Indemnification by the Indemnifying Party. (a) As an integral term of the Acquisition, after the Closing, Buyer and its affiliates (including, after the Closing, the Quadrem Group and the Quadrem Subsidiaries), officers, directors, employees, agents, successors and assigns (collectively, the “Buyer Indemnified Parties”) shall be, subject to the limitations contained in this Article IX, indemnified and held harmless by the Seller (the “Indemnifying Party”) and, solely pursuant to the Stockholder Agreements and Major Entitled Optionee Agreements, the Company Stockholders and Major Entitled Optionees, as applicable, for any and all liabilities, losses, damages of any kind (whether direct, indirect or consequential), decline in value, claims, costs, expenses, fines, fees, royalties, deficiencies, interest, awards, reduction in net operating losses (except for any reduction in net operating losses resulting from the continued profitability of the Quadrem Group and the Quadrem Subsidiaries), judgments, amounts paid in settlement and penalties (including, without limitation, reasonable attorneys’, consultants’ and experts’ fees and expenses and other costs of defending, investigating or settling claims) suffered, incurred, or paid by them (including, without limitation, in connection with any action brought or otherwise initiated by any of them) (collectively, “Losses”), without adjustment for any insurance recovery (excluding any insurance recovery under any directors and officers insurance purchased by the Company or its Subsidiaries on or prior to the Closing Date) or tax deduction relating thereto, arising out of or resulting from: (i) any inaccuracy or breach of any representation or warranty made by the Company in any Acquisition Document (disregarding for purposes of this Section 9.02(a)(i) any “material,” “in all material respects,” “Quadrem Material Adverse Effect” or similar qualification contained therein or with respect thereto both for purposes of determining whether a representation or warranty is inaccurate or has been breached and for purposes of calculating Losses); (ii) the breach or default of any covenant or agreement made by any of the Seller in any Acquisition Document; (iii) any cost, loss or other expense (excluding any lost or disallowed Tax deduction) as a result of the application of Section 280G of the Code to any of the transactions contemplated by this Agreement plus any necessary gross up amount (the “280G Losses”); (iv) any fees and expenses of the Company and its Subsidiaries in connection with this Agreement and the transactions contemplated hereby, including the fees and expenses of their financial advisors, accountants, legal counsel and consultants, that are paid by Buyer or its Subsidiaries (including the Quadrem Acquisition Expenses), except to the extent payment of such fees and expenses reduces the Base Consideration pursuant to Article II; (A) any indemnification obligations owing by Buyer or any of its Subsidiaries (including, after the Closing, the Quadrem Group and the Quadrem Subsidiaries) to any past or present officers or directors of Quadrem or Quadrem Subsidiaries (whether under the applicable Law, the respective Organizational Documents of the Quadrem Group or Quadrem Subsidiaries, any current indemnification agreement, this Agreement or otherwise) with respect to claims made against such past or present officers or directors with respect to any act or omission by such officers or directors, in their capacity as such, prior to the Closing, or (B) any liability resulting from any act omission occurring prior to the Closing constituting a breach or alleged breach of a fiduciary duty or a breach or alleged breach of applicable law by past or present officers and directors of the Quadrem Group or Quadrem Subsidiaries, in their capacities as such, prior to Closing. (vi) to the extent not recovered from the Escrow Fund pursuant to §2.03(c), the amount, if any, by which Estimated Closing Date Working Capital exceeds the Final Closing Date Working Capital as provided in Section 2.03(c), but with no payment to the extent as provided in Section 2.03(c); (vii) any violations of anti-corruption laws or regulations and any export control laws or regulations occurring prior to the Closing Date, including (A) any violation discovered after the Closing Date whether known or unknown to Buyer or Seller at the time of the Closing Date, (B) the reasonable costs of Buyer’s investigation of the same, including but not limited to costs of retaining outside counsel or consultants to assist in the investigation and representation before the responsible government authority, and (C) all fines, penalties, or reasonable costs associated with remedial compliance measures related to any such violation; (viii) any Loss incurred by Buyer as a result of the possession or hosting of information subject to export control laws or regulations by Buyer after the Closing Date to the extent such information was possessed or hosted by Quadrem or any Quadrem Subsidiary on the Quadrem Network prior to the Closing Date, including (A) fines or penalties imposed by any Governmental Entity, (B) reasonable costs of defense (including retention of outside counsel and consultants) of Proceedings initiated by any Governmental Entity; (C) reasonable costs of Buyer’s investigation (including retention of outside counsel and consultants) initiated as a result of any Proceedings initiated by any Governmental Entity or as a result of Buyer’s decision to self-report violations discovered after the Closing Date (provided that such violations are, in fact, self-reported); and (D) any other Losses, as defined above; and (ix) any of the items set forth on Schedule 9.02(a). (b) As used herein, “Losses” are not limited to matters asserted by third parties, but include Losses suffered, incurred or accrued by a Buyer Indemnified Party for which such Buyer Indemnified Party is entitled to indemnification pursuant to Section 9.02(a). In the event the Quadrem Group or any Quadrem Subsidiary suffers, incurs or otherwise becomes subject to any Losses as a result of or in connection with any inaccuracy in or breach of any representation, warranty, covenant or obligation of the Seller hereunder, then (without limiting any of the rights of the Quadrem Group and Quadrem Subsidiaries as a Buyer Indemnified Party) Buyer shall also be deemed, by virtue of its ownership of the stock of Quadrem, to have incurred Losses as a result of and in connection with such inaccuracy or breach but in either case the total amount both Buyer and Quadrem may recover shall not exceed the amount of Losses.
Appears in 1 contract
Sources: Stock Purchase Agreement (Ariba Inc)
Indemnification by the Indemnifying Party. The Vendor (a) As an integral term for the purpose of the Acquisition, after the Closing, Buyer and its affiliates (including, after the Closing, the Quadrem Group and the Quadrem Subsidiaries), officers, directors, employees, agents, successors and assigns (collectively, the “Buyer Indemnified Parties”) shall be, subject to the limitations contained in this Article IX6, indemnified and held harmless by the Seller (the “Indemnifying Party”) andshall indemnify and save the Purchaser Parties harmless for and from:
6.1.1 all debts and liabilities of the Corporation, solely including liabilities for any Governmental Charges, existing at the Time of Closing and not expressly disclosed to the Purchaser prior to the Time of Closing, whether in the Financial Statements or otherwise;
6.1.2 all contingent liabilities which the Corporation becomes obligated to pay and which exist at the Time of Closing whether or not disclosed or reflected in the Financial Statements and whether or not the Vendor or the Corporation or any of them has notice thereof or of the facts or circumstances which give rise thereto;
6.1.3 any assessment or reassessment for Governmental Charges in respect of any taxation period or any portion of a taxation year or other period up to and including the Closing Date, for which no adequate reserve has been provided and disclosed in the Financial Statements or otherwise;
6.1.4 any loss, damages or deficiencies suffered by the Purchaser Parties or by the Corporation as a result of any breach of representation, warranty or covenant on the part of the Vendor contained in this Agreement, any of the Closing Documents or in any other certificate or document delivered pursuant to or contemplated by this Agreement;
6.1.5 any warranty, damage or similar claim made against the Stockholder Agreements and Major Entitled Optionee AgreementsCorporation for or arising from defects in any goods, the Company Stockholders and Major Entitled Optioneesmaterials, as applicableproducts, for any and all liabilities, losses, damages of any kind (whether direct, indirect services or consequential), decline in value, claims, costs, expenses, fines, fees, royalties, deficiencies, interest, awards, reduction in net operating losses (except for any reduction in net operating losses resulting from the continued profitability of the Quadrem Group and the Quadrem Subsidiaries), judgments, amounts paid in settlement and penalties (including, without limitation, reasonable attorneys’, consultants’ and experts’ fees and expenses and other costs of defending, investigating or settling claims) suffered, incurred, or paid by them (including, without limitationworkmanship, in connection with any action brought or otherwise initiated by any of them) (collectively, “Losses”), without adjustment for any insurance recovery (excluding any insurance recovery under any directors and officers insurance purchased each case provided by the Company or its Subsidiaries Corporation on or prior to the Closing Date) Date for which the Corporation is or tax deduction relating theretois alleged to be liable; and
6.1.6 all claims, arising out demands, costs and expenses, including legal fees, in respect of or resulting from:
(i) the foregoing, including any inaccuracy or breach claim of any representation or warranty made by third party, including, without limitation, [PERSONAL INFORMAITON REDACTED] and any Person referred to in the Company third sentence of section 3.1.26 in any Acquisition Document (disregarding for purposes respect of this Section 9.02(a)(i) any “material,” “in all material respects,” “Quadrem Material Adverse Effect” or similar qualification contained therein or with respect thereto both for purposes of determining whether a representation or warranty is inaccurate or has been breached and for purposes of calculating Losses);
(ii) the breach or default unpaid compensation of any covenant kind or agreement made by nature for the period up to and including the Closing Date or any rights whatsoever (including moral or rights of Intellectual Property) that any of the Seller them may have or claim in any Acquisition Document;
(iii) any cost, loss or other expense (excluding any lost or disallowed Tax deduction) as a result of the application of Section 280G of the Code and to any of the transactions contemplated by this Agreement plus any necessary gross up amount (the “280G Losses”);
(iv) any fees and expenses assets of the Company and its Subsidiaries in connection with this Agreement and the transactions contemplated herebyCorporation, including the fees and expenses of their financial advisors, accountants, legal counsel and consultants, that are paid by Buyer or its Subsidiaries (including the Quadrem Acquisition Expenses), except to the extent payment of such fees and expenses reduces the Base Consideration pursuant to Article II;
(A) any indemnification obligations owing by Buyer or any of its Subsidiaries (including, after the Closing, the Quadrem Group and the Quadrem Subsidiaries) to any past or present officers or directors of Quadrem or Quadrem Subsidiaries (whether under the applicable Law, the respective Organizational Documents of the Quadrem Group or Quadrem Subsidiaries, any current indemnification agreement, this Agreement or otherwise) with respect to claims made against such past or present officers or directors with respect to any act or omission by such officers or directors, in their capacity as such, prior to the Closing, or (B) any liability resulting from any act omission occurring prior to the Closing constituting a breach or alleged breach of a fiduciary duty or a breach or alleged breach of applicable law by past or present officers and directors of the Quadrem Group or Quadrem Subsidiaries, in their capacities as such, prior to ClosingOrtsbo Software.
(vi) to the extent not recovered from the Escrow Fund pursuant to §2.03(c), the amount, if any, by which Estimated Closing Date Working Capital exceeds the Final Closing Date Working Capital as provided in Section 2.03(c), but with no payment to the extent as provided in Section 2.03(c);
(vii) any violations of anti-corruption laws or regulations and any export control laws or regulations occurring prior to the Closing Date, including (A) any violation discovered after the Closing Date whether known or unknown to Buyer or Seller at the time of the Closing Date, (B) the reasonable costs of Buyer’s investigation of the same, including but not limited to costs of retaining outside counsel or consultants to assist in the investigation and representation before the responsible government authority, and (C) all fines, penalties, or reasonable costs associated with remedial compliance measures related to any such violation;
(viii) any Loss incurred by Buyer as a result of the possession or hosting of information subject to export control laws or regulations by Buyer after the Closing Date to the extent such information was possessed or hosted by Quadrem or any Quadrem Subsidiary on the Quadrem Network prior to the Closing Date, including (A) fines or penalties imposed by any Governmental Entity, (B) reasonable costs of defense (including retention of outside counsel and consultants) of Proceedings initiated by any Governmental Entity; (C) reasonable costs of Buyer’s investigation (including retention of outside counsel and consultants) initiated as a result of any Proceedings initiated by any Governmental Entity or as a result of Buyer’s decision to self-report violations discovered after the Closing Date (provided that such violations are, in fact, self-reported); and (D) any other Losses, as defined above; and
(ix) any of the items set forth on Schedule 9.02(a).
(b) As used herein, “Losses” are not limited to matters asserted by third parties, but include Losses suffered, incurred or accrued by a Buyer Indemnified Party for which such Buyer Indemnified Party is entitled to indemnification pursuant to Section 9.02(a). In the event the Quadrem Group or any Quadrem Subsidiary suffers, incurs or otherwise becomes subject to any Losses as a result of or in connection with any inaccuracy in or breach of any representation, warranty, covenant or obligation of the Seller hereunder, then (without limiting any of the rights of the Quadrem Group and Quadrem Subsidiaries as a Buyer Indemnified Party) Buyer shall also be deemed, by virtue of its ownership of the stock of Quadrem, to have incurred Losses as a result of and in connection with such inaccuracy or breach but in either case the total amount both Buyer and Quadrem may recover shall not exceed the amount of Losses.
Appears in 1 contract
Sources: Share Purchase Agreement