Common use of Offset Right Clause in Contracts

Offset Right. Notwithstanding anything to the contrary contained herein, the SPE Shareholders shall have the right to off-set, on a pro rata basis, the amount of any unrecouped claim for Losses the SPE Shareholders or any of their Indemnified Parties may have pursuant to the provisions of this Section 7 or pursuant to Article X of the Share Purchase and Subscription Agreement against any amounts due and payable by them to the Non-SPE Shareholders, including in respect of the Call Price, if (a) a Adjudicated Decision is issued that entitles the SPE Shareholders to compensation or reimbursement for any Losses, or (b) if the SPE Shareholders notify the Non-SPE Shareholders’ Representative of any Losses that are not subject to any Adjudicated Decision (by written notice including reasonable details and supporting documentation concerning the grounds for the Losses), in which case the SPE Shareholders shall be entitled to deduct the amount of such Losses from such amounts due and payable to the Non-SPE shareholders prior to the payment thereof to the Non-SPE Shareholders hereunder and deposit such amount in an interest bearing escrow account. The escrow account shall be established with Citibank, or other bank designated by the SPE Shareholders, to be held until such time as a Adjudicated Decision is issued that entitles the SPE Shareholders to compensation or reimbursement for any Losses or pursuant to a mutual settlement agreement of the Parties, at which time the funds in the escrow account shall be distributed in accordance with the Adjudicated Decision or the mutual settlement agreement, as applicable. In addition, the SPE Shareholders shall be entitled to receive, and the Non-SPE shareholders shall direct that the Company shall pay on a pro rata basis to the SPE Shareholders or the escrow agent, as applicable, any such unrecouped claim for Losses on the same basis as set forth above, and the Non-SPE Shareholders shall be deemed to waive their rights to such dividends. Any such off-set or payment direction shall be made in good faith and only if the SPE Shareholders have delivered to the Non-SPE Shareholders a reasonably detailed notice of the basis for such off-set or payment direction, at least three Business Days prior to the due date for payment of such amount. The Non-SPE Shareholders agree and confirm that they shall take all steps as are required under applicable Law to effectuate the offset right of the SPE Shareholders and the Indemnified Parties as set out in this Section 7.3(c), including making applications for statutory consents as may be required (e.g., for establishment of an escrow account).

Offset Right. Notwithstanding anything to the contrary contained herein, the SPE Shareholders shall have the right to off-set, on a pro rata basis, the amount of any unrecouped claim for Losses the SPE Shareholders or any of their Indemnified Parties may have pursuant to the provisions of this Section 7 or pursuant to Article X of the Share Purchase and Subscription Agreement against any amounts due and payable by them to the Non-SPE Shareholders, including in respect of the Call Price, if (a) a Adjudicated Decision is issued that entitles the SPE Shareholders to compensation or reimbursement for any Losses, or (b) if the SPE Shareholders notify the Non-SPE Shareholders’ Representative of any Losses that are not subject to any Adjudicated Decision (by written notice including reasonable details and supporting documentation concerning the grounds for the Losses), in which case the SPE Shareholders shall be entitled to deduct the amount of such Losses from such amounts due and payable to the Non-SPE shareholders prior to the payment thereof to the Non-SPE Shareholders hereunder and deposit such amount in an interest bearing escrow account. The escrow account shall be established with Citibank, or other bank designated by the SPE Shareholders, to be held until such time as a Adjudicated Decision is issued that entitles the SPE Shareholders to compensation or reimbursement for any Losses or pursuant to a mutual settlement agreement of the Parties, at which time the funds in the escrow account shall be distributed in accordance with the Adjudicated Decision or the mutual settlement agreement, as applicable. In addition, the SPE Shareholders shall be entitled to receive, and the Non-SPE shareholders shall direct that the Company shall pay on a pro rata basis to the SPE Shareholders or the escrow agent, as applicable, any such unrecouped claim for Losses on the same basis as set forth above, and the Non-SPE Shareholders shall be deemed to waive their rights to such dividends. Any such off-set or payment direction shall be made in good faith and only if the SPE Shareholders have delivered to the Non-SPE Shareholders a reasonably detailed notice of the basis for such off-set or payment direction, at least three Business Days prior to the due date for payment of such amount. The Non-SPE Shareholders agree and confirm that they shall take all steps as are required under applicable Law to effectuate the offset right of the SPE Shareholders and the Indemnified Parties as set out in this Section 7.3(c), including making applications for statutory consents as may be required (e.g., for establishment of an escrow account).

Offset Right. Notwithstanding anything (a) Without limiting any other remedies of the Buyer Indemnified Persons, from and after the Effective Date, and subject to the contrary contained hereinlimitations set forth in this Article VII, the SPE Shareholders Buyer Indemnified Persons shall have be entitled to recover (the right “Offset Right”) (i) against the value of the shares of Buyer Common Stock issuable to offthe Sellers pursuant to Section 2.1(b)(ii) or to become exercisable by the Employee Optionholders pursuant to Section 2.2(a)(iii) (i.e., all of the Hold-set, on a pro rata basisBack Shares in respect of the aggregate Hold-Back Amount for all Sellers), the amount of any unrecouped claim for Losses Damages as to which the SPE Shareholders Sellers are obligated to indemnify and hold the Buyer Indemnified Persons harmless from under Section 7.1(a), and (ii) against the value of the shares of Buyer Common Stock issuable to any specific Seller pursuant to Section 2.1(b)(ii) (as it would be applied to such specific Seller) or to become exercisable by any specific Employee Optionholder pursuant to Section 2.2(a)(iii) (as it would be applied to such specific Employee Optionholder), the amount of any Damages as to which such Seller is obligated to indemnify and hold the Buyer Indemnified Persons harmless from under Section 7.1(b). (b) To exercise the Offset Right, Buyer shall (on behalf of Buyer or any other Buyer Indemnified Persons at issue), prior to the Hold-Back Payment Date, deliver to the Sellers’ Agent at the notice address set forth in Section 8.4 (as the same may be amended from time to time as provided therein and including all Persons to be copied on any notice to the Sellers’ Agent), a certificate signed by Buyer (an “Offset Certificate”): (i) stating in good faith that one or more of their the Buyer Indemnified Parties may have Persons has suffered or incurred Damages which are entitled to be recovered pursuant to the provisions Offset Right (the “Stated Damages”); and (ii) specifying to the extent practicable in reasonable detail the individual items of this Stated Damages and the nature of the breach or other circumstance to which each such item is related. Upon the timely delivery of an Offset Certificate stating a bona fide claim for Stated Damages, any issuance of shares of Buyer’s Common Stock shall be stayed to the extent of the Stated Damages as provided in Section 7 or 2.1(c). (c) After the expiration of a period of thirty (30) days following the time of delivery of an Offset Certificate to the Sellers’ Agent, the Offset Right shall be deemed perfected as to the applicable Stated Damages and the value of the shares of Buyer Common Stock issuable to the Sellers pursuant to Article X of the Share Purchase and Subscription Agreement against any amounts due and payable by them to the Non-SPE Shareholders, including in respect of the Call Price, if Section 2.1(b)(ii) (a) a Adjudicated Decision is issued that entitles the SPE Shareholders to compensation or reimbursement for any Losses, or (b) if the SPE Shareholders notify the Non-SPE Shareholders’ Representative of any Losses that are not subject to any Adjudicated Decision (by written notice including reasonable details and supporting documentation concerning the grounds for the Losses), in which case the SPE Shareholders shall be entitled to deduct the amount of such Losses from such amounts due and payable to the Non-SPE shareholders prior to the payment thereof to the Non-SPE Shareholders hereunder and deposit such amount in an interest bearing escrow account. The escrow account shall be established with Citibank, or other bank designated by the SPE Shareholders, to be held until such time as a Adjudicated Decision is issued that entitles the SPE Shareholders to compensation or reimbursement for any Losses or pursuant to a mutual settlement agreement of the Parties, at which time the funds in the escrow account shall be distributed in accordance with the Adjudicated Decision or the mutual settlement agreement, as applicable. In addition, the SPE Shareholders shall be entitled to receive, and the Non-SPE shareholders shall direct that the Company shall pay on a pro rata basis to the SPE Shareholders or the escrow agentor, as applicable, the value of the shares of Buyer Common Stock issuable to any specific Seller pursuant to Section 2.1(b)(ii) as it would be applied to such unrecouped claim for Losses on specific Seller) or to become exercisable by any specific Employee Optionholder pursuant to Section 2.2(a)(iii) (or, as applicable, the same basis value of the shares of Buyer Common Stock to become exercisable by any specific Employee Optionholder pursuant to Section 2.2(a)(iii) as set forth above, and the Non-SPE Shareholders it would be applied to such specific Employee Optionholder) or shall be deemed reduced by an equal amount unless (i) the Sellers’ Agent shall object in a written statement delivered to waive their rights Buyer to the claims made in the Offset Certificate and (ii) such dividends. Any statement shall have been delivered to Buyer prior to the expiration of such off-set or payment direction thirty (30) day period. (d) If the Sellers’ Agent shall be made timely object in writing to an exercise of the Offset Right by Buyer, the Sellers’ Agent and Buyer shall attempt in good faith to agree upon the rights of the respective parties with respect to each of such claims within thirty (30) days after such objection. If the Sellers’ Agent and only if Buyer should so agree on a claim, a memorandum setting forth such agreement shall be prepared and signed by such parties, which shall include a statement of the SPE Shareholders have delivered amount of resulting reduction in value of the shares of Buyer Common Stock issuable to the Non-SPE Shareholders a reasonably detailed notice Sellers pursuant to Section 2.1(b)(ii) (or, as applicable, the value of the basis for shares of Buyer Common Stock issuable to any specific Seller pursuant to Section 2.1(b)(ii) as it would be applied to such off-set specific Seller) or payment directionto become exercisable by any specific Employee Optionholder pursuant to Section 2.2(a)(iii) (or, at least three Business Days prior as applicable, the value of the shares of Buyer Common Stock to become exercisable by any specific Employee Optionholder pursuant to Section 2.2(a)(iii) as it would be applied to such specific Employee Optionholder). (e) If no agreement can be reached after good faith negotiation between the Sellers’ Agent and Buyer pursuant to Section 7.2(d), either Buyer or the Sellers’ Agent may initiate an Action with the state or federal courts located in the City and County of San Francisco, California to resolve such dispute. The decision of any such court as to the due date for payment validity and amount of any claim in such amount. The Non-SPE Shareholders agree Offset Certificate shall be binding and confirm that they shall take all steps as are required under applicable Law to effectuate conclusive upon the offset right of the SPE Shareholders and the Indemnified Parties as set out in this Section 7.3(c), including making applications for statutory consents as may be required (e.g., for establishment of an escrow account)parties.

Offset Right. Notwithstanding anything (a) Subject to the contrary contained hereinlimitations set forth in this ARTICLE VIII, from and after the Effective Time, the SPE Shareholders Parent Indemnified Persons shall have be entitled to recover, by offset against any unissued or unearned Milestone Shares (the right to off-set“Offset Right”), on a pro rata basis, (x) the amount of any unrecouped Losses resulting from or arising out of the following (whether or not involving a Third Party Claim) and, (y) solely with respect to clause (vii) below (i.e., regarding the Xxxxxx Litigation), 50% of the Losses: (i) any claim for Losses Intentional Fraud; (ii) any inaccuracy in the SPE Shareholders Allocation Schedule (other than with respect to the calculation of the items set forth in Section 2.19(a), which matters are covered in the Post-Closing Adjustment); (iii) any appraisal rights exercised by a Holder to the extent not covered by amounts returned to Parent with respect to such Holder’s Dissenting Shares pursuant to Section 2.14, and any other Action brought by a Holder or any other Person claiming rights by, through or associated with such Holder that seeks to challenge any of the Transactions (including the Mergers) based on adequacy of the consideration received by such Holder (or all Holders) or claims that any director or officer of the Company breached any fiduciary duty owed to the Company or any of their Indemnified Parties may have pursuant to the provisions Holders in connection with the negotiation, approval, execution or performance of this Section 7 Agreement or pursuant to Article X any of the Share Purchase and Subscription Transactions (including the Mergers); (iv) any breach of or failure to perform any covenant or agreement of (A) the Company provided for in this Agreement against any amounts due and payable by them with respect to the Non-SPE Shareholders, including in respect of the Call Price, if (a) a Adjudicated Decision is issued that entitles the SPE Shareholders covenants required to compensation or reimbursement for any Losses, or (b) if the SPE Shareholders notify the Non-SPE Shareholders’ Representative of any Losses that are not subject to any Adjudicated Decision (by written notice including reasonable details and supporting documentation concerning the grounds for the Losses), in which case the SPE Shareholders shall be entitled to deduct the amount of such Losses from such amounts due and payable to the Non-SPE shareholders performed prior to the payment thereof Closing or (B) Holders’ Representative; (v) any Eligible Post-Closing Adjustment; (vi) any Pre-Closing Taxes, but only to the Non-SPE Shareholders hereunder and deposit extent such amount Taxes were not included in an interest bearing escrow account. The escrow account shall be established with Citibankthe computation of the Closing Net Working Capital or Company Transaction Expenses, or other bank designated by the SPE Shareholdersin each case, to be held until such time as a Adjudicated Decision is issued that entitles the SPE Shareholders to compensation or reimbursement for any Losses or finally determined pursuant to a mutual settlement agreement of Section 2.19; and (vii) the Parties, at which time the funds in the escrow account shall be distributed in accordance with the Adjudicated Decision or the mutual settlement agreement, as applicable. In addition, the SPE Shareholders shall be entitled to receive, and the Non-SPE shareholders shall direct that the Company shall pay on a pro rata basis to the SPE Shareholders or the escrow agent, as applicable, any such unrecouped claim for Losses on the same basis as set forth above, and the Non-SPE Shareholders shall be deemed to waive their rights to such dividends. Any such off-set or payment direction shall be made in good faith and only if the SPE Shareholders have delivered to the Non-SPE Shareholders a reasonably detailed notice of the basis for such off-set or payment direction, at least three Business Days prior to the due date for payment of such amount. The Non-SPE Shareholders agree and confirm that they shall take all steps as are required under applicable Law to effectuate the offset right of the SPE Shareholders and the Indemnified Parties as set out in this Section 7.3(c), including making applications for statutory consents as may be required (e.g., for establishment of an escrow account)Xxxxxx Litigation.

Offset Right. (a) In accordance with and subject to the limitations set forth in this Article VII, from and after the First Effective Time, Parent, the First-Step Surviving Corporation, the Surviving Entity and each of their respective Affiliates, officers, directors, partners, managers, equityholders, agents and employees (collectively, the “Parent Indemnified Parties”) shall be entitled to recover, by offset against any Milestone Shares not yet issued or any Tax Refunds or Earnout Consideration not yet paid, on a several and not joint basis with respect to each Seller in accordance with each Seller’s Percentage Interest (as adjusted, with respect to any Offset Right exercised against any Milestone Shares, to account for the specific allocation set forth in Section 2.21(d)) (the “Offset Right”), the aggregate amount of any Damages resulting from or arising out of the following (whether or not involving a Third-Party Claim): (i) any breach by the Company of any representation or warranty set forth in Article III or in the certificate delivered by the Company pursuant to Section 6.2(p)1.1(p) (other than to the extent related to any representation or warranty that is a Fundamental Representation); (ii) any breach by the Company of any Fundamental Representation or in the certificate delivered by the Company pursuant to Section 6.2(p) to the extent related to any Fundamental Representation; (iii) any breach of any covenant or agreement of the Company contained in this Agreement; (iv) any Company Debt to the extent unpaid as of the Closing and not included in the Post-Closing Adjustment; (v) any Company Transaction Expenses to the extent unpaid as of the Closing and not included in Company Transaction Expenses; (vi) any Pre-Closing Taxes to the extent not taken into account in the calculation of Company Debt or Company Transaction Expenses; (vii) any claims, whether direct, derivative, class or individual, by (A) any then current or former holder or alleged then-current or former holder of any Equity Interests of the Company (including any predecessors), based upon, (I) the Mergers or this Agreement, including the allocation of the Merger Consideration, or (II) such Person’s status or alleged status as a holder of Equity Interests of the Company (including any predecessors) at any time at or prior to the Closing, whether for breach of fiduciary duty or otherwise, (B) any Person to the effect that such Person is entitled to any Equity Interests of the Company or any payment in connection with the Mergers by virtue of such Equity Interests of the Company, including appraisal rights under any applicable Law (excluding cash payments to holders of Dissenting Shares not in excess of the consideration to which they would have been entitled for their shares of Company Capital Stock had they received a portion of the Merger Consideration payable pursuant to Section 2.6 rather than exercising appraisal rights) or (C) any Person with respect to any Company Equity Plan or any other plan, policy or Contract providing for compensation to such Person in respect of a Company Security; (viii) any claim by any Seller against any Parent Indemnified Party relating to the allocation or disbursement of the Merger Consideration (other than as required to be paid by Parent or the Surviving Entity, as applicable, pursuant to the terms of this Agreement); (ix) any claim for Fraud solely in respect of the representations and warranties set forth in Article III of this Agreement. (b) Notwithstanding the foregoing: (i) the Parent Indemnified Parties shall not be entitled to offset any Damages pursuant to Section 7.1(a)(i) unless and until the aggregate amount of all such Damages that the Parent Indemnified Parties, but for this clause (i) of this Section 7.1(b), are entitled to offset under Section 7.1(a)(i) exceeds $1,500,000 (the “Deductible”) (in which case the Parent Indemnified Parties shall be entitled to all Damages in excess of the Deductible); (ii) the aggregate amount of Damages the Parent Indemnified Parties shall be entitled to offset under Section 7.1(a)(i) shall not exceed twelve and a half percent (12.5%) of the value of the Merger Consideration actually received by Sellers under this Agreement; provided, that the aggregate amount of Damages the Parent Indemnified Parties shall be entitled to offset under Section 7.1(a)(i) in respect of a breach of Section 3.12 (Intellectual Property) shall be twenty percent (20%) of the value of the Merger Consideration actually received by the Sellers under this Agreement; (iii) notwithstanding anything else in this Agreement, (A) the aggregate amount of Damages the Parent Indemnified Parties shall be entitled to offset under Section 7.1(a)(ii) through Section 7.1(a)(ix), inclusive, shall not exceed the value of the Merger Consideration actually received by the Sellers under this Agreement, and (B) in no event shall any Seller’s Liability for Damages exceed the aggregate Merger Consideration actually received by such Seller; provided, that, notwithstanding the foregoing, in the case of Fraud solely with respect to a breach of the representations and warranties contained in Article III of this Agreement, there shall be no limitation on the amount of Damages the Parent Indemnified Party may recover from the Seller who committed for such Fraud (and in no event shall any Seller have any Liability for Damages resulting from or arising out of Fraud committed by another Seller). (iv) For the sake of clarity, the Deductible shall not apply to any claim for Damages arising out of, resulting from or in connection with the matters set forth in Section 7.1(a)(ii) through Section 7.1(a)(ix), inclusive. Notwithstanding anything to the contrary contained herein, (i) no Sellers shall have any right of indemnification, contribution or right of advancement from Parent, the SPE Shareholders Merger Subs, the Company or any other Parent Indemnified Party with respect to any Damages claimed by any Parent Indemnified Party and (ii) the Sellers shall not have any right of subrogation against the Company, Parent or the Merger Subs with respect to the Offset Right of any Parent Indemnified Party. The representations, warranties and covenants of the Company, and the Parent Indemnified Parties’ right to indemnification with respect thereto, shall not be affected, deemed waived or otherwise limited by reason of any investigation made by or on behalf of any Parent Indemnified Party or by reason of the fact that any Parent Indemnified Party knew or should have known that any such representation or warranty is, was or might be inaccurate or by reason of any Parent Indemnified Party’s waiver of any condition set forth in Article VI, as the case may be. Parent shall have the right right, irrespective of any knowledge or investigation of Parent, the Merger Subs or their respective agents or representatives to offrely fully on the representations, warranties and covenants contained herein. For purposes of determining the measurement of the amount of Damages resulting from any such breach or inaccuracy of a representation or warranty or failure to perform any covenant, agreement or obligation (but not for purposes of determining the existence of such breach or inaccuracy or the failure to so perform), all qualifications (in any form) as to “material,” “materiality,” “material respects,” “Material Adverse Effect” or “knowledge” qualifications, contained in such representations, warranties, covenants, agreements and obligations shall be disregarded and have no force or effect. (v) For purposes of this Agreement, Damages shall be calculated after giving effect to any amounts actually recovered from third parties, including amounts recovered under insurance policies (for the avoidance of doubt, excluding any self-setinsurance program or similar arrangement) with respect to such Damages, on and the net of any costs to recover such amounts. Any Damages for indemnification under this Agreement shall be determined without duplication of recovery due to the facts giving rise to such Damages forming a pro rata basisbasis for a claim for recovery under multiple provisions of this Article VII. Any Damages for indemnification under this Agreement shall be determined without duplication of recovery due to the facts giving rise to such Damages constituting a breach of more than one representation, warranty, covenant or agreement. (vi) In the case of the exercise of the Offset Right against the payment of any Milestone Shares hereunder, the amount of any unrecouped claim Damages which may be offset against such payment of Milestone Shares shall be determined as (A) a number of shares of Parent Common Stock equal to the applicable amount of Damages divided by the Average Parent Stock Price; provided, that the “determination date” for Losses purposes of determining the SPE Shareholders or any Average Parent Stock Price shall be the date used for purposes of their determining the number of Milestone Shares payment for the applicable payment for which Parent is seeking to offset under this Article VII. (vii) In the event that the amount of Damages that the Parent Indemnified Parties may have are entitled to offset pursuant to the provisions of this Section 7 or pursuant to Article X their Offset Right exceed, as of the Share Purchase and Subscription Agreement against time of distribution of any amounts due and payable by them to applicable Milestone Shares or payment of Earnout Consideration, (A) the Non-SPE Shareholders, including in respect aggregate amount of the Call Price, if (a) a Adjudicated Decision is issued that entitles the SPE Shareholders to compensation such Milestone Shares or reimbursement for any Lossespayment of Earnout Consideration, or (bB) if exceed the SPE Shareholders notify limitation set forth in Section 7.1(b)(ii) prior to the Non-SPE Shareholders’ Representative issuance of any Losses that are not subject all Milestone Shares or prior to any Adjudicated Decision (by written notice including reasonable details and supporting documentation concerning the grounds for payment of all Earnout Consideration, the Losses), in which case the SPE Shareholders Parent Indemnified Parties shall be entitled to deduct the offset such excess amount of such Losses from such amounts due Damages against the next succeeding distribution of Milestone Shares or payment of Earnout Consideration (and payable in the case of the limitation set forth in Section 7.1(b)(ii) pursuant to the Non-SPE shareholders prior foregoing clause (B), recalculated to take into account the aggregate amount of Merger Consideration paid after giving effect to the payment thereof to the Non-SPE Shareholders hereunder and deposit distribution of such amount in an interest bearing escrow account. The escrow account shall be established with Citibank, or other bank designated by the SPE Shareholders, to be held until such time as a Adjudicated Decision is issued that entitles the SPE Shareholders to compensation or reimbursement for any Losses or pursuant to a mutual settlement agreement of the Parties, at which time the funds in the escrow account shall be distributed in accordance with the Adjudicated Decision or the mutual settlement agreement, as applicable. In addition, the SPE Shareholders shall be entitled to receive, and the Non-SPE shareholders shall direct that the Company shall pay on a pro rata basis to the SPE Shareholders or the escrow agent, as applicable, any such unrecouped claim for Losses on the same basis as set forth above, and the Non-SPE Shareholders shall be deemed to waive their rights to such dividends. Any such off-set succeeding Milestone Shares or payment direction shall be made in good faith and only if the SPE Shareholders have delivered to the Non-SPE Shareholders a reasonably detailed notice of the basis for such off-set or payment direction, at least three Business Days prior to the due date for payment of such amount. The Non-SPE Shareholders agree and confirm that they shall take all steps as are required under applicable Law to effectuate the offset right of the SPE Shareholders and the Indemnified Parties as set out in this Section 7.3(c), including making applications for statutory consents as may be required (e.g., for establishment of an escrow accountEarnout Consideration).