Claims for Indemnification Resolution of Conflicts. (a) Subject to the survival periods in Section 8.1 and the limitations set forth in Section 8.3 hereof, if an Indemnified Party wishes to make an indemnification claim under this Article 8, the Indemnified Party, shall deliver a written notice (an “Indemnification Claim Notice”) to the Indemnifying Party (i) stating that such Indemnified Party has paid, incurred, suffered or sustained, or reasonably anticipates that it may pay, incur, suffer or sustain Losses and (ii) specifying such Losses in reasonable detail (to the extent available), and, if applicable, the nature of the misrepresentation, breach of warranty or covenant to which such item is related, including, with respect to any breach of a representation, warranty or covenant the applicable section of this Agreement which was breached. To the extent reasonably practicable, the Indemnified Party shall include with the Indemnification Claim Notice such documents and other information available to the Indemnified Party in support of the claims asserted therein, and shall timely provide such other information as the Indemnifying Party may reasonably request in order to allow the Indemnifying Party to assess the merits of the claims. The Indemnified Party may update an Indemnification Claim Notice from time to time to reflect any change in circumstances following the date thereof. (b) If the Indemnifying Party shall not object in writing within the twenty (20) Business Day period after receipt of an Indemnification Claim Notice by delivery of a written notice of objection containing a reasonably detailed description supporting an objection to the applicable indemnification claim (an “Indemnification Claim Objection Notice”), such failure to so object shall be an irrevocable acknowledgment by the Indemnifying Party that the Indemnified Party is entitled to the full amount of the claim for Losses set forth in the Indemnification Claim Notice, but subject to the limitations on recovery set forth in this Article 8. In the event the Sellers Representative fails to timely deliver an Indemnification Claim Objection Notice, Buyer shall immediately be permitted to retain (until final resolution) a portion of the Indemnity Holdback Amount equal to the Losses set forth in such Indemnification Claim Notice that are recoverable subject to the limitations set forth herein (or in the event such Losses exceed the then available balance of the Indemnity Holdback Amount, Buyer shall be permitted to retain the remaining balance of the Indemnity Holdback Amount until final resolution). Should the amount held in the Indemnity Holdback Amount, if any, be insufficient to satisfy in whole the amount to be paid to a Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8, each Seller shall promptly, but in any event within ten (10) Business Days following the date of such memorandum, pay to the Indemnified Party, such Seller’s Pro Rata Fraction of such shortfall in cash. (c) In the event that the Indemnifying Party shall timely deliver an Indemnification Claim Objection Notice in accordance with Section 8.4(b), the Sellers Representative and Buyer shall attempt in good faith to agree upon the rights of the respective parties with respect to each of such claims. If the Sellers Representative and Buyer should so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties. Buyer shall immediately be permitted to permanently retain a portion of the Indemnity Holdback Amount equal to the Losses set forth in such memorandum (or to the extent then available from the Indemnity Holdback Amount in the event such Losses exceed the then available balance of the Indemnity Holdback Amount). Should the amount held in the Indemnity Holdback Amount, if any, be insufficient to satisfy in whole the amount to be paid to a Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8, each Seller shall promptly, but in any event within ten (10) Business Days following the date of such memorandum, pay to the Indemnified Party, such Seller’s Pro Rata Fraction of such shortfall in cash. (d) In the event that there is a dispute relating to any Indemnification Claim Notice or Indemnification Claim Objection Notice that cannot be settled in accordance with Section 8.4(c), each of Buyer or the Sellers Representative may file suit with respect to such dispute in any court having jurisdiction in accordance with Section 9.11. Notwithstanding the foregoing, if ▇▇▇▇▇ and the Sellers Representative mutually agree, ▇▇▇▇▇ and the Sellers Representative may submit any such dispute to alternative dispute resolution prior to, or in lieu of, pursuing the claim in court. (e) On or before the third (3rd) Business Day after the Holdback Termination Date, Buyer will notify the Sellers Representative in writing of the amount that Buyer determines in good faith to be necessary to satisfy all claims for indemnification, compensation or reimbursement that have been asserted in any Indemnification Claim Notice that was delivered to the Sellers Representative at or prior to 11:59 p.m. (Pacific time) on the Holdback Termination Date, but not resolved, at or prior to such time (each such claim a “Continuing Claim” and such amount, the “Retained Indemnity Holdback Amount”). Within eight (8) Business Days following the Holdback Termination Date, Buyer shall release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Indemnity Holdback Amount an amount in cash equal to (i) the amount then remaining of the Indemnity Holdback Amount less (ii) the Retained Indemnity Holdback Amount (if any). (f) Following the Holdback Termination Date, after resolution and payment of (or retention by Buyer of amounts in respect of) a Continuing Claim, Buyer shall release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Retained Indemnity Holdback Amount any amounts no longer subject to a Continuing Claim. (g) Except as otherwise set forth in this Section 8.4, once a Loss is agreed to by the Indemnifying Party or finally adjudicated to be payable pursuant to this Article 8, the Indemnifying Party shall satisfy its obligations within five (5) Business Days of such final, non-appealable adjudication by wire transfer of immediately available funds. (h) Notwithstanding the foregoing, (i) any notice that is required to be delivered to any Seller pursuant to this Article 8 shall be deemed satisfied by delivery of such notice to the Sellers Representative and (ii) any notices required to be delivered by, or any actions that are required to be taken by, (other than any obligations to make or right to receive any payments) any Seller pursuant to this Article 8 shall be satisfied by delivery by, or action taken by the Sellers Representative.
Appears in 1 contract
Claims for Indemnification Resolution of Conflicts. (a) Subject to the survival periods in Section 8.1 7.1 and the limitations set forth in Section 8.3 7.3 hereof, if an a Parent Indemnified Party wishes to make an indemnification claim under this Article 8VII, the Parent, on behalf of such Parent Indemnified Party, Party shall deliver a written notice (an “Indemnification Claim Notice”) to the Indemnifying Party Securityholder Representative (i) stating that such Parent Indemnified Party has paid, incurred, suffered or sustained, or reasonably anticipates that it may pay, incur, suffer or sustain Losses and (ii) specifying such Losses in reasonable detail (to the extent available), and, if applicable, the nature of the misrepresentation, breach of warranty or covenant to which such item is related, including, with respect to any breach of a representation, warranty or covenant the applicable section of this Agreement which was breached. To the extent reasonably practicable, the Indemnified Party Parent shall include with the Indemnification Claim Notice such documents and other information available to the Indemnified Party Parent in support of the claims asserted therein, and shall timely provide such other information as the Indemnifying Party Securityholder Representative may reasonably request in order to allow the Indemnifying Party Securityholder Representative to assess the merits of the claims. The Indemnified Party Parent may update an Indemnification Claim Notice from time to time to reflect any change in circumstances following the date thereof, so long as such update reasonably relates to the underlying facts and circumstances specifically set forth in such original Indemnification Claim Notice.
(b) If the Indemnifying Party Securityholder Representative on behalf of the Company Indemnitors shall not object in writing within the twenty (20) Business Day period after receipt of an Indemnification Claim Notice by delivery of a written notice of objection containing a reasonably detailed description of the facts and circumstances supporting an objection to the applicable indemnification claim (an “Indemnification Claim Objection Notice”), such failure to so object shall be an irrevocable acknowledgment by the Indemnifying Party Securityholder Representative on behalf of the Company Indemnitors that the Parent Indemnified Party is entitled to the full amount of the claim for Losses set forth in the such Indemnification Claim NoticeNotice if and to the extent such Losses are actually paid, incurred, suffered or sustained, but subject to the other limitations on recovery set forth in this Article 8herein. In such event, Parent and the Securityholder Representative shall promptly (but in any event within three (3) Business Days of the Sellers Representative fails to timely deliver an resolution of such Indemnification Claim Objection Notice) deliver a joint written instruction (a “Joint Instruction”) to the Escrow Agent instructing the Escrow Agent to immediately release to Parent from the Escrow Fund, Buyer shall immediately be permitted to retain (until final resolution) a portion of the Indemnity Holdback Amount extent then available, cash with an aggregate value equal to the Losses set forth in such Indemnification Claim Notice that are recoverable subject to the limitations set forth herein (or as much cash as is then available in the Escrow Fund in the event such Losses exceed the then available balance of the Indemnity Holdback Amount, Buyer shall be permitted to retain the remaining balance of the Indemnity Holdback Amount until final resolutionEscrow Fund). Should the amount held in the Indemnity Holdback Amount, if any, be insufficient to satisfy in whole the amount to be paid to a Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8, each Seller shall promptly, but in any event within ten (10) Business Days following the date of such memorandum, pay to the Indemnified Party, such Seller’s Pro Rata Fraction of such shortfall in cash.
(c) In the event that the Indemnifying Party Securityholder Representative shall timely deliver an Indemnification Claim Objection Notice in accordance with Section 8.4(b7.4(b), the Sellers Securityholder Representative and Buyer Parent shall attempt in good faith to agree upon the rights of the respective parties with respect to each of such claims. If the Sellers Securityholder Representative and Buyer Parent should so agree, a memorandum setting forth such agreement shall be prepared and signed by both partiesparties and, in the case of an indemnification claim to be recovered from the Escrow Fund, shall be furnished to the Escrow Agent. Buyer The Escrow Agent shall immediately be permitted entitled to permanently retain conclusively rely on any such memorandum and make distributions from the Escrow Fund in accordance with the terms thereof. In such event, the Escrow Agent shall promptly release to Parent from the Escrow Fund a portion of the Indemnity Holdback Escrow Amount equal to the Losses set forth in such memorandum (or to as much of the extent Escrow Amount as is then available from in the Indemnity Holdback Amount Escrow Fund in the event such Losses exceed the then available balance of the Indemnity Holdback AmountEscrow Fund). Should the amount held in the Indemnity Holdback AmountEscrow Fund, if any, be insufficient to satisfy in whole the amount to be paid to a Parent Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8VII, each Seller shall promptlyCompany Indemnitor shall, but in any event within ten (10) Business Days following the date of such memorandum, pay to the Parent Indemnified Party, such SellerCompany Indemnitor’s Pro Rata Fraction Share of such shortfall in cashshortfall.
(d) In If no such agreement can be reached after good faith negotiation within thirty (30) days after the event that there is a dispute relating to any Indemnification Claim Notice or timely delivery of an Indemnification Claim Objection Notice that cannot be settled by the Securityholder Representative in accordance with Section 8.4(c7.4(b), either Parent or the Securityholder Representative may demand arbitration of the matter unless the amount of the Losses is at issue in pending litigation with a third party, in which event arbitration shall not be commenced until such amount is ascertained or both parties agree to arbitration, and in either such event the matter shall be settled by arbitration conducted in accordance with Section 9.12. The decision of the arbitrator (or a majority of the three arbitrators, as applicable) in such arbitration proceeding pursuant to Section 9.12 as to the validity and amount of any claim in such Indemnification Claim Notice shall be final, binding and conclusive upon the parties to this Agreement. Such decision shall be written and shall be supported by written findings of fact and conclusions which shall set forth the award, judgment, decree or order awarded by the arbitrator and, in the case of an indemnification claim to be recovered from the Escrow Fund, shall be furnished to the Escrow Agent. The Escrow Agent shall be entitled to conclusively rely on any such decision and make distributions from the Escrow Fund in accordance with the terms thereof. In such event, the Escrow Agent shall promptly release to Parent from the Escrow Fund a portion of the Escrow Amount equal to the Losses set forth in such decision (or as much of the Escrow Amount as is then available in the Escrow Fund in the event such Losses exceed the then available balance of the Escrow Fund). Should the amount held in the Escrow Fund, if any, be insufficient to satisfy in whole the amount to be paid to a Parent Indemnified Party in accordance with such decision, then, subject to the limitations set forth in this Article VII, each Company Indemnitor shall, within ten (10) Business Days following the date of such decision, pay to the Parent Indemnified Party, such Company Indemnitor’s Pro Rata Share of such shortfall.
(e) Subject to the limitations contained in Section 7.3, including Section 7.3(c), the Escrow Amount shall be available as partial security to compensate the Parent Indemnified Parties for any claims by such parties for any Losses suffered or incurred by them and for which they are entitled to recovery under this Article VII. Any Losses that are agreed or determined pursuant to this Article VII to be indemnifiable (“Indemnifiable Losses”) and which are recovered from the Escrow Amount shall come (A) with respect to each Founder, proportionally from the vested portion of the Escrow Amount that is not subject to revesting and the unvested portion of the Escrow Amount that is subject to revesting, in each case pursuant to such Founder’s Joinder Agreement, and (B) pro rata from the cash and stock portion of the Escrow Amount. Indemnifiable Losses recovered from the Escrow Amount shall reduce the portion of the remaining Escrow Amount attributable to each of Buyer or the Sellers Representative may file suit Company Indemnitor in proportion to their respective Pro Rata Shares of the remaining Escrow Amount, if any, and out of each such Company Indemnitor’s portion of the Escrow Cash and Escrow Shares in the same proportions as Escrow Cash and Escrow Shares were deposited in the Escrow Account with respect to such dispute Company Indemnitor at the Closing (as set forth on the Allocation Schedule). Each Company Indemnitor may elect, in his, her or its sole discretion, whether to satisfy any court having jurisdiction shortfall between the amount of such Indemnifiable Losses and the Escrow Amount then remaining in accordance with Section 9.11the Escrow Fund in cash, in shares of Parent Common Stock, or a combination thereof, which such shares to be valued for these purposes at an amount equal to the Parent Common Stock Closing Price. Notwithstanding In furtherance of, and without limiting, the foregoing, if ▇▇▇▇▇ in the event a Founder is obligated to satisfy any such shortfall and such Founder still has Revested Merger Consideration that has not yet vested, such Founder shall satisfy such amount proportionally from the vested portion of the Founder’s Total Merger Consideration and the Sellers Representative mutually agree, ▇▇▇▇▇ and unvested portion of the Sellers Representative may submit any such dispute to alternative dispute resolution prior to, or in lieu of, pursuing the claim in courtRevested Merger Consideration.
(ef) On or before the third (3rd) Business Day after the Holdback Termination Escrow Expiration Date, Buyer Parent will notify the Sellers Securityholder Representative in writing of the amount that Buyer Parent determines in good faith to be necessary to satisfy all claims for indemnification, compensation or reimbursement that have been asserted in any Indemnification Claim Notice that was delivered to the Sellers Securityholder Representative at or prior to 11:59 p.m. (Pacific timeCalifornia Time) on the Holdback Termination Escrow Expiration Date, but not resolved, at or prior to such time (each such claim a “Continuing Claim” and such amount, the “Retained Indemnity Holdback Escrow Amount”). Within eight ten (8) 10) Business Days following the Holdback Termination Escrow Expiration Date, Buyer Parent and the Securityholder Representative shall release and distribute deliver a Joint Instruction to the Sellers in accordance with each Seller’s Pro Rata Fraction Escrow Agent instructing the Escrow Agent to release from the Indemnity Holdback Amount Escrow Fund an amount in cash the aggregate equal to (i) the amount then remaining Escrow Amount as of the Indemnity Holdback Amount less Escrow Expiration Date (as reduced from time to time pursuant to the terms of this Agreement), minus (ii) the Retained Indemnity Holdback Escrow Amount to the Paying Agent for further distribution to the Company Indemnitors (if any)other than amounts payable in respect of Employee Options) in accordance with their applicable Pro Rata Share of such amount; provided, that the portion of such amount due in respect of Employee Options shall be distributed by the Escrow Agent to Parent and paid by Parent or the Surviving Entity to the holders of Company Options in accordance with their applicable Pro Rata Share of such amount through its payroll processing system.
(fg) Following the Holdback Termination Escrow Expiration Date, after resolution and payment of (or retention by Buyer of amounts in respect of) a Continuing Claim, Buyer Parent and the Securityholder Representative shall release and distribute deliver a Joint Instruction to the Sellers Escrow Agent instructing the Escrow Agent to release from the Escrow Fund an amount in the aggregate equal to (i) the Retained Escrow Amount as of the date of such resolution and payment (as reduced from time to time pursuant to the terms of this Agreement), minus (ii) the amounts that Parent determines in good faith to be necessary to satisfy other Continuing Claims (which amounts will continue to be held as the Retained Escrow Amount) to the Paying Agent for further distribution to the Company Indemnitors (other than amounts payable in respect of Employee Options) in accordance with each Seller’s their applicable Pro Rata Fraction from Share of such amount; provided, that the Retained Indemnity Holdback Amount any amounts no longer subject to a Continuing Claim.
(g) Except as otherwise set forth portion of such amount due in this Section 8.4, once a Loss is agreed to respect of Employee Options shall be distributed by the Indemnifying Party Escrow Agent to Parent and paid by Parent or finally adjudicated the Surviving Entity to be payable pursuant to this Article 8, the Indemnifying Party shall satisfy its obligations within five (5) Business Days holders of Company Options in accordance with their applicable Pro Rata Share of such final, non-appealable adjudication by wire transfer of immediately available fundsamount through its payroll processing system.
(h) Each of the parties acknowledges and agrees that as a condition to Parent’s and Paying Agent’s obligation to make any payments pursuant to Section 7.4(f) or Section 7.4(g), the Securityholder Representative shall first deliver to Parent an updated Allocation Schedule setting forth the amounts payable to each Company Indemnitor in accordance with such section. Parent and the Surviving Entity shall be entitled to conclusively rely upon the updated Allocation Schedule delivered by the Securityholder Representative, including with respect to whether any individual Company Indemnitor received the appropriate portion of any such distribution, and in no event will Parent, the Surviving Corporation, the Surviving Entity or any of their Affiliates have any liability to any person on account of payments or distributions made in accordance with the updated Allocation Schedule delivered by the Securityholder Representative.
(i) Notwithstanding the foregoing, (i) any notice that is required to be delivered to any Seller Company Indemnitors pursuant to this Article 8 VII shall be deemed satisfied by delivery of such notice to the Sellers Securityholder Representative and (ii) any notices required to be delivered by, or any actions (other than any obligation to make, or right to receive, any payments) that are required to be taken by, (other than any obligations to make or right to receive any payments) any Seller Company Indemnitors pursuant to this Article 8 VII shall be satisfied by delivery by, or action taken by the Sellers Securityholder Representative.
Appears in 1 contract
Sources: Merger Agreement (PagerDuty, Inc.)
Claims for Indemnification Resolution of Conflicts. (a) Subject to the survival periods in Section 8.1 and the limitations set forth in Section 8.3 hereofMaking a Claim for Indemnification; Officer’s Certificate. The Purchaser, if on behalf of an Indemnified Party wishes to make an indemnification claim under this Article 8, the Indemnified Party, shall deliver a written notice (an “Indemnification Claim Notice”) may seek recovery of Losses pursuant to this Article IX by delivering to the Indemnifying Party (i) stating that Stockholder Representative an Officer’s Certificate in respect of such Indemnified Party has paid, incurred, suffered or sustained, or reasonably anticipates that it may pay, incur, suffer or sustain Losses and (ii) specifying such Losses in reasonable detail (to the extent available), and, if applicable, the nature of the misrepresentation, breach of warranty or covenant to which such item is related, including, with respect to any breach of a representation, warranty or covenant the applicable section of this Agreement which was breached. To the extent reasonably practicable, the Indemnified Party shall include with the Indemnification Claim Notice such documents and other information available to the Indemnified Party in support of the claims asserted therein, and shall timely provide such other information as the Indemnifying Party may reasonably request in order to allow the Indemnifying Party to assess the merits of the claims. The Indemnified Party may update an Indemnification Claim Notice from time to time to reflect any change in circumstances following the date thereof.
(b) If the Indemnifying Party shall not object in writing within the twenty (20) Business Day period after receipt of an Indemnification Claim Notice by delivery of a written notice of objection containing a reasonably detailed description supporting an objection to the applicable indemnification claim (an “Indemnification Claim Objection Notice”), such failure to so object shall be an irrevocable acknowledgment by the Indemnifying Party that the Indemnified Party is entitled to the full amount of the claim for Losses set forth in the Indemnification Claim Notice, but subject to the limitations on recovery set forth in this Article 8. In the event the Sellers Representative fails to timely deliver an Indemnification Claim Objection Notice, Buyer shall immediately be permitted to retain (until final resolution) a portion of the Indemnity Holdback Amount equal to the Losses set forth in such Indemnification Claim Notice that are recoverable subject to the limitations set forth herein (or in the event such Losses exceed the then available balance of the Indemnity Holdback Amount, Buyer shall be permitted to retain the remaining balance of the Indemnity Holdback Amount until final resolution). Should the amount held in the Indemnity Holdback Amount, if any, be insufficient to satisfy in whole the amount to be paid to a Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8, each Seller shall promptly, but in any event within ten sixty (1060) Business Days days following the date on which the Purchaser obtained knowledge of such memorandum, pay claim; provided that the failure to timely deliver an Officer’s Certificate shall not impair such claim or any rights or remedies available with respect thereto except to the extent the Indemnifying Party is actually prejudiced thereby. The date of receipt by the Stockholder Representative of an Officer’s Certificate is referred to herein as the “Claim Date” of such Officer’s Certificate (and the claims for indemnification contained therein). For purposes hereof, “Officer’s Certificate” shall mean a certificate signed by any officer of the Purchaser: (i) stating that an Indemnified Party has paid, sustained, or incurred, or reasonably anticipates in good faith that it will have to pay, sustain, or incur, Losses and including a reasonable estimate of the amounts of such Losses, if known, (ii) specifying in reasonable detail the individual items of Losses included in the amount so stated, the date each such item was paid, sustained, or incurred, or the basis for such anticipated liability, and the nature of the Indemnifiable Matter to which such item is related; provided that (i) the Officer’s Certificate need only specify such information to the knowledge of such officer or such Indemnified Party as of the Claim Date, shall not limit any of the rights or remedies of any Indemnified Party, and (ii) the Officer’s Certificate may be updated and amended from time to time prior to the applicable Survival Date by the Purchaser by delivering an updated or amended Officer’s Certificate to the Stockholder Representative (it being understood that any such Sellerupdate or amendment, if material, will extend the Objection Deadline by a new forty-five (45) day period) and (iii) no Indemnified Party’s Pro Rata Fraction rights and remedies shall be prejudiced as a result of such shortfall limitations on disclosure in cash.
any Officer’s Certificate (c) In except to the event that extent the Indemnifying Party shall timely deliver an Indemnification Claim Objection Notice in accordance with Section 8.4(bis actually prejudiced thereby), the Sellers Representative and Buyer shall attempt including any updates or amendments thereto, where such limitations are made in good faith to agree upon preserve the rights attorney client privilege, the work product doctrine or any other privileges (provided, further, that the Purchaser shall at the time of delivery of the respective parties Officer’s Certificate notify the Stockholder Representative that it has so limited its disclosure and thereafter shall cooperate with respect to each of such claims. If the Sellers Stockholder Representative and Buyer should so agree, a memorandum setting forth use commercially reasonable efforts to cause such agreement shall limitation to be prepared removed and signed by both parties. Buyer shall immediately be permitted to permanently retain a portion of the Indemnity Holdback Amount equal applicable information provided to the Losses set forth Stockholder Representative or its representatives in such memorandum (or a manner that would not reasonably be expected to the extent then available from the Indemnity Holdback Amount in the event such Losses exceed the then available balance of the Indemnity Holdback Amount). Should the amount held in the Indemnity Holdback Amount, if any, be insufficient to satisfy in whole the amount to be paid to a Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8, each Seller shall promptly, but result in any event within ten waiver of any privilege (10) Business Days following the date of such memorandum, pay to the Indemnified Party, such Seller’s Pro Rata Fraction of such shortfall in cash.
(d) In the event that there is including by entering into a dispute relating to any Indemnification Claim Notice common interest or Indemnification Claim Objection Notice that cannot be settled in accordance with Section 8.4(cjoint defense agreement), each of Buyer or the Sellers Representative may file suit with respect to such dispute in any court having jurisdiction in accordance with Section 9.11. Notwithstanding the foregoing, if ▇▇▇▇▇ and the Sellers Representative mutually agree, ▇▇▇▇▇ and the Sellers Representative may submit any such dispute to alternative dispute resolution prior to, or in lieu of, pursuing the claim in court.
(e) On or before the third (3rd) Business Day after the Holdback Termination Date, Buyer will notify the Sellers Representative in writing of the amount that Buyer determines in good faith to be necessary to satisfy all claims for indemnification, compensation or reimbursement that have been asserted in any Indemnification Claim Notice that was delivered to the Sellers Representative at or prior to 11:59 p.m. (Pacific time) on the Holdback Termination Date, but not resolved, at or prior to such time (each such claim a “Continuing Claim” and such amount, the “Retained Indemnity Holdback Amount”). Within eight (8) Business Days following the Holdback Termination Date, Buyer shall release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Indemnity Holdback Amount an amount in cash equal to (i) the amount then remaining of the Indemnity Holdback Amount less (ii) the Retained Indemnity Holdback Amount (if any).
(f) Following the Holdback Termination Date, after resolution and payment of (or retention by Buyer of amounts in respect of) a Continuing Claim, Buyer shall release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Retained Indemnity Holdback Amount any amounts no longer subject to a Continuing Claim.
(g) Except as otherwise set forth in this Section 8.4, once a Loss is agreed to by the Indemnifying Party or finally adjudicated to be payable pursuant to this Article 8, the Indemnifying Party shall satisfy its obligations within five (5) Business Days of such final, non-appealable adjudication by wire transfer of immediately available funds.
(h) Notwithstanding the foregoing, (i) any notice that is required to be delivered to any Seller pursuant to this Article 8 shall be deemed satisfied by delivery of such notice to the Sellers Representative and (ii) any notices required to be delivered by, or any actions that are required to be taken by, (other than any obligations to make or right to receive any payments) any Seller pursuant to this Article 8 shall be satisfied by delivery by, or action taken by the Sellers Representative.
Appears in 1 contract
Claims for Indemnification Resolution of Conflicts. (ai) Subject The Securityholder Representative may object to the survival periods in Section 8.1 and the limitations a claim for indemnification set forth in Section 8.3 hereof, if an the Notice of Claim by delivering to the Indemnified Party wishes to make an seeking indemnification claim under this Article 8, the Indemnified Party, shall deliver a written notice statement of objection to the claim made in the Notice of Claim (an “Indemnification Claim Objection Notice”); provided, that to be effective, such Objection Notice must (A) be delivered to the Indemnifying Party (i) stating that such Indemnified Party has paid, incurred, suffered or sustained, or reasonably anticipates that it may pay, incur, suffer or sustain Losses Parent prior to the 45th day following the date on which the Notice of Claim was received by the Securityholder Representative; and (iiB) specifying such Losses set forth in reasonable detail (to the extent available), and, if applicable, the nature of the misrepresentation, breach of warranty or covenant to which such item is related, including, with respect to any breach of a representation, warranty or covenant the applicable section of this Agreement which was breached. To the extent reasonably practicable, the Indemnified Party shall include with the Indemnification Claim Notice such documents and other information available objections to the Indemnified Party claims in support respect of which the claims asserted therein, and shall timely provide such other information as the Indemnifying Party may reasonably request in order to allow the Indemnifying Party to assess the merits of the claims. The Indemnified Party may update an Indemnification Claim Notice from time to time to reflect any change in circumstances following the date thereofobjection is made.
(bii) If the Indemnifying Party shall not object in writing within the twenty (20) Business Day period after receipt of Securityholder Representative timely delivers an Indemnification Claim Notice by delivery of a written notice of objection containing a reasonably detailed description supporting an objection to the applicable indemnification claim (an “Indemnification Claim Objection Notice”), such failure to so object shall be an irrevocable acknowledgment by the Indemnifying Party that the Indemnified Party is entitled to the full amount of the claim for Losses set forth in the Indemnification Claim Notice, but subject to the limitations on recovery set forth in this Article 8. In the event the Sellers Representative fails to timely deliver an Indemnification Claim Objection Notice, Buyer shall immediately be permitted to retain (until final resolution) a portion of the Indemnity Holdback Amount equal to the Losses set forth in such Indemnification Claim Notice that are recoverable subject to the limitations set forth herein (or in the event such Losses exceed the then available balance of the Indemnity Holdback Amount, Buyer shall be permitted to retain the remaining balance of the Indemnity Holdback Amount until final resolution). Should the amount held in the Indemnity Holdback Amount, if any, be insufficient to satisfy in whole the amount to be paid to a Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8, each Seller shall promptly, but in any event within ten (10) Business Days following the date of such memorandum, pay to the Indemnified Party, such Seller’s Pro Rata Fraction of such shortfall in cash.
(c) In the event that the Indemnifying Party shall timely deliver an Indemnification Claim Objection Notice in accordance with Section 8.4(b)8.2(e)(i) hereof, the Sellers Securityholder Representative and Buyer shall the Indemnified Parties will attempt in good faith to agree upon the rights of the respective parties with respect to each of such claims; provided, that the Indemnified Parties may limit their disclosures to the Securityholder Representative pursuant to good faith efforts, based on the advice of legal counsel, to preserve attorney-client privilege, or any other similar privileges. If the Sellers Securityholder Representative and Buyer should so agreethe Indemnified Parties reach an agreement, a memorandum setting forth such agreement shall will be prepared and signed by both parties. Buyer shall immediately be permitted to permanently retain a portion of the Indemnity Holdback Amount equal to the Losses set forth in all applicable parties (any claims covered by such memorandum (or to the extent then available from the Indemnity Holdback Amount in the event such Losses exceed the then available balance of the Indemnity Holdback Amountan agreement, “Settled Claims”). Should the amount held in the Indemnity Holdback Amount, if any, be insufficient to satisfy in whole the amount Any amounts required to be paid as a result of a Settled Claim will be paid by the applicable Indemnifying Party to the Indemnified Parties pursuant to the Settled Claim within 30 days of the applicable claim becoming a Indemnified Party in accordance with such memorandum, thenSettled Claim, subject to the limitations herein, including the provisions of Sections 8.2(f) and 8.3.
(iii) If no such agreement can be reached after good faith negotiation prior to 60 days after delivery of an Objection Notice, then upon the expiration of such 60-day period either Parent or the Securityholder Representative may demand arbitration of the matter unless the amount of the Damage that is at issue is the subject of a pending third-party claim or any investigation by any Governmental Body, in which event arbitration will not be commenced until such third-party claim or investigation is finally resolved or both parties agree to arbitration, and in either such event the matter will be settled by arbitration conducted pursuant to Section 11.11
(iv) Arbitration under Section 11.11 will apply to any dispute among the Indemnifying Parties and the Indemnified Parties under this Article VIII. The decision of the Arbitrator as to the validity and amount of any claim in such Notice of Claim will be final, binding, and conclusive upon the parties to this Agreement, the Indemnified Parties and the Indemnifying Parties. Such decision will be written and will be supported by written findings of fact and conclusions which will set forth the award, judgment, decree or order awarded by the Arbitrator. Claims determined by arbitration as provided in this Article 8, each Seller shall promptly, but in any event within ten (10Section 8.2(e)(iv) Business Days following are referred to as “Resolved Claims”. Within 30 days of a decision of the date of such memorandum, pay Arbitrator requiring payment by an Indemnifying Party to the an Indemnified Party, such Seller’s Pro Rata Fraction of such shortfall in cash.
(d) In Indemnifying Party will make the event that there is a dispute relating to any Indemnification Claim Notice or Indemnification Claim Objection Notice that cannot be settled in accordance with Section 8.4(c), each of Buyer or the Sellers Representative may file suit with respect payment to such dispute in any court having jurisdiction in accordance with Section 9.11. Notwithstanding the foregoingIndemnified Party, if ▇▇▇▇▇ and the Sellers Representative mutually agree, ▇▇▇▇▇ and the Sellers Representative may submit any such dispute to alternative dispute resolution prior to, or in lieu of, pursuing the claim in court.
(e) On or before the third (3rd) Business Day after the Holdback Termination Date, Buyer will notify the Sellers Representative in writing of the amount that Buyer determines in good faith to be necessary to satisfy all claims for indemnification, compensation or reimbursement that have been asserted in any Indemnification Claim Notice that was delivered to the Sellers Representative at or prior to 11:59 p.m. (Pacific time) on the Holdback Termination Date, but not resolved, at or prior to such time (each such claim a “Continuing Claim” and such amount, the “Retained Indemnity Holdback Amount”). Within eight (8) Business Days following the Holdback Termination Date, Buyer shall release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Indemnity Holdback Amount an amount in cash equal to (i) the amount then remaining of the Indemnity Holdback Amount less (ii) the Retained Indemnity Holdback Amount (if any).
(f) Following the Holdback Termination Date, after resolution and payment of (or retention by Buyer of amounts in respect of) a Continuing Claim, Buyer shall release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Retained Indemnity Holdback Amount any amounts no longer subject to a Continuing ClaimSections 8.2(f) and 8.3.
(g) Except as otherwise set forth in this Section 8.4, once a Loss is agreed to by the Indemnifying Party or finally adjudicated to be payable pursuant to this Article 8, the Indemnifying Party shall satisfy its obligations within five (5) Business Days of such final, non-appealable adjudication by wire transfer of immediately available funds.
(h) Notwithstanding the foregoing, (i) any notice that is required to be delivered to any Seller pursuant to this Article 8 shall be deemed satisfied by delivery of such notice to the Sellers Representative and (ii) any notices required to be delivered by, or any actions that are required to be taken by, (other than any obligations to make or right to receive any payments) any Seller pursuant to this Article 8 shall be satisfied by delivery by, or action taken by the Sellers Representative.
Appears in 1 contract
Claims for Indemnification Resolution of Conflicts. (a) Subject to the survival periods in Section 8.1 and the limitations set forth in Section 8.3 hereofMaking a Claim for Indemnification; Officer’s Certificate. The Purchaser, if on behalf of an Indemnified Party wishes to make an indemnification claim under this Article 8, the Indemnified Party, shall deliver a written notice (an “Indemnification Claim Notice”) may seek recovery of Losses pursuant to this Article IX by delivering to the Indemnifying Party (i) stating that Stockholder Representative an Officer’s Certificate in respect of such Indemnified Party has paid, incurred, suffered or sustained, or reasonably anticipates that it may pay, incur, suffer or sustain Losses and (ii) specifying such Losses in reasonable detail (to the extent available), and, if applicable, the nature of the misrepresentation, breach of warranty or covenant to which such item is related, including, with respect to any breach of a representation, warranty or covenant the applicable section of this Agreement which was breached. To the extent reasonably practicable, the Indemnified Party shall include with the Indemnification Claim Notice such documents and other information available to the Indemnified Party in support of the claims asserted therein, and shall timely provide such other information as the Indemnifying Party may reasonably request in order to allow the Indemnifying Party to assess the merits of the claims. The Indemnified Party may update an Indemnification Claim Notice from time to time to reflect any change in circumstances following the date thereof.
(b) If the Indemnifying Party shall not object in writing within the twenty (20) Business Day period after receipt of an Indemnification Claim Notice by delivery of a written notice of objection containing a reasonably detailed description supporting an objection to the applicable indemnification claim (an “Indemnification Claim Objection Notice”), such failure to so object shall be an irrevocable acknowledgment by the Indemnifying Party that the Indemnified Party is entitled to the full amount of the claim for Losses set forth in the Indemnification Claim Notice, but subject to the limitations on recovery set forth in this Article 8. In the event the Sellers Representative fails to timely deliver an Indemnification Claim Objection Notice, Buyer shall immediately be permitted to retain (until final resolution) a portion of the Indemnity Holdback Amount equal to the Losses set forth in such Indemnification Claim Notice that are recoverable subject to the limitations set forth herein (or in the event such Losses exceed the then available balance of the Indemnity Holdback Amount, Buyer shall be permitted to retain the remaining balance of the Indemnity Holdback Amount until final resolution). Should the amount held in the Indemnity Holdback Amount, if any, be insufficient to satisfy in whole the amount to be paid to a Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8, each Seller shall promptly, but in any event within ten sixty (1060) Business Days days following the date on which the Purchaser obtained knowledge of such memorandum, pay claim; provided that the failure to timely deliver an Officer’s Certificate shall not impair such claim or any rights or remedies available with respect thereto except to the extent the Indemnifying Party is actually prejudiced thereby. The date of receipt by the Stockholder Representative of an Officer’s Certificate is referred to herein as the “Claim Date” of such Officer’s Certificate (and the claims for indemnification contained therein). For purposes hereof, “Officer’s Certificate” shall mean a certificate signed by any officer of the Purchaser: (i) stating that an Indemnified Party has paid, sustained, or incurred, or reasonably anticipates in good faith that it will have to pay, sustain, or incur, Losses and including a reasonable estimate of the amounts of such Losses, if known, (ii) specifying in reasonable detail the individual items of Losses included in the amount so stated, the date each such item was paid, sustained, or incurred, or the basis for such 71 anticipated liability, and the nature of the Indemnifiable Matter to which such item is related; provided that (i) the Officer’s Certificate need only specify such information to the knowledge of such officer or such Indemnified Party as of the Claim Date, shall not limit any of the rights or remedies of any Indemnified Party, and (ii) the Officer’s Certificate may be updated and amended from time to time prior to the applicable Survival Date by the Purchaser by delivering an updated or amended Officer’s Certificate to the Stockholder Representative (it being understood that any such Sellerupdate or amendment, if material, will extend the Objection Deadline by a new forty-five (45) day period) and (iii) no Indemnified Party’s Pro Rata Fraction rights and remedies shall be prejudiced as a result of such shortfall limitations on disclosure in cash.
any Officer’s Certificate (c) In except to the event that extent the Indemnifying Party shall timely deliver an Indemnification Claim Objection Notice in accordance with Section 8.4(bis actually prejudiced thereby), the Sellers Representative and Buyer shall attempt including any updates or amendments thereto, where such limitations are made in good faith to agree upon preserve the rights attorney client privilege, the work product doctrine or any other privileges (provided, further, that the Purchaser shall at the time of delivery of the respective parties Officer’s Certificate notify the Stockholder Representative that it has so limited its disclosure and thereafter shall cooperate with respect to each of such claims. If the Sellers Stockholder Representative and Buyer should so agree, a memorandum setting forth use commercially reasonable efforts to cause such agreement shall limitation to be prepared removed and signed by both parties. Buyer shall immediately be permitted to permanently retain a portion of the Indemnity Holdback Amount equal applicable information provided to the Losses set forth Stockholder Representative or its representatives in such memorandum (or a manner that would not reasonably be expected to the extent then available from the Indemnity Holdback Amount in the event such Losses exceed the then available balance of the Indemnity Holdback Amount). Should the amount held in the Indemnity Holdback Amount, if any, be insufficient to satisfy in whole the amount to be paid to a Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8, each Seller shall promptly, but result in any event within ten waiver of any privilege (10) Business Days following the date of such memorandum, pay to the Indemnified Party, such Seller’s Pro Rata Fraction of such shortfall in cash.
(d) In the event that there is including by entering into a dispute relating to any Indemnification Claim Notice common interest or Indemnification Claim Objection Notice that cannot be settled in accordance with Section 8.4(cjoint defense agreement), each of Buyer or the Sellers Representative may file suit with respect to such dispute in any court having jurisdiction in accordance with Section 9.11. Notwithstanding the foregoing, if ▇▇▇▇▇ and the Sellers Representative mutually agree, ▇▇▇▇▇ and the Sellers Representative may submit any such dispute to alternative dispute resolution prior to, or in lieu of, pursuing the claim in court.
(e) On or before the third (3rd) Business Day after the Holdback Termination Date, Buyer will notify the Sellers Representative in writing of the amount that Buyer determines in good faith to be necessary to satisfy all claims for indemnification, compensation or reimbursement that have been asserted in any Indemnification Claim Notice that was delivered to the Sellers Representative at or prior to 11:59 p.m. (Pacific time) on the Holdback Termination Date, but not resolved, at or prior to such time (each such claim a “Continuing Claim” and such amount, the “Retained Indemnity Holdback Amount”). Within eight (8) Business Days following the Holdback Termination Date, Buyer shall release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Indemnity Holdback Amount an amount in cash equal to (i) the amount then remaining of the Indemnity Holdback Amount less (ii) the Retained Indemnity Holdback Amount (if any).
(f) Following the Holdback Termination Date, after resolution and payment of (or retention by Buyer of amounts in respect of) a Continuing Claim, Buyer shall release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Retained Indemnity Holdback Amount any amounts no longer subject to a Continuing Claim.
(g) Except as otherwise set forth in this Section 8.4, once a Loss is agreed to by the Indemnifying Party or finally adjudicated to be payable pursuant to this Article 8, the Indemnifying Party shall satisfy its obligations within five (5) Business Days of such final, non-appealable adjudication by wire transfer of immediately available funds.
(h) Notwithstanding the foregoing, (i) any notice that is required to be delivered to any Seller pursuant to this Article 8 shall be deemed satisfied by delivery of such notice to the Sellers Representative and (ii) any notices required to be delivered by, or any actions that are required to be taken by, (other than any obligations to make or right to receive any payments) any Seller pursuant to this Article 8 shall be satisfied by delivery by, or action taken by the Sellers Representative.
Appears in 1 contract
Sources: Merger Agreement
Claims for Indemnification Resolution of Conflicts. (a) Subject to the survival periods in Section 8.1 and the limitations set forth in Section 8.3 hereof7.3, if an Indemnified Party wishes to make an indemnification claim under this Article 8VII, the such Indemnified Party, Party (“Beneficiary”) shall deliver a written notice (an “Indemnification Claim Notice”) to the party required to provide indemnification under this Agreement (the “Indemnifying Party Party”) (i) stating that such Indemnified Party the Beneficiary has paid, incurred, suffered or sustained, or reasonably anticipates that it may pay, incur, suffer or sustain sustain, Losses for the Beneficiary is entitled to indemnification under this Article VII (a “Liability Claim”), and (ii) specifying such Losses in reasonable detail (to the extent available), and, if applicable, the nature of the misrepresentation, breach of warranty or covenant to which such item is related, including, . Any such Indemnification Claim Notice with respect to any breach of a representation, warranty or covenant the applicable section of this Agreement which was breached. To the extent Third Party Claim must be provided as soon as reasonably practicable, but no later than twenty (20) Business Days, after any Beneficiary becomes aware of any such Liability Claim; provided, however, that no delay on the Indemnified Party shall include with part of the Beneficiary in giving such Indemnification Claim Notice such documents and other information available to the Indemnified Party in support of the claims asserted therein, and shall timely provide such other information as relieve the Indemnifying Party may reasonably request in order of any indemnification obligation hereunder unless (and then solely to allow the extent that) the Indemnifying Party to assess the merits of the claimsis materially prejudiced by such delay. The Indemnified Party A Beneficiary may update an Indemnification Claim Notice from time to time to reflect any change in circumstances following the date thereof.
(b) If the Indemnifying Party shall not object in writing within the twenty (20) Business Day period after receipt of an Indemnification Claim Notice by delivery of a written notice of objection containing a reasonably detailed description of the facts and circumstances supporting an objection to the applicable indemnification claim (an “Indemnification Claim Objection Notice”), such failure to so object shall be an irrevocable acknowledgment by the Indemnifying Party that the Indemnified Party Beneficiary is entitled to the full amount of the claim for Losses set forth in the such Indemnification Claim Notice, but subject to the limitations on recovery set forth in this Article 8. In the event the Sellers Representative fails to timely deliver an Indemnification Claim Objection Notice, Buyer shall immediately be permitted to retain (until final resolution) a portion of the Indemnity Holdback Amount equal to the Losses set forth in such Indemnification Claim Notice that are recoverable subject to the limitations set forth herein (or in the event such Losses exceed the then available balance of the Indemnity Holdback Amount, Buyer shall be permitted to retain the remaining balance of the Indemnity Holdback Amount until final resolution). Should the amount held in the Indemnity Holdback Amount, if any, be insufficient to satisfy in whole the amount to be paid to a Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8, each Seller shall promptly, but in any event within ten (10) Business Days following the date of such memorandum, pay to the Indemnified Party, such Seller’s Pro Rata Fraction of such shortfall in cash.
(c) In the event that the Indemnifying Party shall timely deliver an Indemnification Claim Objection Notice in accordance with Section 8.4(b7.4(b), the Sellers Representative Beneficiary and Buyer Indemnifying Party shall attempt in good faith to agree upon the rights of the respective parties Parties with respect to each of such claims. If the Sellers Representative Beneficiary and Buyer Indemnifying Party should so agree, a memorandum setting forth such agreement shall be prepared and signed by both partiesParties. Buyer The Beneficiary and the Indemnifying Party shall immediately be permitted entitled to permanently retain a portion of the Indemnity Holdback Amount equal to the Losses set forth in such memorandum (or to the extent then available from the Indemnity Holdback Amount in the event such Losses exceed the then available balance of the Indemnity Holdback Amount). Should the amount held in the Indemnity Holdback Amount, if any, be insufficient to satisfy in whole the amount to be paid to a Indemnified Party in accordance with conclusively rely on any such memorandum, then, subject to the limitations set forth in this Article 8, each Seller shall promptly, but in any event within ten (10) Business Days following the date of such memorandum, pay to the Indemnified Party, such Seller’s Pro Rata Fraction of such shortfall in cash.
(d) In the event that there is a dispute relating to any Indemnification Claim Notice or Indemnification Claim Objection Notice that cannot be settled in accordance with Section 8.4(c7.4(c), each either of Buyer Parent or the Sellers Stockholder Representative may file suit with respect to such dispute in any court having jurisdiction in accordance with Section 9.11. Notwithstanding the foregoing, if ▇▇▇▇▇ and the Sellers Representative mutually agree, ▇▇▇▇▇ and the Sellers Representative may submit any such dispute to alternative dispute resolution prior to, or in lieu of, pursuing the claim in court.
(e) On or before the third (3rd) Business Day after the Holdback Termination Date, Buyer will notify the Sellers Representative in writing of the amount that Buyer determines in good faith to be necessary to satisfy all claims for indemnification, compensation or reimbursement that have been asserted in any Indemnification Claim Notice that was delivered to the Sellers Representative at or prior to 11:59 p.m. (Pacific time) on the Holdback Termination Date, but not resolved, at or prior to such time (each such claim a “Continuing Claim” and such amount, the “Retained Indemnity Holdback Amount”). Within eight (8) Business Days following the Holdback Termination Date, Buyer shall release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Indemnity Holdback Amount an amount in cash equal to (i) the amount then remaining of the Indemnity Holdback Amount less (ii) the Retained Indemnity Holdback Amount (if any).
(f) Following the Holdback Termination Date, after resolution and payment of (or retention by Buyer of amounts in respect of) a Continuing Claim, Buyer shall release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Retained Indemnity Holdback Amount any amounts no longer subject to a Continuing Claim.
(g) Except as otherwise set forth in this Section 8.4, once a Loss is agreed to by the Indemnifying Party or finally adjudicated to be payable pursuant to this Article 8, the Indemnifying Party shall satisfy its obligations within five (5) Business Days of such final, non-appealable adjudication by wire transfer of immediately available funds.
(h) Notwithstanding the foregoing, (i) any notice that is required to be delivered to any Seller Company Indemnitors pursuant to this Article 8 VII shall be deemed satisfied by delivery of such notice to the Sellers Representative Stockholder Representative, and (ii) any notices required to be delivered by, or any actions that are required to be taken by, (other than any obligations to make or right to receive any payments) any Seller Company Indemnitors pursuant to this Article 8 VII shall be satisfied by delivery by, or action taken by, the Stockholder Representative (other than provisions related to an obligation to make or a right to receive any payments). Any rights of the Company Stockholder Indemnified Parties shall be exercised only by the Sellers RepresentativeStockholder Representative and not by any individual Company Stockholder Indemnified Party. Any obligation by Parent or Parent Holdco LLC to make any payments to any Company Stockholder Indemnified Party under this Article VII shall be deemed to be satisfied by payment (or issuance) of such indemnifying payment to the Company Stockholder Indemnified Parties, based on their Pro Rata Shares implied by the Allocation Schedule.
Appears in 1 contract
Sources: Merger Agreement (Comscore, Inc.)
Claims for Indemnification Resolution of Conflicts. (a) Subject to Any Indemnified Person seeking indemnification hereunder will promptly, and no less than 30 days after becoming aware of such claim, notify in writing (the survival periods in Section 8.1 and the limitations set forth in Section 8.3 hereof, if an Indemnified Party wishes to make an indemnification claim under this Article 8, the Indemnified Party, shall deliver a written notice (an “Indemnification Claim Notice”) the Representative (on behalf of the Sellers) of any claim, action, suit, Proceeding, demand or breach (collectively, a “Claim”) with respect to which the Indemnified Person claims indemnification hereunder; provided, however, that the failure to provide such notice shall not release the Sellers from any of their obligations under this Article XI except to the Indemnifying Party (i) stating that extent the Sellers are materially prejudiced by such Indemnified Party has paid, incurred, suffered or sustained, or reasonably anticipates that it may pay, incur, suffer or sustain Losses and (ii) specifying such Losses failure. Any Claim Notice delivered under this Section 11.4 shall describe in reasonable detail (to the extent available), and, if applicable, the nature of the misrepresentation, breach of warranty or covenant to basis upon which such item is related, including, with respect to any breach of a representation, warranty or covenant the applicable section of this Agreement which was breached. To the extent reasonably practicable, the Indemnified Party shall include with the Indemnification Claim Notice such documents and other information available to the Indemnified Party in support of the claims asserted therein, and shall timely provide such other information as the Indemnifying Party may reasonably request in order to allow the Indemnifying Party to assess the merits of the claims. The Indemnified Party may update an Indemnification Claim Notice from time to time to reflect any change in circumstances following the date thereofPerson’s claim for indemnification is asserted.
(b) If In the Indemnifying event Purchaser becomes aware of a third party claim (a “Third Party Claim”) which Purchaser reasonably believes may result in a claim for indemnification pursuant to this Article XI, Purchaser shall not object in writing within notify the twenty (20) Business Day period after receipt Representative of an Indemnification such claim with a Claim Notice by delivery of (a written notice of objection containing a reasonably detailed description supporting an objection to the applicable indemnification claim (an “Indemnification Claim Objection Third Party Notice”), and the Third Party Notice shall be accompanied by copies of any documentation submitted by the third party making such Third Party Claim (except that Purchaser may withhold from Representative such communications with its legal counsel to the extent that legal counsel to Purchaser advises that providing such communication could result in the loss of any attorney-client privilege or right under the work-product doctrine of Purchaser or any Indemnified Person in respect of such claim); provided, however, that the failure to so object provide such notice shall not release the Sellers from any of their obligations under this Article XI except to the extent and only to the extent that the Sellers are materially prejudiced by such failure. Upon receipt of a Third Party Notice, the Representative shall be an irrevocable acknowledgment by entitled (on behalf of the Indemnifying Sellers, as applicable, and at their expense) to participate in, but not to control, determine or conduct, the defense of such Third Party Claim. Purchaser shall have the right in its sole discretion to conduct the defense of, and to settle, any such claim and the Representative shall not be entitled to control any negotiation of settlement, adjustment or compromise with respect to any such Third Party Claim; provided, that except with the consent of the Representative (such consent not to be unreasonably withheld, conditioned or delayed), no settlement of any such Third Party Claim with third party claimants shall be determinative of the right of any Indemnified Person to be indemnified with respect to such Third Party Claim or settlement or any Losses relating thereto; provided, further, that the Indemnified Party is entitled to the full amount consent of the claim Representative with respect to any settlement of any such Third Party Claim shall be deemed to have been given unless the Representative shall have objected within thirty (30) days after a written request for Losses set forth in the Indemnification Claim Notice, but subject to the limitations on recovery set forth in this Article 8such consent by Purchaser. In the event that the Representative has consented to any such settlement, adjustment or compromise, the Sellers Representative fails shall have no power or authority to timely deliver an Indemnification Claim Objection Notice, Buyer shall immediately be permitted to retain (until final resolution) a portion object under any provision of the Indemnity Holdback Amount equal this Article XI to the Losses set forth in amount of such Indemnification Claim Notice settlement, adjustment or compromise; provided, that any such amounts are recoverable subject to following the limitations set forth herein (or in the event such Losses exceed the then available balance application of the Indemnity Holdback Amount, Buyer shall be permitted to retain the remaining balance of the Indemnity Holdback Amount until final resolution). Should the amount held in the Indemnity Holdback Amount, if any, be insufficient to satisfy in whole the amount to be paid to a Indemnified Party in accordance with such memorandum, then, subject to the any relevant limitations set forth in this Article 8, each Seller shall promptly, but in any event within ten (10) Business Days following the date of such memorandum, pay to the Indemnified Party, such Seller’s Pro Rata Fraction of such shortfall in cashXI.
(c) In the event that the Indemnifying Party shall timely deliver an Indemnification Claim Objection Notice in accordance with Section 8.4(b), the Sellers Representative and Buyer shall attempt in good faith to agree upon the rights of the respective parties with respect to each of such claims. If the Sellers Representative and Buyer should so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties. Buyer shall immediately be permitted to permanently retain a portion of the Indemnity Holdback Amount equal to the Losses set forth in such memorandum (or to the extent then available from the Indemnity Holdback Amount in the event such Losses exceed the then available balance of the Indemnity Holdback Amount). Should the amount held in the Indemnity Holdback Amount, if any, be insufficient to satisfy in whole the amount to be paid to a Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8, each Seller shall promptly, but in any event within ten (10) Business Days following the date of such memorandum, pay to the Indemnified Party, such Seller’s Pro Rata Fraction of such shortfall in cash.
(d) In the event that there is a dispute relating to any Indemnification Claim Notice or Indemnification Claim Objection Notice that cannot be settled in accordance with Section 8.4(c), each of Buyer or the Sellers Representative may file suit with respect to such dispute in any court having jurisdiction in accordance with Section 9.11. Notwithstanding the foregoing, if ▇▇▇▇▇ and the Sellers Representative mutually agree, ▇▇▇▇▇ and the Sellers Representative may submit any such dispute to alternative dispute resolution prior to, or in lieu of, pursuing the claim in court.
(e) On or before the third (3rd) Business Day after the Holdback Termination Date, Buyer will notify the Sellers Representative in writing of the amount that Buyer determines in good faith to be necessary to satisfy all claims for indemnification, compensation or reimbursement that have been asserted in any Indemnification Claim Notice that was delivered to the Sellers Representative at or prior to 11:59 p.m. (Pacific time) on the Holdback Termination Date, but not resolved, at or prior to such time (each such claim a “Continuing Claim” and such amount, the “Retained Indemnity Holdback Amount”). Within eight (8) Business Days following the Holdback Termination Date, Buyer shall release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Indemnity Holdback Amount an amount in cash equal to (i) the amount then remaining of the Indemnity Holdback Amount less (ii) the Retained Indemnity Holdback Amount (if any).
(f) Following the Holdback Termination Date, after resolution and payment of (or retention by Buyer of amounts in respect of) a Continuing Claim, Buyer shall release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Retained Indemnity Holdback Amount any amounts no longer subject to a Continuing Claim.
(g) Except as otherwise set forth in this Section 8.4, once a Loss is agreed to by the Indemnifying Party or finally adjudicated to be payable pursuant to this Article 8, the Indemnifying Party shall satisfy its obligations within five (5) Business Days of such final, non-appealable adjudication by wire transfer of immediately available funds.
(h) Notwithstanding the foregoing, (i) any notice that is required to be delivered to any Seller pursuant to this Article 8 shall be deemed satisfied by delivery of such notice to the Sellers Representative and (ii) any notices required to be delivered by, or any actions that are required to be taken by, (other than any obligations to make or right to receive any payments) any Seller pursuant to this Article 8 shall be satisfied by delivery by, or action taken by the Sellers Representative.
Appears in 1 contract
Claims for Indemnification Resolution of Conflicts. (a) Subject to the survival periods in Section 8.1 8.1, Section 8.2, and the limitations set forth in Section 8.3 hereof8.3, if an a Parent Indemnified Party wishes to make an indemnification claim under this Article 8VIII, the Parent, on behalf of such Parent Indemnified Party, shall deliver a written notice (an “Indemnification Claim Notice”) to the Indemnifying Party Stockholder Representative (i) stating that such Parent Indemnified Party has paid, incurred, suffered or sustained, or reasonably anticipates that it may pay, incur, suffer or sustain Losses and (ii) specifying such Losses in reasonable detail (to the extent available), and, if applicable, the nature of the misrepresentation, breach of warranty or covenant to which such item is related, including, with respect to any breach of a representation, warranty or covenant the applicable section of this Agreement which was breached. To the extent reasonably practicable, the Indemnified Party Parent shall include with the Indemnification Claim Notice such documents and other information available to the Indemnified Party Parent in support of the claims asserted therein, and shall timely provide such other information as the Indemnifying Party Stockholder Representative may reasonably request in order to allow the Indemnifying Party Stockholder Representative to assess the merits of the claims. The Indemnified Party Parent may update an Indemnification Claim Notice from time to time to reflect any change in circumstances following the date thereof, so long as such update reasonably relates to the underlying facts and circumstances specifically set forth in such original Indemnification Claim Notice.
(b) If the Indemnifying Party Stockholder Representative on behalf of the Company Indemnitors shall not object in writing within the twenty (20) 20 Business Day period after receipt of an Indemnification Claim Notice by delivery of a written notice of objection containing a reasonably detailed description of the facts and circumstances (if then known) supporting an objection to the applicable indemnification claim (an “Indemnification Claim Objection Notice”), such failure to so object shall be an irrevocable acknowledgment by the Indemnifying Party Stockholder Representative on behalf of the Company Indemnitors that the Parent Indemnified Party is entitled to the full amount of the claim for Losses set forth in the such Indemnification Claim NoticeNotice if and to the extent such Losses are actually paid, incurred, suffered or sustained, but subject to the other limitations on recovery set forth in this Article 8herein. In such event, Parent and the Stockholder Representative shall promptly (but in any event within three Business Days of the Sellers Representative fails to timely deliver an resolution of such Indemnification Claim Objection Notice, Buyer shall ) deliver a joint instruction to the Escrow Agent instructing the Escrow Agent to immediately be permitted release and distribute to retain (until final resolution) a portion of Parent from the Indemnity Holdback Amount Escrow Account (or the Other Indemnity Escrow Account with respect to an Other Indemnity Claim, Indemnity Escrow Cash (if any remains) or the Other Indemnity Escrow Cash with respect to an Other Indemnity Claim) with an aggregate value equal to the Losses set forth in such Indemnification Claim Notice that are recoverable subject (or to the limitations set forth herein extent then available in the Indemnity Escrow Account in the event such Losses exceed the then-available balance of the Indemnity Escrow Account (or to the extent then available in the Other Indemnity Escrow Account in the event such Losses exceed the then available balance of the Other Indemnity Holdback Amount, Buyer shall be permitted Escrow Account with respect to retain the remaining balance of the an Other Indemnity Holdback Amount until final resolutionClaim). Should the amount held in the Indemnity Holdback Amount, if any, be insufficient to satisfy in whole the amount to be paid to a Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8, each Seller shall promptly, but in any event within ten (10) Business Days following the date of such memorandum, pay to the Indemnified Party, such Seller’s Pro Rata Fraction of such shortfall in cash).
(c) In the event that the Indemnifying Party Stockholder Representative shall timely deliver an Indemnification Claim Objection Notice in accordance with Section 8.4(b), the Sellers Stockholder Representative and Buyer Parent shall attempt in good faith to agree upon the rights of the respective parties with respect to each of such claims. If the Sellers Stockholder Representative and Buyer Parent should so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties. Buyer shall immediately parties and, in the case of an indemnification claim to be permitted to permanently retain a portion of recovered from the Indemnity Holdback Amount Escrow Account or Other Indemnity Escrow Account, as applicable, shall be furnished to the Escrow Agent. The Escrow Agent shall be entitled to conclusively rely on any such memorandum and make distributions from the Indemnity Escrow Account or Other Indemnity Escrow Account, as the case may be, in accordance with the terms thereof. In such event, the Escrow Agent shall promptly release and distribute to Parent (i) from the Indemnity Escrow Account, the Indemnity Escrow Cash or (ii) from the Other Indemnity Escrow Account, the Other Indemnity Escrow Cash with respect to an Other Indemnity Claim, as applicable, with an aggregate value equal to the Losses set forth in such memorandum (or to the extent then available from in the Indemnity Holdback Amount Escrow Account in the event such Losses exceed the then available balance of the Indemnity Holdback AmountEscrow Account (or, in the case of Losses arising from an Other Indemnity Claim, to the extent then available in the Other Indemnity Escrow Account in the event such Losses exceed the then available balance of the Other Indemnity Escrow Account)). Should the amount held in the Indemnity Holdback AmountEscrow Account, if any, be insufficient to satisfy in whole the amount to be paid to a Parent Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8VIII, each Seller shall promptlyCompany Indemnitor shall, but in any event within ten (10) 20 Business Days following the date of such memorandum, pay to the Parent Indemnified Party, such SellerCompany Indemnitor’s Pro Rata Fraction Share of such shortfall. If such shortfall becomes payable prior to the Liquidity Date applicable to a particular Company Indemnitor, such Company Indemnitor may elect, in its sole discretion, whether to satisfy such shortfall in cash, in shares of Parent Class A Common Stock, or a combination thereof, with such shares to be valued for these purposes at the Parent Stock Price. If such shortfall becomes payable following the Liquidity Date applicable to a particular Company Indemnitor, the shortfall shall be payable solely in cash.
(d) In the event that there is a dispute relating to any Indemnification Claim Notice or Indemnification Claim Objection Notice that cannot be settled in accordance with Section 8.4(c), each of Buyer Parent or the Sellers Stockholder Representative may file suit with respect to such dispute in any court having jurisdiction in accordance with Section 9.1110.11. Notwithstanding the foregoing, if ▇▇▇▇▇ Parent and the Sellers Stockholder Representative mutually agree, ▇▇▇▇▇ Parent and the Sellers Stockholder Representative may submit any such dispute to alternative dispute resolution prior to, or in lieu of, pursuing the claim in court.
(e) On or before the third (3rd) Business Day after the Holdback Termination Indemnity Escrow Expiration Date, Buyer Parent will notify the Sellers Stockholder Representative in writing of the amount that Buyer Parent determines in good faith to be necessary to satisfy all claims for (i) indemnification, compensation or reimbursement that have been asserted in any Indemnification Claim Notice (other than for Other Indemnity Claims) that was delivered to the Stockholder Representative at or prior to 11:59 p.m. (Pacific Time) on the Indemnity Escrow Expiration Date, but not resolved, at or prior to such time (each such claim a “RW Indemnity Continuing Claim” and such amount, as may be reduced from time to time in accordance with this Agreement, the “RW Indemnity Retained Escrow Amount”) and (ii) indemnification, compensation or reimbursement that have been asserted in any Indemnification Claim Notice for Other Indemnity Claims that was delivered to the Stockholder Representative at or prior to 11:59 p.m. (Pacific Time) on the Indemnity Escrow Expiration Date, but not resolved, at or prior to such time (each such claim an “Other Indemnity Continuing Claim” and such amount, as may be reduced from time to time in accordance with this Agreement, the “Other Indemnity Retained Escrow Amount”). Within 10 Business Days following the Indemnity Escrow Expiration Date, Parent and the Stockholder Representative shall deliver a joint instruction to the Escrow Agent instructing the Escrow Agent to release and distribute from (i) the Indemnity Escrow Account an amount equal to (A) the Indemnity Escrow Cash (as reduced from time to time pursuant to the terms of this Agreement) as of the Indemnity Escrow Expiration Date, minus (B) the Indemnity Escrow Cash in the aggregate equal to the RW Indemnity Retained Escrow Amount, which amount shall be released and distributed to the Paying Agent for further distribution to the Company Indemnitors in accordance with their applicable Pro Rata Share of such amount pursuant to Section 2.1(a) or Section 2.1(c), as applicable, and (ii) the Other Indemnity Escrow Account an amount equal to (A) the amount remaining in the Other Indemnity Escrow Account at such time in excess of $30,000,000 as of the Other Indemnity Escrow Expiration Date, minus (B) the Other Indemnity Escrow Cash in the aggregate equal to the Other Indemnity Retained Escrow Amount at such time, which amount shall be released and distributed to the Paying Agent for further distribution to the Company Indemnitors in accordance with their applicable Pro Rata Share of such amount pursuant to Section 2.1(a) or Section 2.1(c), as applicable; provided if the amount in the Other Indemnity Escrow Account is less than $30,000,000 at the Indemnity Escrow Expiration Date, no amount therein shall be released.
(f) Following the Indemnity Escrow Expiration Date, after resolution and payment of a RW Indemnity Continuing Claim, Parent and the Stockholder Representative shall deliver a joint instruction to the Escrow Agent instructing the Escrow Agent to release from the Indemnity Escrow Account the Indemnity Escrow Cash in an amount in the aggregate equal to (i) the RW Indemnity Retained Escrow Amount (as reduced from time to time pursuant to the terms of this Agreement) as of the date of such resolution and payment, minus (ii) the amounts that Parent determines in good faith to be necessary to satisfy other RW Indemnity Continuing Claims (which amounts will continue to be held as the RW Indemnity Retained Escrow Amount) to the Paying Agent for further distribution to the Company Indemnitors in accordance with their applicable Pro Rata Share of such amount pursuant to Section 2.1(a) or Section 2.1(c), as applicable.
(g) On or before the third Business Day after the Other Indemnity Escrow Expiration Date, Parent will notify the Stockholder Representative in writing of the amount that Parent determines in good faith to be necessary to satisfy all claims for indemnification, compensation or reimbursement that have been asserted in any Indemnification Claim Notice for an Other Indemnity Claim that was delivered to the Sellers Stockholder Representative at or prior to 11:59 p.m. (Pacific timeTime) on the Holdback Termination Other Indemnity Escrow Expiration Date, but not resolved, at or prior to such time (each such claim a “claim, also an Other Indemnity Continuing Claim” and such amount, the “Retained Indemnity Holdback Amount”). Within eight (8) 10 Business Days following the Holdback Termination Other Indemnity Escrow Expiration Date, Buyer Parent and the Stockholder Representative shall deliver a joint instruction to the Escrow Agent instructing the Escrow Agent to release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Other Indemnity Holdback Amount Escrow Account an amount in cash equal to (i) the amount then remaining Other Indemnity Escrow Cash (as reduced from time to time pursuant to the terms of this Agreement) as of the Other Indemnity Holdback Amount less Escrow Expiration Date, minus (ii) the Other Indemnity Escrow Cash in the aggregate equal to the Other Indemnity Retained Indemnity Holdback Escrow Amount (if anyoutstanding at such time, which amount shall be released and distributed to the Paying Agent for further distribution to the Company Indemnitors in accordance with their applicable Pro Rata Share of such amount pursuant to Section 2.1(a) or Section 2.1(c), as applicable.
(fh) Following the Holdback Termination Other Indemnity Escrow Expiration Date, after resolution and payment of (or retention by Buyer of amounts in respect of) a Other Indemnity Continuing Claim, Buyer Parent and the Stockholder Representative shall release and distribute deliver a joint instruction to the Sellers Escrow Agent instructing the Escrow Agent to release from the Other Indemnity Escrow Account the Other Indemnity Escrow Cash in an amount in the aggregate equal to (i) the Other Indemnity Retained Escrow Amount (as reduced from time to time pursuant to the terms of this Agreement) as of the date of such resolution and payment, minus (ii) the amounts that Parent determines in good faith to be necessary to satisfy other Other Indemnity Continuing Claims (which amounts will continue to be held as the Other Indemnity Retained Escrow Amount) to the Paying Agent for further distribution to the Company Indemnitors in accordance with each Seller’s their applicable Pro Rata Fraction from the Retained Indemnity Holdback Amount any amounts no longer subject Share of such amount pursuant to a Continuing ClaimSection 2.1(a) or Section 2.1(c), as applicable.
(gi) Except Each of the parties acknowledges and agrees that as otherwise set a condition to Parent’s and Paying Agent’s obligation to make any payments pursuant to Section 8.4(e) or Section 8.4(f), the Stockholder Representative shall first deliver to Parent an updated Allocation Schedule setting forth the amounts payable to each Company Indemnitor in this Section 8.4, once a Loss is agreed accordance with such section. Parent and the Paying Agent shall be entitled to conclusively rely upon the updated Allocation Schedule delivered by the Indemnifying Party or finally adjudicated Stockholder Representative, including with respect to be payable pursuant to this Article 8whether any individual Company Indemnitor received the appropriate portion of any such distribution, and in no event will Parent, the Indemnifying Party shall satisfy its obligations within five (5) Business Days Final Surviving Entity or any of such final, non-appealable adjudication their Affiliates have any liability to any Person on account of payments or distributions made in accordance with the updated Allocation Schedule delivered by wire transfer of immediately available fundsthe Stockholder Representative.
(hj) Notwithstanding the foregoing, (i) any notice that is required to be delivered to any Seller Company Indemnitors pursuant to this Article 8 VIII shall be deemed satisfied by delivery of such notice to the Sellers Stockholder Representative and (ii) any notices required to be delivered by, or any actions that are required to be taken by, (other than any obligations to make or right to receive any payments) any Seller Company Indemnitors pursuant to this Article 8 VIII shall be satisfied by delivery by, or action taken by the Sellers Stockholder Representative.
Appears in 1 contract
Sources: Merger Agreement (Twilio Inc)
Claims for Indemnification Resolution of Conflicts. (a) Subject to the survival periods in Section 8.1 and the limitations set forth in Section 8.3 hereof8.3, if an a Parent Indemnified Party wishes to make an indemnification claim under this Article 8VIII, the such Parent Indemnified Party, Party shall deliver a written notice (an “Indemnification Claim Notice”) to the Indemnifying Party Stockholder Representative (i) stating that such Parent Indemnified Party has paid, incurred, suffered or sustained, or reasonably anticipates that it may pay, incur, suffer or sustain Losses and (ii) specifying such Losses in reasonable detail and the amount thereof (to the extent available)known and reasonably quantifiable or estimable) in reasonable detail, and, if applicable, the nature of the misrepresentation, breach of warranty or covenant to which such item is related, including, with respect to any breach of a representation, warranty or covenant the applicable section of this Agreement which was breached. To the extent reasonably practicable, the Indemnified Party shall include with the Indemnification Claim Notice such documents and other information available to the Indemnified Party in support of the claims asserted therein, and shall timely provide such other information as the Indemnifying Party may reasonably request in order to allow the Indemnifying Party to assess the merits of the claims. The A Parent Indemnified Party may update an Indemnification Claim Notice from time to time to reflect any change in circumstances following the date thereof, but not to allege a breach of a representation or warranty that expired pursuant to Section 8.1 prior to the date such update is delivered to the Stockholder Representative.
(b) If the Indemnifying Party shall Stockholder Representative on behalf of the Company Indemnitors does not object in writing within the twenty (20) Business Day 30-day period after receipt of an Indemnification Claim Notice by delivery to Parent of a written notice of objection containing a reasonably detailed description of the facts and circumstances supporting an objection to the applicable indemnification claim (an “Indemnification Claim Objection Notice”), such failure to so object shall be an irrevocable acknowledgment by the Indemnifying Party Stockholder Representative on behalf of the Company Indemnitors that the Parent Indemnified Party is entitled to the full amount of the claim for Losses set forth in the such Indemnification Claim Notice. In such event, but subject Parent and the Stockholder Representative shall deliver a joint written instruction, duly executed by each of Parent and the Stockholder Representative to the limitations on recovery set forth in this Article 8. In Escrow Agent directing the event the Sellers Representative fails Escrow Agent to timely deliver transfer and release to Parent an Indemnification Claim Objection Notice, Buyer shall immediately be permitted to retain (until final resolution) a portion aggregate amount of the Indemnity Holdback Amount Escrow Cash equal to the amount of the Losses set forth in such Indemnification Claim Notice that are recoverable subject to the limitations set forth herein so acknowledged (or as much Indemnity Escrow Cash as is then available in the event such Losses exceed the then available balance of Indemnity Escrow Cash). Any Losses recovered under this Article VIII from the Indemnity Holdback Amount, Buyer Escrow Cash shall be permitted to retain reduce the remaining balance amount of Indemnity Escrow Cash in the same proportion as Indemnity Holdback Amount until final resolutionEscrow Cash was withheld from the Company Indemnitors at the Closing (as set forth on the Allocation Schedule). Should the amount held in the Indemnity Holdback Amount, if any, Escrow Cash be insufficient to satisfy in whole the amount of Losses agreed upon or acknowledged to be paid to a Parent Indemnified Party in accordance with such memorandumthis Section 8.4(b), then, subject to the limitations set forth in this Article 8VIII (including the limitations set forth in Sections 8.3(a)-(e)), each Seller shall promptlyCompany Indemnitor shall, but in any event within ten (10) Business Days following the date of such memorandumwritten notice from the Stockholder Representative, pay to the Parent Indemnified Party, Party such SellerCompany Indemnitor’s Pro Rata Fraction Share of such shortfall in cash; provided, however, that in respect of a Company Indemnitor who received Parent Common Stock in the Merger, such Company Indemnitor may elect, in its sole discretion, whether to satisfy such shortfall in cash, in shares of Parent Common Stock, or a combination thereof, with such shares to be valued at an amount equal to the Parent Stock Price.
(c) In the event that the Indemnifying Party Stockholder Representative shall timely deliver an Indemnification Claim Objection Notice in accordance with Section 8.4(b) (or in the event indemnification is being sought hereunder directly from a Company Indemnitor, if such Company Indemnitor shall object to any claim(s) made in any Indemnification Claim Notice to recover directly from such Company Indemnitor within 30 days after delivery of such Indemnification Claim Notice), the Sellers Stockholder Representative (or such objecting Company Indemnitor) and Buyer Parent shall attempt in good faith to agree upon the rights of the respective parties with respect to each of such claims. If the Sellers Stockholder Representative (or such objecting Company Indemnitor) and Buyer Parent should so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties. Buyer Parent shall immediately be permitted entitled to permanently retain conclusively rely on any such memorandum. In such event, Parent and the Stockholder Representative shall deliver a portion joint written instruction, duly executed by each of Parent and the Stockholder Representative to the Escrow Agent directing the Escrow Agent to transfer and release to Parent an aggregate amount of Indemnity Holdback Amount Escrow Cash equal to the amount of the Losses set forth agreed to in such memorandum (or to the extent as much Indemnity {N4442029.10} 255288355 v23 Escrow Cash as is then available from the Indemnity Holdback Amount in the event such Losses exceed the then available balance of the Indemnity Holdback AmountEscrow Cash). Should the amount held in the Indemnity Holdback Amount, if any, Escrow Cash be insufficient to satisfy in whole the amount to be paid to a Parent Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8VIII, each Seller shall promptlyCompany Indemnitor shall, but in any event within ten (10) Business Days following the date the Stockholder Representative delivers to the Company Indemnitors a copy of such memorandum, pay to the Parent Indemnified Party, such SellerCompany Indemnitor’s Pro Rata Fraction Share of such shortfall in cash.
(d) In the event that there is a dispute relating to any Indemnification Claim Notice or Indemnification Claim Objection Notice that cannot be settled in accordance with Section 8.4(c)) after good faith negotiation for not less than thirty (30) days after delivery of an Indemnification Claim Objection Notice, each of Buyer Parent or the Sellers Stockholder Representative may file suit with respect to such dispute in any court having jurisdiction in accordance with Section 9.1110.11. Notwithstanding No Losses being disputed under this Section 8.4(d) shall be paid until a final determination is made by a court of competent jurisdiction or is settled pursuant to a settlement agreement or is agreed to by the foregoingStockholder Representative (or objecting Company Indemnitor) in writing (in each case, if ▇▇▇▇▇ and a “Final Determination”). Any Losses set forth in such Final Determination shall be paid out of the Sellers Representative mutually agreeIndemnity Escrow Cash or by the Company Indemnitors, ▇▇▇▇▇ and as applicable, within ten (10) Business Days following the Sellers Representative may submit any date of such dispute to alternative dispute resolution prior to, or in lieu of, pursuing the claim in courtFinal Determination.
(e) On or before the third (3rd) Business Day Promptly after the Holdback Termination date that is eighteen (18) months following the Closing Date (the “Indemnity Escrow Expiration Date”), Buyer Parent will notify the Sellers Stockholder Representative in writing of the amount that Buyer Parent determines in good faith to be necessary to satisfy all claims for indemnification, compensation or reimbursement that have been asserted in any Indemnification Claim Notice that was delivered to the Sellers Stockholder Representative at or prior to 11:59 p.m. (Pacific time) on the Holdback Termination Indemnity Escrow Expiration Date, but not resolved, resolved at or prior to such time (each such claim a “Continuing Claim” and such amount, the “Retained Indemnity Holdback Escrow Amount”). Within eight ten (8) 10) Business Days following the Holdback Termination Indemnity Escrow Expiration Date, Buyer Parent and the Stockholder Representative shall release deliver a joint written instruction, duly executed by each of Parent and distribute the Stockholder Representative, to the Sellers Escrow Agent directing the Escrow Agent to transfer and release to the Paying Agent and the Surviving Corporation for further distribution to the Company Indemnitors in accordance with each Seller’s Pro Rata Fraction from the Indemnity Holdback Amount an amount in cash equal to Section 2.1 (i) the amount Indemnity Escrow Cash then remaining as of the Indemnity Holdback Amount less Escrow Expiration Date (as reduced by distributions from time to time expressly authorized pursuant to the terms of this Agreement and the Escrow Agreement) minus (ii) an amount equal to the Retained Escrow Amount. Parent shall cause any such Indemnity Holdback Amount (Escrow Cash, if any), to be released and delivered by the Escrow Agent to the Paying Agent or the Surviving Corporation for further distribution to the Company Indemnitors in accordance with Section 2.1.
(f) Following the Holdback Termination Indemnity Escrow Expiration Date, after resolution and payment of (or retention all Continuing Claims, Parent and the Stockholder Representative shall deliver a joint written instruction, duly executed by Buyer each of amounts in respect of) a Continuing ClaimParent and the Stockholder Representative, Buyer shall release and distribute to the Sellers Escrow Agent directing the Escrow Agent to transfer and release to the Paying Agent and/or the Surviving Corporation for further distribution to Company Indemnitors in accordance with each Seller’s Pro Rata Fraction from the Retained Section 2.1 any then remaining Indemnity Holdback Amount any amounts no longer subject to a Continuing ClaimEscrow Cash.
(g) Except Each of the parties acknowledges and agrees that as otherwise set a condition to Parent’s, Surviving Corporation’s and Paying Agent’s obligation to make any distributions or payments pursuant to Section 8.4(e) and Section 8.4(f), the Stockholder Representative shall first deliver to Parent an updated Allocation Schedule setting forth the amounts distributable or payable to each Company Indemnitor in this Section 8.4accordance with such sections; provided, once a Loss is agreed that Parent shall cooperate with and provide to the Stockholder Representative such information as it may require to so update the Allocation Schedule, including all additional or incremental Transaction Payroll Taxes calculated with respect to such distributable or payable amounts (if any). Parent and the Paying Agent shall be entitled to conclusively rely upon the updated {N4442029.10} 255288355 v23 Allocation Schedule delivered by the Indemnifying Party or finally adjudicated Stockholder Representative, including with respect to be payable pursuant to this Article 8, whether any individual Company Indemnitor received the Indemnifying Party shall satisfy its obligations within five (5) Business Days appropriate portion of any such final, non-appealable adjudication by wire transfer of immediately available fundsdistribution.
(h) Notwithstanding the foregoing, (i) any notice that is required to be delivered to any Seller Company Indemnitors pursuant to this Article 8 VIII shall be deemed satisfied by delivery of such notice to the Sellers Stockholder Representative and (ii) any notices required to be delivered by, or any actions that are required to be taken by, (other than any obligations to make or right to receive any payments) any Seller Company Indemnitors pursuant to this Article 8 VIII shall be satisfied by delivery by, or action taken by the Sellers Stockholder Representative.
Appears in 1 contract
Claims for Indemnification Resolution of Conflicts. (a) Subject to the survival periods in Section 8.1 and the limitations set forth in Section 8.3 hereof8.3, if an a Parent Indemnified Party wishes to make an indemnification claim under this Article 8VIII, the such Parent Indemnified Party, Party shall deliver a written notice (an “Indemnification Claim Notice”) to the Indemnifying Party Stockholder Representative (i) stating that such Parent Indemnified Party has paid, incurred, suffered or sustained, or reasonably anticipates that it may pay, incur, suffer or sustain Losses and (ii) specifying such Losses in reasonable detail (to the extent available), and, if applicable, the nature of the misrepresentation, breach of warranty or covenant to which such item is related, including, with respect to any breach of a representation, warranty or covenant the applicable section of this Agreement which was breached. To the extent reasonably practicable, the Indemnified Party shall include with the Indemnification Claim Notice such documents and other information available to the Indemnified Party in support of the claims asserted therein, and shall timely provide such other information as the Indemnifying Party may reasonably request in order to allow the Indemnifying Party to assess the merits of the claims. The A Parent Indemnified Party may update an Indemnification Claim Notice from time to time to reflect any change in circumstances following the date thereof.
(b) If the Indemnifying Party Stockholder Representative on behalf of the Company Indemnitors shall not object in writing within the twenty (20) Business Day period after receipt of an Indemnification Claim Notice by delivery of a written notice of objection containing a reasonably detailed description of the facts and circumstances supporting an objection to the applicable indemnification claim (an “Indemnification Claim Objection Notice”), such failure to so object shall be an irrevocable acknowledgment by the Indemnifying Party Stockholder Representative on behalf of the Company Indemnitors that the Parent Indemnified Party is entitled to the full amount of the claim for Losses set forth in the such Indemnification Claim Notice. In such event, but subject Parent and the Stockholder Representative shall deliver a joint written instruction, duly executed by each of Parent and the Stockholder Representative to the limitations on recovery set forth in this Article 8. In Escrow Agent directing the event the Sellers Representative fails Escrow Agent to timely deliver transfer and release to Parent an Indemnification Claim Objection Noticeaggregate amount of (x) Indemnity Escrow Cash and Indemnity Escrow Shares or (y) Other Indemnity Escrow Cash, Buyer shall immediately be permitted to retain (until final resolution) a portion of the Indemnity Holdback Amount as applicable, equal to the amount of the Losses set forth in such Indemnification Claim Notice that are recoverable subject to the limitations set forth herein (or as much Indemnity Escrow Shares and Indemnity Escrow Cash or Other Indemnity Escrow Cash, as applicable, as is then available in the event such Losses exceed the then available balance Indemnity Escrow Shares and Indemnity Escrow Cash or Other Indemnity Escrow Cash). Additionally, in such event, to the extent such Indemnification Claim is pursuant to Section 8.2(a)(x) and Parent does not recover such amounts from the Other Indemnity Escrow Fund, Parent will permanently retain the applicable amount of Losses from the Contingent Holdback Cash and Shares. Any Losses recovered under this Article VIII from the Indemnity Escrow Shares and Indemnity Escrow Cash shall reduce the amount of Indemnity Escrow Shares and Indemnity Escrow Cash in the same proportion as Indemnity Escrow Shares and Indemnity Escrow Cash were withheld from the Company Indemnitors at the Closing (as set forth on the Allocation Schedule). Likewise, any Losses recovered under this Article VIII from the Other Indemnity Escrow Cash or the Contingent Holdback Amount, Buyer Cash and Shares shall be permitted to retain reduce the remaining balance amount of Other Indemnity Escrow Cash or Contingent Holdback Cash and Shares in the same proportion as Other Indemnity Escrow Cash and Contingent Holdback Amount until final resolutionCash and Shares were withheld from the Company Indemnitors at the Closing (as set forth on the Allocation Schedule) or at the time specified in Section 2.11(h) (as set forth in the updated Allocation Schedule). Should the amount held in Indemnity Escrow Shares and Indemnity Escrow Cash or the Other Indemnity Escrow Cash and Contingent Holdback AmountCash and Shares, if anyas applicable, be insufficient to satisfy in whole the amount to be paid to a Parent Indemnified Party in accordance with such memorandumthe Indemnification Claim Notice, then, subject to the limitations set forth in this Article 8VIII, each Seller shall promptlyCompany Indemnitor shall, but in any event within ten (10) Business Days following the date of such memorandum, pay to the Parent Indemnified Party, Party such SellerCompany Indemnitor’s Pro Rata Fraction Share of such shortfall in cash.
(c) In the event that the Indemnifying Party shall timely deliver an Indemnification Claim Objection Notice in accordance with Section 8.4(b), the Sellers Representative and Buyer shall attempt in good faith to agree upon the rights of the respective parties with respect to each of such claims. If the Sellers Representative and Buyer should so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties. Buyer shall immediately be permitted to permanently retain a portion of the Indemnity Holdback Amount equal to the Losses set forth in such memorandum (or to the extent then available from the Indemnity Holdback Amount in the event such Losses exceed the then available balance of the Indemnity Holdback Amount). Should the amount held in the Indemnity Holdback Amount, if any, be insufficient to satisfy in whole the amount to be paid to a Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8, each Seller shall promptly, but in any event within ten (10) Business Days following the date of such memorandum, pay to the Indemnified Party, such Seller’s Pro Rata Fraction of such shortfall in cash.
(d) In the event that there is a dispute relating to any Indemnification Claim Notice or Indemnification Claim Objection Notice that cannot be settled in accordance with Section 8.4(c), each of Buyer or the Sellers Representative may file suit with respect to such dispute in any court having jurisdiction in accordance with Section 9.11. Notwithstanding the foregoing, if ▇▇▇▇▇ and the Sellers Representative mutually agree, ▇▇▇▇▇ and the Sellers Representative may submit any such dispute to alternative dispute resolution prior to, or in lieu of, pursuing the claim in court.
(e) On or before the third (3rd) Business Day after the Holdback Termination Date, Buyer will notify the Sellers Representative in writing of the amount that Buyer determines in good faith to be necessary to satisfy all claims for indemnification, compensation or reimbursement that have been asserted in any Indemnification Claim Notice that was delivered to the Sellers Representative at or prior to 11:59 p.m. (Pacific time) on the Holdback Termination Date, but not resolved, at or prior to such time (each such claim a “Continuing Claim” and such amount, the “Retained Indemnity Holdback Amount”). Within eight (8) Business Days following the Holdback Termination Date, Buyer shall release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Indemnity Holdback Amount an amount in cash equal to (i) the amount then remaining of the Indemnity Holdback Amount less (ii) the Retained Indemnity Holdback Amount (if any).
(f) Following the Holdback Termination Date, after resolution and payment of (or retention by Buyer of amounts in respect of) a Continuing Claim, Buyer shall release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Retained Indemnity Holdback Amount any amounts no longer subject to a Continuing Claim.
(g) Except as otherwise set forth in this Section 8.4, once a Loss is agreed to by the Indemnifying Party or finally adjudicated to be payable pursuant to this Article 8, the Indemnifying Party shall satisfy its obligations within five (5) Business Days of such final, non-appealable adjudication by wire transfer of immediately available funds.
(h) Notwithstanding the foregoing, (i) any notice that is required to be delivered to any Seller pursuant to this Article 8 shall be deemed satisfied by delivery of such notice to the Sellers Representative and (ii) any notices required to be delivered by, or any actions that are required to be taken by, (other than any obligations to make or right to receive any payments) any Seller pursuant to this Article 8 shall be satisfied by delivery by, or action taken by the Sellers Representative.
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Claims for Indemnification Resolution of Conflicts. (a) Subject to the survival periods in Section 8.1 and the limitations set forth in Section 8.3 hereof, if an a Parent Indemnified Party wishes to make an indemnification claim under this Article 8VIII, the Parent, on behalf of such Parent Indemnified Party, shall deliver a written notice (an “Indemnification Claim Notice”) to the Indemnifying Party Stockholder Representative (i) stating that such Parent Indemnified Party has paid, incurred, suffered or sustained, or reasonably anticipates that it may pay, incur, suffer or sustain Losses and (ii) specifying such Losses in reasonable detail (to the extent available), and, if applicable, the nature of the misrepresentation, breach of warranty or covenant to which such item is related, including, with respect to any breach of a representation, warranty or covenant the applicable section of this Agreement which was breached. To the extent reasonably practicable, the Indemnified Party Parent shall include with the Indemnification Claim Notice such documents and other information available to the Indemnified Party Parent in support of the claims asserted therein, and shall timely provide such other information as the Indemnifying Party Stockholder Representative may reasonably request in order to allow the Indemnifying Party Stockholder Representative to assess the merits of the claims. The Indemnified Party Parent may update an Indemnification Claim Notice from time to time to reflect any change in circumstances following the date thereof, so long as such update reasonably relates to the underlying facts and circumstances specifically set forth in such original Indemnification Claim Notice.
(b) If the Indemnifying Party Stockholder Representative on behalf of the Company Indemnitors shall not object in writing within the twenty (20) Business Day period after receipt of an Indemnification Claim Notice by delivery of a written notice of objection containing a reasonably detailed description supporting an objection to the applicable indemnification claim (an “Indemnification Claim Objection Notice”), such failure to so object shall be an irrevocable acknowledgment by the Indemnifying Party Stockholder Representative on behalf of the Company Indemnitors that the Parent Indemnified Party is entitled to the full amount of the claim for Losses set forth in the such Indemnification Claim NoticeNotice if and to the extent such Losses are actually paid, incurred, suffered or sustained, but subject to the other limitations on recovery set forth in this Article 8herein. In the event the Sellers Stockholder Representative fails to timely deliver an Indemnification Claim Objection Notice, Buyer Parent and the Stockholder Representative shall immediately be permitted to retain promptly (until final resolutionbut in any event within three (3) a portion Business Days of the resolution of such Indemnification Claim Notice) deliver a joint instruction to the Escrow Agent instructing the Escrow Agent to immediately release and distribute to Parent from the Indemnity Holdback Amount Escrow Account (or the Specific Indemnity Escrow Account with respect to a claim made pursuant to Section 8.2(a)(viii)), to the extent then available, Indemnity Escrow Cash and Indemnity Escrow Shares (or the Specific Indemnity Escrow Cash and Specific Indemnity Escrow Shares with respect to a claim made pursuant to Section 8.2(a)(viii)) with an aggregate value equal to the Losses set forth in such Indemnification Claim Notice that are recoverable subject to the limitations set forth herein (or to the extent then available in the Indemnity Escrow Account in the event such Losses exceed the then available balance of the Indemnity Holdback Amount, Buyer shall be permitted Escrow Account (or to retain the remaining extent then available in the Specific Indemnity Escrow Account in the event such Losses exceed the then available balance of the Specific Indemnity Holdback Amount until final resolutionEscrow Account with respect to a claim made pursuant to Section 8.2(a)(viii)) and Parent shall be entitled to permanently retain or cancel any such Escrow Shares so received from the Indemnity Escrow Account. Should Any Losses recovered by the Parent Indemnified Parties from the Indemnity Escrow Account pursuant to this Section 8.4 shall reduce the amount held of Escrow Cash and Escrow Shares in the Indemnity Holdback AmountEscrow Account (or the Specific Indemnity Escrow Account with respect to a claim made pursuant to Section 8.2(a)(viii) in the same proportion as Escrow Cash and Escrow Shares were deposited in the Indemnity Escrow Account (or the Specific Indemnity Escrow Account with respect to a claim made pursuant to Section 8.2(a)(viii)) at the Closing (in each case, if any, be insufficient as set forth on the Allocation Schedule). For purposes of determining the number of Escrow Shares required to satisfy in whole the amount any Losses under this Article VIII, each Escrow Share shall be deemed to be paid to have a Indemnified Party in accordance with such memorandum, then, subject value equal to the limitations set forth in this Article 8, each Seller shall promptly, but in any event within ten Parent Stock Price (10) Business Days following and the date of such memorandum, pay parties hereto acknowledge that the Parent Stock Price only reflects an agreed-upon amount as to the Indemnified Partyvalue of a share of Parent Class A Common Stock for the limited purpose of this sentence and is not intended to be, such Seller’s Pro Rata Fraction nor is it, deemed to constitute the fair market value of such shortfall in casha share of Parent Class A Common Stock at any given time).
(c) In the event that the Indemnifying Party Stockholder Representative shall timely deliver an Indemnification Claim Objection Notice in accordance with Section 8.4(b), the Sellers Stockholder Representative and Buyer Parent shall attempt in good faith to agree upon the rights of the respective parties with respect to each of such claims. If the Sellers Stockholder Representative and Buyer Parent should so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties. Buyer shall immediately parties and, in the case of an indemnification claim to be permitted to permanently retain a portion of recovered from the Indemnity Holdback Amount Escrow Account or Specific Indemnity Escrow Account, shall be furnished to the Escrow Agent with a joint written instruction to release any applicable amounts from the Indemnity Escrow Account as set forth in the memorandum. The Escrow Agent shall be entitled to conclusively rely on any such memorandum and make distributions from the Indemnity Escrow Account in accordance with the terms thereof. In such event, the Escrow Agent shall promptly release and distribute to Parent from the Indemnity Escrow Account, Indemnity Escrow Cash and Indemnity Escrow Shares (or from the Specific Indemnity Escrow Account, Specific Indemnity Escrow Cash and Specific Indemnity Escrow Shares with respect to a claim made pursuant to Section 8.2(a)(viii)) with an aggregate value equal to the Losses set forth in such memorandum (or to the extent then available from in the Indemnity Holdback Amount Escrow Account in the event such Losses exceed the then available balance of the Indemnity Holdback AmountEscrow Account (or to the extent then available in the Specific Indemnity Escrow Account in the event such Losses exceed the then available balance of the Specific Indemnity Escrow Account with respect to a claim made pursuant to Section 8.2(a)(viii)) and Parent shall be entitled to permanently retain or cancel any such Escrow Shares so received from the Indemnity Escrow Account (or the Specific Indemnity Escrow Account with respect to a claim made pursuant to Section 8.2(a)(viii)). Should the amount held in the Indemnity Holdback AmountEscrow Account, if any, be insufficient to satisfy in whole the amount to be paid to a Parent Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8VIII, each Seller shall promptlyCompany Indemnitor shall, but in any event within ten (10) Business Days following the date of such memorandum, pay to the Parent Indemnified Party, such SellerCompany Indemnitor’s Pro Rata Fraction Share of such shortfall. If such shortfall becomes payable prior to the Liquidity Date applicable to a particular Company Indemnitor, such Company Indemnitor may elect, in its sole discretion, whether to satisfy such shortfall in cash, in shares of Parent Class A Common Stock, or a combination thereof, with such shares to be valued for these purposes at the higher of (i) the Parent Stock Price or (ii) the volume weighted average price of Parent Class A Common Stock on the last trading day prior to the date of the memorandum instructions relating to such shortfall. If such shortfall becomes payable following the Liquidity Date applicable to a particular Company Indemnitor, the shortfall shall be payable by such Company Indemnitor solely in cash.
(d) In the event that there is a dispute relating to any Indemnification Claim Notice or Indemnification Claim Objection Notice that cannot be settled in accordance with Section 8.4(c), each of Buyer Parent or the Sellers Stockholder Representative may file suit with respect to such dispute in any court having jurisdiction in accordance with Section 9.1110.11. Notwithstanding the foregoing, if ▇▇▇▇▇ Parent and the Sellers Stockholder Representative mutually agree, ▇▇▇▇▇ Parent and the Sellers Stockholder Representative may submit any such dispute to alternative dispute resolution prior to, or in lieu of, pursuing the claim in court.
(e) On or before the third (3rd) Business Day after the Holdback Termination Indemnity Escrow Expiration Date, Buyer Parent will notify the Sellers Stockholder Representative in writing of the amount that Buyer Parent determines in good faith to be necessary to satisfy all claims for indemnification, compensation or reimbursement that have been asserted in any Indemnification Claim Notice (other than those pursuant to Section 8.2(a)(viii)) that was delivered to the Sellers Stockholder Representative at or prior to 11:59 p.m. (Pacific timeCalifornia Time) on the Holdback Termination Indemnity Escrow Expiration Date, but not resolved, at or prior to such time (each such claim a “Non-Specific Indemnity Continuing Claim” and such amount, the “Non-Specific Indemnity Retained Indemnity Holdback Escrow Amount”). Within eight ten (8) 10) Business Days following the Holdback Termination Indemnity Escrow Expiration Date, Buyer Parent and the Stockholder Representative shall deliver a joint instruction to the Escrow Agent instructing the Escrow Agent to release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Indemnity Holdback Amount an amount in cash equal to Escrow Account (i) the amount then remaining Indemnity Escrow Cash and the Indemnity Escrow Shares as of the Indemnity Holdback Amount less Escrow Expiration Date (as reduced from time to time pursuant to the terms of this Agreement), minus (ii) the Indemnity Escrow Cash and the Indemnity Escrow Shares in the aggregate equal to the Non-Specific Indemnity Retained Indemnity Holdback Escrow Amount to the Paying Agent for further distribution to the Company Indemnitors (if anyother than amounts payable in respect of Employee Options) in accordance with their applicable Pro Rata Share of such amount pursuant to Section 2.1(a), Section 2.1(b)(i) and Section 2.1(c), as applicable; provided, that the portion of such amount due in respect of Employee Options shall be distributed by the Escrow Agent to Parent and paid by Parent, the Surviving Corporation or a Subsidiary of the Surviving Corporation through its payroll processing system to the holders of Employee Options in accordance with their applicable Pro Rata Share of such amount pursuant to Section 2.1(b)(i).
(f) Following the Holdback Termination Indemnity Escrow Expiration Date, after resolution and payment of (or retention by Buyer of amounts in respect of) a Non-Specific Indemnity Continuing Claim, Buyer Parent and the Stockholder Representative shall release and distribute deliver a joint instruction to the Sellers Escrow Agent instructing the Escrow Agent to release from the Indemnity Escrow Account Indemnity Escrow Cash and Indemnity Escrow Shares in an amount in the aggregate equal to (i) the Retained Escrow Amount as of the date of such resolution and payment (as reduced from time to time pursuant to the terms of this Agreement), minus (ii) the amounts that Parent determines in its reasonable good faith opinion to be necessary to satisfy other Non-Specific Indemnity Continuing Claims (which amounts will continue to be held as the Retained Escrow Amount so long as such amounts remain necessary in Parent’s reasonable good faith opinion to satisfy other Non-Specific Indemnity Continuing Claims that remain unresolved) to the Paying Agent for further distribution to the Company Indemnitors (other than amounts payable in respect of Employee Options) in accordance with each Seller’s their applicable Pro Rata Fraction from Share of such amount pursuant to Section 2.1(a), Section 2.1(b)(i) and Section 2.1(c), as applicable; provided, that the Retained Indemnity Holdback Amount any amounts no longer subject portion of such amount due in respect of Employee Options shall be distributed by the Escrow Agent to Parent and paid by Parent, the Surviving Corporation or a Continuing ClaimSubsidiary of the Surviving Corporation through its payroll processing system to the holders of Employee Options in accordance with their applicable Pro Rata Share of such amount pursuant to Section 2.1(b)(i).
(g) Except as otherwise set forth On or before the third (3rd) Business Day after the Specific Indemnity Escrow Expiration Date, Parent will notify the Stockholder Representative in this Section 8.4, once a Loss is agreed to by writing of the Indemnifying Party or finally adjudicated amount that Parent determines in good faith to be payable necessary to satisfy all claims for indemnification, compensation or reimbursement that have been asserted in any Indemnification Claim Notice pursuant to this Article 8Section 8.2(a)(viii) that was delivered to the Stockholder Representative at or prior to 11:59 p.m. (California Time) on the Specific Indemnity Escrow Expiration Date, but not resolved, at or prior to such time (each such claim a “Specific Indemnity Continuing Claim” and such amount, the Indemnifying Party shall satisfy its obligations within five “Specific Indemnity Retained Escrow Amount”). Within ten (510) Business Days following the Specific Indemnity Escrow Expiration Date, Parent and the Stockholder Representative shall deliver a joint instruction to the Escrow Agent instructing the Escrow Agent to release and distribute from the Specific Indemnity Escrow Account (i) the Specific Indemnity Escrow Cash and the Specific Indemnity Escrow Shares as of the Specific Indemnity Escrow Expiration Date (as reduced from time to time pursuant to the terms of this Agreement), minus (ii) the Specific Indemnity Escrow Cash and the Specific Indemnity Escrow Shares in the aggregate equal to the Specific Indemnity Retained Escrow Amount to the Paying Agent for further distribution to the Company Indemnitors (other than amounts payable in respect of Employee Options) in accordance with their applicable Pro Rata Share of such finalamount pursuant to Section 2.1(a), non-appealable adjudication Section 2.1(b)(i) and Section 2.1(c), as applicable; provided, that the portion of such amount due in respect of Employee Options shall be distributed by wire transfer the Escrow Agent to Parent and paid by Parent, the Surviving Corporation or a Subsidiary of immediately available fundsthe Surviving Corporation through its payroll processing system to the holders of Employee Options in accordance with their applicable Pro Rata Share of such amount pursuant to Section 2.1(b)(i).
(h) Notwithstanding Following the foregoingSpecific Indemnity Escrow Expiration Date, after resolution and payment of a Specific Indemnity Continuing Claim, Parent and the Stockholder Representative shall deliver a joint instruction to the Escrow Agent instructing the Escrow Agent to release from the Specific Indemnity Escrow Account Specific Indemnity Escrow Cash and Specific Indemnity Escrow Shares in an amount in the aggregate equal to (i) any notice that is required the Specific Indemnity Retained Escrow Amount as of the date of such resolution and payment (as reduced from time to be delivered to any Seller time pursuant to the terms of this Article 8 shall be deemed satisfied by delivery of such notice to the Sellers Representative and Agreement), minus (ii) any notices required the amounts that Parent determines in its reasonable good faith opinion to be delivered by, or any actions that are required necessary to satisfy other Specific Indemnity Continuing Claims (which amounts will continue to be taken by, held as the Retained Escrow Amount so long as such amounts remain necessary in Parent’s reasonable good faith opinion to satisfy other Specific Indemnity Continuing Claims that remain unresolved) to the Paying Agent for further distribution to the Company Indemnitors (other than any obligations amounts payable in respect of Employee Options) in accordance with their applicable Pro Rata Share of such amount pursuant to Section 2.1(a), Section 2.1(b)(i) and Section 2.1(c), as applicable; provided, that the portion of such amount due in respect of Employee Options shall be distributed by the Escrow Agent to Parent and paid by Parent, the Surviving Corporation or a Subsidiary of the Surviving Corporation through its payroll processing system to the holders of Employee Options in accordance with their applicable Pro Rata Share of such amount pursuant to Section 2.1(b)(i).
(i) Each of the parties acknowledges and agrees that as a condition to Parent’s and Paying Agent’s obligation to make or right to receive any payments) any Seller payments pursuant to this Article 8 Section 8.4(e), Section 8.4(f), Section 8.4(g) or Section 8.5(h) the Stockholder Representative shall first deliver to Parent an updated Allocation Schedule setting forth the amounts payable to each Company Indemnitor in accordance with such section. Parent and the Surviving Corporation shall be satisfied by delivery by, or action taken by entitled to conclusively rely upon the Sellers Representative.updated Allocati
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Claims for Indemnification Resolution of Conflicts. (a) Subject Making a Claim for Indemnification; Officer’s Certificate. Parent (on behalf of itself and/or any other Indemnified Parties) may seek recovery of Losses pursuant to this Article VII by delivering to the survival periods Escrow Representative (and, in Section 8.1 the case of recovery sought from fewer than all of the Indemnifying Parties, delivering to the applicable Indemnifying Parties) an Officer’s Certificate in respect of such claim (and, in the case of a claim against the Escrow Fund, with a copy delivered simultaneously to the Escrow Agent). The date of such delivery of an Officer’s Certificate is referred to herein as the “Claim Date” of such Officer’s Certificate (and the limitations set forth in Section 8.3 claims for indemnification contained therein). For purposes hereof, if an Indemnified Party wishes to make an indemnification claim under this Article 8, the Indemnified Party, “Officer’s Certificate” shall deliver mean a written notice (an “Indemnification Claim Notice”) to the Indemnifying Party certificate signed by any officer of Parent: (i) stating that such an Indemnified Party has paid, incurred, suffered sustained or sustained, incurred or it is reasonably anticipates likely that it may will have to pay, incursustain or incur Losses and including, suffer or sustain to the extent reasonably practicable, a non-binding, preliminary estimate of the amounts of such Losses and (ii) specifying such Losses in reasonable detail (to the extent available)individual items of Losses included in the amount so stated, andthe date each such item was paid, if applicablesustained or incurred, or the basis for such anticipated Liability, and the nature of the misrepresentation, breach of warranty or covenant Indemnifiable Matter to which such item is related; provided, includinghowever, with respect that the Officer’s Certificate need only specify such information to any breach the knowledge of a representation, warranty such officer or covenant the applicable section of this Agreement which was breached. To the extent reasonably practicable, the such Indemnified Party shall include with the Indemnification Claim Notice such documents and other information available to the Indemnified Party in support as of the claims asserted thereinClaim Date, shall not limit any of the rights or remedies of any Indemnified Party, and shall timely provide such other information as the Indemnifying Party may reasonably request in order to allow the Indemnifying Party to assess the merits of the claims. The Indemnified Party may update an Indemnification Claim Notice be updated and amended from time to time to reflect any change in circumstances following the date thereof.
(b) If the Indemnifying Party shall not object in writing within the twenty (20) Business Day period after receipt of an Indemnification Claim Notice by delivery of a written notice of objection containing a reasonably detailed description supporting an objection to the applicable indemnification claim (an “Indemnification Claim Objection Notice”), such failure to so object shall be an irrevocable acknowledgment by the Indemnifying Party that the Indemnified Party is entitled by delivering an updated or amended Officer’s Certificate to the full amount Escrow Representative or applicable Indemnifying Party(ies), as the case may be. Following the delivery of an Officer’s Certificate, the claim for Losses set forth in the Indemnification Claim Notice, but subject to the limitations on recovery set forth in this Article 8. In the event the Sellers Escrow Representative fails to timely deliver an Indemnification Claim Objection Notice, Buyer shall immediately be permitted to retain (until final resolution) a portion of the Indemnity Holdback Amount equal to the Losses set forth in such Indemnification Claim Notice that are recoverable subject to the limitations set forth herein (or in the event such Losses exceed the then available balance of the Indemnity Holdback Amount, Buyer and its representatives and agents shall be permitted to retain the remaining balance of the Indemnity Holdback Amount until final resolution). Should the amount held in the Indemnity Holdback Amountgiven all such access (including electronic access, if any, be insufficient to satisfy in whole the amount to be paid to a Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8, each Seller shall promptly, but in any event within ten (10) Business Days following the date of such memorandum, pay to the Indemnified Party, such Seller’s Pro Rata Fraction of such shortfall in cash.
(c) In the event that the Indemnifying Party shall timely deliver an Indemnification Claim Objection Notice in accordance with Section 8.4(b), the Sellers Representative and Buyer shall attempt in good faith to agree upon the rights of the respective parties with respect to each of such claims. If the Sellers Representative and Buyer should so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties. Buyer shall immediately be permitted to permanently retain a portion of the Indemnity Holdback Amount equal to the Losses set forth in such memorandum (or to the extent then available from available) as they may reasonably require to the Indemnity Holdback Amount books and records of the Surviving Corporation and access to such personnel or representatives of the Surviving Corporation and Parent, including but not limited to the individuals responsible for the matters that are the subject of the Officer’s Certificate, as they may reasonably require for the purposes of investigating or resolving any disputes or responding to any matters or inquiries raised in the event such Losses exceed the then available balance of the Indemnity Holdback Amount). Should the amount held in the Indemnity Holdback Amount, if any, be insufficient to satisfy in whole the amount to be paid to a Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8, each Seller shall promptly, but in any event within ten (10) Business Days following the date of such memorandum, pay to the Indemnified Party, such SellerOfficer’s Pro Rata Fraction of such shortfall in cashCertificate.
(d) In the event that there is a dispute relating to any Indemnification Claim Notice or Indemnification Claim Objection Notice that cannot be settled in accordance with Section 8.4(c), each of Buyer or the Sellers Representative may file suit with respect to such dispute in any court having jurisdiction in accordance with Section 9.11. Notwithstanding the foregoing, if ▇▇▇▇▇ and the Sellers Representative mutually agree, ▇▇▇▇▇ and the Sellers Representative may submit any such dispute to alternative dispute resolution prior to, or in lieu of, pursuing the claim in court.
(e) On or before the third (3rd) Business Day after the Holdback Termination Date, Buyer will notify the Sellers Representative in writing of the amount that Buyer determines in good faith to be necessary to satisfy all claims for indemnification, compensation or reimbursement that have been asserted in any Indemnification Claim Notice that was delivered to the Sellers Representative at or prior to 11:59 p.m. (Pacific time) on the Holdback Termination Date, but not resolved, at or prior to such time (each such claim a “Continuing Claim” and such amount, the “Retained Indemnity Holdback Amount”). Within eight (8) Business Days following the Holdback Termination Date, Buyer shall release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Indemnity Holdback Amount an amount in cash equal to (i) the amount then remaining of the Indemnity Holdback Amount less (ii) the Retained Indemnity Holdback Amount (if any).
(f) Following the Holdback Termination Date, after resolution and payment of (or retention by Buyer of amounts in respect of) a Continuing Claim, Buyer shall release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Retained Indemnity Holdback Amount any amounts no longer subject to a Continuing Claim.
(g) Except as otherwise set forth in this Section 8.4, once a Loss is agreed to by the Indemnifying Party or finally adjudicated to be payable pursuant to this Article 8, the Indemnifying Party shall satisfy its obligations within five (5) Business Days of such final, non-appealable adjudication by wire transfer of immediately available funds.
(h) Notwithstanding the foregoing, (i) any notice that is required to be delivered to any Seller pursuant to this Article 8 shall be deemed satisfied by delivery of such notice to the Sellers Representative and (ii) any notices required to be delivered by, or any actions that are required to be taken by, (other than any obligations to make or right to receive any payments) any Seller pursuant to this Article 8 shall be satisfied by delivery by, or action taken by the Sellers Representative.
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Claims for Indemnification Resolution of Conflicts. (a) Subject to the survival periods in Section 8.1 and the limitations set forth in Section 8.3 hereofthis Article IX, if an a Buyer Indemnified Party or the Sellers Representative (on behalf of a Seller Indemnified Party) (as applicable, an “Indemnified Party”) wishes to make an indemnification claim under this Article 8IX, the such Indemnified Party, Party shall deliver a written notice (an “Indemnification Claim Notice”) to the Sellers Representative (in the case of any indemnification claims by a Buyer Indemnified Party under Section 9.2(a)), the applicable Selling Securityholder (in the case of any indemnification claims by a Buyer Indemnified Party under Section 9.2(b)) or Buyer (in the case of any indemnification claims by the Sellers Representative (on behalf of a Seller Indemnified Party) (as applicable, the “Indemnifying Party Party”) prior to the expiration of the Expiration Time (i) stating that such Indemnified Party has paid, incurred, suffered or sustained, or reasonably anticipates that sustained Losses for which it may pay, incur, suffer or sustain Losses is entitled to indemnification under this Article IX and (ii) specifying such Losses in reasonable detail (including the amount of such Losses to the extent known or available or, if such amount is not known or available, an estimate of such Losses to the extent reasonably practicable), and, if applicable, the nature of the misrepresentation, breach of warranty or covenant matter to which such item indemnification claim is related, including, with respect to any breach of a representation, warranty or covenant the applicable section of this Agreement which was breached. To the extent reasonably practicable, the Indemnified Party shall include with the Indemnification Claim Notice such documents and other information available to the Indemnified Party in support of the claims asserted therein, and shall timely provide such other information as the Indemnifying Party may reasonably request in order to allow the Indemnifying Party to assess the merits of the claims. The Indemnified Party may update an Indemnification Claim Notice from time to time to reflect any change in circumstances following the date thereof.
(b) If the Indemnifying Party shall not object in writing within the twenty (20) Business Day period after receipt of an Indemnification Claim Notice by delivery of a written notice of objection containing a reasonably detailed description supporting an objection to the applicable indemnification claim (an “Indemnification Claim Objection Notice”), such failure to so object shall be an irrevocable acknowledgment by the Indemnifying Party that the Indemnified Party is entitled to the full amount of the claim for Losses set forth in the Indemnification Claim Notice, but subject to the limitations on recovery set forth in this Article 8. In the event the Sellers Representative fails to timely deliver an Indemnification Claim Objection Notice, Buyer shall immediately be permitted to retain (until final resolution) a portion of the Indemnity Holdback Amount equal to the Losses set forth in such Indemnification Claim Notice that are recoverable subject to the limitations set forth herein (or in the event such Losses exceed the then available balance of the Indemnity Holdback Amount, Buyer shall be permitted to retain the remaining balance of the Indemnity Holdback Amount until final resolution). Should the amount held in the Indemnity Holdback Amount, if any, be insufficient to satisfy in whole the amount to be paid to a Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8, each Seller shall promptly, but in any event within ten (10) Business Days following the date of such memorandum, pay to the Indemnified Party, such Seller’s Pro Rata Fraction of such shortfall in cash.
(c) In the event that the Indemnifying Party shall timely deliver an Indemnification Claim Objection Notice in accordance with Section 8.4(b), the Sellers Representative and Buyer shall attempt in good faith to agree upon the rights of the respective parties with respect to each of such claims. If the Sellers Representative and Buyer should so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties. Buyer shall immediately be permitted to permanently retain a portion of the Indemnity Holdback Amount equal to the Losses set forth in such memorandum (or to the extent then available from the Indemnity Holdback Amount in the event such Losses exceed the then available balance of the Indemnity Holdback Amount). Should the amount held in the Indemnity Holdback Amount, if any, be insufficient to satisfy in whole the amount to be paid to a Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8, each Seller shall promptly, but in any event within ten (10) Business Days following the date of such memorandum, pay to the Indemnified Party, such Seller’s Pro Rata Fraction of such shortfall in cash.
(d) In the event that there is a dispute relating to any Indemnification Claim Notice or Indemnification Claim Objection Notice that Buyer, the Selling Securityholder and/or the Sellers Representative cannot be settled in accordance with Section 8.4(c)resolve through discussions and negotiation, each of Buyer or the Sellers Representative may file suit with respect to such dispute in any court having jurisdiction in accordance with Section 9.11. Notwithstanding the foregoing, if ▇▇▇▇▇ and the Sellers Representative mutually agree, ▇▇▇▇▇ and the Sellers Representative may submit any such dispute to alternative dispute resolution prior to, or in lieu of, pursuing the claim in court11.11.
(e) On or before the third (3rd) Business Day after the Holdback Termination Date, Buyer will notify the Sellers Representative in writing of the amount that Buyer determines in good faith to be necessary to satisfy all claims for indemnification, compensation or reimbursement that have been asserted in any Indemnification Claim Notice that was delivered to the Sellers Representative at or prior to 11:59 p.m. (Pacific time) on the Holdback Termination Date, but not resolved, at or prior to such time (each such claim a “Continuing Claim” and such amount, the “Retained Indemnity Holdback Amount”). Within eight (8) Business Days following the Holdback Termination Date, Buyer shall release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Indemnity Holdback Amount an amount in cash equal to (i) the amount then remaining of the Indemnity Holdback Amount less (ii) the Retained Indemnity Holdback Amount (if any).
(f) Following the Holdback Termination Date, after resolution and payment of (or retention by Buyer of amounts in respect of) a Continuing Claim, Buyer shall release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Retained Indemnity Holdback Amount any amounts no longer subject to a Continuing Claim.
(g) Except as otherwise set forth in this Section 8.4, once a Loss is agreed to by the Indemnifying Party or finally adjudicated to be payable pursuant to this Article 8, the Indemnifying Party shall satisfy its obligations within five (5) Business Days of such final, non-appealable adjudication by wire transfer of immediately available funds.
(hc) Notwithstanding the foregoing, (i) any notice that is required to be delivered to any Seller Selling Securityholder pursuant to this Article 8 IX shall be deemed satisfied by delivery of such notice to the Sellers Representative and (ii) any notices required to be delivered by, or any actions that are required to be taken by, (other than any obligations to make or right to receive any payments) any Seller Selling Securityholders pursuant to this Article 8 IX shall be satisfied by delivery by, or action taken by the Sellers Representative.
Appears in 1 contract
Sources: Merger Agreement (Compass Group Diversified Holdings LLC)
Claims for Indemnification Resolution of Conflicts. (a) Subject Making a Claim for Indemnification; Officer’s Certificate. A Parent Indemnified Party may seek recovery of Losses pursuant to this Section 8.4(a) by delivering to the survival periods Stockholder Representative (and, in Section 8.1 the case of recovery sought from fewer than all of the Indemnifying Parties, delivering to the applicable Indemnifying Parties, with a copy to the Stockholder Representative) an Officer’s Certificate in respect of such claim. The date of such delivery of an Officer’s Certificate is referred to herein as the “Claim Date” of such Officer’s Certificate (and the limitations set forth in Section 8.3 claims for indemnification contained therein). For purposes hereof, if an “Officer’s Certificate” shall mean a certificate signed by any authorized officer of a Parent Indemnified Party wishes to make (or, in the case of a Parent Indemnified Party who is an indemnification claim under this Article 8individual, the Indemnified Party, shall deliver a written notice (an “Indemnification Claim Notice”) to the Indemnifying Party signed by such individual): (i) stating that such Parent Indemnified Party has paid, sustained, incurred, suffered or sustainedaccrued, or reasonably anticipates that it may will have to pay, incursustain, suffer incur or sustain accrue Losses and including, to the extent reasonably practicable, a non-binding, preliminary estimate of the amounts of such Losses and (ii) specifying such Losses in reasonable detail (detail, to the extent available)known, andthe individual items of Losses included in the amount so stated, if applicablethe date each such item was paid, sustained, incurred, or accrued, or the basis for such anticipated liability, and the nature of the misrepresentationIndemnifiable Matter to which such item is related (including, breach but not limited to, setting forth the sections of warranty or covenant this Agreement to which such item is related; provided, includinghowever, with respect that the Officer’s Certificate need only specify such information to any breach the knowledge of a representation, warranty such officer or covenant the applicable section of this Agreement which was breached. To the extent reasonably practicable, the such Parent Indemnified Party shall include with the Indemnification Claim Notice such documents and other information available to the Indemnified Party in support as of the claims asserted thereinClaim Date, shall not limit any of the rights or remedies of such Parent Indemnified Party, and shall timely provide such other information as the Indemnifying Party may reasonably request in order to allow the Indemnifying Party to assess the merits of the claims. The Indemnified Party may update an Indemnification Claim Notice be updated and amended from time to time to reflect any change in circumstances following the date thereof.
(b) If the Indemnifying by such Parent Indemnified Party shall not object in writing within the twenty (20) Business Day period after receipt of by delivering an Indemnification Claim Notice by delivery of a written notice of objection containing a reasonably detailed description supporting an objection updated or amended Officer’s Certificate to the Stockholder Representative or applicable indemnification claim (an “Indemnification Claim Objection Notice”)Indemnifying Parties, such failure to so object shall be an irrevocable acknowledgment by as the Indemnifying Party that the Indemnified Party is entitled to the full amount of the claim for Losses set forth in the Indemnification Claim Notice, but subject to the limitations on recovery set forth in this Article 8. In the event the Sellers Representative fails to timely deliver an Indemnification Claim Objection Notice, Buyer shall immediately be permitted to retain (until final resolution) a portion of the Indemnity Holdback Amount equal to the Losses set forth in such Indemnification Claim Notice that are recoverable subject to the limitations set forth herein (or in the event such Losses exceed the then available balance of the Indemnity Holdback Amount, Buyer shall be permitted to retain the remaining balance of the Indemnity Holdback Amount until final resolution). Should the amount held in the Indemnity Holdback Amount, if any, be insufficient to satisfy in whole the amount to be paid to a Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8, each Seller shall promptly, but in any event within ten (10) Business Days following the date of such memorandum, pay to the Indemnified Party, such Seller’s Pro Rata Fraction of such shortfall in cashcase may be.
(c) In the event that the Indemnifying Party shall timely deliver an Indemnification Claim Objection Notice in accordance with Section 8.4(b), the Sellers Representative and Buyer shall attempt in good faith to agree upon the rights of the respective parties with respect to each of such claims. If the Sellers Representative and Buyer should so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties. Buyer shall immediately be permitted to permanently retain a portion of the Indemnity Holdback Amount equal to the Losses set forth in such memorandum (or to the extent then available from the Indemnity Holdback Amount in the event such Losses exceed the then available balance of the Indemnity Holdback Amount). Should the amount held in the Indemnity Holdback Amount, if any, be insufficient to satisfy in whole the amount to be paid to a Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8, each Seller shall promptly, but in any event within ten (10) Business Days following the date of such memorandum, pay to the Indemnified Party, such Seller’s Pro Rata Fraction of such shortfall in cash.
(d) In the event that there is a dispute relating to any Indemnification Claim Notice or Indemnification Claim Objection Notice that cannot be settled in accordance with Section 8.4(c), each of Buyer or the Sellers Representative may file suit with respect to such dispute in any court having jurisdiction in accordance with Section 9.11. Notwithstanding the foregoing, if ▇▇▇▇▇ and the Sellers Representative mutually agree, ▇▇▇▇▇ and the Sellers Representative may submit any such dispute to alternative dispute resolution prior to, or in lieu of, pursuing the claim in court.
(e) On or before the third (3rd) Business Day after the Holdback Termination Date, Buyer will notify the Sellers Representative in writing of the amount that Buyer determines in good faith to be necessary to satisfy all claims for indemnification, compensation or reimbursement that have been asserted in any Indemnification Claim Notice that was delivered to the Sellers Representative at or prior to 11:59 p.m. (Pacific time) on the Holdback Termination Date, but not resolved, at or prior to such time (each such claim a “Continuing Claim” and such amount, the “Retained Indemnity Holdback Amount”). Within eight (8) Business Days following the Holdback Termination Date, Buyer shall release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Indemnity Holdback Amount an amount in cash equal to (i) the amount then remaining of the Indemnity Holdback Amount less (ii) the Retained Indemnity Holdback Amount (if any).
(f) Following the Holdback Termination Date, after resolution and payment of (or retention by Buyer of amounts in respect of) a Continuing Claim, Buyer shall release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Retained Indemnity Holdback Amount any amounts no longer subject to a Continuing Claim.
(g) Except as otherwise set forth in this Section 8.4, once a Loss is agreed to by the Indemnifying Party or finally adjudicated to be payable pursuant to this Article 8, the Indemnifying Party shall satisfy its obligations within five (5) Business Days of such final, non-appealable adjudication by wire transfer of immediately available funds.
(h) Notwithstanding the foregoing, (i) any notice that is required to be delivered to any Seller pursuant to this Article 8 shall be deemed satisfied by delivery of such notice to the Sellers Representative and (ii) any notices required to be delivered by, or any actions that are required to be taken by, (other than any obligations to make or right to receive any payments) any Seller pursuant to this Article 8 shall be satisfied by delivery by, or action taken by the Sellers Representative.
Appears in 1 contract
Sources: Share Purchase Agreement
Claims for Indemnification Resolution of Conflicts. (a) Subject to the survival periods in Section 8.1 and the limitations set forth in Section 8.3 hereof10.3, if an Indemnified Party wishes to make an indemnification claim under this Article 8X, the such Indemnified Party, Party shall deliver a written notice (an “Indemnification Claim Notice”) to the Party obligated to provide indemnification pursuant to this Article X (each, an “Indemnifying Party Party”) (i) stating that such Indemnified Party has paid, incurred, suffered or sustained, or reasonably anticipates that it may pay, incur, suffer or sustain Losses and (ii) specifying such Losses in reasonable detail (to the extent available), and, if applicable, the nature of the misrepresentation, breach of warranty or covenant to which such item is related, including, with respect to any breach of a representation, warranty or covenant the applicable section of this Agreement which was breached. To the extent reasonably practicable, the Indemnified Party shall include with the Indemnification Claim Notice such documents and other information available to the Indemnified Party in support of the claims asserted therein, and shall timely provide such other information as the Indemnifying Party may reasonably request in order to allow the Indemnifying Party to assess the merits of the claims. The An Indemnified Party may update an Indemnification Claim Notice from time to time to reflect any change in circumstances following the date thereof.
(b) If the Indemnifying Party shall not object in writing within the twenty thirty (2030) Business Day period days after receipt of an Indemnification Claim Notice by delivery of a written notice of objection containing a reasonably detailed description of the facts and circumstances supporting an objection to the applicable indemnification claim (an “Indemnification Claim Objection Notice”), such failure to so object shall be an irrevocable acknowledgment by the Indemnifying Party that the Indemnified Party that provided such Indemnification Claim Notice is entitled to the full amount of the claim for Losses set forth in the such Indemnification Claim Notice, but subject . Subject to the limitations on recovery set forth in this Article 8. In X, the event Indemnifying Party shall, within thirty (30) days following the Sellers Representative fails to timely deliver an date of such Indemnification Claim Objection Notice, Buyer shall immediately be permitted to retain (until final resolution) a portion of the Indemnity Holdback Amount equal pay to the Indemnified Party that provided such Indemnification Claim Notice the full amount of claim for Losses set forth in such Indemnification Claim Notice that are recoverable subject to the limitations set forth herein (or in the event such Losses exceed the then available balance of the Indemnity Holdback Amount, Buyer shall be permitted to retain the remaining balance of the Indemnity Holdback Amount until final resolution). Should the amount held in the Indemnity Holdback Amount, if any, be insufficient to satisfy in whole the amount to be paid to a Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8, each Seller shall promptly, but in any event within ten (10) Business Days following the date of such memorandum, pay to the Indemnified Party, such Seller’s Pro Rata Fraction of such shortfall in cash.
(c) In the event that the an Indemnifying Party shall timely deliver an Indemnification Claim Objection Notice in accordance with Section 8.4(b10.4(b), the Sellers Representative Indemnifying Party and Buyer the Indemnified Party shall attempt in good faith to agree upon the rights of the respective parties Parties with respect to each of such claims. If the Sellers Representative Indemnifying Party and Buyer the Indemnified Party should so agree, a memorandum setting forth such agreement shall be prepared and signed by both partiesParties. Buyer shall immediately be permitted to permanently retain a portion of the Indemnity Holdback Amount equal to the Losses set forth in such memorandum (or to the extent then available from the Indemnity Holdback Amount in the event such Losses exceed the then available balance of the Indemnity Holdback Amount). Should the amount held in the Indemnity Holdback Amount, if any, be insufficient to satisfy in whole the amount to be paid to a The Indemnified Party in accordance with shall be entitled to conclusively rely on any such memorandum, then, subject . Subject to the limitations set forth in this Article 8X, each Seller shall promptlythe Indemnifying Party shall, but in any event within ten (10) Business Days following the date of such memorandumIndemnification Claim Notice, pay to the Indemnified Party, such Seller’s Pro Rata Fraction Party the full amount of such shortfall in cash.
(d) In the event that there is a dispute relating to any Indemnification Claim Notice or Indemnification Claim Objection Notice that cannot be settled in accordance with Section 8.4(c10.4(c), each of Buyer the Indemnifying Party or the Sellers Representative Indemnified Party may file suit with respect to such dispute in any court having jurisdiction in accordance with Section 9.11. Notwithstanding the foregoing, if ▇▇▇▇▇ and the Sellers Representative mutually agree, ▇▇▇▇▇ and the Sellers Representative may submit any such dispute to alternative dispute resolution prior to, or in lieu of, pursuing the claim in court12.13.
(e) On or before the third (3rd) Business Day after the Holdback Termination Date, Buyer will notify the Sellers Representative in writing of the amount that Buyer determines in good faith to be necessary to satisfy all claims for indemnification, compensation or reimbursement that have been asserted in any Indemnification Claim Notice that was delivered to the Sellers Representative at or prior to 11:59 p.m. (Pacific time) on the Holdback Termination Date, but not resolved, at or prior to such time (each such claim a “Continuing Claim” and such amount, the “Retained Indemnity Holdback Amount”). Within eight (8) Business Days following the Holdback Termination Date, Buyer shall release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Indemnity Holdback Amount an amount in cash equal to (i) the amount then remaining of the Indemnity Holdback Amount less (ii) the Retained Indemnity Holdback Amount (if any).
(f) Following the Holdback Termination Date, after resolution and payment of (or retention by Buyer of amounts in respect of) a Continuing Claim, Buyer shall release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Retained Indemnity Holdback Amount any amounts no longer subject to a Continuing Claim.
(g) Except as otherwise set forth in this Section 8.4, once a Loss is agreed to by the Indemnifying Party or finally adjudicated to be payable pursuant to this Article 8, the Indemnifying Party shall satisfy its obligations within five (5) Business Days of such final, non-appealable adjudication by wire transfer of immediately available funds.
(h) Notwithstanding the foregoing, (i) any notice that is required to be delivered to any Seller pursuant to this Article 8 shall be deemed satisfied by delivery of such notice to the Sellers Representative and (ii) any notices required to be delivered by, or any actions that are required to be taken by, (other than any obligations to make or right to receive any payments) any Seller pursuant to this Article 8 shall be satisfied by delivery by, or action taken by the Sellers Representative.
Appears in 1 contract
Sources: Securities Purchase Agreement (Tempo Automation Holdings, Inc.)
Claims for Indemnification Resolution of Conflicts. (a) Subject to the survival periods in Section 8.1 6.1 and the limitations set forth in Section 8.3 6.3 hereof, if an Indemnified Party wishes to make an indemnification claim under this Article 8VI, the such Indemnified Party, Party shall deliver a written notice (an “Indemnification Claim Notice”) to the indemnifying party (the “Indemnifying Party Party”) (i) stating that such Indemnified Party has paid, incurred, suffered or sustained, or reasonably anticipates that it may pay, incur, suffer or sustain Losses Losses, and (ii) specifying such Losses in reasonable detail (to the extent available), and, if applicable, the nature of the misrepresentation, breach of warranty or covenant to which such item is related, including, with respect to any breach of a representation, warranty or covenant the applicable section of this Agreement which was breached. To the extent reasonably practicable, the Indemnified Party shall include with the Indemnification Claim Notice such documents and other information available to the Indemnified Party in support of the claims asserted therein, and shall timely provide such other information as the Indemnifying Party may reasonably request in order to allow the Indemnifying Party to assess the merits of the claims. The An Indemnified Party may update an Indemnification Claim Notice from time to time to reflect any change in circumstances following the date thereof.
(b) If the Indemnifying Party shall not object in writing within the twenty fifteen (2015) Business Day period after receipt of an Indemnification Claim Notice by delivery of a written notice of objection containing a reasonably detailed description of the facts and circumstances supporting an objection to the applicable indemnification claim (an “Indemnification Claim Objection Notice”), such failure to so object shall be an irrevocable acknowledgment by the Indemnifying Party that the Indemnified Party is entitled to the full amount of the claim for Losses set forth in the such Indemnification Claim Notice. In such event, but subject (i) if the Indemnifying Party is the Company Stockholders, the Company Stockholders shall forfeit the right to receive Holdback Shares equal to the limitations on recovery set forth in this Article 8. In the event the Sellers Representative fails to timely deliver an Indemnification Claim Objection Notice, Buyer shall immediately be permitted to retain (until final resolution) a portion value of the Indemnity Holdback Amount equal to amount of the Losses set forth in such Indemnification Claim Notice that are recoverable subject to the limitations set forth herein (or as much Holdback Shares as is then available in the event such Losses exceed the then available balance of Holdback Shares), and should the Indemnity Holdback Amount, Buyer shall be permitted to retain the remaining balance of the Indemnity Holdback Amount until final resolution). Should the amount held in the Indemnity Holdback Amount, if any, Shares be insufficient to satisfy in whole the amount to be paid to a Parent Indemnified Party in accordance with such memorandumthe Indemnification Claim Notice, then, subject to the limitations set forth in this Article 8VI, each Seller shall promptlyCompany Stockholders shall, but in any event at its election, within ten (10) Business Days following the date of such memorandum, pay to the Parent Indemnified Party either (x) cash, (y) shares of Parent Common Stock or (z) a mixture of cash and shares of Parent Common Stock (with such shares of Parent Common Stock valued at the Parent Common Stock Price) equal to its Pro Rata Share of the Losses set forth in such Indemnification Claim Notice; and (ii) if the Indemnifying Party is Parent, Parent shall, within ten (10) Business Days following the date of such memorandum, pay cash to the Stockholder Indemnified Party, such Seller’s Pro Rata Fraction of such shortfall in cash.
(c) In the event that the Indemnifying Party shall timely deliver an Indemnification Claim Objection Notice in accordance with Section 8.4(b6.4(b), the Sellers Representative Company Stockholders and Buyer Parent shall attempt in good faith to agree upon the rights of the respective parties with respect to each of such claims. If the Sellers Representative Company Stockholders and Buyer Parent should so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties. Buyer Parent and the Company Stockholders shall immediately be permitted entitled to permanently retain a portion of conclusively rely on any such memorandum. In such event, (i) if the Indemnity Indemnifying Party is the Company Stockholders, the Company Stockholders shall forfeit the right to receive Holdback Amount Shares equal to an aggregate amount of Holdback Shares equal to the amount of the Losses set forth in such memorandum (or to the extent as much Holdback Shares as is then available from the Indemnity Holdback Amount in the event such Losses exceed the then available balance value of the Indemnity Holdback AmountShares). Should , and should the amount held in the Indemnity Holdback Amount, if any, Shares be insufficient to satisfy in whole the amount to be paid to a Parent Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8VI, each Seller shall promptlyCompany Stockholder shall, but at its election, within ten (10) Business Days -42- following the date of such memorandum, pay to the Parent Indemnified Party (y) shares of Parent Common Stock or (z) a mixture of cash and shares of Parent Common Stock (with such shares valued at the Parent Common Stock Price) equal to its Pro Rata Share of the Losses set forth in any event such Indemnification Claim Notice; and (ii) if the Indemnifying Party is Parent, Parent shall, within ten (10) Business Days following the date of such memorandum, pay cash to the Stockholder Indemnified Party, such Seller’s Pro Rata Fraction of such shortfall in cash.
(d) In the event that there is a dispute relating to any Indemnification Claim Notice or Indemnification Claim Objection Notice that cannot be settled in accordance with Section 8.4(c6.4(c), each of Buyer Parent or the Sellers Representative Company Stockholders may file suit with respect to such dispute in any court having jurisdiction in accordance with Section 9.11. Notwithstanding the foregoing, if ▇▇▇▇▇ and the Sellers Representative mutually agree, ▇▇▇▇▇ and the Sellers Representative may submit any such dispute to alternative dispute resolution prior to, or in lieu of, pursuing the claim in court7.11.
(e) On or before the third (3rd) Business Day Promptly after the date that is twelve (12) months following the Closing Date (the “Interim Indemnity Holdback Termination Expiration Date”), Buyer Parent will notify the Sellers Representative Company Stockholders in writing of the amount that Buyer Parent determines in good faith to be necessary to satisfy all claims for indemnification, compensation or reimbursement that have been asserted in any Indemnification Claim Notice that was delivered to the Sellers Representative Company Stockholders at or prior to 11:59 p.m. (Pacific New York time) on the Interim Indemnity Holdback Termination Expiration Date, but not resolved, at or prior to such time (each such claim a “Interim Continuing Claim”). Within ten (10) Business Days following the Interim Indemnity Holdback Expiration Date, Parent shall cause its transfer agent to deliver to the Company Stockholders (in accordance with each such stockholder’s Pro Rata Share of such amount) the amount of Holdback Shares equal to one-half of the initial amount of Holdback Shares, minus the amount of Holdback Shares used to satisfy any claims for indemnification prior to the Interim Indemnity Holdback Expiration Date, and the amount of Holdback Shares necessary to satisfy any Interim Continuing Claim.
(f) Promptly after the date that is eighteen (18) months following the Closing Date (the “Final Indemnity Holdback Expiration Date”), Parent will notify the Company Stockholders in writing of the amount that Parent determines in good faith to be necessary to satisfy all claims for indemnification, compensation or reimbursement that have been asserted in any Indemnification Claim Notice that was delivered to the Company Stockholders at or prior to 11:59 p.m. (New York time) on the Final Indemnity Holdback Expiration Date, but not resolved, at or prior to such time (each such claim a “Final Continuing Claim” and such amount, the “Retained Indemnity Holdback Amount”). Within eight ten (8) 10) Business Days following the Final Indemnity Holdback Termination Expiration Date, Buyer Parent shall release and distribute cause its transfer agent to deliver to the Sellers Company Stockholders (in accordance with each Sellersuch stockholder’s Pro Rata Fraction from the Indemnity Holdback Amount an amount in cash equal to Share of such amount) (i) the amount Holdback Shares then remaining as of the Final Indemnity Holdback Amount less Expiration Date (as reduced by distributions from time to time pursuant to the terms of this Agreement), minus (ii) an amount of Holdback Shares that in the aggregate equal the Retained Indemnity Holdback Amount (if any)Amount.
(fg) Following the Final Indemnity Holdback Termination Expiration Date, after resolution and payment of (or retention by Buyer of amounts in respect of) a all Continuing ClaimClaims, Buyer shall release and distribute Parent cause its transfer agent to deliver to the Sellers Company Stockholders any then-remaining Holdback Shares (in accordance with each Sellersuch stockholder’s Pro Rata Fraction from the Retained Indemnity Holdback Amount any amounts no longer subject to a Continuing Claim.
(g) Except as otherwise set forth in this Section 8.4, once a Loss is agreed to by the Indemnifying Party or finally adjudicated to be payable pursuant to this Article 8, the Indemnifying Party shall satisfy its obligations within five (5) Business Days Share of such final, non-appealable adjudication by wire transfer of immediately available fundsamount).
(h) Notwithstanding the foregoing, (i) any notice that is required to be delivered to any Seller pursuant to this Article 8 shall be deemed satisfied by delivery of such notice to the Sellers Representative and (ii) any notices required to be delivered by, or any actions that are required to be taken by, (other than any obligations to make or right to receive any payments) any Seller pursuant to this Article 8 shall be satisfied by delivery by, or action taken by the Sellers Representative.
Appears in 1 contract
Claims for Indemnification Resolution of Conflicts. (a) Subject to the survival periods in Section 8.1 8.1, Section 8.2, and the limitations set forth in Section 8.3 hereof8.3, if an a Parent Indemnified Party wishes to make an indemnification claim under this Article 8VIII, the Parent, on behalf of such Parent Indemnified Party, shall reasonably promptly deliver a written notice (an “Indemnification Claim Notice”) to the Indemnifying Party Stockholder Representative (i) stating that such Parent Indemnified Party has paid, incurred, suffered or sustained, or reasonably anticipates that it may pay, incur, suffer or sustain Losses and (ii) specifying such Losses in reasonable detail (to the extent available), and, if applicable, the nature of the misrepresentation, breach of warranty warranty, covenant or covenant agreement to which such item is related, including, with respect to any breach of a representation, warranty or covenant the applicable section of this Agreement which was breached. To the extent reasonably practicable, the Indemnified Party shall include with the Indemnification Claim Notice such documents and other information available to the Indemnified Party in support of the claims asserted therein, and shall timely provide such other information as the Indemnifying Party may reasonably request in order to allow the Indemnifying Party to assess the merits of the claims. The Indemnified Party Parent may update an Indemnification Claim Notice from time to time to reflect any change in circumstances following the date thereof, so long as such update reasonably relates to the underlying facts and circumstances specifically set forth in such original Indemnification Claim Notice.
(b) If the Indemnifying Party Stockholder Representative on behalf of the Company Indemnitors shall not object in writing within the twenty (20) 20 Business Day period after receipt of an Indemnification Claim Notice by delivery of a written notice of objection containing a reasonably detailed description of the facts and circumstances (if then known) supporting an objection to the applicable indemnification claim (an “Indemnification Claim Objection Notice”), such failure to so object shall be an irrevocable acknowledgment by the Indemnifying Party Stockholder Representative on behalf of the Company Indemnitors that the Parent Indemnified Party is entitled to the full amount of the claim for Losses set forth in the such Indemnification Claim NoticeNotice if and to the extent such Losses are actually paid, incurred, suffered or sustained, but subject to the other limitations on recovery set forth in this Article 8herein. In such event, Parent and the Stockholder Representative shall promptly (but in any event within three Business Days of the Sellers Representative fails to timely deliver an resolution of such Indemnification Claim Objection Notice, Buyer shall ) deliver a joint instruction to the Escrow Agent instructing the Escrow Agent to immediately be permitted release and distribute to retain (until final resolution) a portion of Parent from the Indemnity Holdback Amount Escrow Account, Indemnity Escrow Cash (if any remains) with an aggregate value equal to the Losses set forth in such Indemnification Claim Notice that are recoverable subject (or to the limitations set forth herein (or extent then available in the Indemnity Escrow Account in the event such Losses exceed the then then-available balance of the Indemnity Holdback Amount, Buyer shall be permitted to retain the remaining balance of the Indemnity Holdback Amount until final resolutionEscrow Account). Should the amount held in the Indemnity Holdback Amount, if any, be insufficient to satisfy in whole the amount to be paid to a Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8, each Seller shall promptly, but in any event within ten (10) Business Days following the date of such memorandum, pay to the Indemnified Party, such Seller’s Pro Rata Fraction of such shortfall in cash.
(c) In the event that the Indemnifying Party Stockholder Representative shall timely deliver an Indemnification Claim Objection Notice in accordance with Section 8.4(b), the Sellers Stockholder Representative and Buyer Parent shall attempt in good faith to agree upon the rights of the respective parties with respect to each of such claims. If the Sellers Stockholder Representative and Buyer Parent should so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties. Buyer shall immediately parties and, in the case of an indemnification claim to be permitted to permanently retain a portion of recovered from the Indemnity Holdback Amount Escrow Account, shall be furnished to the Escrow Agent. The Escrow Agent shall be entitled to conclusively rely on any such memorandum and make distributions from the Indemnity Escrow Account in accordance with the terms thereof. In such event, the Escrow Agent shall promptly release and distribute to Parent from the Indemnity Escrow Account, the Indemnity Escrow Cash, with an aggregate value equal to the Losses set forth in such memorandum (or to the extent then available from in the Indemnity Holdback Amount Escrow Account in the event that such Losses exceed the then then-available balance of the Indemnity Holdback AmountEscrow Account). Should the amount held in the Indemnity Holdback AmountEscrow Account, if any, be insufficient to satisfy in whole the amount to be paid to a Parent Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8VIII, each Seller shall promptlyCompany Indemnitor shall, but in any event within ten (10) 20 Business Days following the date of such memorandum, pay to the Parent Indemnified Party, such SellerCompany Indemnitor’s Pro Rata Fraction Share of such shortfall in cash.
(d) In the event that there is a dispute relating to any Indemnification Claim Notice or Indemnification Claim Objection Notice that cannot be settled in accordance with Section 8.4(c), each of Buyer Parent or the Sellers Stockholder Representative may file suit with respect to such dispute in any court having jurisdiction in accordance with Section 9.1110.11. Notwithstanding the foregoing, if ▇▇▇▇▇ Parent and the Sellers Stockholder Representative mutually agree, ▇▇▇▇▇ Parent and the Sellers Stockholder Representative may submit any such dispute to alternative dispute resolution prior to, or in lieu of, pursuing the claim in court.
(e) On or before the third (3rd) Business Day after the Holdback Termination Indemnity Escrow Expiration Date, Buyer Parent will notify the Sellers Stockholder Representative in writing of the amount that Buyer Parent determines in good faith to be necessary to satisfy all claims for indemnification, compensation or reimbursement that have been asserted in any Indemnification Claim Notice that was delivered to the Sellers Stockholder Representative at on or prior to 11:59 p.m. (Pacific time) on the Holdback Termination Indemnity Escrow Expiration Date, but not resolved, at or prior to such time (each such claim a “RW Indemnity Continuing Claim” and such amount, as may be reduced from time to time in accordance with this Agreement, the “RW Indemnity Retained Indemnity Holdback Escrow Amount”). Within eight (8) 10 Business Days following the Holdback Termination Indemnity Escrow Expiration Date, Buyer Parent and the Stockholder Representative shall deliver a joint instruction to the Escrow Agent instructing the Escrow Agent to release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Indemnity Holdback Amount Escrow Account an amount in cash equal to (i) the amount then remaining Indemnity Escrow Cash (as may be reduced from time to time pursuant to the terms of this Agreement) as of the Indemnity Holdback Amount less Escrow Expiration Date, minus (ii) the Indemnity Escrow Cash in the aggregate equal to the RW Indemnity Retained Indemnity Holdback Amount (if anyEscrow Amount, which amount shall be released and distributed to the Paying Agent for further distribution to the Company Indemnitors in accordance with their applicable Pro Rata Share of such amount pursuant to Section 2.1(a) or Section 2.1(b), as applicable.
(f) Following the Holdback Termination Indemnity Escrow Expiration Date, after resolution and payment of (or retention by Buyer of amounts in respect of) a RW Indemnity Continuing Claim, Buyer Parent and the Stockholder Representative shall release and distribute deliver a joint instruction to the Sellers Escrow Agent instructing the Escrow Agent to release from the Indemnity Escrow Account the Indemnity Escrow Cash in an amount in the aggregate equal to (i) the RW Indemnity Retained Escrow Amount (as may be reduced from time to time pursuant to the terms of this Agreement) as of the date of such resolution and payment, minus (ii) the amounts that Parent determines in good faith to be necessary to satisfy any other remaining RW Indemnity Continuing Claims (which amounts will continue to be held as the RW Indemnity Retained Escrow Amount) to the Paying Agent for further distribution to the Company Indemnitors in accordance with each Seller’s their applicable Pro Rata Fraction from the Retained Indemnity Holdback Amount any amounts no longer subject Share of such amount pursuant to a Continuing ClaimSection 2.1(a) or Section 2.1(b), as applicable.
(g) Except Each of the parties acknowledges and agrees that as otherwise set a condition to Parent’s and Paying Agent’s obligation to make any payments pursuant to Section 8.4(e) or Section 8.4(f), the Stockholder Representative shall first deliver to Parent an updated Allocation Schedule setting forth the amounts payable to each Company Indemnitor in this Section 8.4, once a Loss is agreed accordance with such section. Parent and the Paying Agent shall be entitled to conclusively rely upon the updated Allocation Schedule delivered by the Indemnifying Party or finally adjudicated Stockholder Representative, including with respect to be payable pursuant to this Article 8whether any individual Company Indemnitor received the appropriate portion of any such distribution, and in no event will Parent, the Indemnifying Party shall satisfy its obligations within five (5) Business Days Final Surviving Entity or any of such final, non-appealable adjudication their Affiliates have any liability to any Person on account of payments or distributions made in accordance with the updated Allocation Schedule delivered by wire transfer of immediately available fundsthe Stockholder Representative.
(h) Notwithstanding the foregoing, (i) any notice that is required to be delivered to any Seller Company Indemnitors pursuant to this Article 8 VIII shall be deemed satisfied by delivery of such notice to the Sellers Representative Stockholder Representative, and (ii) any notices required to be delivered by, or any actions that are required to be taken by, by (other than any obligations to make or right to receive any payments) ), any Seller Company Indemnitors pursuant to this Article 8 VIII shall be satisfied by delivery by, or action taken by the Sellers Stockholder Representative.
Appears in 1 contract
Sources: Agreement and Plan of Merger and Reorganization (CCC Intelligent Solutions Holdings Inc.)
Claims for Indemnification Resolution of Conflicts. (aA) Subject to the survival periods in Section 8.1 and the limitations set forth in Section 8.3 hereof, if an Indemnified Party wishes to make an Any Person making a claim for indemnification claim under this Article 8, the Indemnified Party, shall deliver a written notice Section 5 (an “Indemnification Indemnified Party”) must give the indemnifying Party (the “Indemnifying Party”) written notice of such claim describing such claim in reasonable detail and the nature and amount of the Loss, to the extent that the nature and amount, or anticipated amount, thereof are determinable at such time (a “Claim Notice”) as soon as reasonably practicable, but in all events within twenty (20) days, after the Indemnified Party receives notice from a third party with respect to any matter which may give rise to a claim for indemnification against the Indemnifying Party (ia “Third Party Claim”) stating that or otherwise discovers the Liability, obligation or facts giving rise to such Indemnified Party has paid, incurred, suffered or sustained, or reasonably anticipates that it may pay, incur, suffer or sustain Losses and (ii) specifying such Losses in reasonable detail (to the extent available)claim for indemnification, and, if applicable, will send a copy of such Claim Notice to the nature Escrow Agent during the period for which the Escrow Agreement remains in effect; provided, that the failure to notify or delay in notifying the Indemnifying Party will not relieve the Indemnifying Party of its obligations under this Section 5, except to the misrepresentation, breach extent that the defense of warranty or covenant to which such item claim is related, including, with respect to any breach of materially prejudiced as a representation, warranty or covenant the applicable section result thereof. For purposes of this Agreement which was breached. To Section 5(b), if the extent reasonably practicableSellers, collectively, comprise the Indemnified Party shall include with the Indemnification Claim Notice or Indemnifying Party, then in each such documents and other information available case all references to the such Indemnified Party in support of the claims asserted thereinor Indemnifying Party, and shall timely provide such other information as the Indemnifying Party case may reasonably request in order to allow the Indemnifying Party to assess the merits of the claims. The Indemnified Party may update an Indemnification Claim Notice from time to time to reflect any change in circumstances following the date thereof.
be, (b) If the Indemnifying Party shall not object in writing within the twenty (20) Business Day period after receipt of an Indemnification Claim Notice by delivery of a written notice of objection containing a reasonably detailed description supporting an objection to the applicable indemnification claim (an “Indemnification Claim Objection Notice”), such failure to so object shall be an irrevocable acknowledgment by the Indemnifying Party that the Indemnified Party is entitled to the full amount of the claim except for Losses set forth in the Indemnification Claim Notice, but subject to the limitations on recovery set forth in this Article 8. In the event the Sellers Representative fails to timely deliver an Indemnification Claim Objection Notice, Buyer shall immediately be permitted to retain (until final resolution) a portion of the Indemnity Holdback Amount equal to the Losses set forth in such Indemnification Claim Notice that are recoverable subject to the limitations set forth herein (or in the event such Losses exceed the then available balance of the Indemnity Holdback Amount, Buyer shall be permitted to retain the remaining balance of the Indemnity Holdback Amount until final resolution). Should the amount held in the Indemnity Holdback Amount, if any, be insufficient to satisfy in whole the amount to be paid to a Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8, each Seller shall promptly, but in any event within ten (10) Business Days following the date of such memorandum, pay to the Indemnified Party, such Seller’s Pro Rata Fraction of such shortfall in cash.
(c) In the event that the Indemnifying Party shall timely deliver an Indemnification Claim Objection Notice in accordance with Section 8.4(b), the Sellers Representative and Buyer shall attempt in good faith to agree upon the rights of the respective parties with respect to each of such claims. If the Sellers Representative and Buyer should so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties. Buyer shall immediately be permitted to permanently retain a portion of the Indemnity Holdback Amount equal to the Losses set forth in such memorandum (or to the extent then available from the Indemnity Holdback Amount in the event such Losses exceed the then available balance of the Indemnity Holdback Amount). Should the amount held in the Indemnity Holdback Amount, if any, be insufficient to satisfy in whole the amount to be paid to a Indemnified Party in accordance with such memorandum, then, subject to the limitations set forth in this Article 8, each Seller shall promptly, but in any event within ten (10) Business Days following the date of such memorandum, pay to the Indemnified Party, such Seller’s Pro Rata Fraction of such shortfall in cash.
(d) In the event that there is a dispute provisions relating to any Indemnification Claim Notice or Indemnification Claim Objection Notice that cannot be settled in accordance with Section 8.4(c), each of Buyer or the Sellers Representative may file suit with respect to such dispute in any court having jurisdiction in accordance with Section 9.11. Notwithstanding the foregoing, if ▇▇▇▇▇ and the Sellers Representative mutually agree, ▇▇▇▇▇ and the Sellers Representative may submit any such dispute to alternative dispute resolution prior to, or in lieu of, pursuing the claim in court.
(e) On or before the third (3rd) Business Day after the Holdback Termination Date, Buyer will notify the Sellers Representative in writing of the amount that Buyer determines in good faith to be necessary to satisfy all claims for indemnification, compensation or reimbursement that have been asserted in any Indemnification Claim Notice that was delivered to the Sellers Representative at or prior to 11:59 p.m. (Pacific time) on the Holdback Termination Date, but not resolved, at or prior to such time (each such claim a “Continuing Claim” and such amount, the “Retained Indemnity Holdback Amount”). Within eight (8) Business Days following the Holdback Termination Date, Buyer shall release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Indemnity Holdback Amount an amount in cash equal to (i) the amount then remaining of the Indemnity Holdback Amount less (ii) the Retained Indemnity Holdback Amount (if any).
(f) Following the Holdback Termination Date, after resolution and payment of (or retention by Buyer of amounts in respect of) a Continuing Claim, Buyer shall release and distribute to the Sellers in accordance with each Seller’s Pro Rata Fraction from the Retained Indemnity Holdback Amount any amounts no longer subject to a Continuing Claim.
(g) Except as otherwise set forth in this Section 8.4, once a Loss is agreed to by the Indemnifying Party or finally adjudicated to be payable pursuant to this Article 8, the Indemnifying Party shall satisfy its obligations within five (5) Business Days of such final, non-appealable adjudication by wire transfer of immediately available funds.
(h) Notwithstanding the foregoing, (i) any notice that is required to be delivered to any Seller pursuant to this Article 8 shall be deemed satisfied by delivery of such notice to the Sellers Representative and (ii) any notices required to be delivered by, or any actions that are required to be taken by, (other than any obligations obligation to make or a right to receive any payments) any Seller pursuant to this Article 8 shall be satisfied by delivery bydeemed to refer to the Sellers’ Representative acting on behalf of such Indemnified Party or Indemnifying Party, as applicable.
(B) Within thirty (30) days after receipt of a Claim Notice with respect to a Third Party Claim, the Indemnified Party may assume the defense of such matter; provided, that (1) the Indemnified Party shall retain counsel reasonably acceptable to the Indemnifying Party, (2) the Indemnifying Party will be given the opportunity to participate in the defense of such claim at its sole cost and expense, but not to direct or action taken by conduct such defense, and (3) the Sellers RepresentativeIndemnified Party may not consent to the entry of any judgment with respect to the matter or enter into any settlement with respect to the matter which does not include a provision whereby the plaintiff or claimant in the matter releases the Indemnifying Party from all Liability and obligations with respect thereto. If, within such thirty (30) day period, the Indemnified Party does not assume the defense of such matter, the Indemnifying Party may defend against the matter in any manner that it reasonably may deem appropriate and may consent to the entry of any judgment with respect to the matter or enter into any settlement with respect to the matter without the consent of the Indemnified Party (not to be unreasonably withheld, conditioned or delayed). The Indemnifying Party shall cooperate with the Indemnified Party in all matters arising under this Section 5.
Appears in 1 contract
Sources: Merger Agreement (Ceva Inc)