Seller’s obligations under Section 6.6 with respect more than once for the same matter or Losses.
(x) For purposes of this Article VIII, any inaccuracy in or breach of any representation or warranty, the breach of any covenants and agreements, and calculating Losses shall be determined without regard to Taxes attributable any materiality, Material Adverse Effect or other similar qualification contained in or otherwise applicable to a Pre-Closing Tax Period such representation or that portion of a Straddle Tax Period ending at the end of business on the Closing Datewarranty.
Appears in 1 contract
Samples: Merger Agreement (Ideanomics, Inc.)
Limitations on Rights of Indemnitees. (a) Except as set forth below, (i) Seller CLP shall not be required to indemnify Purchaser the Buyer Indemnitees with respect to any Losses claim for indemnification arising out of or relating to (A) matters described in Section 8.3(a) unless and until the aggregate amount of all such Losses claims by the Buyer Indemnitees for such matters exceeds $500,0002,000,000 (the “Deductible”), in which event Purchaser the Buyer Indemnitees will shall be entitled to recover such Losses arising out of or relating to such matters matters, but only to the extent that the aggregate amount of such Losses exceeds the Deductible (provided, however, that the Deductible shall not apply to claims for indemnification in excess thereof respect of breaches of any of the Special Representations or fraud) or (B) (x) matters described in Item 1 under the heading “Deductible”). SellerWabash, Indiana Facility” on Schedule 3.10 or (y) matters described on Schedule 8.4(a)(i)(B)(y) and (ii) CLP’s maximum liability to Purchaser the Buyer Indemnitees under Section 8.3(a) shall not exceed $25,000,000 in the aggregate (the “Cap”), provided, however, that the Cap shall not apply to claims for indemnification in respect of breaches of any of the Special Representations or fraud.
(b) Except as set forth below, (i) Buyer shall not be required to indemnify the Seller Indemnitees with respect to any claim for indemnification arising out of or relating to matters described in Section 16.2(b8.2(a) shall not exceed $30,000,000 in the aggregate (the “Cap”).
(ii) Seller shall not be required to indemnify Purchaser Indemnitees with respect to any claim for indemnification arising out of or relating to matters described in Section 16.2(b) made by any Purchaser Indemnitee after Closing if the facts and circumstances giving rise to such claim are known to the Purchaser Indemnitee prior to the Closing or if, as the result of exercise of reasonable diligence and review, determined with due regard for Seller’s desire to close by December 31, 2015, should have been known to the Purchaser Indemnitee prior to the Closing.
(iii) Purchaser shall not be required to indemnify Seller Indemnitees with respect to any Losses unless and until the aggregate amount of all such Losses claims by the Seller Indemnitees for such matters exceeds the Deductible, in which event the Seller Indemnitees will shall be entitled to recover such Losses arising out of or relating to such matters matters, but only to the extent in excess thereof and only up to that the Cap.
(iv) Neither party shall have any obligation to indemnify the other to the extent the Loss arises from the fraud, willful misconduct, or the material breach aggregate amount of this Agreement by the indemnified party.
(v) Without limiting the generality of the foregoing, any indemnification claim involving such Losses of less than $50,000 (the “De Minimus Amount”) shall not be entitled to indemnification under this Section 16.2 and shall not be counted toward satisfaction of the Deductible. No Losses shall be included in determining whether exceeds the Deductible has been reached unless a notice seeking indemnification for such Losses has been given by (provided, however, that the indemnified parties in accordance with Section 16.2(d). The Deductible shall not apply to Sellerclaims for indemnification in respect of fraud) and (ii) Buyer’s obligation maximum liability to indemnify Purchaser the Seller Indemnitees under Section 16.2(b)(iii). In addition8.2(a) shall not exceed the Cap, neither provided, however, that the Deductible nor the De Minimus Amount exception Cap shall not apply to either (A) Purchaser’s obligations under Section 2.4 with claims for indemnification in respect to Transfer Taxes or (B) Seller’s obligations under Section 6.6 with respect to Taxes attributable to a Pre-Closing Tax Period or that portion of a Straddle Tax Period ending at the end of business on the Closing Datefraud.
Appears in 1 contract
Limitations on Rights of Indemnitees. Notwithstanding anything herein to the contrary:
(i) Seller (A) the Securityholders shall not be required to indemnify Purchaser Indemnitees with respect to any Losses unless and until the aggregate amount of all such Losses exceeds $500,000, in which event Purchaser Indemnitees will be entitled to recover Losses arising out of or relating to such matters only to the extent in excess thereof (the “Deductible”). Seller’s maximum liability to Purchaser Parent Indemnitees with respect to any claim for indemnification arising out of or relating to matters described in Section 16.2(b8.2(a)(i) shall not exceed $30,000,000 in unless and until the aggregate amount of all such claims for such matters exceeds an amount equal to Two Hundred Fifty Thousand Dollars ($250,000) (the “CapDeductible”).
, in which event the Parent Indemnitees shall be entitled to recover Losses only in excess thereof; provided, that the foregoing limitation shall not apply to a claim for indemnification to the extent such claim is based upon fraud or a breach of any of the Fundamental Representations of the Company, and (iiB) Seller Parent shall not be required to indemnify Purchaser the Securityholder Indemnitees with respect to any claim for indemnification arising out of or relating to matters described in Section 16.2(b8.2(b)(i) made by any Purchaser Indemnitee after Closing if the facts and circumstances giving rise to such claim are known to the Purchaser Indemnitee prior to the Closing or if, as the result of exercise of reasonable diligence and review, determined with due regard for Seller’s desire to close by December 31, 2015, should have been known to the Purchaser Indemnitee prior to the Closing.
(iii) Purchaser shall not be required to indemnify Seller Indemnitees with respect to any Losses unless and until the aggregate amount of all such Losses claims for such matters exceeds the Deductible, in which event Seller the Securityholder Indemnitees will shall be entitled to recover Losses only in excess thereof; provided, that the foregoing limitation shall not apply to a claim for indemnification to the extent such claim is based upon fraud or a breach of any of the Fundamental Representations of Parent and Merger Sub;
(ii) (A) in no event shall the aggregate Liability of the Securityholders (x) arising out of or relating to Section 8.2(a)(i) exceed an amount equal to the Indemnity Escrow Amount (the “Cap”); provided, however, that the limitation set forth in this clause (x) shall not apply to indemnification for Losses arising out of or resulting from a claim for indemnification to the extent such claim is based upon fraud or a breach of any of the Fundamental Representations of the Company or (y) arising out of or relating to this Article VIII exceed the Merger Consideration; provided that the limitation set forth in this clause (y) shall not apply to indemnification for Losses arising out of or resulting from a claim for indemnification to the extent such claim is based upon fraud, which shall be uncapped, and (B) in no event shall the aggregate Liability of Parent (x) arising out of or relating to Section 8.2(b)(i) exceed the Cap; provided, however, that the limitation set forth in this clause (x) shall not apply to indemnification for Losses arising out of or resulting from a claim for indemnification to the extent such claim is based upon fraud or a breach of any of the Fundamental Representations of Parent and Merger Sub or (y) arising out of or relating to this Article VIII exceed the Merger Consideration; provided that the limitation set forth in this clause (y) shall not apply to indemnification for Losses arising out of or resulting from a claim for indemnification to the extent such claim is based upon fraud, which shall be uncapped;
(iii) to the extent required by applicable Law, each Indemnitee shall use commercially reasonable efforts to mitigate any Losses arising out of or relating to this Agreement or the Contemplated Transactions upon becoming aware of any event that would be reasonably expected to give rise to Losses; provided that costs incurred in connection with such matters only to the extent in excess thereof and only up to the Cap.efforts shall be included as Losses;
(iv) Neither the amount of any Losses for which an Indemnitee claims indemnification under this Agreement shall be reduced by the amount of any insurance proceeds and any indemnification, contribution, offset or reimbursement payments actually received from a third party shall have any obligation with respect to indemnify such Losses (net of (x) documented out-of-pocket expenses incurred in connection with such recovery, (y) deductibles, premiums and retentions paid pursuant to the other insurance policies under which such recovery is made to the extent arising out of or in connection with such claims and (z) the Loss arises net present value of any increase in premiums paid and retentions for such policies to the extent arising out of or in connection with such claim); provided that if an Indemnitee actually receives insurance proceeds or indemnification, contribution, offset or reimbursement payments from third party insurers with respect to such Losses, in each case, at any time subsequent to any indemnification payment pursuant to this Article VIII, then such Indemnitee shall promptly reimburse the fraudapplicable Indemnitor for the lesser of (A) the amount of such proceeds and/or payments actually received by such Indemnitee in respect of such Losses (net of (x) documented out-of-pocket expenses incurred in connection with such recovery, willful misconduct(y) deductibles, premiums and retentions paid pursuant to the insurance policies under which such recovery is made to the extent arising out of or in connection with such claims, and (z) the material breach net present value of this Agreement any increase in premiums paid and retentions for such policies to the extent arising out of or in connection with such claim) and (B) the aggregate amount of the payment made by the indemnified party.such Indemnitor in respect of such Losses; and
(v) Without limiting the generality of the foregoing, any indemnification claim involving Losses of less than $50,000 (the “De Minimus Amount”) provided hereunder shall not be so applied as to avoid any double counting and no Indemnitee shall be entitled to obtain indemnification under this Section 16.2 and shall not be counted toward satisfaction (x) to the extent that such Losses are taken into account in the determination of the Deductible. No Losses shall be included Closing Consideration set forth in determining whether the Deductible has been reached unless a notice seeking indemnification for such Losses has been given by the indemnified parties in accordance with Section 16.2(d). The Deductible shall not apply to Seller’s obligation to indemnify Purchaser Indemnitees under Section 16.2(b)(iii). In addition, neither the Deductible nor the De Minimus Amount exception shall apply to either (A) Purchaser’s obligations under Section 2.4 with respect to Transfer Taxes Final Statement or (By) Seller’s obligations under Section 6.6 with respect to Taxes attributable to a Pre-Closing Tax Period more than once for the same matter or that portion of a Straddle Tax Period ending at the end of business on the Closing DateLosses.
Appears in 1 contract
Samples: Merger Agreement (Ideanomics, Inc.)
Limitations on Rights of Indemnitees. Notwithstanding anything herein to the contrary:
(i) Seller neither Buyer nor any Stockholder, as applicable, shall not be required to indemnify Purchaser Indemnitees with respect to any Losses unless and until the aggregate amount of all such Losses exceeds $500,000, in which event Purchaser Indemnitees will be entitled to recover Losses arising out of or relating to such matters only to the extent in excess thereof (the “Deductible”). Seller’s maximum liability to Purchaser Indemnitees an Indemnitee with respect to any claim for indemnification arising out of or relating to matters described in Section 16.2(b9.2(a)(i) or Section 9.2(b)(i), as applicable, unless and until the aggregate amount of all such claims for such matters exceeds an amount equal to $200,000, in which event the Indemnitee shall be entitled to recover Losses only in excess thereof; provided, that the foregoing limitation shall not exceed $30,000,000 in apply to a claim for indemnification to the aggregate (extent such claim is based upon Fraud or a breach of any of the “Cap”).Surviving Representations;
(ii) Seller in no event shall not be required to indemnify Purchaser Indemnitees with respect to (1) the aggregate Liability of any claim for indemnification Stockholder arising out of or relating to matters described in Section 16.2(b9.2(a)(i) made exceed the Stockholder’s Share of the Escrow Amount (which, with respect to each Stockholder, shall be deemed to be the product of (i) 10.0%, multiplied by the (ii) Consideration, multiplied by (iii) such Stockholder’s Share (with respect to each Stockholder, the “Stockholder’s Liability Cap”)); provided, however, that (A) the Stockholder’s Liability Cap for a claim for breach of any Purchaser Indemnitee after Closing if of the facts Surviving Representations of the Company or a Stockholder shall be increased to an amount inclusive of the Stockholder’s Liability Cap not to exceed the product of (x) fifty percent (50%) of the Consideration, multiplied by (y) such Stockholder’s Share, and circumstances giving rise (B) the Stockholder’s Liability Cap for a claim for indemnification for Losses for Fraud against a Stockholder shall be increased to an amount inclusive of the Stockholder’s Liability Cap not to exceed the product of (x) Consideration, multiplied by (y) such claim are known to the Purchaser Indemnitee prior to the Closing or if, as the result of exercise of reasonable diligence and review, determined with due regard for SellerStockholder’s desire to close by December 31, 2015, should have been known to the Purchaser Indemnitee prior to the ClosingShare.
(iii) Purchaser to the extent required by applicable Law, each Indemnitee shall not be required use commercially reasonable efforts to indemnify Seller Indemnitees with respect to mitigate any Losses unless and until the aggregate of all such Losses exceeds the Deductible, in which event Seller Indemnitees will be entitled to recover Losses arising out of or relating to such matters only this Agreement or the Contemplated Transactions upon becoming aware of any Event that would be reasonably expected to the extent in excess thereof and only up give rise to the Cap.Losses;
(iv) Neither the amount of any Losses for which an Indemnitee claims indemnification under this Agreement shall be reduced by the amount of any insurance proceeds and any indemnification, contribution, offset or reimbursement payments actually received from a third party shall have any obligation with respect to indemnify such Losses (net of (x) documented out-of-pocket expenses incurred in connection with such recovery, (y) deductibles, premiums and retentions paid pursuant to the other insurance policies under which such recovery is made to the extent arising out of or in connection with such claims and (z) the Loss arises net present value of any increase in premiums paid and retentions for such policies to the extent arising out of or in connection with such claim); provided that if an Indemnitee actually receives insurance proceeds or indemnification, contribution, offset or reimbursement payments from third party insurers with respect to such Losses, in each case, at any time subsequent to any indemnification payment pursuant to this Article IX, then such Indemnitee shall promptly reimburse the fraudapplicable Indemnitor for the lesser of (A) the amount of such proceeds and/or payments actually received by such Indemnitee in respect of such Losses (net of (x) documented out-of-pocket expenses incurred in connection with such recovery, willful misconduct(y) deductibles, premiums and retentions paid pursuant to the insurance policies under which such recovery is made to the extent arising out of or in connection with such claims, and (z) the material breach net present value of any increase in premiums paid and retentions for such policies to the extent arising out of or in connection with such claim) and (B) the aggregate amount of the payment made by such Indemnitor in respect of such Losses; provided further that, with respect to any Losses incurred by the Group Companies, all such amounts, proceeds, and payments which are the subject of this Agreement by Section 9.2(c)(iv) shall be calculated in accordance with the indemnified party.proportionality principle set forth in Section 9.2(c)(v);
(v) Without limiting the generality of the foregoing, [reserved];
(vi) any indemnification claim involving Losses of less than $50,000 (the “De Minimus Amount”) provided hereunder shall not be so applied as to avoid any double counting and no Indemnitee shall be entitled to obtain indemnification under more than once for the same matter or Losses;
(vii) notwithstanding anything to the contrary herein, claims for breach of Sections 9.2(a)(i)(B), 9.2(a)(ii)(B), or 9.2(a)(vi) shall only be made against that Stockholder who has breached or failed to perform and no other Stockholder will be liable therefor; and
(viii) notwithstanding any other provision of this Section 16.2 Agreement, no party hereto shall have liability for any consequential, exemplary or punitive damages, in each case, except to the extent any such damages are awarded and shall not be counted toward satisfaction of the Deductible. No Losses shall be included in determining whether the Deductible has been reached unless a notice seeking indemnification for such Losses has been given by the indemnified parties in accordance with Section 16.2(d). The Deductible shall not apply to Seller’s obligation to indemnify Purchaser Indemnitees under Section 16.2(b)(iii). In addition, neither the Deductible nor the De Minimus Amount exception shall apply to either (A) Purchaser’s obligations under Section 2.4 paid with respect to Transfer Taxes or (B) Seller’s obligations under Section 6.6 with respect to Taxes attributable to a Pre-Closing Tax Period or that portion of claim asserted by a Straddle Tax Period ending at the end of business on the Closing Datethird party.
Appears in 1 contract
Limitations on Rights of Indemnitees. (i1) Seller Purchaser shall not be required to indemnify Purchaser Indemnitees with respect to any Losses unless and until the aggregate amount of all such Losses exceeds $500,000, in which event Purchaser Indemnitees will be entitled to recover Losses arising out of or relating to such matters only to the extent in excess thereof (the “Deductible”). Seller’s maximum liability to Purchaser Seller Indemnitees with respect to any claim for indemnification arising out of or relating to matters described in Section 16.2(b11(k)(i)(1) unless and until the aggregate amount of all such Losses for such matters exceeds $250,000, in which event Seller Indemnitees will be entitled to recover all Losses arising out of or relating to such matters. Purchaser’s maximum liability to Seller Indemnitees with respect to any claim for indemnification arising out of or relating to matters described in Section 11(k)(i)(1) shall not exceed $30,000,000 15,000,000 in the aggregate (aggregate. Notwithstanding anything to the “Cap”contrary in this Agreement, the foregoing limitations in this Section 11(k)(iii)(1) shall not apply to a claim for indemnification to the extent such claim is based upon a breach of any of the representations and warranties set forth in Sections 11(h)(i)-(iv).
(ii2) Seller shall not be required to indemnify Purchaser Indemnitees with respect to any claim for indemnification arising out of or relating to matters described in Section 16.2(b11(k)(ii)(1) made by any Purchaser Indemnitee after Closing if the facts and circumstances giving rise to such claim are known to the Purchaser Indemnitee prior to the Closing or if, as the result of exercise of reasonable diligence and review, determined with due regard for Seller’s desire to close by December 31, 2015, should have been known to the Purchaser Indemnitee prior to the Closing.
(iii) Purchaser shall not be required to indemnify Seller Indemnitees with respect to any Losses unless and until the aggregate amount of all such Losses for such matters exceeds the Deductible$250,000, in which event Seller Purchaser Indemnitees will be entitled to recover all Losses arising out of or relating to such matters. Seller’s maximum liability to Purchaser Indemnitees with respect to any claim for indemnification arising out of or relating to matters only described in Section 11(k)(ii)(1) (A) with respect to the extent in excess thereof and only up to the Cap.
(iv) Neither party shall have any obligation to indemnify the other to the extent the Loss arises from the fraud, willful misconduct, or the material claims based upon a breach of this Agreement by the indemnified party.
(v) Without limiting the generality any of the foregoingrepresentations and warranties relating to a Non-Ranger Portfolio shall not exceed $20,000,000 in the aggregate and, with respect to any indemnification claim involving Losses of less than $50,000 single Non-Ranger Portfolio shall not exceed the allocated portion thereof as set forth on Schedule 11(k)(iii)(2) (the “De Minimus AmountHoldback Allocated Portion”) in the aggregate, and (B) with respect to any claims based upon a breach of any of the representations and warranties relating to the Ranger Portfolio (other than Section 11(e)(xi)), shall not be entitled exceed $15,000,000 in the aggregate. Notwithstanding anything to indemnification under the contrary in this Agreement, the foregoing limitations in this Section 16.2 and shall not be counted toward satisfaction of the Deductible. No Losses shall be included in determining whether the Deductible has been reached unless a notice seeking indemnification for such Losses has been given by the indemnified parties in accordance with Section 16.2(d). The Deductible 11(k)(iii)(2) shall not apply to Seller’s obligation a claim for indemnification to indemnify Purchaser Indemnitees under the extent such claim is based upon a breach of any of the representations and warranties set forth in Section 16.2(b)(iii11(d) or 11(e)(xi). In addition, neither the Deductible nor the De Minimus Amount exception shall apply to either (A) Purchaser’s obligations under Section 2.4 with respect to Transfer Taxes or (B) Seller’s obligations under Section 6.6 with respect to Taxes attributable to a Pre-Closing Tax Period or that portion of a Straddle Tax Period ending at the end of business on the Closing Date.
Appears in 1 contract
Limitations on Rights of Indemnitees. (i) Seller Parent shall not be required to indemnify Purchaser the Stockholder Indemnitees with respect to any Losses Claim under Section 8.2(b)(i) unless and until the aggregate amount of all Losses for such Losses Claims exceeds an amount equal to two million two hundred fifty thousand dollars ($500,0002,250,000), in which event Purchaser the Stockholder Indemnitees will shall be entitled to recover Losses only in excess thereof; provided, that the foregoing limitation shall not apply to a claim for indemnification to the extent such claim is based upon Fraud or a breach of any of the Fundamental Representations of Parent and Merger Sub.
(ii) In no event shall Buyer’s aggregate Liability for Losses based upon, arising out of, or related to this Agreement or the Contemplated Transaction exceed ten million dollars ($10,000,000); provided that such limitation shall not apply to indemnification for Losses arising out of or resulting from any breach of any Fundamental Representation or claims of Fraud.
(iii) Stockholders shall not be required to indemnify the Parent Indemnitees with respect to any Claim under Section 8.2(a)(i) unless and until the aggregate amount of all Losses for such Claims exceeds an amount equal to two million two hundred fifty thousand dollars ($2,250,000), in which event the Parent Indemnitees shall be entitled to recover Losses only in excess thereof; provided, that the foregoing limitation shall not apply to a claim for indemnification to the extent such claim is based upon Fraud or a breach of any of the Fundamental Representations of Parent and Merger Sub.
(iv) The sole and exclusive remedy of the Parent Indemnitees with respect to any and all Losses based upon, arising out of, or related to this Agreement or the Contemplated Transactions, shall be first, from the Special Indemnity Escrow Shares then remaining in the Special Indemnity Escrow Account in accordance with the disbursement provisions of Section 8.4 and second, if there are no funds remaining in the Special Indemnity Escrow Account, to the extent such Claim is based upon breach of Fundamental Representations of the Company, Fraud or the matters in Section 8.2(a)(ii)-(iv), Parent Indemnitees may seek recovery directly from the Stockholders pursuant to Section 8.2(a).
(v) The sole and exclusive remedy of the Parent Indemnitees with respect to any and all Losses based upon, arising out of, or related to Claims made pursuant to the Section 8.2(a)(v)-(vi), shall be from the Special Indemnity Escrow Shares then remaining in the Special Indemnity Escrow Account, in accordance with the disbursement provisions of Section 8.4.
(vi) The sole and exclusive remedy of the Parent Indemnitees with respect to any and all Losses based upon, arising out of, or related to Claims made pursuant to Section 8.2(a)(v), shall be from the Special Indemnity Escrow Shares then remaining in the Special Indemnity Escrow Account, in accordance with the disbursement provisions of Section 8.4.
(vii) To the extent required by applicable Law, the Parent Indemnitee shall use commercially reasonable efforts to mitigate any Losses arising out of or relating to this Agreement or the Contemplated Transactions upon becoming aware of any Event that would be reasonably expected to give rise to Losses; provided that costs incurred in connection with such matters only efforts shall be included as Losses.
(viii) The amount of any Losses for which an Indemnitee claims indemnification under this Agreement shall be reduced by the amount by which the Tax liability of the Indemnitee, with respect to a taxable period, is actually reduced as a result of such Losses (net of any Tax cost actually incurred by the Indemnitee arising from the receipt of the indemnity payments hereunder), calculated by computing the amount of Taxes before and after inclusion of any Tax items attributable to such Losses for which indemnification was made and treating such Tax items attributable to such Losses as the last items claimed for such taxable period.
(ix) Any indemnification provided under this Agreement shall be so applied as to avoid any double counting and no Indemnitee shall be entitled to obtain indemnification (A) to the extent in excess thereof (the “Deductible”). Seller’s maximum liability to Purchaser Indemnitees with respect to any claim for indemnification arising out of or relating to matters described in Section 16.2(b) shall not exceed $30,000,000 that such Losses are taken into account in the aggregate (the “Cap”).
(ii) Seller shall not be required to indemnify Purchaser Indemnitees with respect to any claim for indemnification arising out of or relating to matters described in Section 16.2(b) made by any Purchaser Indemnitee after Closing if the facts and circumstances giving rise to such claim are known to the Purchaser Indemnitee prior to the Closing or if, as the result of exercise of reasonable diligence and review, determined with due regard for Seller’s desire to close by December 31, 2015, should have been known to the Purchaser Indemnitee prior to the Closing.
(iii) Purchaser shall not be required to indemnify Seller Indemnitees with respect to any Losses unless and until the aggregate of all such Losses exceeds the Deductible, in which event Seller Indemnitees will be entitled to recover Losses arising out of or relating to such matters only to the extent in excess thereof and only up to the Cap.
(iv) Neither party shall have any obligation to indemnify the other to the extent the Loss arises from the fraud, willful misconduct, or the material breach of this Agreement by the indemnified party.
(v) Without limiting the generality determination of the foregoing, any indemnification claim involving Losses number of less than $50,000 (Closing Consideration Shares set forth in the “De Minimus Amount”) shall not be entitled to indemnification under this Section 16.2 and shall not be counted toward satisfaction of the Deductible. No Losses shall be included in determining whether the Deductible has been reached unless a notice seeking indemnification for such Losses has been given by the indemnified parties in accordance with Section 16.2(d). The Deductible shall not apply to Seller’s obligation to indemnify Purchaser Indemnitees under Section 16.2(b)(iii). In addition, neither the Deductible nor the De Minimus Amount exception shall apply to either (A) Purchaser’s obligations under Section 2.4 with respect to Transfer Taxes Final Statement or (B) Seller’s obligations under Section 6.6 with respect more than once for the same matter or Losses.
(x) For purposes of this Article VIII, any inaccuracy in or breach of any representation or warranty, the breach of any covenants and agreements, and calculating Losses shall be determined without regard to Taxes attributable any materiality, Material Adverse Effect or other similar qualification contained in or otherwise applicable to a Pre-Closing Tax Period such representation or that portion of a Straddle Tax Period ending at the end of business on the Closing Datewarranty.
Appears in 1 contract
