Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) are subject to the following limitations: (i) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses); (ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares; (iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess); (iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap; (v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and (vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunder.
Appears in 2 contracts
Sources: Unit Purchase Agreement, Unit Purchase Agreement (Hannon Armstrong Sustainable Infrastructure Capital, Inc.)
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees (a) Other than as provided in this Section 8.06, neither Purchaser nor Purchaser Indemnified Persons shall be entitled to indemnification pursuant to the provisions Section 8.03(a) of Section 7.2(b) are subject to the following limitations:
this Agreement (i) the amount other than for an intentional breach of any Loss subject to indemnification hereunder agreement or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are covenant contained outside of in this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to ) unless the aggregate amount of Damages incurred by Purchaser or such Purchaser Indemnified Persons (as defined in this Agreement or the recovery Water Purchase Agreement, as applicable) under this Agreement and the Water Purchase Agreement exceeds Two Hundred Fifty Thousand Dollars and No/100 ($250,000.00) in the aggregate (the "Threshold Amount"), in which case the Indemnifying Party (as defined in this Agreement or payment (net of direct collection expenses and Taxesthe Water Purchase Agreement, as applicable) shall then be made promptly to liable for Damages in excess of the SellersThreshold Amount.
(b) Other than as provided in this Section 8.06, which refund neither Seller nor Seller's Indemnified Persons shall be distributed based on the proportion entitled to indemnification pursuant to Section 8.04(a) of the Loss borne by each such Seller, or, if a Loss has not yet been determined this Agreement (other than for an intentional breach of any agreement or paid by the Sellers, the Sellers’ indemnification obligations covenant contained in respect of such Loss shall be reduced by this Agreement) unless the aggregate amount of Damages incurred by Seller and Seller's Indemnified Persons (as defined in this Agreement or the insurance recovery or indemnification payment (net of direct collection expenses);
(iiWater Purchase Agreement, as applicable) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units under this Agreement and the Shares or its final purchase price for Water Purchase Agreement exceeds the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project LiabilitiesThreshold Amount, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ Indemnifying Party (as defined in this Agreement or the Water Purchase Agreement, as applicable) shall then be liable for Damages in excess of the Threshold Amount.
(c) Other than as provided in this Section 8.06, the cumulative, combined, aggregate indemnity obligation or liability hereunder for all such Losses will Damages of Seller pursuant to this Agreement shall not be permitted to exceed the Purchase Price), Liability Cap.
(d) The Threshold Amount and the Purchasers Indemnitees will Liability Cap shall not be entitled apply to recover Losses Seller's obligations to indemnify (i) pursuant to Section 7.2(b8.03(c) due to failure to pay or discharge an Excluded Liability, (ii) to the extent due to an intentional breach of any agreement or covenant contained in this Agreement, (iii) if related to a Claim for breach of a representation under Section 4.01 (Power), Section 4.02 (Authorization and Validity of Agreement), Section 4.07 (Tax Matters), the Sellers aggregate liability hereunder second sentence of Section 4.08 (Title to Real Property), Section 4.12 (Employee Benefit Plans) or Section 4.20 (Title to Acquired Assets), (iii) for all such Losses would otherwise exceed twenty percent (20%) a Claim arising out of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11intentional breach of any agreement or covenant in this Agreement, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, fraud or 4.26 and ten percent (10%) willful misconduct of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;.
(ve) except The rights of Seller set forth in this Article VIII shall be the sole and exclusive remedy available to Seller for Claims arising any Claim for Damages pursued under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; andthis Agreement.
(vif) except The rights of Purchaser set forth in this Article VIII shall be the sole and exclusive remedy available to Purchaser for Claims arising any Claim for Damages pursued under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to this Agreement.
(g) For purposes of calculating the amount of such Loss multiplied Damages incurred by such Seller’s Percentage Share. The Purchasersthe Indemnified Party arising out of or resulting from any breach of, for themselves and for a representation, covenant, or agreement by any Party hereto, the Purchasers Indemnitees, unconditionally waives any right it references to a "Material Adverse Effect" or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 materiality shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderbe disregarded.
Appears in 2 contracts
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees (a) Novatel shall have no obligation to indemnification pursuant to the provisions of Section 7.2(b) are subject to the following limitations:
(i) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers indemnify Purchaser Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to Losses arising under Section 8.1(a) until the aggregate amount of all Losses arising thereunder exceeds $150,000 (such amount, the recovery or payment (net “Basket”), in which case Novatel, on behalf of direct collection expenses and Taxes) shall Sellers, will be made promptly liable for all Losses arising thereunder including the Basket, subject to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations other limitations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses8.5; provided, however, that thereafter solely the Basket shall not apply to Losses arising from Product Recalls or fraud, criminal conduct or willful misconduct by Novatel.
(b) Novatel shall have no obligation to indemnify Purchaser Indemnitees with respect to Losses arising under Section 8.1(a) in excess of the amounts actually paid to and received by Novatel under Section 1.3; provided that are individually less than the aggregate amount of all Losses for which Novatel shall be obligated to indemnify the Purchaser Indemnitees under this Agreement shall not exceed $50,000 6,000,000 (such amount, the Purchasers “Cap”); provided, however that the Cap shall not apply to Losses from Product Recalls or fraud, criminal conduct or willful misconduct by Novatel.
(c) Purchaser shall have no obligation to indemnify the Seller Indemnitees will not be entitled with respect to recover for such Losses pursuant to arising under Section 7.2(b8.2(a) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only amount of all Losses arising thereunder exceeds the Basket, in which case Purchaser will be liable for all Losses arising thereunder including the Basket, subject to the extent of such excess);other limitations in this Section 8.5; provided, however, that the Basket shall not apply to Losses arising from fraud, criminal conduct or willful misconduct by Purchaser.
(ivd) except for Claims Purchaser shall have no obligation to indemnify Seller Indemnitees under Section 8.2(a) with respect to Losses in an amount greater than the Cap.
(e) Notwithstanding anything to the contrary in this Agreement, (i) Purchaser Indemnitees’ rights to indemnification with respect to Losses arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d8.1(b) through 8.1(f), 4.22or based upon fraud, 4.27 criminal conduct or willful misconduct, shall not be subject to the limitations set forth in Sections 8.5(a) and 8.5(b), regardless of whether such rights to indemnification could also have arisen under Section 8.1(a) in absence of such limitations, and (ii) Seller Indemnitee’s rights to indemnification with respect to Losses arising under Sections 8.2(b) and 8.2(c), or based upon fraud, criminal conduct or willful misconduct, shall not be subject to the limitations set forth in Sections 8.5(c) and 8.5(d) regardless of Operating Wind Project Liabilities whether such rights to indemnification could also have arisen under Section 8.2(a) in the absence of such limitations.
(in which case the Sellers’ aggregate liability hereunder f) Any indemnity payments made pursuant to this ARTICLE VIII shall be treated for all such Losses will not be permitted Tax purposes by the parties hereto as an adjustment to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;.
(vg) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer For purposes of Purchasers who is not determining whether a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to has occurred and calculating the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, Losses in connection with a claim for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller indemnification under this Section 7.2 shall not exceed such Seller’s Percentage Share ARTICLE VIII, each of the Purchase Price (representations and warranties that contains any qualifications as adjusted pursuant to Section 2.6) “materiality” shall be deemed to have been given as though there were no such qualifications, and any such qualifications shall be disregarded for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderpurposes of this ARTICLE VIII.
Appears in 2 contracts
Sources: Asset Purchase Agreement (Novatel Wireless Inc), Asset Purchase Agreement (Micronet Enertec Technologies, Inc.)
Limitations on Indemnification Obligations. The rights (a) From and after the Closing, the sole and exclusive remedy of the Purchasers Indemnitees Parent Indemnified Persons against the Seller Indemnifying Persons for any Damages directly or indirectly incurred, resulting from or arising out of this Agreement, any of the Buyer Ancillary Agreements or any of the Seller Ancillary Agreements is set forth in this Article 7 and the Escrow Agreement. The Liability of the Seller Indemnifying Persons under Section 7.2(a) of this Agreement shall be limited to recourse to (i) first the Escrow Shares (which shall constitute a partial security for such indemnification obligations) and (ii) if the Escrow Shares are insufficient to satisfy the indemnification obligations of the Seller Indemnifying Persons, then an amount of cash up to an additional $1,000,000 (collectively, the “Indemnification Cap”).
(b) From and after the Closing, the sole and exclusive remedy of the Seller Indemnified Persons against the Parent Indemnifying Person for any Damages directly or indirectly incurred, resulting from or arising out of this Agreement, any of the Buyer Ancillary Agreements or any of the Seller Ancillary Agreements is set forth in this Article 7. The Liability of the Parent Indemnifying Person under Section 7.3(a) of this Agreement shall be limited to recourse to, at Parent’s option, (i) Parent’s issuance of shares of Parent Common Stock having a maximum aggregate value equal to the total value of the Indemnification Cap or (ii) cash in an aggregate amount equal to the total value of the Indemnification Cap. Any shares issued by Parent pursuant to this Article 7 shall be “Indemnification Shares.” The value of the Indemnification Shares will be determined by utilizing the applicable Parent Average Stock Price.
(c) Neither Parent Indemnified Persons nor Seller Indemnified Persons, respectively, shall have any right to indemnification pursuant under Section 7.2(a) or Section 7.3(a), respectively until such claims, in the aggregate, equal or exceed $100,000 of Damages, in which case, indemnification shall be available for all claims in excess of $100,000.
(d) Notwithstanding anything contained herein to the contrary, the foregoing limitations on indemnification under this Article 7 shall not apply to any indemnification claim by any Parent Indemnified Person that arises from or as a result of (i) any fraudulent conduct or fraudulent misrepresentation on the part of Seller or its personnel, (ii) any breach by Seller of its representations or warranties contained in Section 3.11 of this Agreement relating to any infringement by Seller of any Intellectual Property Right of any other Person, (iii) any refund or similar payment of the purchase price relating to any products sold by Seller prior to Closing or (iv) any breach by Seller of its representations or warranties contained in Section 3.2(c) of this Agreement. In the event that any Parent Indemnified Person makes any indemnification claim that arises from or as a result of any infringement by Seller of any Intellectual Property Right of any other Person covered by clause (ii) of the preceding sentence, then under such circumstances, and solely for the purposes of any such claims, the Indemnification Cap will be equal to $10.0 million; provided, however, that a Parent Indemnified Person shall only be entitled to seek recovery for any such infringement by Seller of any Intellectual Property Right of any other Person until the second anniversary of the Closing Date. In the event that any Parent Indemnified Person makes any indemnification claim that arises from or as a result of any refund or similar payment covered by clause (iii) of the first sentence of this Section 7.4(d), then Seller will promptly reimburse Parent in cash in the amount of any such refund or similar payment made by Parent to a third party, without regard to the provisions of Section 7.2(b7.4(c). In the event that any Parent Indemnified Person makes any indemnification claim that arises from or as a result of any refund or similar payment covered by clause (iii) are subject of the first sentence of this Section 7.4(d) or that arises from or as a result of any breach by Seller of its representations or warranties contained in Section 3.2(c) of this Agreement, then under such circumstances, and solely for the purposes of any such claims, the Indemnification Cap will be equal to $5.0 million; provided, further, that with respect to any such indemnification claim made by any Parent Indemnified Person, such Parent Indemnified Person will be entitled to recover for Damages first from the $3.0 million cash portion of the Indemnification Cap, and second, to the following limitations:extent that such Damages exceed $3.0 million, from the Escrow Shares.
(e) In no event shall any Indemnified Person (as hereinafter defined) be responsible or liable for any Damages or other amounts under this Article 7 that are (a) consequential damages for lost profits or diminution in the value of property, (b) special or punitive damages or (c) otherwise not actual damages, except (i) with respect to a breach by Seller of the covenants set forth in Section 5.24 or (ii) in the event a court, arbitrator or Governmental Agency requires such Indemnified Party to pay special or punitive damages to a third party. Each Indemnified Person shall (and shall cause its Affiliates to) use reasonable commercial efforts to pursue such material legal rights and remedies available which such Indemnified Person believes in its good faith to be reasonable under the circumstances in order to mitigate the Damages for which indemnification is provided to it under this Article 7; provided, however, that a breach by an Indemnified Person of its obligations under this sentence shall not relieve any Indemnifying Person from any of their respective obligations under this Article 7.
(f) The amount of Damages recoverable by any Indemnified Person under this Article 7 with respect to an indemnity claim shall be reduced by (i) the amount of any Loss subject payment received by such Indemnified Person (or an Affiliate thereof), with respect to indemnification hereunder or the Damages to which such indemnity claim relates, from an insurance carrier, and (ii) the amount of any Claim therefor Tax benefit actually realized by such Indemnified Person (or an Affiliate thereof) which is attributable to the Damages to which such indemnity claim relates. Each Indemnified Person shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement)use reasonable commercial efforts to pursue, received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under and to cause its Affiliates to pursue, all insurance policies covering claims and Tax benefits to which it may be entitled in connection with any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder Damages it incurs, and the Purchasers, the Company and the Subsidiaries parties shall not cancel any cooperate with each other in pursuing insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees claims with respect to any Loss Damages or any indemnification obligations with respect to Damages. If an Indemnified Person (or an Affiliate) receives any insurance payment in connection with any claim for Damages for which any it has already received an indemnification payment from the Indemnifying Person (as hereinafter defined), it shall pay to the Indemnifying Person, within 30 days of receiving such Person has been indemnified hereunderinsurance payment, then a refund an amount equal to the aggregate excess of (A) the amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid previously received by the Sellers, Indemnified Person under this Article 7 with respect to such claim plus the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiplepayments received, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, amount of Damages with respect to a particular Loss, each Seller shall only be required such claim which the Indemnified Person has become entitled to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller receive under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderArticle 7.
Appears in 2 contracts
Sources: Asset Purchase Agreement (Neoforma Inc), Asset Purchase Agreement (I Many Inc)
Limitations on Indemnification Obligations. The rights Notwithstanding anything in this Agreement to the contrary, (i) neither Party shall be liable to the other Party for Losses arising under Section 9.2 or 9.3, as applicable, unless the claim therefor is asserted in writing on or prior to the expiration of the Purchasers Indemnitees applicable representations and warranties and (ii) the liability of the Sellers to the Buyer Indemnified Parties with respect to claims for indemnification pursuant to the provisions of Section 7.2(b) are 9.2 is subject to the following limitations:
(ia) The Sellers shall not, in the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall aggregate, be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources liable to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect Buyer Indemnified Parties for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees Losses arising under Section 9.2 (other than with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and TaxesFundamental Representations) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case that the Sellers’ aggregate liability hereunder amounts otherwise indemnifiable for all such Losses will not be permitted exceeds an aggregate maximum amount equal to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty fifteen percent (2015%) of the Purchase Price actually received by the Sellers in cash or from the receipt of payments under the Buyer Notes.
(as adjusted pursuant to Section 2.6b) if the Claim pertains to Section 4.11No Seller shall, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability be liable to the Buyer Indemnified Parties for Losses hereunder arising under this Agreement (including Section 9.2) in excess of the sum of (i) the aggregate Purchase Price received by such Seller in cash at the Closing and (ii) the cash proceeds received by such Seller from payment of the Buyer Notes.
(c) With respect to any indemnification claim for Losses hereunder, such Seller shall solely be responsible for its Pro Rata Share of such indemnification claim. Notwithstanding the foregoing, no Seller shall be responsible for any breach (i) of a representation and warranty made in Article III by any other Seller and (ii) of a post-Closing covenant by any other Seller.
(d) The Sellers shall not exceed its Percentage Share of be liable to the Liability Cap;
(v) except Buyer Indemnified Parties for Claims Losses arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if 9.2 (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, other than with respect to a particular LossFundamental Representations) until and unless the aggregate amounts indemnifiable for such breaches exceeds $150,000, each Seller shall only at which point the Indemnifying Party will be required obligated to indemnify the Purchasers Indemnitees up Buyer Indemnified Party from and against all Losses relating back to the first dollar of Losses.
(e) Without limiting the effect of any other limitation contained in this Article IX, for purposes of computing the amount of any Losses incurred by any Buyer Indemnified Party under this Article IX, there shall be deducted an amount equal to the amount of any insurance proceeds, indemnification payments, contribution payments, reimbursements or other recoveries actually received (net of actual out-of-pocket costs of enforcement, deductibles and retro-premium adjustments), and any Tax benefits realizable, by Buyer or any of its Affiliates in connection with such Loss multiplied Losses or any of the circumstances giving rise thereto. If Buyer or any of its Affiliates becomes entitled to receive any insurance proceeds, indemnification payments, contribution payments, or reimbursements or other recoveries or Tax benefit after an indemnification payment has been made to it, Buyer or its Affiliates, as the case may be, shall promptly pay (up to the aggregate amount of indemnification payments previously made to Buyer or its Affiliates hereunder) to the Sellers, the amount of such insurance proceeds, indemnification payments, contribution payments, or reimbursements or other recoveries or Tax benefit at such time or times as and to the extent that such insurance proceeds, indemnification payments, contribution payments, or reimbursements or other recoveries or Tax benefits are actually received by Buyer or its Affiliates.
(f) If a Seller is finally determined to be liable to a Buyer Indemnified Party for Losses arising under Section 9.2, such Losses shall be paid as follows: (i) fifty percent (50%) of such Losses shall be paid in cash; (ii) twenty-five percent (25%) of such Losses shall be paid through a reduction in the principal amount of such Seller’s Buyer Note I; and (iii) twenty-five percent (25%) of such Losses shall be paid through a reduction in the principal amount of such Seller’s Buyer Note II. Provided that the Buyer shall not seek payment in a manner contrary to the immediately preceding sentence unless otherwise agreed to by such Seller’s Percentage Share. The Purchasers, for themselves and for unless the Purchasers Indemniteescash portion of the Loss set forth in (i) above is not paid in full, unconditionally waives any right it or they in which case Buyer may have to hold any Seller jointly liable for seek an increase in the obligations reduction in the principal amount of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller Buyer Note I or Buyer Note II in an amount equal to the Purchasers hereundercash shortfall.
Appears in 1 contract
Sources: Securities Purchase Agreement (Smart for Life, Inc.)
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees to indemnification pursuant to the provisions of (a) Except as otherwise set forth in this Section 7.2(b) are subject to the following limitations:
(i) the amount 6.3, there shall be no Liability of any Loss subject to Company Holder for indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expensesunder Section 6.1(a) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to unless the aggregate amount of Adverse Consequences thereunder exceeds $100,000 (the recovery “Indemnity Threshold”), at which time the Company Holders will be liable with respect to the full amount of the Adverse Consequences, including those that comprised the Indemnity Threshold amount.
(b) The indemnification obligations of the Company Holders under Section 6.1(a) for breaches and inaccuracies of representations and warranties other than the Company Fundamental Representations shall be limited to the Escrow Fund.
(c) The indemnification obligations of the Company Holders under Section 6.1(a) for Third Party Claims alleging facts that, if true, would constitute an indemnifiable claim shall be limited to the Escrow Fund.
(d) The indemnification obligations of the Company Holders under Section 7.1(a) for breaches related to Section 3.14 (Privacy) or payment Section 3.25 (net of direct collection expenses and TaxesIntellectual Property) shall be made promptly limited to recovery (A) first from the Escrow Fund and thereafter (B)(1) if the aggregate of all unresolved or unsatisfied Adverse Consequences set forth in all Claims Notices delivered to the SellersRepresentative prior to the Escrow Claim Period Expiration Date exceeds the then-existing Escrow Fund or (2) after the Escrow Claim Period Expiration Date, which refund shall be distributed based on directly from each Indemnifying Party, according to such Company Holder’s Participation Percentage of such Adverse Consequences, in each case only to the proportion extent such Adverse Consequences exceed amounts retained in the Escrow Fund in respect to unresolved Claims applicable to such breaches or inaccuracies, up to an aggregate amount equal to twenty-five percent (25%) the Merger Consideration (inclusive of amounts withdrawn from the Escrow Fund) paid to the Company Holders pursuant to Sections 2.1(c), (d) and (e).
(e) The indemnification obligations of the Loss borne by each such SellerCompany Holders under (i) under Section 6.1(a) for breaches related to Sections 3.1 (Organization; Good Standing), or3.2 (Power, if a Loss has not yet been determined Authority and Validity), 3.4 (Capitalization) or paid by the Sellers3.27 (Taxes), the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
and (ii) no adjustment Section 6.1(b) through Section 6.1(g), shall be made as a result limited to recovery (A) first from the Escrow Fund and thereafter (B)(1) if the aggregate of any multipleall unresolved or unsatisfied Adverse Consequences set forth in all Claims Notices delivered to the Representative prior to the Escrow Claim Period Expiration Date exceeds the then-existing Escrow Fund or (2) after the Escrow Claim Period Expiration Date, increase factordirectly from each Indemnifying Party, according to such Company Holder’s Participation Percentage of such Adverse Consequences, in each case only to the extent such Adverse Consequences exceed amounts retained in the Escrow Fund in respect to unresolved Claims applicable to such breaches or any other premium over inaccuracies, up to an aggregate amount equal to the value Merger Consideration (inclusive of amounts withdrawn from the Escrow Fund) paid by to the Purchasers at Closing whether or not such multipleCompany Holders pursuant to Sections 2.1(c), increase factor or other premium had been used by Purchasers at (d) and (e).
(f) Notwithstanding the time offoregoing, or the indemnification obligations of the Company Holders in connection with, calculating with fraud or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will willful misrepresentation shall not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losseslimited; provided, however, that thereafter solely no Company Holder shall be liable for any fraud or willful misrepresentation of another Company Holder if such fraud or willful misrepresentation was committed in such other Company Holder’s capacity as a Company Holder. For the avoidance of doubt, all Company Holders shall be liable for claims of fraud and willful misrepresentations of the Company and any of its representatives (made in their capacity as such, without regard to their status as a Company Holder) pursuant to the terms of this Article VII. The Indemnity Threshold shall not apply to indemnification obligations in connection with (i) fraud or willful misrepresentation or (ii) breaches of Company Fundamental Representations.
(g) Notwithstanding anything to the contrary in this Agreement, for purposes of calculating the amount of any indemnifiable Adverse Consequences pursuant to Section 6.1 or Section 6.2 (but for the sake of clarity, not in determining whether or not there has been a breach), each representation, warranty, covenant and agreement made by the Company, Buyer or Merger Sub (whether made herein or in any other document, agreement or instrument delivered in connection with this Agreement or therewith) is deemed to be made without any qualification or limitation as to materiality (including any qualification or limitation made by reference to “material” or a “Material Adverse Effect”) and, without limiting the foregoing, the words “material” and “Material Adverse Effect” and words of similar import shall be deemed deleted from any such representation, warranty, covenant or agreement for such purposes.
(h) If any fact, circumstance or event gives rise to a claim pursuant to multiple sections or provisions of this Agreement or any Schedule, agreement, certificate or other document delivered in connection with this Agreement, a Person asserting such claim shall have the right, at its sole discretion, to assert its claim pursuant to any or all such sections or provisions, and shall be entitled to each and every remedy available pursuant to each and every section or provision pursuant to which such Person elects, at its sole discretion, to assert such claim.
(i) Except as expressly set forth otherwise in this Agreement, the parties hereto agree that, other than for specific performance, (i) the indemnification provisions set forth in this Article VII shall be the sole and exclusive remedy of the Indemnified Parties for any and all claims against the Indemnifying Parties for Adverse Consequences with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregateAgreement, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share the transactions contemplated hereby, and (ii) all applicable statutes of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (limitations or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, other claims periods with respect to claims hereunder and thereunder shall be shortened to the survival periods expressly set forth herein.
(j) Adverse Consequences shall be calculated net of actual recoveries received by Indemnified Parties under insurance policies or from third parties (net of any collection costs and deductibles, and excluding any recoveries from any Tax Authority). If any recoveries of the nature referred to in the preceding sentence are received by an Indemnified Party with respect to any Adverse Consequences after an Indemnifying Party has made an indemnification payment or a particular Losspayment has been made from the Escrow Fund to such Indemnified Party with respect thereto and receipt of such recoveries prior to such payment would have reduced the amount of such indemnification if received prior to such payment, each Seller then such Indemnified Party shall only be required to indemnify promptly pay the Purchasers Indemnitees net amount of such recoveries up to the amount of such Loss multiplied the applicable indemnification payment made by such Seller’s Percentage Share. The Purchasers, for themselves and for Indemnifying Party or paid from the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller Escrow Fund to the Purchasers hereunderIndemnifying Party as directed in writing by the Representative.
Appears in 1 contract
Sources: Merger Agreement (RetailMeNot, Inc.)
Limitations on Indemnification Obligations. The Notwithstanding anything herein to the contrary, the rights of the Purchasers Indemnitees Indemnified Parties to indemnification pursuant to the provisions of Section 7.2(b) this ARTICLE X are subject to the following limitations:
(ia) the amount of any Loss subject to indemnification hereunder or of any Claim therefor and all Losses shall be calculated determined net of (i) any amounts actually recovered by any Indemnified Party under any insurance proceeds (net of direct collection expenses) or policies from other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received ) with respect to such Losses (net of the cost of recovery and increases in insurance premiums) and (ii) any cash Tax benefits actually realized by the Purchasers Indemnitees on account Indemnified Parties (or their direct or indirect beneficial owners) in the year of such Loss or the next succeeding taxable year that are attributable to any deduction, loss, credit or other Tax benefit resulting from or arising out of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources ;
(b) an Indemnified Party’s right to the same extent as they would if such Loss were not subject to make a claim for indemnification hereunder shall expire (i) with respect to Section 10.01(a) and Section 10.01(c) on the Purchasersdate that is one year from the Closing Date, (ii) with respect to Section 10.01(b) on April 15, 2020 and (iii) with respect to Section 10.01(d), on such date, if any, that the Company and shall no longer have any obligations or liabilities under the Subsidiaries TS Earn-Out Agreement;
(c) in no event shall not cancel the Indemnifying Parties have any insurance policies in effect for periods prior obligation to indemnify the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees Indemnified Parties with respect to any Loss Losses incurred under (i) Section 10.01(a) until the total amount of Losses the Indemnified Parties would recover pursuant to the terms hereof with respect to Section 10.01(a) equals or exceeds $500,000 or (ii) Section 10.01(c) until the total amount of Losses the Indemnified Parties would recover pursuant to the terms hereof with respect to Section 10.01(c) equals or exceeds $500,000, at which point, in each case, the Sellers will be obligated to indemnify the Indemnified Parties for which the entire amount of any such Person has been indemnified hereunderindemnifiable Losses (for the avoidance of doubt, then a refund equal this Section 10.03(c) does not apply to the aggregate amount of the recovery any Losses recoverable pursuant to Section 10.01(b) or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expensesSection 10.01(d));
(d) in no event shall the Indemnifying Parties’ aggregate liability arising out of (i) Section 10.01(a) exceed $25 million, (ii) Section 10.01(c) exceed $25 million and (iii) Section 10.01(b) exceed $500 million (for the avoidance of doubt, this Section 10.03(d) does not apply to any Losses recoverable pursuant to Section 10.01(d));
(e) in no adjustment event shall the Indemnifying Parties be made liable for any consequential, indirect, special, exemplary, punitive, incidental or enhanced damages, or other similar types of damages, including, but not limited to, damages for lost profits, lost revenues, lost business or diminution in value, regardless of whether such damages were foreseeable and the legal or equitable theory (contract, tort or otherwise) upon which the claim was made; provided that the limitation in this Section 10.03(e) shall not apply to any such damages that are payable to a third party by an Indemnified Party as determined by a court of competent jurisdiction in a final, non-appealable judgement; and
(f) in no event shall the Indemnifying Parties be liable for the reduction or unavailability of net operating losses of the Acquired Companies as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iiiCarve-out Transaction; provided that this Section 10.03(f) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will shall not be entitled construed to recover mean that the first $200,000 indemnification obligations set forth in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c10.01(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not would be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only unavailable to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 any actual Tax liability due and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect payable to a particular Loss, each Seller shall only be required to indemnify taxing authority directly resulting from the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderCarve-out Transaction.
Appears in 1 contract
Sources: Stock Purchase Agreement (Double Eagle Acquisition Corp.)
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees Parent Indemnified Parties to indemnification pursuant to the provisions of Section 7.2(b) 9.02 are subject to the following limitations, notwithstanding anything in this Agreement to the contrary:
(ia) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees Parent Indemnified Parties shall not be entitled to recover Losses pursuant to Section 7.2(b9.02(a)(i) if until the total amount which the Parent Indemnified Parties would recover under Section 9.02(a)(i), but for this Section 9.04(a), exceeds Four Million Five Hundred Thousand Dollars (A$4,500,000) (the “Deductible”), whereupon the Parent Indemnified Parties shall be entitled to indemnification for all such Losses in excess of the Deductible subject to the proviso in Section 9.02(a); provided, however, that the Deductible shall not apply to Losses in respect of claims for breach of representations and warranties related to Company Fundamental Representations.
(b) The sole and exclusive source of recovery in respect of any indemnification claim made by any Parent Indemnified Party pursuant to Section 9.02 shall be the Indemnification Escrow Amount. In no event shall (i) any Securityholder or any Affiliate thereof or any other Person have any direct liability or obligation in respect of any such indemnification claim, or (ii) the Purchasers Parent Indemnified Parties be entitled to recover any Losses in respect of any indemnification claim made pursuant to this Article IX from any source other than the Indemnification Escrow Account, it being agreed that on the date the Indemnification Escrow Amount is reduced to zero (0) for any reason (including due to the release of the Indemnification Escrow Amount from the Indemnification Escrow Account on the Survival Termination Date), the Parent Indemnified Parties shall have no further rights to indemnification pursuant to this Article IX.
(c) The amount of any Loss subject to indemnification under this Article IX shall be calculated net of any insurance proceeds or any director indemnity, contribution or officer other similar payment actually received by the Indemnitee from any third party with respect thereto.
(d) The amount of Purchasers who is not a Seller any Loss subject to indemnification under this Article IX or a director, officer or consultant Section 7.03(b) shall be calculated (i) net of any Tax Benefit actually realized by the Parent Indemnified Party in the Tax year of the Company prior to ClosingLoss and (ii) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to increased by the amount of such Loss multiplied any Tax Cost incurred by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it Parent Indemnified Party as a result of the receipt or they may have to hold any Seller jointly liable for the obligations accrual of any other Seller. The aggregate liability indemnification payment.
(e) For all purposes of this Article IX and Section 7.03(b), any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share inaccuracy or breach of the Purchase Price representations and warranties contained in this Agreement (as adjusted pursuant to Section 2.6other than the Company’s representations and warranties in Sections 3.10(a) for the Purchased Units and the Shares sold by such Seller 3.07) shall be determined without reference to the Purchasers hereunderterms “material,” “Material Adverse Effect” and other similar qualifications as to materiality contained in or otherwise applicable to such representations and warranties.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights (a) Except in the case of the Purchasers Indemnitees fraud (for which all applicable legal and equitable remedies will be available to indemnification pursuant to the provisions of Section 7.2(b) are subject to the following limitations:
(i) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this AgreementBuyer), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder Buyer and the Purchasers, the Company and the Subsidiaries Buyer Indemnified Parties shall not cancel any insurance policies in effect for periods prior only be entitled to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal assert claims under Section 6.2 up to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion 5% of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection Date Cash Payment (the “Liability Cap”) in ), which shall represent the aggregate, sole and each Seller’s liability exclusive remedy of Buyer and the other Buyer Indemnified Parties for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;any such claims under Section 6.2.
(vb) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses Payments by an Indemnifying Party pursuant to Section 7.2(b) if (A) the Purchasers (6.2 or Section 6.3 in respect of any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up limited to the amount of any liability or damage that remains after deducting therefrom any insurance proceeds, indemnity, contribution or other similar payment actually received from or committed to by a third party insurer or other third party prior to the payment due date hereunder for such Loss multiplied by such Seller’s Percentage ShareLoss. The PurchasersIndemnified Party shall use its commercially reasonable efforts to recover under insurance policies or indemnity, contribution or other similar agreements for any Loss in the time period prior to such payment due date hereunder for such Loss. The failure to achieve such recovery shall not, however, relieve the Indemnifying Party of its indemnification obligations hereunder.
(c) Each Indemnified Party shall take, and cause its Affiliates and Representatives to take, all commercially reasonable steps to mitigate any Loss for which indemnification may be sought under this Agreement.
(d) Seller shall not be liable to Buyer, including under this Article VI, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it Losses based upon or they may have to hold any Seller jointly liable for the obligations arising out of any other Seller. The aggregate liability facts, circumstances or events if such fact, circumstance or event was made available to Buyer prior to Closing or if Buyer or any of the contractors or subcontractors of Buyer had knowledge of such fact, circumstance or event, in each case prior to the Closing.
(e) Buyer has conducted, or has had the opportunity to conduct, real estate title searches with respect to the Sanitary Sewer System to its satisfaction, and Seller shall not be liable to Buyer, including under this Article VI, for any Losses based upon or arising out of any Seller under facts, circumstances or events related to the title, including lack thereof, imperfections in title, or liens or encumbrances of any kind, to the real estate included in the Sanitary Sewer System or the other Assets.
(f) Subject to Section 8.21 (Specific Performance) and any other provisions for specific performance, the Parties acknowledge and agree that their sole and exclusive remedy with respect to any and all claims for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Section 7.2 Agreement, unless such claims are based on fraud, shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted be pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunder.indemnification provisions set forth in this Article
Appears in 1 contract
Sources: Asset Purchase Agreement
Limitations on Indemnification Obligations. The rights of the Purchasers Purchaser Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) 9.2(a), and of the Company Indemnities pursuant to Section 9.2(b), as applicable, are subject to the following limitations:
(ia) the The amount of any Loss subject to indemnification hereunder or of any Claim therefor and all Losses shall be calculated determined net of any amounts actually recovered (after deducting therefrom the full amount of the expenses incurred in procuring such recovery) by the Purchaser Indemnitees or Company Indemnitees, as applicable, under insurance proceeds (net of direct collection expenses) policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees ) with respect to any Loss for which any such Person has been indemnified hereunderLosses (provided, then a refund equal that the amount deemed to the aggregate amount of the recovery or payment (be so recovered under insurance policies shall be net of direct collection expenses (A) the deductible for such policies and Taxes(B) shall be made promptly to any increase in the Sellers, which refund shall be distributed based on the proportion premium for such policies arising out of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;with such Losses).
(iiib) except for Claims arising under Section 3.5 The Purchaser Indemnitees or in respect of Operating Wind Project Liabilitiesthe Company Indemnitees, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b)applicable, which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses for any particular claim or series of claims arising out of the same facts pursuant to Section 7.2(b9.2(a)(i) or Section 9.2(b)(i), as applicable, other than with respect to breaches of the extent the Sellers aggregate liability hereunder for all Fundamental Representations and Warranties, unless such Losses would otherwise equal or exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;$100,000.
(vc) except for Claims arising under Section 3.5The Purchaser Indemnitees or the Company Indemnitees, the Purchasers Indemnitees as applicable, shall not be entitled to recover Losses pursuant to Section 7.2(b9.2(a)(i) or Section 9.2(b)(i), as applicable, other than with respect to breaches of the Fundamental Representations and Warranties, until the total amount which the Purchaser Indemnitees or the Company Indemnitees, as applicable, would recover under Section 9.2(a)(i) or Section 9.2(b)(i), as applicable, exceeds $4,000,000 (the “Threshold Amount”), in which case, the Purchaser Indemnitees or the Company Indemnitees, as applicable, shall only be entitled to recover Losses in excess of the Threshold Amount.
(d) The funds in the Indemnity Escrow Account, at any given time, shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 9.2(a), and in no event shall the Purchaser Indemnitees be entitled to recover more than the amount of the funds available in the Indemnity Escrow Account pursuant to Section 9.2(a); provided that nothing in this Article 9 shall in any way limit or restrict the availability of the PPA Escrow Account to fund obligations under Section 2.9.
(e) In no event shall any Company Equityholder’s liability for Losses exceed the net proceeds actually received by such Company Equityholder hereunder.
(f) In no event shall the liability of Parent and Merger Sub for Losses pursuant to Section 9.2(b) exceed the Indemnity Escrow Amount.
(g) No Purchaser Indemnitee or Company Indemnitee, as applicable, shall be entitled to indemnification for any claim if and to the extent (Abut only to the extent) the Purchasers Losses with respect to such claim were accounted for in the Actual Adjustment.
(h) For purposes of determining whether there has been a breach for indemnification purposes and the amount of any Losses that are the subject matter of a claim for indemnification hereunder, each representation and warranty in this Agreement and each certificate delivered pursuant hereto (in each case other than the Qualified Representations) shall be read without regard and without giving effect to the term(s) “material” or “Company Material Adverse Effect” contained therein.
(i) Each Person entitled to indemnification hereunder shall take all reasonable steps to mitigate all Losses after becoming aware of any director event which would reasonably be expected to give rise to any Losses that are indemnifiable or officer recoverable hereunder or in connection herewith; provided, that such failure to mitigate Losses in accordance with the foregoing shall not relieve the applicable Responsible Party of Purchasers who is not its indemnification obligations under this Article 9 except to the extent that any Losses were directly the result of such failure to mitigate.
(j) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Indemnity Escrow Funds are reduced to zero, the Purchaser Indemnitees shall have no further rights to indemnification under Section 9.2(a). Where a Seller Purchaser Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a directormatter for which such Purchaser Indemnitee was indemnified pursuant to Section 9.2(a), officer or consultant such Purchaser Indemnitee shall promptly pay over to the Representative the amount so recovered (after deducting therefrom the full amount of the Company prior expenses incurred by such Purchaser Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to Closingor on behalf of such Purchaser Indemnitee in respect of such matter and (ii) had actual knowledge at any time on amount expended by the Representative in pursuing or defending any claim arising out of such matter; provided that, prior to the Closing Date of Survival Period Termination Date, any such recovered amount shall be deposited into the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) Escrow Account to fund the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising indemnification obligations under Section 3.5, with respect to a particular Loss, each Seller shall only 9.2(a) (rather than be required to indemnify the Purchasers Indemnitees up paid over to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderRepresentative).
Appears in 1 contract
Sources: Merger Agreement (Genpact LTD)
Limitations on Indemnification Obligations. (a) The rights of the Purchasers Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) are subject to the following limitations:
(i) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries Seller Party Indemnitors shall not cancel have any insurance policies in effect for periods prior obligation to indemnify the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Purchaser Indemnitees with respect to any Loss claims for which Losses under Section 6.2(a)(i) (except with respect to any such Person has been indemnified hereunderbreach of or inaccuracy in any Fundamental Representation or fraud, then a refund equal to willful misconduct or intentional misrepresentation or Losses arising from third-party claims asserted by Federal Healthcare Programs or any third party payors) until the aggregate amount of all Losses under Section 6.2(a)(i) exceeds [***] (the recovery “Non-Tipping Basket”) in which event the Seller Party Indemnitors shall pay or payment be liable for all such Losses as of the first dollar in excess of such Non-Tipping Basket. Thereafter, the Purchaser Indemnitees shall be entitled to indemnification for all Losses under Section 6.2(a)(i) (net except with respect to any breach of direct collection expenses and Taxesor inaccuracy in any Fundamental Representation or fraud, willful misconduct or intentional misrepresentation or Losses arising from third-party claims asserted by Federal Healthcare Programs or any third party payors) in excess of the Non-Tipping Basket; provided that, the Seller Party Indemnitors’ aggregate liability under Section 6.2(a)(i) (except with respect to any breach of or inaccuracy in any Fundamental Representation or fraud, willful misconduct or intentional misrepresentation or Losses arising from third-party claims asserted by Federal Healthcare Programs or any third party payors) shall be made promptly not exceed the Cap (as defined in Section 6.3(b)).
(b) The Seller Party Indemnitors aggregate liability under Section 6.2(a)(i) to indemnify the Purchaser Indemnitees with respect to any claims for Losses under Section 6.2(a)(i) (except with respect to any breach of or inaccuracy in any Fundamental Representation or fraud, willful misconduct or intentional misrepresentation or Losses arising from third-party claims asserted by Federal Healthcare Programs or any third party payors) shall not exceed an aggregate amount equal to [***] (the “Cap”), except that (i) the applicable Cap for indemnity obligations and Losses arising from, incurred or sustained by, a Purchaser Indemnitee relating to breaches of or inaccuracies in any of the Fundamental Representations shall not exceed an aggregate amount equal to the SellersPurchase Price, which refund and except that (ii) no Cap shall be distributed based on apply to any indemnity obligation resulting from fraud, willful misconduct or intentional misrepresentation or Losses arising from third-party claims asserted by Federal Healthcare Programs or any third party payors.
(c) For avoidance of doubt, the proportion Non-Tipping Basket shall not apply to Losses incurred or sustained by any of the Purchaser Indemnitees relating to breaches of or inaccuracies in any of the Fundamental Representations.
(d) For avoidance of doubt, neither the Non-Tipping Basket nor the Cap apply to Losses incurred or sustained by any of the Purchaser Indemnitees relating to, or arising from, fraud, willful misconduct or third-party claims by payors of Federal Healthcare Program or other third party payors, and none of such Losses shall count towards the satisfaction of the Non-Tipping Basket or the Cap.
(e) With respect to any Liability or Loss borne by each such Sellerof the Business that was specifically taken into account in calculating adjustments to, oror components of, if a Loss has the Final Closing Payment, as determined pursuant to Section 1.9, the Purchaser Indemnitees shall not yet been determined or paid be indemnified by the SellersSeller Party Indemnitors under this Article VI against any such Liability or Loss to the extent necessary to avoid a duplicative, “double-recovery” by the Sellers’ indemnification obligations Purchaser Indemnitees under this Article VI.
(f) The Purchaser Indemnitor shall not have any obligation to indemnify the Seller Indemnitees with respect to any claims for Losses under Section 6.2(b)(i) (except with respect to (A) any breach of or inaccuracy in respect of such Loss shall be reduced by Section 4.1, Section 4.2 or Section 4.3 or (B) fraud, willful misconduct or intentional misrepresentation) until the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising all Losses under Section 3.5 or in respect 6.2(b)(i) exceeds the amount of Operating Wind Project Liabilitiesthe Non-Tipping Basket, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case event the Sellers’ aggregate liability hereunder Purchaser Indemnitor shall pay or be liable for all such Losses will not be permitted to exceed as of the Purchase Price)first dollar in excess of such Non-Tipping Basket. Thereafter, the Purchasers Seller Indemnitees will not shall be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder indemnification for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled 6.2(b)(i) (except with respect to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representationor inaccuracy in Section 4.1, warranty Section 4.2 or covenant Section 4.3 or (B) fraud, willful misconduct or intentional misrepresentation) in excess of the Purchasers could have mitigated or prevented such Loss using commercially reasonable effortsamount of the Non-Tipping Basket; and
(vi) except for Claims arising provided that, the Purchaser Indemnitor’s aggregate liability under Section 3.5, 6.2(b)(i) (except with respect to a particular Lossfraud, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it willful misconduct or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 intentional misrepresentation) shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderCap.
Appears in 1 contract
Sources: Asset Purchase and Contribution Agreement (NRX Pharmaceuticals, Inc.)
Limitations on Indemnification Obligations. The rights of (a) Subject to the Purchasers Indemnitees other limitations contained in this Section 7.05, neither Buyer nor Buyer Indemnified Persons shall be entitled to indemnification pursuant to the provisions of Section 7.2(b) are subject to the following limitations:
(i) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to 7.02 unless the aggregate amount of the recovery or payment (net of direct collection expenses Losses incurred by Buyer and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion Buyer Indemnified Persons under this Agreement exceeds 1% of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations Purchase Price in respect of such Loss shall be reduced by the aggregate amount (the “Threshold Amount”), in which case Seller or City shall then be liable for Losses in excess of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against LossesThreshold Amount; provided, however, that thereafter solely with respect the foregoing limitations contained in this Section 7.05(a) shall not apply to Losses that are individually less than $50,000 any claims for indemnification based on fraud, intentional misrepresentation or willful misconduct.
(b) Subject to the Purchasers Indemnitees will not other limitations contained in this Section 7.05 neither Seller, City nor Seller Indemnified Persons shall be entitled to recover for such Losses indemnification pursuant to Section 7.2(b7.03(a) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in unless the aggregate (amount of Losses incurred by Seller, City and then only to Seller Indemnified Persons under this Agreement exceeds the extent of such excess);
(iv) except for Claims arising under Sections 3.1Threshold Amount, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case Buyer shall then be liable for Losses in excess of the Sellers’ aggregate liability hereunder Threshold Amount; provided, however, that the foregoing limitations contained in this Section 7.05(a) shall not apply to any claims for indemnification based on fraud, intentional misrepresentation or willful misconduct.
(c) Except in the case of fraud, intentional misrepresentation or willful misconduct (for which all such Losses applicable legal and equitable remedies will not be permitted available to exceed the Purchase PriceBuyer), the Purchasers Indemnitees will not Buyer Indemnified Parties shall only be entitled to recover Losses pursuant to assert claims under Section 7.2(b) 7.02 up to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) amount of 5% of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in ), which shall represent the aggregate, sole and each Seller’s liability exclusive remedy of Buyer and the other Buyer Indemnified Parties for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;any such claims under Section 7.02.
(vd) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses Payments by an Indemnifying Party pursuant to Section 7.2(b) if (A) the Purchasers (7.02 or Section 7.03 in respect of any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up limited to the amount of any liability or damage that remains after deducting therefrom any insurance proceeds actually received from a third party insurer and any indemnity, contribution or other similar payment received from a third party insurer by the Indemnified Party in respect of any such Loss multiplied by such Seller’s Percentage Shareclaim. The PurchasersIndemnified Party shall use its commercially reasonable efforts to recover under insurance policies or indemnity, contribution or other similar agreements for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have Losses prior to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller seeking indemnification under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price Agreement.
(as adjusted e) Payments by an Indemnifying Party pursuant to Section 2.67.02 or Section 7.03 in respect of any Loss shall be reduced by an amount equal to any Tax benefit realized or reasonably expected to be realized as a result of such Loss by the Indemnified Party.
(f) for the Purchased Units Each Indemnified Party shall take, and the Shares sold by such Seller cause its Affiliates to take, all reasonable steps to mitigate any Loss in accordance with applicable law.
(g) Subject to the Purchasers hereunderprovisions of Sections 3.01 and 14.11 and any other provisions for specific performance, the Parties acknowledge and agree that their sole and exclusive remedy with respect to any and all claims for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement, unless such claims are based on fraud, intentional misrepresentation or willful misconduct, shall be pursuant to the indemnification provisions set forth in this Article VII. In furtherance of the foregoing, each Party hereby waives, to the fullest extent permitted under Law, any and all rights, claims and causes of action for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement, it may have against the other Party hereto and their Affiliates and each of their respective Representatives arising under or based upon any Law, except pursuant to the indemnification provisions set forth in this Article VII or unless such claims or causes of action allege fraud, intentional misrepresentation or willful misconduct. Nothing in this Section 7.05(g) shall limit any Person’s right to seek and obtain specific performance to which such Person shall be entitled pursuant to this Agreement.
Appears in 1 contract
Sources: Asset Purchase Agreement
Limitations on Indemnification Obligations. The rights of the Purchasers Parent Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) 8.2(a), other than with respect to fraud, are subject to the following limitations:
(ia) the amount of any Loss subject claim for indemnification by any Parent Indemnitee pursuant to indemnification hereunder or of any Claim therefor this Article VIII shall be calculated net of reduced to reflect any insurance proceeds recoverable by and paid to any Parent Indemnitee (other than the proceeds paid under the R&W Policy) and by any tax benefits actually realized by any Parent Indemnitee with respect to the matter giving rise to such claim (net of direct reasonable out-of-pocket expenses for collection expenses) or other collateral sources (such as contractual indemnities in the case of insurance proceeds); provided that in no event shall any indemnification payment be delayed in anticipation of the receipt of any Person which are contained outside such insurance proceeds or tax benefits. Parent shall, and shall cause its Affiliates (including the Surviving Corporation, following the Effective Time) to, in good faith, diligently seek recovery, at its or their own expense, of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees proceeds from insurers with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate all Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses which any Parent Indemnitee makes a claim for indemnification under this Article VIII (other than claims under the R&W Policy); provided that are individually less than $50,000 nothing in this sentence shall require Parent or its Affiliates (including the Purchasers Indemnitees will not be entitled Surviving Corporation, following the Effective Time) to recover for such Losses seek recovery of insurance proceeds prior to pursuing indemnification pursuant to this Article VIII (other than insurance proceeds from the R&W Policy as provided in Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to 8.5 below). To the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (that Parent or any director of its Affiliates (including the Surviving Corporation and the Company’s Subsidiaries, following the Effective Time) receives any amount under insurance coverage or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at realizes any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, tax benefit with respect to a particular Lossmatter for which it has previously received payment in indemnification pursuant to this Article VIII, each Seller shall only Parent shall, as soon as reasonably practicable after the receipt of such insurance proceeds or realization of such tax benefit, pay and reimburse to the Escrow Agent (if such reimbursement is to be required delivered prior to indemnify the Purchasers Indemnitees Escrow Release Date) or to the Member Representative (if such reimbursement is to be delivered after the Escrow Release Date), for any prior indemnification payment (up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasersinsurance proceeds or tax benefit, less any retroactive premium adjustments directly attributable thereto, and net of out-of-pocket expenses for collection).
(b) notwithstanding anything contained herein to the contrary, for themselves purposes of determining whether there has been a breach and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations amount of any Losses that are the subject matter of a claim for indemnification, each representation and warranty in this Agreement shall be read without regard and without giving effect to the term “material” or “Material Adverse Effect” or any similar phrase which has the effect of making such representation and warranty less restrictive (as if any such word or phrase were deleted from such representation and warranty), other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share than (i) the use of the Purchase Price word “Material” in the definitions of Material Contract, Material Lease, Material Customers and Material Suppliers, (as adjusted ii) the failure list items on the Disclosure Schedules because of materiality qualifications to the disclosure, and (iii) the use the word “material” in Section 3.5 with respect to Financial Statements and in Section 10.2;
(c) in no event shall Loss include any consequential, indirect, lost profits, punitive and exemplary damages (other than to the extent consequential, indirect, punitive or exemplary damages are paid in a Third Party Claim);
(d) in no event shall (i) the Company Securityholders be required to provide indemnification to any of the Parent Indemnitees with respect to any claim for indemnification made pursuant to Section 2.68.2(a)(i): (A) if the Losses associated with such claim (or group of related claims arising out of the same or similar circumstances) are less than Ten Thousand Dollars ($10,000) (the “De Minimis Claim Amount”); or (B) unless and until the Losses associated with all claims for indemnification made pursuant to Section 8.2(a)(i) incurred by the Parent Indemnitees aggregate at least One Million Five Hundred Fifty-Two Thousand Five Hundred Dollars ($1,552,500) (the “Deductible”), after which point the Company Securityholders shall only be required to provide indemnification with respect to indemnifiable Losses with respect to any such claim for indemnification made pursuant to Section 8.2(a)(i) in excess of the Deductible (for the Purchased Units avoidance of doubt, Losses associated with any claim for which indemnification is unavailable hereunder solely by reason of the limitation described in foregoing clause (i)(A) will not be counted towards determining if the Deductible has been reached); provided, however, that, notwithstanding anything to the contrary contained herein, the De Minimis Claim Amount and the Shares sold by such Seller Deductible shall not apply to any indemnification claims made with respect to the Purchasers Fundamental Representations, indemnification claims made pursuant to Sections 8.2(a)(ii) or (iii), or any claim based on fraud; (ii) the Company Securityholders be required to provide indemnification to the Parent Indemnitees for indemnifiable Losses arising from claims for indemnification made pursuant to Section 8.2(a)(i) in an aggregate amount in excess of the Escrow Funds except with respect to claims made with respect to the Fundamental Representations or any claim based on fraud; and (iii) any Company Securityholder be required to provide indemnification to the Parent Indemnitees for indemnifiable Losses with respect to Section 8.2(a) in an aggregate amount in excess of the Merger Consideration actually received by the Company Securityholder;
(e) notwithstanding anything to the contrary contained in this Agreement: (i) the Member Representative’s and Company Securityholders’ shall not be entitled to seek indemnification pursuant to Section 8.2(b)(i) with respect to breaches of representations and warranties, other than a claim for breach of Fundamental Representations, or a claim for failure to pay the full Merger Consideration or a claim for rescission of the transactions contemplated hereby, until the amount of all Losses exceeds the Deductible, in which case the Member Representative and the Company Securityholders shall be entitled to seek indemnification only for the amount of such excess, up to the Indemnification Cap and subject to any other applicable limits on indemnification; and
(f) in the event that any facts or circumstances arise resulting in any Losses, each of the Parent Indemnitees and the Member Indemnitees shall have a duty and an obligation to take commercially reasonable and timely actions to mitigate the amount of all such Losses. Each of Parent and the Company Securityholders shall take such actions or cause such actions to be taken as are or may become necessary so as to mitigate, to the extent required by the preceding sentence, all Losses for which they may seek indemnification hereunder.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Purchasers Buyer Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) 7.2 are subject to the following limitations:
(ia) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Buyer Indemnitees shall not be entitled to recover that portion of any Losses to the extent such Losses are specifically reflected or reserved for as a current liability in the calculation of Net Working Capital, as finally determined in accordance with Section 2.7;
(b) The Buyer Indemnitees’ sole recourse for any claims or Losses pursuant to Section 7.2(b7.2(a)(i) if or Section 7.2(a)(ii) (Awith respect to Section 7.2(a)(ii), other than any Fundamental Payout Amount, but only to the extent of such Fundamental Payout Amount as set forth in Section 7.2(a)(ii)) is the Purchasers R&W Insurance Policy except for claims or Losses pursuant to Section 7.2(a)(i) which are (x) in an aggregate amount up to the Retention Amount or (y) after the R&W Insurance Policy has been exhausted.
(c) The Buyer Indemnitees shall not be entitled to recover for any director Losses that in the aggregate exceed the Indemnification Cap. In no event shall any Stockholder or officer holder of Purchasers who is not a Seller or a director, officer or consultant Transaction Incentive Award be required to indemnify the Buyer Indemnitees for any Losses that in the aggregate exceed such Person's pro rata share (based on the amount of proceeds received by such Person in relation to the proceeds received by all Former Holders and holders of Transaction Incentive Awards) of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the factsIndemnification Cap; provided, events or conditions constituting or resulting in such breach of representationhowever, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5that, with respect to a particular Lossholder of a Transaction Incentive Award who is not a Former Holder of Series A Preferred Stock, each Seller such holder shall only not be required to indemnify the Purchasers Buyer Indemnitees up for any Losses that exceed the amount received by such holder pursuant to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderTransaction Incentive Award.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) are subject to the following limitations:
(i) Subject to the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of limitations described in this Agreement), received by none of the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss Sellers or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company shall have any obligation to indemnify Buyer Indemnified Persons from and the Subsidiaries shall not cancel against any insurance policies in effect for periods prior Losses pursuant to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees Section 7(b)(i)(A) (other than with respect to any Loss for which any a breach of a Fundamental Representation) until Buyer Indemnified Persons have suffered Losses by reason of all such Person has been indemnified hereunder, then a refund equal to the breaches in an aggregate amount of that exceeds the recovery or payment (net of direct collection expenses Basket, after which point Sellers will be obligated to indemnify Buyer Indemnified Persons from and Taxes) shall be made promptly to against the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect first dollar of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect the Basket shall not apply to Losses that are individually less than $50,000 resulting from fraud or intentional misrepresentation or Section 7(b)(i)(D) or Section 7(b)(i)(E).
(ii) The aggregate amount of all Losses suffered by Buyer Indemnified Persons for which either the Purchasers Indemnitees Company or the Sellers will not be entitled to recover for such Losses liable pursuant to Section 7.2(b7(b)(i) until such shall not exceed the Indemnification Cap; provided, however, that the Indemnification Cap shall not apply to Losses that are individually less resulting from fraud or intentional misrepresentation, or breaches of Fundamental Representations or Section 7(b)(i)(D) or Section 7(b)(i)(E). Notwithstanding anything herein to the contrary, including the foregoing sentence, other than $50,000 are equal to or exceed $300,000 in the case of fraud or intentional misrepresentation of such Seller, no Seller’s aggregate liability for Losses under this Agreement shall exceed such Seller’s Pro Rata Share.
(iii) Notwithstanding anything to the contrary in this Agreement, no Indemnifying Party shall be liable for, and then only the definition of Losses shall not include any punitive damages (except to the extent of such excessdamages are awarded to a Governmental Authority or other third party);.
(iv) except for Claims arising All indemnification payments under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and this Section 7 in respect of Operating Wind Project Liabilities (any Loss shall be reduced by the amount of insurance proceeds and any indemnity, contribution or other similar payment actually received by the Indemnified Party in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) respect of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;applicable claim.
(v) except for Claims arising under Section 3.5The right to indemnification, the Purchasers Indemnitees shall payment of any Losses or other remedy based on such representations, warranties, covenants, obligations and agreements will not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers affected by any investigation conducted with respect to, or any knowledge acquired (or any director or officer capable of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closingbeing acquired) had actual knowledge at any time on time, whether before or prior after the execution and delivery of this Agreement, with respect to the Closing Date accuracy or inaccuracy of the factsor compliance with, events or conditions constituting or resulting in any such breach of representation, warranty warranty, covenant, obligation or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; andagreement.
(vi) except for Claims arising under Section 3.5Notwithstanding anything to the contrary in this Agreement, with respect to a particular Loss, each neither the Company nor any Seller shall only be required have any obligation to indemnify the Purchasers Indemnitees up any Buyer Indemnified Party for (i) any Losses to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share extent arising as a direct result of the Purchase Price unreasonable exercise by Buyer of Buyer’s rights as set forth in Exhibit F (Actions Requiring Purchaser’s Consent) of the Call Option Agreement or (ii) any Losses to the extent actually resulting in an adjustment to the Agreed Valuation (as adjusted defined in the Call Option Agreement), if any, pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderCall Option Agreement.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees to indemnification pursuant (a) Notwithstanding anything in this Agreement to the provisions contrary, except with respect to claims under Section 11.1(a)(i) or Section 11.1(b)(i) for the failure of any Fundamental Representations made by Seller or Buyer to be true and correct, no indemnification claims for Damages shall be asserted by the Seller Indemnitees or the Buyer Indemnitees, respectively, under Section 7.2(b11.1(a)(i) are subject or Section 11.1(b)(i) unless any individual Damages or group or series of related Damages exceeds $25,000 (such individual Damages or group or series of related Damages that does not exceed $25,000, the “DeMinimis Damages”).
(b) Except with respect to claims under Section 11.1(b)(i) for the following limitations:
failure of any Fundamental Representations made by Seller to be true and correct, (i) the Seller shall not have any obligation to indemnify any Buyer Indemnitee pursuant to Section 11.1(b)(i) unless and until the aggregate amount of any Loss subject to indemnification hereunder all such individual Damages incurred or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received sustained by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Buyer Indemnitees with respect to which the Buyer Indemnitees would otherwise be entitled to indemnification under Section 11.1(b)(i) (which shall not include for such purposes DeMinimis Damages) exceeds $2,250,000 (the “Deductible”), whereupon the Seller shall be liable for all Damages in excess of the Deductible, and (ii) the aggregate liability of the Seller to indemnify (or to cause to be indemnified) the Buyer Indemnitees for Damages under Section 11.1(b)(i) shall in no event exceed $22,500,000 (the “Cap”). Notwithstanding anything to the contrary herein, the maximum amount payable by the Seller to all Buyer Indemnitees for Damages pursuant to Section 11.1(b) and Section 11.8 shall not exceed the sum of (A) the portion of the Purchase Price paid to the Seller pursuant to the Stock Purchase that is not funded by the Seller Debt Financing plus (B) the principal amount and any Loss interest thereon paid by the Buyer to the Seller pursuant to the Seller Debt Financing.
(c) Except with respect to claims under Section 11.1(a)(i) for which the failure of any such Person has been indemnified hereunderFundamental Representations made by Buyer to be true and correct, then a refund equal (i) the Buyer shall not have any obligation to indemnify (or to cause to be indemnified) any Seller Indemnitees pursuant to Section 11.1(a)(i) unless and until the aggregate amount of all individual Damages incurred or sustained by all Seller Indemnitees with respect to which the recovery or payment Seller Indemnitees are entitled to indemnification under Section 11.1(a)(i) (net of direct collection expenses and Taxeswhich shall not include for such purposes DeMinimis Damages) exceeds the Deductible, whereupon the Buyer shall be made promptly to the Sellers, which refund shall be distributed based on the proportion liable for all Damages in excess of the Loss borne by each such SellerDeductible, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
and (ii) no adjustment shall the aggregate liability of the Buyer to indemnify (or to cause to be made as a result of any multiple, increase factor, or any other premium over indemnified) the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price Seller Indemnitees for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising Damages under Section 3.5 or 11.1(a)(i) shall in respect of Operating Wind Project Liabilitiesno event exceed an amount equal to the Cap. Notwithstanding anything to the contrary herein, the Purchasers maximum amount payable by Buyer to all Seller Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) for Damages pursuant to Section 7.2(b), which amount this Agreement shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), sum of (A) the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) portion of the Purchase Price (as adjusted paid to the Seller pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Stock Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who that is not a funded by the Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or Debt Financing plus (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify principal amount and any interest thereon paid by the Purchasers Indemnitees up Buyer to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderDebt Financing.
Appears in 1 contract
Sources: Stock Purchase Agreement (Fifth & Pacific Companies, Inc.)
Limitations on Indemnification Obligations. (a) Reductions for Insurance Proceeds and Other ------------------------------------------- Recoveries. The rights amount that any party (an "Indemnifying Party") is or may ---------- be required to pay to any person (an "Indemnitee") pursuant to Section 5.1, ----------- Section 5.2 or Section 5.3 above, as applicable, shall be reduced ----------- ----------- (retroactively or prospectively)---by any Insurance Proceeds, other amounts actually recovered from third parties, or amounts recovered pursuant to any Ancillary Agreement, by or on behalf of such Indemnitee in respect of the Purchasers Indemnitees related Losses. Each of the parties agrees that it shall use its best efforts to indemnification collect any such Insurance Proceeds or other amounts to which it or any of its Subsidiaries may be entitled. The existence of a claim by an Indemnitee for insurance or against a third party in respect of any Loss shall not delay any payment pursuant to the indemnification provisions contained herein and otherwise determined to be due and owing by an Indemnifying Party; rather, the Indemnifying Party shall make payment in full of Section 7.2(b) are subject such amount so determined to be due and owing by it against an assignment by the Indemnitee to the following limitations:
Indemnifying Party of the entire claim of the Indemnitee for such insurance or against such third party. No insurer or any other third party shall be (i) entitled to a benefit it would not be entitled to receive in the amount absence of the foregoing indemnification provisions, (ii) relieved of the responsibility to pay any Loss subject claims for which it is obligated, or (iii) entitled to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees subrogation rights with respect to any obligation arising under the foregoing indemnification provisions. If an Indemnitee shall have received the payment required by this Agreement from an Indemnifying Party in respect of any Loss for which any and shall subsequently actually receive Insurance Proceeds or other amounts in respect of such Person has been indemnified hereunderLoss, then such Indemnitee shall hold such Insurance Proceeds or other amounts in trust for the benefit of such Indemnifying Party and promptly shall pay to such Indemnifying Party a refund sum equal to the amount of such Insurance Proceeds or other amounts actually received, up to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly any payments received from such Indemnifying Party pursuant to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations this Agreement in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunder.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights In addition to any other limitations contained in Section 16.05 and this Article XVII hereof, the obligations of the Purchasers Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) are subject to the following limitations:
(i) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Ceding Company and the Subsidiaries shall not cancel Reinsurer to indemnify any insurance policies in effect for periods prior to Reinsurer Indemnified Party or Ceding Company Indemnified Party, as the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereundercase may be, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses are subject to, and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellerslimited by, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiplefollowing, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely none of the following limitations shall apply to any indemnification by the Ceding Company of any Reinsurer Indemnified Parties or to any indemnification by the Reinsurer of any Ceding Company Indemnified Parties related to a breach of any Fundamental Representation:
(a) The Ceding Company shall be obligated to provide indemnification pursuant to Section 17.01(a)(i), only if the aggregate dollar amount of Losses with respect to all misrepresentations and breaches of warranty referred to in Section 17.01(a)(i) exceeds an amount equal to $[*], and then only for the amount of Losses that are individually less than in excess of $50,000 [*].
(b) The maximum aggregate liability of the Purchasers Indemnitees will not be entitled to recover Ceding Company for such indemnification for all Losses pursuant to Section 7.2(b17.01(a)(i) until such shall not exceed $[*].
(c) The Reinsurer shall be obligated to provide indemnification pursuant to Section 17.01(b)(i) only if the aggregate dollar amount of Losses that are individually less than $50,000 are with respect to all misrepresentations and breaches of warranty referred to in Section 17.01(b)(i) exceeds an amount equal to or exceed $300,000 in the aggregate ([*], and then only for the amount of Losses in excess of $[*].
(d) The maximum aggregate liability of the Reinsurer for indemnification for all Losses pursuant to Section 17.01(b)(i) shall not exceed $[*].
(e) The Ceding Company and the Reinsurer shall cooperate with each other with respect to resolving any claim or liability with respect to which one party is obligated to indemnify the other party under this Article XVII, including by using commercially reasonable efforts to mitigate the amount of any Losses for which it is entitled to seek indemnification hereunder, whether by seeking claims against a non-affiliated third party, an insurer or otherwise.
(f) Upon making any indemnification payment, the Indemnifying Party will, to the extent of such excess);
(iv) except for Claims arising under Sections 3.1payment, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and be subrogated to all rights of the Indemnified Party against any third party in respect of Operating Wind Project Liabilities the Loss to which the payment relates. Each such Indemnified Party and Indemnifying Party will duly execute upon request all instruments reasonably necessary to evidence and perfect the above-described subrogation rights.
(g) The amount of any Losses sustained by an Indemnified Party and owed by an Indemnifying Party shall be reduced by any amount to which such Indemnified Party collects with respect thereto under any insurance or reinsurance coverage, or from any other party alleged to be responsible therefor (less the out-of-pocket amount of the expenses reasonably incurred by the Indemnified Party in which case procuring such recovery, including the Sellers’ aggregate liability hereunder for all present value of any reasonably determined prospective increase in insurance premiums). The Indemnified Party shall use commercially reasonable efforts to collect any amounts available under such insurance or reinsurance coverage and from such other party alleged to have responsibility. If the Indemnified Party receives an amount under insurance or reinsurance coverage or from such other party with respect to Losses will not be permitted sustained at any time subsequent to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses any indemnification actually having been paid pursuant to Section 7.2(b) to this Article XVII, then such Indemnified Party shall promptly reimburse by that amount (less the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) out-of-pocket amount of the Purchase Price expenses reasonably incurred by the Indemnified Party in procuring such recovery, including the present value of any reasonably determined prospective increase in insurance premiums) the applicable Indemnifying Party for any such indemnification payment actually made by such Indemnifying Party.
(as adjusted pursuant to Section 2.6h) if The indemnities provided for in this Article XVII shall be the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 sole and ten percent (10%) exclusive remedy of the Purchase Price parties hereto and their respective officers, directors, employees, agents, Affiliates, successors and permitted assigns for all other items not listed any breach of any representation or warranty or any breach, nonfulfillment or default in the immediately preceding clause performance of any of the covenants or agreements contained in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregateAgreement, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees parties shall not be entitled to recover Losses pursuant a rescission of this Agreement or to Section 7.2(b) if (A) the Purchasers (any further indemnification rights or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations claims of any other Seller. The aggregate liability nature whatsoever in respect thereof (including any common law rights of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share contribution), all of which the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderparties hereto hereby waive.
Appears in 1 contract
Sources: Funds Withheld Coinsurance Agreement (National Western Life Group, Inc.)
Limitations on Indemnification Obligations. The rights of the Purchasers Buyer Indemnitees and the Seller Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) 11.2 are subject to the following limitations:
(ia) The Buyer Indemnitees shall not be entitled to recover Losses pursuant to Section 11.2(a)(i) or Section 11.2(a)(ii)(A) until the total amount of Losses which the Buyer Indemnitees would recover under Section 11.2(a)(i) and Section 11.2(a)(ii)(A), but for this Section 11.4(a), exceeds two million dollars ($2,000,000) (the “Basket Amount”), in which case, the Buyer Indemnitees shall be entitled to recover Losses (including all Losses comprising the Basket Amount), except that claims related to any breach or inaccuracy in the Seller Fundamental Representations and Warranties shall not be subject to the Basket Amount.
(b) The Seller Indemnitees shall not be entitled to recover Losses pursuant to Section 11.2(b)(i) or Section 11.2(b)(ii)(A) until the total amount of Losses which the Seller Indemnitees would recover under Section 11.2(b)(i) and Section 11.2(b)(ii)(A) but for this Section 11.4(b), exceeds the Basket Amount, in which case, the Seller Indemnitees shall only be entitled to recover Losses (including all Losses comprising the Basket Amount), except that claims related to any breach or inaccuracy in the Buyer Fundamental Representations and Warranties shall not be subject to the Basket Amount.
(c) The Buyer Indemnitees shall not be entitled to recover for any particular Loss (including any series of related Losses) pursuant to Section 11.2(a)(i) or Section 11.2(a)(ii)(A) unless such Loss (including any series of related Losses) equals or exceeds $25,000 (the “De Minimis Threshold”) nor shall any Loss that does not meet the De Minimis Threshold be considered in determining whether the Basket Amount has been met; provided, however, that claims related to any breach or inaccuracy in the Seller Fundamental Representations and Warranties shall not be subject to the De Minimis Threshold.
(d) The Seller Indemnitees shall not be entitled to recover for any particular Loss (including any series of related Losses) pursuant to Section 11.2(b)(i) or Section 11.2(b)(ii)(A) unless such Loss (including any series of related Losses) equals or exceeds the De Minimis Threshold nor shall any Loss that does not meet the De Minimis Threshold be considered in determining whether the Basket Amount has been met; provided, however, that claims related to any breach or inaccuracy in the Buyer Fundamental Representations and Warranties shall not be subject to the De Minimis Threshold.
(e) Subject to the last paragraph of Section 11.2(a), M▇▇▇▇▇ S▇▇▇▇▇▇, Parent, the Group Companies and Seller shall have no liability under this Agreement to any Buyer Indemnitee for Losses in respect of Loss Sharing Claims other than pursuant to Section 11.2(a)(iii).
(f) Other than Losses arising out of fraud or any breach or inaccuracy in the Seller Fundamental Representations and Warranties, the maximum aggregate liability of M▇▇▇▇▇ S▇▇▇▇▇▇, Parent, the Group Companies and Seller with respect to Losses indemnifiable pursuant to Section 11.2(a)(i) and Section 11.2(a)(ii)(A) shall be $5,928,700.
(g) Other than Losses arising out of fraud or any breach or inaccuracy in the Buyer Fundamental Representations and Warranties, the maximum aggregate liability of Buyer and OFC with respect to Losses indemnifiable pursuant to Sections 11.2(b)(i) and Section 11.2(b)(ii)(A) shall be $5,928,700.
(h) The amount of any Loss subject to indemnification hereunder or of any Claim therefor and all Losses shall be calculated determined net of (i) any amounts actually recovered by the Indemnified Party under insurance proceeds (net of direct collection expenses) policies or from other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees ) with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses Losses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely Tax benefits actually received with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);Losses.
(ivi) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers The Buyer Indemnitees shall not be entitled to recover Losses indemnification pursuant to Section 7.2(b11.2(a) if for any Loss to the extent that (Ai) such Loss was taken into account in the determination of the Final Purchase Price pursuant to Section 2.5 or (ii) the Purchasers (Buyer Indemnitees failed to mitigate or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented prevent such Loss using commercially reasonable efforts; andas required by Law.
(vij) except The Buyer Indemnitees and the Seller Indemnitees, in each case, shall not be entitled to recover or make a claim for Claims arising under Section 3.5any amounts in respect of consequential, with respect to a particular Lossincidental, each Seller special or indirect damages, lost profits or punitive damages and, in particular, no “multiple of profits” or “multiple of cash flow” or other similar valuation methodology based upon multiples shall only be required to indemnify the Purchasers Indemnitees up to used in calculating the amount of any Losses, except to the extent such Loss multiplied damages are recovered by third parties in connection with claims made by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller third parties that are indemnified under this Section 7.2 shall not exceed Agreement.
(k) In any case where a Indemnified Party recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Seller’s Percentage Share of the Purchase Price (as adjusted Indemnified Party was indemnified pursuant to Section 2.611.2(a) for or Section 11.2(b), as applicable, such Indemnified Party shall promptly pay over to the Purchased Units and Responsible Party the Shares sold amount so recovered (after deducting therefrom the amount of the expenses incurred by such Seller Indemnified Party in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid by the Responsible Party to or on behalf of such Indemnified Party in respect of such matter and (ii) any amount expended by the Purchasers hereunderResponsible Party in pursuing or defending any claim arising out of such matter.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) this Agreement are subject to the following limitations:
(ia) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Buyer Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses any particular Loss pursuant to Section 7.2(b8.1(a) (other than Losses relating to breaches of the Fundamental Representations) until such the total amount of Losses that are individually less than (or series of related Losses) which the Buyer Indemnitees would recover under Section 8.1(a) exceeds $50,000 are equal to or exceed $300,000 in 275,000 (the aggregate (“Deductible”), and then only to the extent Losses claimed exceed the Deductible, the Buyer Indemnitees shall be entitled to recover all Losses in excess of such excess)the Deductible;
(ivb) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Buyer Indemnitees will shall not be entitled to recover Losses for any particular Loss pursuant to Section 7.2(b8.1(a) relating to breaches of Section 4.12 (Financial Statements) until the total amount of Losses (or series of related Losses) which the Buyer Indemnitees would recover under Section 8.1(a) exceeds $250,000 (the “Financial Statements Deductible”), and to the extent Losses claimed exceed the Sellers aggregate liability hereunder for Financial Statements Deductible, the Buyer Indemnitees shall be entitled to recover all such Losses would otherwise exceed twenty percent (20%) in excess of the Purchase Price (as adjusted pursuant to Section 2.6) if Financial Statements Deductible. The Parties acknowledge that they have engaged in extensive discussion together and in conjunction with the Claim pertains to Section 4.11Company’s auditors regarding the calculation of EBITDA, 4.12the amount of accounts receivable, 4.15the allowance for doubtful accounts, 4.16and working capital, 4.17in each case, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items Group Companies and as set forth on the attached Exhibit K. The Parties acknowledge their agreement with Exhibit K based upon the facts and circumstances as known at such time of agreement, and further acknowledge and agree that no indemnification claims can be made by Buyer (i) with respect to the matters set forth on Exhibit K, unless such indemnification claims are based on the development and/or disclosure of, facts and/or circumstances, which such facts and circumstances were not listed taken into account in the immediately preceding clause or preparation of Exhibit K, thereby resulting in an error and/or omission with respect to the lead-matters contained in qualifier to this subsection Exhibit K and (the “Liability Cap”ii) in the aggregate, and each Seller’s liability for any Losses hereunder shall not exceed its Percentage Share solely arising from any restatements of the Liability Cap;Financial Statements resulting from changes to applicable accounting rules or regulations or a change in interpretation of such accounting rules or regulations or a change in a policy or practice at Buyer or Buyer’s Affiliates election from historical policy or practice; and
(vc) except for Claims arising under Section 3.5, the Purchasers Buyer Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b8.1 in the aggregate in excess of an amount equal to forty percent (40%) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant the “Cap”), other than Losses relating to Section 2.6(i) for Pre-Closing Taxes, (ii) any breach of any covenant made by Seller in this Agreement, (iii) fraud committed by the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderor any of its Affiliates or (iv) any breach of any Fundamental Representation.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Radiation Therapy Services Holdings, Inc.)
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) this Agreement are subject to the following limitations:
(ia) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Buyer Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses any particular Loss pursuant to Section 7.2(b8.1(a) (other than Losses relating to breaches of the Fundamental Representations) until such the total amount of Losses that are individually less than (or series of related Losses) which the Buyer Indemnitees would recover under Section 8.1(a) exceeds $50,000 are equal to or exceed $300,000 in 275,000 (the aggregate (“Deductible”), and then only to the extent Losses claimed exceed the Deductible, the Buyer Indemnitees shall be entitled to recover all Losses in excess of such excess)the Deductible;
(ivb) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Buyer Indemnitees will shall not be entitled to recover Losses for any particular Loss pursuant to Section 7.2(b8.1(a) relating to breaches of Section 4.12 (Financial Statements) until the total amount of Losses (or series of related Losses) which the Buyer Indemnitees would recover under Section 8.1(a) exceeds $250,000 (the “Financial Statements Deductible”), and to the extent Losses claimed exceed the Sellers aggregate liability hereunder for Financial Statements Deductible, the Buyer Indemnitees shall be entitled to recover all such Losses would otherwise exceed twenty percent (20%) in excess of the Purchase Price (as adjusted pursuant to Section 2.6) if Financial Statements Deductible. The Parties acknowledge that they have engaged in extensive discussion together and in conjunction with the Claim pertains to Section 4.11Company’s auditors regarding the calculation of EBITDA, 4.12the amount of accounts receivable, 4.15the allowance for doubtful accounts, 4.16and working capital, 4.17in each case, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items Group Companies and as set forth on the attached Exhibit E. The Parties acknowledge their agreement with Exhibit E based upon the facts and circumstances as known at such time of agreement, and further acknowledge and agree that no indemnification claims can be made by Buyer (i) with respect to the matters set forth on Exhibit E, unless such indemnification claims are based on the development and/or disclosure of, facts and/or circumstances, which such facts and circumstances were not listed taken into account in the immediately preceding clause or preparation of Exhibit E, thereby resulting in an error and/or omission with respect to the lead-matters contained in qualifier to this subsection Exhibit E and (the “Liability Cap”ii) in the aggregate, and each Seller’s liability for any Losses hereunder shall not exceed its Percentage Share solely arising from any restatements of the Liability Cap;Financial Statements resulting from changes to applicable accounting rules or regulations or a change in interpretation of such accounting rules or regulations or a change in a policy or practice at Buyer or Buyer’s Affiliates election from historical policy or practice; and
(vc) except for Claims arising under Section 3.5, the Purchasers Buyer Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b8.1 in the aggregate in excess of an amount equal to forty percent (40%) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant the “Cap”), other than Losses relating to Section 2.6(i) for Pre-Closing Taxes, (ii) any breach of any covenant made by Seller in this Agreement, (iii) fraud committed by the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderor any of its Affiliates or (iv) any breach of any Fundamental Representation.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Radiation Therapy Services Holdings, Inc.)
Limitations on Indemnification Obligations. The Notwithstanding any provision to the contrary contained in this Agreement, the rights of the Purchasers Buyer Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) 9.2 are subject to the following limitations:
(ia) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall and all Losses will be calculated determined net of (i) any amounts recovered or reasonably expected to be recovered by the Buyer Indemnitees pursuant to any indemnification by, or indemnification agreement with, any third party, (ii) any amounts recovered by the Buyer Indemnitees pursuant to any insurance proceeds policy (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreementthan the R&W Insurance Policy), (iii) any other cash receipts or sources of reimbursement received by the Purchasers Buyer Indemnitees on account in respect of or as an offset against such Loss. The Purchasers Indemnitees shall seek full Losses, (each source of recovery under all insurance policies covering referred to in clauses (i), (ii) and (iii), a “Collateral Source”) and (iv) the amount of any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received Tax benefits realized by the Purchasers Buyer Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then Losses (a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses“Tax Benefit”);
(iib) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Buyer Indemnitees shall not be entitled to recover Losses from Seller pursuant to Section 7.2(b9.2(a)(i) if until the total amount which the Buyer Indemnitees would recover under this Agreement (Aas limited by the provisions of this Section 9.4), but for this Section 9.4(b), exceeds $425,000 (the “Threshold”) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each which event Seller shall only be required to indemnify pay or be liable for Losses in excess of the Purchasers Threshold;
(c) the Buyer Indemnitees up shall not be entitled to the amount of recover any Loss from Seller (and such Loss multiplied by shall not be counted against the Threshold) pursuant to Section 9.2(a)(i) or Section 9.2(a)(v) unless such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for individual Loss exceeds $50,000;
(d) in no event shall the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price to provide indemnification (as adjusted i) pursuant to Section 2.69.2(a)(i) for the Purchased Units exceed an aggregate amount equal to $425,000 and the Shares sold by such Seller (ii) pursuant to the Purchasers hereunderSection 9.2(a)(v) exceed an aggregate amount equal to $1,500,000.
Appears in 1 contract
Sources: Stock Purchase Agreement (Fiesta Restaurant Group, Inc.)
Limitations on Indemnification Obligations. The rights of the Purchasers Buyer Indemnitees to indemnification pursuant to the provisions of Section 7.2(b7.2(a) are subject to the following limitations:
(ia) the amount of any Loss subject to indemnification hereunder or of any Claim therefor and all Losses shall be calculated determined net of (i) any amounts recovered by the Buyer Indemnitees under insurance proceeds (net of direct collection expenses) policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees ) with respect to such Losses and (ii) any Loss for Tax benefits actually realized with respect to such Losses in the Tax year in which such Losses are paid or incurred, with any such Person has been indemnified hereunder, then a refund equal deduction or credit to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations Taxes in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery Losses deemed made after all other deductions are claimed or indemnification payment (net of direct collection expenses)credits applied for such Tax year;
(iib) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Buyer Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent clause (20%i) of Section 7.2(a) until the Purchase Price total amount which the Buyer Indemnitees would recover under clause (i) of Section 7.2(a) (as adjusted pursuant to limited by the provisions of Section 2.6) if the Claim pertains to 7.4(a)), but for this Section 4.117.4(b), 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection exceeds $425,000 (the “Liability Cap”"Threshold") in and then only for the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of excess over the Liability CapThreshold;
(vc) except for Claims arising under Section 3.5any inaccuracy in or breach of any representation or warranty shall be determined without regard to any materiality, "Company Material Adverse Effect" or other similar qualification contained in or otherwise applicable to such representation or warranty;
(d) at any time the Purchasers Buyer Indemnitees shall (i) will be entitled to recover no more than the amount of cash then in the Escrow Account and (ii) pursuant to this Agreement, will not be entitled to recover Losses pursuant to Section 7.2(bfrom any source other than the Escrow Account;
(e) until such time that the Escrow Funds have been fully disbursed in accordance with this Agreement and the Escrow Agreement, if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or Buyer Indemnitee has been indemnified for a directorLoss hereunder, officer or consultant of the Company prior to Closing) had actual knowledge and at any time on thereafter a Buyer Indemnitee recovers all or prior a portion of such Loss from a third Person (including pursuant to any insurance policy), the Buyer Indemnitee which made such recovery shall promptly return to the Closing Date Escrow Account (or to Seller Representative, on behalf of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (BMembers) the Purchasers could have mitigated or prevented amount paid from the Escrow Account with respect to such Loss using commercially reasonable efforts(up to the amount recovered from the third Person);
(f) Losses for which any Buyer Indemnitee may be entitled to indemnification hereunder shall not include any of the current liabilities of the Target Companies as of the Closing to the extent such current liabilities are included in the calculation of the Net Working Capital Adjustment included in the Final Statement of Purchase Price; and
(vig) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up notwithstanding anything contained herein to the amount of such Loss multiplied contrary, in no event will the Buyer Indemnitees be entitled to indemnification hereunder for any Losses that are incurred by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations Buyer Indemnitee as a result of any other Seller. The aggregate liability action taken by Buyer or any of its Affiliates after the Closing (including, without limitation, as a result of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share changes to the directors and/or officers of any of the Purchase Price (as adjusted pursuant to Section 2.6) for Target Companies/or officers of any of the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderTarget Companies).
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees an Indemnified Party to indemnification pursuant to the provisions of Section 7.2(b) 8.1 are subject to the following limitations:
(a) Stockholder Indemnifying Parties shall have no liability under Section 8.1(a)(i)(A) for Damages resulting from (i) any individual claim unless the Damages from such individual claim exceed [****] dollars ($[****]) (the “Threshold”), and (ii) unless the cumulative amount of Damages for which the Stockholder Indemnifying Parties would, but for this provision, be liable to the Buyer Indemnified Party exceeds [****] Dollars ($[****]) (the “Basket”), in which case, such Buyer Indemnified Party shall be entitled to indemnification only for Damages in excess of the Basket. For the avoidance of doubt, Stockholder Indemnifying Parties shall not have any liability under Section 8.1(a)(i)(A) unless and until the amount of any Loss subject to indemnification hereunder an individual claim for Damages equals or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement)exceeds the Threshold. Once a claim exceeds the Threshold, received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources then, to the same extent as they would if such Loss were not subject to indemnification hereunder and that cumulative Damages exceed the PurchasersBasket, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not Buyer Indemnified Parties would be entitled to recover the first full amount of Damages in excess of the Basket.
(b) The Stockholder Indemnifying Parties shall not in the aggregate be liable for any Damages in excess of [****] Dollars ($200,000 in aggregate Losses [****]) (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b“Cap”), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 Damages arising out of the Purchasers Indemnitees will Surviving Claims, the Stockholder Indemnifying Parties shall not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate be liable for any Damages in excess of the actual Purchase Price paid to Holdings under this Agreement.
(and then only c) The Stockholder Indemnifying Parties shall not be liable for any Damages to the extent that such Damages have been reserved for on the Closing Balance Sheet and taken into account in calculating the Closing Net Asset Value amount or have been actually recovered by the Buyer Indemnified Party from another Person including, without limitation, as a result of the Buyer Indemnified Party receiving compensation for such excessDamages pursuant to any policy of insurance maintained by the Buyer Indemnified Party, the Company or a tail policy purchased by the Stockholder Indemnifying Parties. The Buyer Indemnified Party shall use commercially reasonable efforts to pursue insurance coverage for Damages so long as such action does not result in a material premium increase for its insurance or negatively change the insurability of Buyer’s activities (whether in terms of coverable risks or otherwise);.
(ivd) except for Claims arising under Sections 3.1Each Indemnified Party hereunder shall take, 3.2and cause its Affiliates to take, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 commercially reasonable steps to mitigate and in respect limit any Damages upon becoming aware of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not any event or circumstance that would be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25reasonably expected to, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregatedoes, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereundergive rise thereto.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Rollins Inc)
Limitations on Indemnification Obligations. (a) The rights Sellers and Stockholders shall not be liable to indemnify the Buyer Indemnitees for breaches of the Purchasers Indemnitees to indemnification representations and warranties pursuant to the provisions of Section 7.2(b) are subject to the following limitations:
(i) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expensesSections 12.2(a)(i) or other collateral sources 12.2(b)(i) (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect except for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees claims with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d3.6(e), 4.223.15, 4.27 3.17, 3.34, 3.36, 4.1 and 4.2 and the closing certificates in respect of Operating Wind Project Liabilities Section 8.1 insofar as they relate to such representations and warranties (the representation and warranties contained in such sections and certificates being the “Seller Excluded Representations”)) until the aggregate Damages incurred by the Buyer Indemnitees for which case indemnification may be sought but for this sentence exceeds $350,000 (the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price“Basket Amount”), at which point the Purchasers Buyer Indemnitees will not shall only be entitled to recover Losses seek indemnification for the amount by which such Damages exceed the Basket Amount. The Seller Indemnitees may not make any claim for indemnification for breaches of representations and warranties pursuant to Section 7.2(b12.3(i) (except for claims with respect to Sections 5.1 and 5.2, and the extent closing certificates in Section 9.1 insofar as they relate to such representations and warranties (the representations and warranties contained in such sections and certificates being the “Buyer Excluded Representations”)) until the aggregate Damages incurred by the Seller Indemnitees for which indemnification may be sought but for this sentence exceeds the Basket Amount, at which point the Seller Indemnitees shall only be entitled to seek indemnification for the amount by which such Damages exceed the Basket Amount.
(b) The aggregate indemnification obligation of the Sellers aggregate liability hereunder and the Stockholders for all such Losses would otherwise (i) breaches of representations and warranties (other than the Seller Excluded Representations) pursuant to Sections 12.2(a)(i) and 12.2(b)(i) and for breaches of the covenant in Section 6.2(b), (c) and (h) shall not exceed twenty percent $12,225,000 (20%the “Cap Amount”) and (ii) breaches of the Seller Excluded Representations shall not exceed (together with the amount of any indemnification obligation arising under clause (i) of this Section 12.4(b)) the Purchase Price in the aggregate.
(as adjusted c) The aggregate indemnification obligations of Buyer for breaches of representations and warranties pursuant to Section 2.612.3(i) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share the Cap Amount; provided that this limitation shall not apply to breaches of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderBuyer Excluded Representations.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees (a) Other than as provided in this Section 8.06, neither Purchaser nor Purchaser Indemnified Persons shall be entitled to indemnification pursuant to the provisions Section 8.03(a) of Section 7.2(b) are subject to the following limitations:
this Agreement (i) the amount other than for an intentional breach of any Loss subject to indemnification hereunder agreement or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are covenant contained outside of in this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to ) unless the aggregate amount of Damages incurred by Purchaser or such Purchaser Indemnified Persons (as defined in this Agreement or the recovery Wastewater Purchase Agreement, as applicable) under this Agreement and the Wastewater Purchase Agreement exceeds Two Hundred Fifty Thousand Dollars and No/100 ($250,000.00) in the aggregate (the "Threshold Amount"), in which case the Indemnifying Party (as defined in this Agreement or payment (net of direct collection expenses and Taxesthe Wastewater Purchase Agreement, as applicable) shall then be made promptly to liable for Damages in excess of the SellersThreshold Amount.
(b) Other than as provided in this Section 8.06, which refund neither Seller nor Seller's Indemnified Persons shall be distributed based on the proportion entitled to indemnification pursuant to Section 8.04(a) of the Loss borne by each such Seller, or, if a Loss has not yet been determined this Agreement (other than for an intentional breach of any agreement or paid by the Sellers, the Sellers’ indemnification obligations covenant contained in respect of such Loss shall be reduced by this Agreement) unless the aggregate amount of Damages incurred by Seller and Seller's Indemnified Persons (as defined in this Agreement or the insurance recovery or indemnification payment (net of direct collection expenses);
(iiWastewater Purchase Agreement, as applicable) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units under this Agreement and the Shares or its final purchase price for Wastewater Purchase Agreement exceeds the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project LiabilitiesThreshold Amount, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ Indemnifying Party (as defined in this Agreement or the Wastewater Purchase Agreement, as applicable) shall then be liable for Damages in excess of the Threshold Amount.
(c) Other than as provided in this Section 8.06, the cumulative, combined, aggregate indemnity obligation or liability hereunder for all such Losses will Damages of Seller pursuant to this Agreement shall not be permitted to exceed the Purchase Price), Liability Cap.
(d) The Threshold Amount and the Purchasers Indemnitees will Liability Cap shall not be entitled apply to recover Losses Seller's obligations to indemnify (i) pursuant to Section 7.2(b8.03(c) due to failure to pay or discharge an Excluded Liability, (ii) to the extent due to an intentional breach of any agreement or covenant contained in this Agreement, (iii) if related to a Claim for breach of a representation under Section 4.01 (Power), Section 4.02 (Authorization and Validity of Agreement), Section 4.07 (Tax Matters), the Sellers aggregate liability hereunder second sentence of Section 4.08 (Title to Real Property), Section 4.12 (Employee Benefit Plans) or Section 4.20 (Title to Acquired Assets), (iii) for all such Losses would otherwise exceed twenty percent (20%) a Claim arising out of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11intentional breach of any agreement or covenant in this Agreement, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, fraud or 4.26 and ten percent (10%) willful misconduct of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;.
(ve) except The rights of Seller set forth in this Article VIII shall be the sole and exclusive remedy available to Seller for Claims arising any Claim for Damages pursued under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; andthis Agreement.
(vif) except The rights of Purchaser set forth in this Article VIII shall be the sole and exclusive remedy available to Purchaser for Claims arising any Claim for Damages pursued under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to this Agreement.
(g) For purposes of calculating the amount of such Loss multiplied Damages incurred by such Seller’s Percentage Share. The Purchasersthe Indemnified Party arising out of or resulting from any breach of, for themselves and for a representation, covenant, or agreement by any Party hereto, the Purchasers Indemnitees, unconditionally waives any right it references to a "Material Adverse Effect" or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 materiality shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderbe disregarded.
Appears in 1 contract
Sources: Asset Purchase Agreement
Limitations on Indemnification Obligations. The rights respective obligations of Seller and the Seller Owners to indemnify the Buyer Indemnified Persons pursuant to Section 13.02(a) and of the Purchasers Indemnitees Buyer Parties to indemnification indemnify the Seller Indemnified Persons pursuant to the provisions of Section 7.2(b13.02(b) are subject to the following limitationsadditional limitations and qualifications:
(ia) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder Seller and the Purchasers, the Company and the Subsidiaries Seller Owners shall not cancel any insurance policies in effect for periods prior have no indemnification obligation pursuant to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees Section 13.02(a)(i) with respect to any Loss for which any individual claim or series of claims having the same nature or origin where the Losses relating thereto are less than $20,000.00, and such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees items less than $20,000.00 will not be entitled to recover counted or aggregated for purposes of calculating the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against LossesSeller Deductible; provided, however, that thereafter solely if the amount of Losses with respect to Losses that are individually less than any individual claim or series of claims having the same nature or origin aggregate to $50,000 20,000.00 or more, the Purchasers Indemnitees will not be entitled to recover for full amount of such Losses shall be subject to indemnification obligation of Seller and the Seller Owners under Section 13.02(a)(i); provided further that this Subsection (a) shall not apply with respect to the indemnification obligation of Seller and the Seller Owners pursuant to Section 7.2(b13.02(a)(i) on account of the breach of any of the Special Representations (Losses subject to such indemnification obligation pursuant to Section 13.02(a)(i) on account of the breach of any of the Special Representations being "Special Representation Losses") or any of the Secondary Representations (Losses subject to such indemnification obligation pursuant to Section 13.02(a)(i) on account of the breach of any of the Secondary Representations being "Secondary Representation Losses").
(b) Seller and the Seller Owners shall have no indemnification obligation pursuant to Section 13.02(a)(i) for any Losses until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate amount of all Losses incurred by the Buyer Indemnified Persons exceeds $408,252.00 (the "Seller Deductible"), and then only for the amount by which such Losses exceed the Seller Deductible; provided, however, that this Subsection (b) shall not apply with respect to the extent indemnification obligation of such excess);Seller and the Seller Owners pursuant to Section 13.02(a)(i) on account of any Special Representation Losses or any Secondary Representation Losses.
(ivc) except The maximum aggregate indemnification obligation of Seller and the Seller Owners under Section 13.02(a)(i) for Claims arising Losses on account of breach of the General Representations and Secondary Representations other than any Excluded Matters shall not exceed the R&W Escrow Amount (the "General Seller Cap"). The maximum aggregate indemnification obligation of Seller and the Seller Owners under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(dSection 13.02(a)(i) for Losses on account of the Excluded Matters (other than with respect to any Special Representations Loss that is an Excluded Matter) (Losses subject to such indemnification obligation being "Excluded Matters Losses"), 4.22including Secondary Representation Losses with respect to Secondary Representations which are Excluded Matters, 4.27 shall not exceed $250,000 (the "Excluded Matter Seller Cap"). The maximum aggregate indemnification obligation of Seller and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will Seller Owners under Section 13.02(a) shall not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.62.09 (the "Ultimate Seller Cap").
(d) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) The maximum aggregate indemnification obligation of any Seller Owner on account of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Excluded Matters Losses hereunder shall not exceed its the product obtained by multiplying the applicable Excluded Matter Seller Cap times such Seller Owner's Pro Ration Percentage Share (for each Seller Owner, the "Excluded Matter Pro Rated Cap"). The maximum aggregate indemnification obligation of any Seller Owner under Section 13.02(a) shall not exceed the product obtained by multiplying the Ultimate Seller Cap times such Seller Owner's Pro Ration Percentage (for each Seller Owner, the "Ultimate Pro Rated Cap").
(e) Notwithstanding anything in this Agreement to the contrary, no Seller Owner shall have any liability for any Loss, except in the case of Losses resulting from a Seller Owner Misrepresentation or a Seller Owner Covenant Breach, in excess of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior amount equal to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to product obtained by multiplying the amount of such Loss multiplied times such Seller Owner's Pro Ration Percentage.
(f) For the avoidance of doubt, no costs or expenses (including Court costs, and attorneys', accountants', investigators' and experts' fees and expenses) incurred by any of the Selling Parties in defending any Direct Claim or Third-Party Claim asserted by any Buyer Indemnified Person shall be taken into account in determining Losses for purposes for calculating whether or not the Seller Deductible, the General Seller Cap, the Excluded Matter Seller Cap, the Ultimate Seller Cap, any Excluded Matter Pro Rated Cap or any Ultimate Pro Rated Cap has been exceed or may be recoverable by the Selling Parties from the R&W Escrow Fund.
(g) The Buyer Parties shall have no indemnification obligation pursuant to Section 13.02(b)(i) with respect to any individual claim or series of claims having the same nature or origin where the Losses relating thereto are less than $20,000.00, and such Seller’s Percentage Share. items less than $20,000.00 will not be counted or aggregated for purposes of calculating the Buyer Deductible; provided, however, that if the amount of such Losses with respect to any individual claim or series of claims having the same nature or origin aggregate to $20,000.00 or more, the full amount of such Losses shall be subject to the Buyer Parties' indemnification obligation under Section 13.02(b)(i); provided further that this Subsection (g) shall not apply with respect to the Buyer Parties' indemnification obligation pursuant to Section 13.02(b)(i) on account of the breach of any of the Special Representations.
(h) The PurchasersBuyer Parties shall have no indemnification obligation pursuant to Section 13.02(b)(i) for any Losses until the aggregate amount of all Losses incurred by the Seller Indemnified Persons exceeds $408,252.00 (the "Buyer Deductible"), for themselves and then only for the Purchasers Indemniteesamount by which such Losses exceed the Buyer Deductible; provided, unconditionally waives any right it or they may have however, that this Subsection (h) shall not apply with respect to hold any Seller jointly liable for the obligations Buyer Parties' indemnification obligation pursuant to Section 13.02(b)(i) on account of the breach of any of the Special Representations.
(i) The maximum aggregate indemnification obligation of the Buyer Parties under Section 13.02(b)(i) on account of breach of the Buyer Parties' representations and warranties set forth in this Agreement (other Seller. The aggregate liability of any Seller than Fundamental Representations) and under this Section 7.2 13.02(b)(ii) shall not exceed such Seller’s Percentage Share $10,000,000.00 (the "General Buyer Cap"). The maximum aggregate indemnification obligation of the Buyer Parties under Section 13.02(b) shall not exceed the Purchase Price (Price, as adjusted pursuant to Section 2.62.07 (the "Ultimate Buyer Cap").
(j) for None of the Purchased Units limitations on Seller's and the Shares sold Seller Owners' indemnification obligations under Section 13.02(a) set forth in this Section 13.04 shall apply with respect to Losses which would be their obligation under Section 13.02(a) but for this Section 13.04 if the matter giving rise to such Losses was Fraud, intentional misrepresentation in ARTICLE III or ARTICLE IV, or conduct punishable under applicable criminal Law of such Selling Party. None of the limitations on the Buyer Parties' indemnification obligations under Section 13.02(b) set forth in this Section 13.04 shall apply with respect to Losses which would be their obligation under Section 13.02(b) but for this Section 13.04 if the matter giving rise to such Losses was Fraud, intentional misrepresentation in ARTICLE V, or conduct punishable under applicable criminal Law of such Buyer Party.
(k) For the avoidance of doubt, no costs or expenses (including Court costs, and attorneys', accountants', investigators' and experts' fees and expenses) incurred by such either of the Buyer Parties in defending any Direct Claim or Third-Party Claim asserted by any Seller Indemnified Person shall be taken into account in determining Losses for purposes for calculating whether or not the Buyer Deductible, the General Buyer Cap, or the Ultimate Buyer Cap has been exceeded.
(l) Notwithstanding any other provision of this Agreement to the Purchasers hereundercontrary, except with respect to a breach of Section 3.14(d), Seller and Seller Owners will have no obligation to indemnify any Buyer Indemnified Persons from and against any Taxes of the Acquired Companies that are attributable to Post-Closing Tax Periods.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees Parent Indemnified Parties to indemnification pursuant to the provisions of Section 7.2(b) 9.02 are subject to the following limitations:
(ia) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees Parent Indemnified Parties shall not be entitled to recover Losses pursuant to Section 7.2(b9.02(a)(i) if or the last sentence of Section 7.03(b) until the total amount which the Parent Indemnified Parties would recover under Section 9.02(a)(i) and the last sentence of Section 7.03(b), but for this Section 9.04(a), exceeds One Million Dollars (A$1,000,000) (the Purchasers "Tipping Amount"), whereupon the Parent Indemnified Parties shall be entitled to indemnification for all such Losses from the first dollar; provided, however, that the Tipping Amount shall not apply to Losses in respect of claims for breach of representations and warranties related to Company Fundamental Representations and any amounts recovered for Losses by Parent Indemnified Parties pursuant to breaches of Company Fundamental Representations shall not apply against the Tipping Amount.
(b) Individual Losses of less than Ten Thousand Dollars ($10,000) shall not be recoverable by any Indemnified Party under this Article IX.
(c) Notwithstanding anything contained herein to the contrary, nothing in this Section 9.04 shall limit any Person's rights to recovery in respect of fraud or willful misconduct.
(d) For the purposes of this Article IX and Section 7.03(b) only, solely when determining the amount of Losses suffered by an Indemnified Party as a result of any director inaccuracy or officer of Purchasers who is not a Seller or a director, officer or consultant breach of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the factsrepresentations and warranties contained in this Agreement, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by Losses shall be determined (but not the determination of the inaccuracy or breach) without reference to the terms "knowledge of the Company," "knowledge of the Parent," "material," "Material Adverse Effect" and other similar qualifications as to materiality contained in or otherwise applicable to such Seller’s Percentage Share. The Purchasersrepresentations and warranties.
(e) In calculating amounts of Losses payable to an Indemnified Party hereunder, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations amount of any other Seller. The aggregate liability indemnified Losses shall be determined net of amounts actually recovered under any Seller under this Section 7.2 shall not exceed insurance policy (less costs incurred to obtain such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant recoveries) with respect to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderLosses.
Appears in 1 contract
Limitations on Indemnification Obligations. (a) The rights of Seller’s and the Purchasers Indemnitees Shareholders’ obligation to make indemnification pursuant payments to the provisions of Section 7.2(b) are subject to the following limitations:
(i) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees Purchaser Indemnified Parties on account of such Loss. The Purchasers Indemnitees shall seek full recovery Indemnifiable Losses claimed under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries Section 9.1(a) shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to arise until the aggregate amount of all Indemnifiable Losses claimed under Section 9.1(a) exceeds One Hundred Thousand Dollars ($100,000) (the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by “Threshold Amount”). Once the aggregate amount of Indemnifiable Losses claimed by the insurance recovery Purchaser Indemnified Parties under Section 9.1(a) exceeds the Threshold Amount, the Purchaser Indemnified Parties shall then be entitled to recover all such Indemnifiable Losses, except those Indemnifiable Losses that were used to reach the Threshold Amount. The foregoing Threshold Amount limitation shall not apply to, and the determination of whether the Threshold Amount has been reached shall not include, any Indemnifiable Losses which (i) relate to a breach by the Seller and the Shareholders of any of the representations and warranties contained in any of Section 3.6, Section 3.9, Section 3.20 and Section 3.26, or indemnification payment (net of direct collection expenses);
(ii) no adjustment arise from any misrepresentation or breach of warranty made fraudulently or with intent to defraud or mislead or recklessly or with gross negligence.
(b) The Purchaser’s obligation to make indemnification payments to the Seller Indemnified Parties on account of Indemnifiable Losses claimed under Section 9.2(a) shall be made not arise until the aggregate amount of all Indemnifiable Losses claimed under Section 9.2(a) exceeds the Threshold Amount. Once the aggregate amount of Indemnifiable Losses claimed by the Seller Indemnified Parties as a result of any multiplethe events and circumstances described in Section 9.2(a) exceeds the Threshold Amount, increase factor, or any other premium over then the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not Seller Indemnified Parties shall then be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b)all such Indemnifiable Losses, which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to except those Indemnifiable Losses that are individually less than $50,000 were used to reach the Purchasers Indemnitees will Threshold Amount. The foregoing Threshold Amount limitation shall not be entitled apply to, and the determination of whether the Threshold Amount has been reached shall not include, any Indemnifiable Losses arising from any misrepresentation or breach of warranty made fraudulently or with intent to recover for such defraud or mislead or recklessly or with gross negligence.
(c) The Seller’s and the Shareholders’ aggregate obligation to make indemnification payments to the Purchaser Indemnified Parties on account of Indemnifiable Losses pursuant to claimed under Section 7.2(b9.1(a) until such Losses that are individually less than $50,000 are shall not exceed an amount equal to or exceed Four Million Five Hundred Thousand Dollars ($300,000 in the aggregate (and then only to the extent of such excess);
(iv4,500,000) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate). The foregoing Cap limitation shall not apply to, and each Sellerthe determination of whether the Cap has been reached shall not include, any Indemnifiable Losses which (i) relate to a breach by the Seller and the Shareholders of any of the representations and warranties contained in any of Section 3.6, Section 3.9, Section 3.20 and Section 3.26 or (ii) arise from any misrepresentation or breach of warranty made fraudulently or with intent to defraud or mislead or recklessly or with gross negligence. In addition, the foregoing Cap limitation shall not apply to, and the determination of whether the Cap has been reached shall not include, any Indemnifiable Losses which are due under Section 9.3 and satisfied by a payment from the Escrow Amount.
(d) The Purchaser’s liability for aggregate obligation to make indemnification payments to the Seller Indemnified Parties on account of Indemnifiable Losses hereunder claimed under Section 9.2(a) shall not exceed its Percentage Share of an amount equal to the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees . The foregoing Cap limitation shall not be entitled to recover apply to, and the determination of whether the Threshold Amount has been reached shall not include, any Indemnifiable Losses pursuant to Section 7.2(b) if (A) the Purchasers (arising from any misrepresentation or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty made fraudulently or covenant with intent to defraud or (B) the Purchasers could have mitigated mislead or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, recklessly or with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereundergross negligence.
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Limitations on Indemnification Obligations. (a) The rights amount of any Losses for which the Purchasers Buyer Indemnitees may be entitled to indemnification pursuant to the provisions of Section 7.2(b9.2(a) are subject to the following limitations:
(i) will be determined net of the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources Losses to the same extent such Losses were included as they would if such Loss were not subject a liability in the calculation of Net Working Capital.
(b) To the extent permitted by applicable Law, in no event shall Seller or any of its Affiliates, on the one hand, or Buyer or any of its Affiliates, on the other hand, be liable to indemnification hereunder Buyer or any Buyer Indemnitee or Seller or any Seller Indemnitee, as applicable, for, and the Purchasersdefinition of “Losses” shall exclude, any (i) punitive damages; or (ii) any indirect, special or consequential losses that are not a reasonably foreseeable result of the Company matter giving rise to a claim for indemnification hereunder, in each case unless any such damages are of a third party and the Subsidiaries shall not cancel any insurance policies are actually assessed against an Indemnified Party in effect a valid Third Party Claim for periods prior to the Closingwhich indemnification is available hereunder. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees Other than with respect to any Loss valid Third Party Claim, this limitation shall apply regardless of whether any Litigation, claim or demand seeking or related to any of the foregoing damages is based on breach of contract, breach of warranty, tort or otherwise, and shall apply even where such damages (or the events giving rise to such damages) are caused, in whole or in part, by the negligence, gross negligence or acts and omissions of Seller or Buyer or any of their respective Affiliates. This Section 9.4(b) shall survive termination or cancellation of this Agreement.
(c) The amount of any and all Losses indemnified pursuant to Section 9.2 will be (i) determined net of an amount equal to any Tax savings or benefits actually realized in cash for the taxable year in which such Losses are incurred or for any taxable year ending before the date on which the indemnification payment is made pursuant to this Article IX by the Indemnified Party, in each case, that is attributable to any deduction, loss, credit or other Tax saving or benefit resulting from or arising out of such Losses, provided that the Responsible Party shall pay to the Indemnified Party an amount equal to any such Person has been indemnified hereunderTax benefit (plus any penalties, then a refund equal to the aggregate amount of the recovery interest or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid other charges imposed by the Sellers, relevant Governmental Authority) in the Sellers’ indemnification obligations in respect of event such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
Tax benefit is disallowed and (ii) no adjustment shall be made as a result increased by any Taxes or reduction in refund (including any interest with respect thereto) of any multiple, increase factor, Indemnified Party resulting from or arising out of the receipt of any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) payment pursuant to Section 7.2(b), which 9.2.
(d) The amount shall serve of any and all Losses will be determined net of (A) any liabilities to the extent included as a one-time deductible against Losses; provided, however, that thereafter solely deduction in the calculation of the Final Statement of Purchase Price with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled matters to recover for which such Losses pursuant to Section 7.2(brelate, and (B) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only any amounts to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case actually recovered by the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Buyer Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations net of any other Seller. The aggregate liability costs of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderrecovery.
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Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees Indemnified Parties to indemnification pursuant to the provisions of Section 7.2(b) this Article IX are subject to the following limitations:
(a) With respect to each indemnification obligation in this Article IX: (i) the amount of any Loss subject to indemnification hereunder or of any Claim therefor will be determined on an After-Tax Basis, (ii) all Losses shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event Eligible Insurance Proceeds that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has have already been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units amount of such Losses are determined and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) in no event shall a Responsible Party have liability to the Indemnified Party for any consequential, special, indirect or punitive damages, lost profits, diminution in value or similar items, except for Claims arising under Section 3.5 or in respect if and to the extent any such damages are recovered against an Indemnified Party pursuant to a Third Party Claim.
(b) None of Operating Wind Project Liabilities, the Purchasers Indemnitees will not Indemnified Parties shall be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) for any particular Loss pursuant to Section 7.2(bSections 9.2(a), which amount shall serve Section 9.2(b) (in respect of a breach of Section 5.6 as it relates to the failure to disclose any inaccuracy of any representation or warranty) or 9.3(a) unless such Loss (or series of related Losses) equals or exceeds $50,000 (each, a one-time deductible against Losses“Qualifying Loss”); provided, however, that thereafter solely this limitation shall not apply to Losses in respect of claims for breaches of any Fundamental Representation; provided, further that in respect of any inaccuracy of any representation or warranty disclosed after the date of this Agreement pursuant to Section 5.6 with respect to Losses that are individually less than which (i) the material facts, events or conditions, as applicable, which caused such inaccuracy first occurred after the date of this Agreement (or in the case of Litigation, a notice is first received by the Company or any of its Subsidiaries after the date of this Agreement) and (ii) the Company first had Knowledge after the date of this Agreement, only a Loss (or series of related Losses) with respect to such supplementally disclosed matters in excess of $50,000 500,000 shall be deemed to be a Qualifying Loss.
(c) None of the Purchasers Indemnitees will not Parent Indemnified Parties or the Seller Indemnified Parties shall be entitled to recover for such Qualifying Losses pursuant to Section 7.2(bSections 9.2(a) or 9.3(a) (as applicable) until such the total amount of Qualifying Losses that are individually less than $50,000 are equal to which the Parent Indemnified Parties or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising Seller Indemnified Parties, respectively, would recover under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d9.2(a), 4.22, 4.27 and Section 9.2(b) (in respect of Operating Wind Project Liabilities a breach of Section 5.6 as it relates to the failure to disclose any inaccuracy of any representation or warranty) or 9.3(a), but for this Section 9.5(c), exceeds $19,312,500 (the “Deductible”), whereupon the Parent Indemnified Parties and the Seller Indemnified Parties, respectively, shall be entitled to indemnification only for such Qualifying Losses in which case excess of the Sellers’ aggregate liability hereunder Deductible; provided, however, that the Deductible shall not apply to Losses in respect of claims for breach of any Fundamental Representation.
(d) Notwithstanding anything contained herein to the contrary, nothing in this Section 9.5 shall limit any Person’s rights to recovery in respect of fraud.
(e) For all such Losses will not be permitted to exceed purposes of this Article IX, any inaccuracy or breach of the Purchase Pricerepresentations and warranties contained in this Agreement (other than the Company’s representations and warranties in the fourth sentence of Section 3.5 the first sentence of Section 3.6 (a), Section 3.7(a), the Purchasers Indemnitees will not first sentence of Section 3.8, and Sections 3.9(a) and 3.14), shall be entitled to recover Losses pursuant to Section 7.2(b) determined without reference to the extent the Sellers aggregate liability hereunder for all terms “material,” “materially,” “Material Adverse Effect,” “material adverse effect” or other similar qualifications as to materiality contained or incorporated directly or indirectly in any such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, representation or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;warranty.
(vf) except for Claims arising For purposes of determining the amount of any Losses subject to indemnification under Section 3.59.2, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and Losses will be determined net of all liabilities that are specifically accrued for the Purchasers Indemniteesmatter subject to indemnification and reflected in the Final Working Capital.
(g) If any portion of Losses to be reimbursed by the Responsible Party is determined to be covered, unconditionally waives any right it in whole or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share in part, by Third Party Insurance coverage of the Purchase Price (Company as adjusted of the date hereof and any D&O “tail” coverage pursuant to Section 2.65.10, the Indemnified Party shall promptly give notice thereof to the Responsible Party (a “Notice of Insurance”). If the Responsible Party so requests within one hundred eighty (180) calendar days after receipt of a Notice of Insurance, the Indemnified Party shall use its commercially reasonable efforts to collect the maximum amount of insurance proceeds thereunder, in which event all such proceeds actually received, net of costs reasonably incurred by the Indemnified Party in seeking such collection, shall be considered “Eligible Insurance Proceeds”. Any amount payable by a Responsible Party pursuant to this Article IX shall be paid promptly and payment shall not be delayed pending any determination of Eligible Insurance Proceeds. In any case where an Indemnified Party recovers from a third Person any Eligible Insurance Proceeds and/or any other amount in respect of any Losses for which a Responsible Party has actually reimbursed such Indemnified Party pursuant to this Article IX, such Indemnified Party shall promptly pay over to the Purchased Units Responsible Party such Eligible Insurance Proceeds and/or the amount so recovered (after deducting therefrom the amount of expenses incurred by it in procuring such recovery), but not in excess of the sum of (i) any amount previously paid by the Responsible Party to or on behalf of the Indemnified Party in respect of such claim and (ii) any amount expended by the Responsible Party in pursuing or defending any claim arising out of such matter.
(h) Any Indemnified Party shall take all commercially reasonable steps to mitigate any Losses incurred by such party upon and after becoming aware of any event or condition that would reasonably be expected to give rise to any indemnification rights hereunder.
(i) If the Indemnified Party receives any payment from a Responsible Party in respect of any Losses pursuant to Sections 9.2 or 9.3 and the Shares sold by Indemnified Party could have recovered all or a part of such Seller Losses from a third party (a “Potential Contributor”) based on the underlying claim asserted against the Responsible Party, the Indemnified Party shall assign such of its rights to proceed against the Purchasers hereunderPotential Contributor as are necessary to permit the Responsible Party to recover from the Potential Contributor the amount of such payment.
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Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees Purchaser Indemnified Parties and Seller Indemnified Parties to indemnification pursuant to the provisions of Section 7.2(b) this Article VI are subject to the following limitations:
(a) Notwithstanding anything to the contrary in this Article VI: (i) except with respect to Losses incurred by a Purchaser Indemnified Party as a result of a breach of a Core Representation, in no event shall Seller be required to provide indemnification to any of the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees Purchaser Indemnified Parties with respect to any Loss claim for indemnification made pursuant to Section 6.2(a)(i), unless and until the Losses incurred by the Purchaser Indemnified Parties aggregate at least [***] (the “Indemnification Threshold”), after which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) point Seller shall be required to provide indemnification with respect to indemnifiable Losses with respect to claims for indemnification made promptly pursuant to Section 6.2(a)(i), including the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
Indemnification Threshold; and (ii) in no adjustment event shall Seller be required to provide indemnification to the Purchaser Indemnified Parties for indemnifiable Losses with respect to any claim for indemnification made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b6.2(a)(i) in an aggregate amount in excess of [***] (the “Indemnification Cap”), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely the limitations set forth in this Section 6.3(a) shall not apply to any Excluded Claim.
(b) Notwithstanding anything to the contrary in this Article VI: (i) except with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not incurred by a Seller Indemnified Party as a result of a breach of a Core Representation, in no event shall Purchaser be entitled required to recover provide indemnification to any of Seller Indemnified Parties with respect to any claim for such Losses indemnification made pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d6.2(b)(i), 4.22unless and until the Losses incurred by Seller Indemnified Parties aggregate at the Indemnification Threshold, 4.27 and in after which point Purchaser shall be required to provide indemnification with respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder to indemnifiable Losses with respect to claims for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses indemnification made pursuant to Section 7.2(b6.2(b)(i) including the Indemnification Threshold; and (ii) in no event shall Purchaser be required to the extent the Sellers aggregate liability hereunder provide indemnification to Seller Indemnified Parties for all such indemnifiable Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted arising from claims for indemnification made pursuant to Section 2.66.2(b)(i) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) in an aggregate amount in excess of the Purchase Price for all other items not listed Indemnification Cap; provided, however, that the limitations set forth in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”Section 6.3(b) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled apply to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderExcluded Claim.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Purchasers Parent Indemnitees to indemnification pursuant to the provisions of Section 7.2(b9.2(a) and of the Holder Indemnitees to indemnification pursuant to the provisions of Section 9.2(b) are subject to the following limitations:
(ia) the amount of any Loss subject to indemnification hereunder or of any Claim therefor and all Losses shall be calculated determined net of any amounts recovered by the Parent Indemnitees or Holder Indemnitees, as applicable, under insurance proceeds (net of direct collection expenses) policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees ) with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses)Losses;
(iib) no adjustment the Parent Indemnitees shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses any particular Loss pursuant to Section 7.2(b9.2(a) until unless such Losses that are individually less than Loss equals or exceeds $50,000 are equal to or exceed $300,000 in (the aggregate (and then only to the extent of such excess“Parent De Minimis Amount”);
(ivc) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b9.2(a)(i) if until the total amount which the Parent Indemnitees would recover under Section 9.2(a)(i) (Aas limited by the provisions of Section 9.4(a), Section 9.4(b) and Section 11.11), but for this Section 9.4(c), exceeds $4,000,000 (the Purchasers “Parent Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of such amount;
(or any director or officer of Purchasers who is not a Seller or a directord) from and after the Closing, officer or consultant of the Company prior to Closing) had actual knowledge shares in the Indemnity Escrow Account, at any time on or prior to given time, shall be the Closing Date sole source of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, recovery with respect to Losses indemnifiable pursuant to Section 9.2(a) and in no event shall the Parent Indemnitees be entitled to recover more than the amount of the Parent Common Stock and funds in the Indemnity Escrow Account pursuant to Section 9.2(a); provided, however, that this Section 9.4(d) shall not apply to Losses suffered or paid, directly or indirectly, by a particular LossParent Indemnitee as a result of, each Seller in connection with, or arising out of any breach of any Fundamental Representation (“Parent Excess Indemnification Losses”) for which the Parent Indemnitees shall only be required entitled to indemnify recover the Purchasers Indemnitees up to value of the amount Stock Consideration, such value determined based on the Twenty Day Average for the date of final resolution of such Loss multiplied claim. Each Company stockholder receiving Merger Consideration Shares in the Merger shall be liable Severally in Proportion, and not jointly, for Parent Excess Indemnification Losses; provided, that no Company stockholders shall be liable for amounts in excess of the Merger Consideration Shares received by such Seller’s Percentage ShareCompany stockholder; provided, further, that the Parent Indemnitees shall first make a claim for Losses against the Indemnity Escrow Account and the Indemnity Escrow Account shall be exhausted before any claims for Losses are made directly against the Company stockholders. The Purchasers, “Severally in Proportion” means several liability for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share a percentage of the Purchase Price (as adjusted pursuant Parent Excess Indemnification Losses, if any, equal to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunder.stockholder’s Escrow Percentage;
Appears in 1 contract
Limitations on Indemnification Obligations. The Notwithstanding any provision to the contrary contained in this Agreement, the rights of the Purchasers Buyer Indemnitees to indemnification pursuant to the provisions of Section 7.2(b7.2(a) are subject to the following limitations:
(ia) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall and all Losses will be calculated determined net of (i) any amounts recovered or reasonably expected to be recovered by the Buyer Indemnitees pursuant to any indemnification by, or indemnification agreement with, any third party, (ii) any amounts recovered or reasonably expected to be recovered by the Buyer Indemnitees pursuant to any insurance proceeds policy, (net iii) any other cash receipts or sources of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), reimbursement received by the Purchasers Buyer Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of or as an offset against such Loss shall be reduced by the aggregate amount Losses, (each source of the insurance recovery or indemnification payment referred to in clauses (net of direct collection expensesi), (ii) and (iii), a “Collateral Source”);
(b) excluding (i) claims arising from or based on Fraud, of any Transaction Document, and (ii) no adjustment shall be made as a result claims for breach of any multiple, increase factor, Fundamental Representations or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project LiabilitiesSpecified Representations, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Buyer Indemnitees shall not be entitled to recover Losses pursuant to this Agreement until the total amount which the Buyer Indemnitees would recover under this Agreement (as limited by the provisions of this Section 7.2(b7.4), but for this Section 7.4(b), exceeds $90,000 (the “Threshold”);
(c) in no event shall the obligations of the Sellers to provide indemnification pursuant to Section 7.2(a)(i) Agreement exceed an aggregate amount equal to the Indemnity Escrow Amount, other than based on a breach of a Fundamental Representation, Specified Representation or arising from or based on Fraud, criminal misconduct or intentional or willful misrepresentation or intentional or willful breach of any Transaction Document;
(d) the Buyer Indemnitees shall not be entitled to recover Losses hereunder resulting from breach of representations and warranties (other than based on a Fraud, breach of a Fundamental Representation or Specified Representation) from any source other than the Indemnity Escrow Amount in the Escrow Account;
(e) if any Buyer Indemnitee has been indemnified for a Loss hereunder and at any time thereafter such Buyer Indemnitee or any other Buyer Indemnitee recovers all or a portion of such Loss from a Collateral Source, the Buyer Indemnitees shall promptly refund to the Escrow Account (if the during the term of the Escrow Fund) or the Shareholder Representative (if the term of the Escrow Fund has expired and the Escrow Fund has been liquidated) the amount previously received by the Buyer Indemnitees (whether received from the Escrow Account or from or on behalf of the Sellers) with respect to such Loss (up to the amount recovered from the Collateral Source);
(f) to the extent an item has been reflected as a liability or a deduction from an asset in the calculation of the Closing Net Working Capital, or has been treated as Closing Date Funded Indebtedness or a Selling Expense included in the determination of the Closing Cash Consideration, the Buyer Indemnitees shall not be entitled to indemnification pursuant to this Agreement on account of said item; and
(g) The Sellers shall have no obligation to indemnify the Buyer Indemnitees for any Losses attributable to any Taxes (i) to the extent such Taxes have been adequately reflected as a liability in the Closing Net Working Capital, (ii) resulting from an action taken by Buyer, SMP or any of their Affiliates after the Closing Date outside the ordinary course of business that is not contemplated by this Agreement (iii) attributable to the Buyer’s breach of any covenant set forth in Section 4.4, or (iv) of Buyer, SMP or any of their Affiliates (A) the Purchasers (or attributable to any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Post-Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant Tax Period or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to any Straddle Period, attributable to the portion of such Taxable period deemed to begin after the Closing Date determined pursuant to Section 4.4(f). The Buyer Indemnitees shall use commercially reasonable efforts to make a particular Lossclaim for recovery of any amounts recoverable by them from any Collateral Source. Notwithstanding anything to the contrary set forth herein, each Seller the limitations set forth in Section 7.4(b), Section 7.4(c), Section 7.4(d) and Section 7.4(e) shall only not limit the rights of the Buyer Indemnitees to indemnification with respect to breaches of covenants or Fraud; provided, however, that the liability of the Sellers for such matters shall be required subject to indemnify the Purchasers Indemnitees up a cap equal to the amount of such Loss multiplied net, after-Tax proceeds received by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderSellers.
Appears in 1 contract
Limitations on Indemnification Obligations. (a) The rights of Partnership, the Purchasers Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) are subject to the following limitations:
(i) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder General Partner and the Purchasers, the Company and the Subsidiaries Trust shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited indemnification under Section 14.3 hereof unless a Notice of Breach has been delivered by the applicable provisions Partnership, the General Partner or the Trust within the time period specified in Section 14.2 hereof.
(b) None of this the Primary Limited Partners shall be liable under Section 7.2(c) pursuant to 14.3 hereof unless the total amount recoverable under Section 7.2(b)14.3 hereof exceeds, which amount shall serve as a one-time deductible against Lossesin the aggregate, $1,000,000; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Primary Limited Partners obligation under Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) 14.3 hereof exceeds $1,000,000 in the aggregate, the Primary Limited Partners' obligation under Section 14.3 hereof shall be for the full amount of such obligation.
(c) If a claim for indemnification is asserted by the Partnership, the General Partner or the Trust against a Primary Limited Partner, such Primary Limited Partner shall have the right, at its own expense, to assume the defense of any claim, action or proceeding ("Claim") asserted against the Partnership, the General Partner or the Trust which resulted in the claim for indemnification, and each Seller’s liability if such right is exercised, (i) the parties shall cooperate in the defense of such action or proceeding and (ii) the cost and expense of any counsel retained by the indemnified party shall be borne by such indemnified party. No Claim for Losses hereunder which indemnification is sought shall not exceed its Percentage Share be settled or otherwise completed without the prior written consent of the Liability Cap;Primary Limited Partner(s) from which indemnification is being sought.
(vd) except for Claims arising under Section 3.5Indemnification of the Partnership, the Purchasers Indemnitees shall not be entitled to recover Losses General Partner or the Trust pursuant to Section 7.2(b) if (A) 14.3 hereof and the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant remedies in respect thereof as set forth in Section 14.5 hereof shall be the exclusive remedy of the Company prior to Closing) had actual knowledge at Partnership, the General Partner and the Trust for any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representationany representation or warranty contained herein, warranty or covenant or (B) and the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to only legal action which may be asserted against a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller Primary Limited Partner under this Section 7.2 14 shall be to pursue the actions under Section 14.5 hereof.
(e) In the event that the Partnership or any Subsidiary Partnership shall pursue its rights and remedies to indemnification or otherwise against the prior owner of a Property, an insurer or any other person relating to the same facts or events which gave rise to the Notice of Breach delivered to the Primary Limited Partners, the Partnership or Subsidiary Partnership, as the case may be, shall reimburse the Primary Limited Partners for any amount paid, and costs and expenses incurred, by the Primary Limited Partners relating to such Notice of Breach and any claim thereunder to the extent any such amounts, costs or expenses are recovered by the Partnership or Subsidiary Partnership. In the event that the Partnership or any Subsidiary Partnership determines not exceed such Seller’s Percentage Share to pursue its rights and remedies against a prior owner of a Property, an insurer or any other person relating to the same facts and events which gave rise to the Notice of Breach delivered to the Primary Limited Partners, the Partnership or Subsidiary Partnership shall, upon request of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units Primary Limited Partners, assign its rights and the Shares sold by such Seller remedies with respect thereto to the Purchasers hereunderPrimary Limited Partners. The Primary Limited Partners shall thereafter be free to pursue such rights and remedies for its own account and at its sole cost and expense and any amounts recovered from the prior owner of a Property, an insurer or any other person by the Primary Limited Partners shall be their sole property and neither the Trust, the Partnership nor any Subsidiary Partnership shall have any rights thereto.
Appears in 1 contract
Sources: Limited Partnership Agreement (Glimcher Realty Trust)
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees (a) Seller shall have no obligation to indemnification pursuant to the provisions of Section 7.2(b) are subject to the following limitations:
(i) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers indemnify Purchaser Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to Losses described in Section 7.01(a) until the aggregate amount of all such Losses exceeds $500,000 (such amount, the recovery or payment (net of direct collection expenses and Taxes) shall “Basket”), in which case Seller will be made promptly liable for all Losses, subject to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations other limitations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses7.05; provided, however, that thereafter solely the Basket shall not apply to Losses arising from (i) fraud or willful misconduct by Seller or (ii) any breach or inaccuracy of the Tax Representations or the Seller Fundamental Representations.
(b) Seller shall have no obligation to indemnify Purchaser Indemnitees with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 Section 7.01 in excess of twelve and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty one-half percent (2012.5%) of the Purchase Price received (as adjusted pursuant such amount, the “General Cap”); provided, however, that the General Cap shall not apply to Losses arising from (i) fraud or willful misconduct by Seller or (ii) breaches or inaccuracies of the Tax Representations or the Seller Fundamental Representations.
(c) For Losses in connection with claims relating to a breach or inaccuracy of the Tax Representations or the Seller Fundamental Representations, Seller shall have no obligation to indemnify Purchaser Indemnitees with respect to Losses arising under Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten 7.01 in excess of thirty-five percent (1035%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection received (such amount, the “Liability Fundamental Representations Cap”) in ); provided, however, that the aggregate, and each Seller’s liability for Losses hereunder Fundamental Representations Cap shall not exceed its Percentage Share of the Liability Cap;apply to Losses arising from fraud or willful misconduct by Seller.
(vd) except for Claims Purchasers shall have no obligation to indemnify Seller Indemnitees with respect to Losses arising under Section 3.57.02(a) until the aggregate amount of all Losses arising thereunder exceeds the Basket, in which case Purchasers will be jointly and severally liable for all Losses, subject to the other limitations in this Section 7.05; provided, however, that the Basket shall not apply to Losses arising from (i) fraud or willful misconduct by Purchasers or (ii) breaches or inaccuracies of the Purchasers Fundamental Representations.
(e) Purchasers shall have no obligation to indemnify Seller Indemnitees under Section 7.02 with respect to Losses in excess of the General Cap.
(f) Notwithstanding anything to the contrary in this Agreement, (i) Purchaser Indemnitees’ rights to indemnification with respect to Losses based upon fraud or willful misconduct shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior subject to the Closing Date of the factslimitations set forth in Sections 7.05(a) and 7.05(b), events or conditions constituting or resulting in such breach of representation, warranty or covenant or and (Bii) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, Seller Indemnitee’s rights to indemnification with respect to Losses based upon fraud or willful misconduct shall not be subject to the limitations set forth in Sections 7.05(c) and 7.05(d).
(g) The amount of any Losses for which indemnification is provided under this Article VII shall be net of any Tax benefit actually realized and received by the Indemnified Party (which term shall, for purposes of this paragraph, include the ultimate payer(s) of Taxes in the case of an Indemnified Party that is a particular Lossbranch or a disregarded entity or other pass-through entity for any Tax purpose) as a result of the circumstances giving rise to the Loss (determined on a “with and without” basis by computing the Indemnified Party’s Tax liability with and without taking the Losses and all related Tax consequences into account); provided, each Seller that if the Indemnified Party does not actually realize and receive any such reduction in Taxes at the time of such payment or indemnity by the Indemnifying Party, then (i) the Indemnifying Party shall only be required to indemnify the Purchasers Indemnitees up to pay the amount of such Loss multiplied payment or indemnity without taking into account any such reduction in Taxes and (ii) the Indemnified Party shall remit to the Indemnifying Party the amount of any such reduction in Taxes actually realized and received by such Seller’s Percentage Shareperson but only to the extent that such reduction in Taxes is actually realized and received no later than four (4) years after any such payment or indemnity is made. The PurchasersIn determining the amount necessary to be subtracted from any payment or indemnity or to be remitted to the Indemnifying Party, as the case may be, in order to accomplish the foregoing, the Parties hereto agree (i) to treat all Taxes required to be paid by, and all reductions in Tax realized by any Indemnified Party, as if such Indemnified Party were subject to Tax at the actual marginal Tax rates (for themselves both federal and for the Purchasers Indemniteesstate, unconditionally waives as determined on a combined basis) applicable to such Indemnified Party and (ii) to treat any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller indemnification payments made to the Purchasers hereunderpursuant to this Agreement as a reduction to the final Purchase Price, unless either party receives a written opinion, reasonably satisfactory in form and substance to the other party, of a law firm with appropriate experience and expertise to the effect that it is not or is not likely to be permissible to treat such payments in that manner on a Tax Return.
(h) The representations, warranties and covenants of the Indemnifying Party, and the Indemnified Party’s right to indemnification with respect thereto, shall not be affected or deemed waived by reason of any investigation made by or on behalf of the Indemnified Party (including by any of its Representatives) or by reason of the fact that the Indemnified Party or any of its Representatives knew or should have known that any such representation or warranty is, was or might be inaccurate or by reason of the Indemnified Party’s waiver of any condition set forth in Section 6.02 or Section 6.03, as the case may be.
Appears in 1 contract
Limitations on Indemnification Obligations. The Notwithstanding anything to the contrary contained herein, the rights of the Purchasers Purchaser Indemnitees to any indemnification pursuant to the provisions of Section 7.2(b) 8.2 are subject to the following limitations:
(a) Except with respect to (i) claims for Fraud, and (ii) breaches of Fundamental Representations made by the Company, the aggregate amount of Losses for which the Purchaser Indemnitees shall be entitled to indemnification by the Company Equityholders pursuant to Section 8.2(a)(i) and Section 8.2(a)(iii) will not exceed the Indemnity Escrow Amount;
(b) the amount of any Loss subject and all Losses pursuant to indemnification hereunder or of any Claim therefor Section 8.2(a) shall be calculated determined net of any amounts actually recovered by the Purchaser Indemnitees under insurance proceeds (net of direct collection expenses) policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees ) with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to Losses (after deducting therefrom the aggregate amount sum of the recovery or payment (net increase of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne any insurance premiums incurred by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made Purchaser Indemnitee as a result of its recovery under any multiple, increase factor, or any other premium over insurance policy) and the value Purchaser Indemnitees shall be required to use commercially reasonable efforts to timely pursue such recovery;
(c) the aggregate amount required to be paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used Company Equityholders under Section 8.2(a)(ii) shall in no event exceed the amount of Gross Merger Consideration actually received by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shareseach Company Equityholder;
(iiid) except for Claims arising under Section 3.5 the Purchaser Indemnitees or in respect of Operating Wind Project Liabilitiesthe Seller Indemnitees, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b)applicable, which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b8.2(a)(i), Section 8.2(a)(iii), or Section 8.2(b)(i), other than with respect to claims for Fraud or resulting from or relating to a breach of any of the Fundamental Representations, until the total amount which the Purchaser Indemnitees would recover under Section 8.2(a)(i) and Section 8.2(a)(iii) or the Seller Indemnitees would recover under Section 8.2(b)(i), as applicable, (as limited by the provisions of this Article VIII and 11.14), is an amount equal to one-half of one percent (0.50%) of the Gross Merger Consideration (the “Threshold”), in which case the Purchaser Indemnitees or the Seller Indemnitees, as applicable, shall only be entitled to recover all Losses in excess of the Threshold;
(e) except with respect to claims arising from Fraud or breaches of the Fundamental Representations, the Indemnity Escrow Amount remaining at any given time in the Indemnity Escrow Account shall be the sole source of recovery, and in no event shall the Purchaser Indemnitees be entitled to recover more than the amount of the funds available in the Indemnity Escrow Account pursuant to Section 8.2(a)(i) and Section 8.2(a)(iii) in the aggregate;
(f) breaches of the Fundamental Representations made by the Company shall be satisfied: (i) first, from the Indemnity Escrow Account; (ii) second, by submission of claims by Parent pursuant to the R&W Insurance Policy until such time as the policy limit set forth in the R&W Insurance Policy has been reached; and (iii) thereafter, if the aggregate amount of indemnifiable Losses for breaches of the Fundamental Representations made by the Company exceeds the policy limit set forth in the R&W Insurance Policy, then, against the Company Equityholders (solely to the extent of such excess) and subject to each of the limitations set forth in this Article VIII; provided that the aggregate amount required to be paid by the Company Equityholders under Section 8.2(a)(i) and Section 8.2(a)(iii) for breaches of Fundamental Representations shall in no event exceed the amount of Gross Merger Consideration actually received by each Company Equityholder. Notwithstanding anything to the contrary set forth in this Section 8.4, to the extent Parent is unable to recover Losses under the R&W Insurance Policy because (x) the policy limit under the R&W Insurance Policy has been met, and (y) a portion of Losses previously recovered under the R&W Insurance Policy related to breaches of the Fundamental Representations, then: (1) the total aggregate amount of the liability of the Company Equityholders for Losses with respect to any subsequent claims for breaches of any Fundamental Representations made by the Company shall be increased by an amount (the “Additional Cap Amount”) equal to the amount of Losses previously recovered by Parent under the R&W Insurance Policy related to breaches of the Fundamental Representations; and (2) the total aggregate amount of the liability of the Company Equityholders for Losses with respect to any claims made pursuant to Section 8.2(a)(i) and Section 8.2(a)(iii) (excluding Fundamental Representations) shall be increased by an amount equal to the lesser of (A) the Purchasers Additional Cap Amount, and (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant B) that portion of the Indemnity Escrow Amount that was previously used to satisfy Losses for breaches of any Fundamental Representations, and Parent shall be entitled to seek indemnification under this Article 8 for Losses up to such amounts, as applicable, directly from the Company prior Equityholders. For the avoidance of doubt, this Section 8.4(f) does not increase the survival periods in Section 8.1.
(g) Nothing in this Agreement shall in any way restrict or limit any general obligation at Law of an Indemnified Party to Closingmitigate any Losses which it may suffer or incur by reason of the breach by a Responsible Party of any representation or warranty or the breach of any covenant of the Responsible Party hereunder;
(h) had actual knowledge Parent, on behalf of itself and each other Purchaser Indemnitee, further acknowledges and agrees that the provisions of Section 8.4(e) shall apply regardless of whether (i) Parent obtains at or following Closing or maintains following Closing the R&W Insurance Policy, (ii) the R&W Insurance Policy expires, is revoked, cancelled or modified in any time manner after issuance, or (iii) any Purchaser Indemnitee makes a claim under the R&W Insurance Policy and such claim is denied by the insurer under such R&W Insurance Policy;
(i) in no event shall any Purchaser Indemnitees be entitled to seek or receive indemnification for the same Loss more than once under this Article VIII even if a claim for indemnification in respect of such Loss has been made as a result of a breach of more than one (1) representation, warranty, covenant or agreement contained in this Agreement;
(j) in no event shall any Purchaser Indemnitee be entitled to indemnification pursuant to this Article VIII with respect to a specific Loss to the extent such Loss is (i) clearly and separately reserved for on the face of the Balance Sheet Date or prior in the footnotes to any other Financial Statements, (ii) is included in the calculation of the Gross Merger Consideration, including any such Loss that is related to any reserve or other similar item included in such calculation, or (iii) consisting of or relating to Taxes with respect to any taxable period beginning after the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to any Straddle Period, the portion of such Straddle Period following the Closing Date as a particular Lossresult of any breach of the representations and warranties set forth in Section 3.8; Notwithstanding anything contained herein to the contrary, each Seller after the Closing, and except with respect to claims arising from Fraud or breaches of the Fundamental Representations, on the date that the Indemnity Escrow Amount is reduced to zero, the Purchaser Indemnitees shall only be required have no further rights to indemnify indemnification from any Person or otherwise under or pursuant to this Agreement. In any case where a Purchaser Indemnitee recovers, under insurance policies or from other collateral sources, any amount, or realizes any Tax Benefit not previously taken into account, in respect of a matter for which such Purchaser Indemnitee was indemnified pursuant to Section 8.2, such Purchaser Indemnitee shall promptly pay over to the Purchasers Indemnitees up to Exchange Agent (on behalf of, and for further distribution to, the Company Equityholders) the amount so recovered or realized (after deducting therefrom the amount of such Loss multiplied the expenses incurred by such Seller’s Percentage Share. The PurchasersPurchaser Indemnitee in procuring such recovery or realization), for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall but not exceed such Seller’s Percentage Share in excess of the Purchase Price sum of (as adjusted pursuant i) any amount previously so paid to Section 2.6or on behalf of such Purchaser Indemnitee in respect of such matter and (ii) for any amount expended by the Purchased Units and the Shares sold by Company Equityholders in pursuing or defending any claim arising out of such Seller to the Purchasers hereundermatter.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees Parent Indemnified Parties to indemnification pursuant to the provisions of Section 7.2(b9.2(a) are subject to the following limitations:limitations set forth below.
(ia) the amount of any Loss subject With respect to claims for Damages by a Parent Indemnified Party pursuant to Section 9.2(a)(i), such Parent Indemnified Party shall be entitled to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to Damages only when the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly all Damages to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any Parent Indemnified Party other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising than Damages recoverable under Section 3.5 or in respect of Operating Wind Project Liabilities9.2(a)(ix) exceeds $1,000,000 (the “Deductible”), the Purchasers Indemnitees will not and then such Parent Indemnified Party shall be entitled to recover indemnification only for its Damages that are in excess of the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against LossesDeductible; provided, however, that thereafter the Deductible shall not apply to claims for Damages by a Parent Indemnified Party pursuant to Section 9.2(a)(i) relating to Fundamental Representations or claims for fraud. The aggregate liability of all of the Sellers, on the one hand, and Parent, on the other hand, for Damages shall not exceed the Escrow Amount or be paid from any other source other than the Escrow Funds; provided, however, that such limitation shall not apply to claims for fraud.
(b) No Seller shall be entitled to contribution from, or indemnification by, Parent or the Surviving Entity, directly or indirectly, under the Company’s Governing Documents, this Agreement, applicable corporate or other laws or otherwise, in respect of amounts due from a Seller to a Parent Indemnified Party under this ARTICLE IX, and Sellers shall hold the Company and the Parent Indemnified Parties harmless in respect of all such amounts and shall not seek to join the Company in connection with any suit arising under this Agreement.
(c) No information or knowledge acquired, or investigations conducted, by Parent, Merger Sub or their respective representatives or otherwise shall in any way limit, or constitute a waiver of, or a defense to, any right of a Parent Indemnified Party to assert a claim for indemnification under this Agreement or the Escrow Agreement.
(d) All materiality qualifications contained in the Company’s or the Sellers’ representations and warranties in this Agreement or in any Ancillary Document, including the term Company Material Adverse Effect, shall be taken into account under this ARTICLE IX solely for purposes of determining whether a breach or violation has occurred for which an indemnity obligation exists. Without limiting the generality of the foregoing, with respect to Losses any representation or warranty that are individually less than $50,000 is breached, all such qualifications shall be ignored and not given effect for purposes of determining the Purchasers Indemnitees will not be entitled to recover for amount of any Damages resulting from any such Losses pursuant to Section 7.2(bbreach or violation.
(e) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only Notwithstanding any provisions of this Agreement to the extent contrary, none of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregateshall be responsible for, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees Parent Indemnified Parties shall not be entitled to, indemnification with respect to recover Losses Taxes of a Group Company for a taxable period beginning after the Closing Date, or the portion of a Straddle Period beginning after the Closing Date, to the extent attributable the amount, expiration date, availability of or limitations on any Group Company Tax attributes, including any net operating loss, capital loss or credit carryover, and including tax bases of assets, or the depreciation or amortization thereof, of any Group Company. For the avoidance of doubt, this Section 9.4(e) shall not in any way be interpreted as limiting the obligations of Sellers to indemnify, defend and hold harmless the Parent Indemnified Parties pursuant to Section 7.2(b9.2(a)(vii) if (A) the Purchasers (or any director or officer for Taxes of Purchasers who is not a Seller or Group Company for a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time taxable period ending on or prior to the Closing Date Date, or the portion of a Straddle Period ending on the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderClosing Date.
Appears in 1 contract
Sources: Merger Agreement (Aramark Corp)
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees Indemnified Parties to indemnification pursuant to the provisions of Section 7.2(b) this Article IX are subject to the following limitations:
(a) With respect to each indemnification obligation in this Article IX: (i) the amount of any Loss subject to indemnification hereunder or of any Claim therefor will be determined on an After-Tax Basis, (ii) all Losses shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event Eligible Insurance Proceeds that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has have already been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units amount of such Losses are determined and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) in no event shall an Indemnifying Party have liability to the Indemnified Party for any consequential, special, indirect or punitive damages, lost profits, diminution in value or similar items, except for Claims arising under Section 3.5 or in respect if and to the extent any such damages are recovered against an Indemnified Party pursuant to a Third Party Claim.
(b) None of Operating Wind Project Liabilities, the Purchasers Indemnitees will not Indemnified Parties shall be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) for any particular Loss pursuant to Section 7.2(bSections 9.2(a) or 9.3(a) unless such Loss (or series of related Losses) equals or exceeds $50,000 (each, a “Qualifying Loss”), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect this limitation shall not apply to Losses that are individually less than $50,000 in respect of claims for breaches of any Fundamental Representation.
(c) None of the Purchasers Indemnitees will not Parent Indemnified Parties or the Seller Indemnified Parties shall be entitled to recover for such Qualifying Losses pursuant to Section 7.2(bSections 9.2(a) 83 or 9.3(a) (as applicable) until such the total amount of Qualifying Losses that are individually less than $50,000 are equal to which the Parent Indemnified Parties or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising Seller Indemnified Parties, respectively, would recover under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d9.2(a) or 9.3(a), 4.22but for this Section 9.5(c), 4.27 exceeds $10,350,000 (the “Deductible”), whereupon the Parent Indemnified Parties and the Seller Indemnified Parties, respectively, shall be entitled to indemnification only for such Qualifying Losses in excess of the Deductible; provided, however, that the Deductible shall not apply to Losses in respect of Operating Wind Project Liabilities claims for breach of any Fundamental Representation.
(d) Notwithstanding anything contained herein to the contrary, nothing in which case this Section 9.5 shall limit any Person’s rights to recovery in respect of fraud or willful misconduct.
(e) For all purposes of this Article IX, any inaccuracy or breach of the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed representations and warranties contained in this Agreement (other than the Purchase PriceCompany’s representations and warranties in the first sentence of Section 3.6(a), Section 3.7(a), the Purchasers Indemnitees will not first sentence of Section 3.8, and Sections 3.9(a) and 3.14, shall be entitled to recover Losses pursuant to Section 7.2(b) determined without reference to the extent the Sellers aggregate liability hereunder for all terms “material,” “materially,” “Material Adverse Effect,” “material adverse effect” or other similar qualifications as to materiality contained or incorporated directly or indirectly in any such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, representation or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;warranty.
(vf) except for Claims arising For purposes of determining the amount of any Losses subject to indemnification under Section 3.59.2, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The PurchasersLosses will be determined net of all liabilities that are (i) properly accrued, for themselves and (ii) specifically accrued for the Purchasers Indemniteesmatter subject to indemnification and (iii) reflected in the Final Closing Working Capital.
(g) Any portion of Losses to be reimbursed by the Responsible Party determined to be covered, unconditionally waives any right it in whole or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share in part, by Third Party Insurance coverage of the Purchase Price (Company as adjusted of the date hereof and any D&O “tail” coverage pursuant to Section 2.65.10, the Indemnified Party shall promptly give notice thereof to the Responsible Party (a “Notice of Insurance”). If the Responsible Party so requests within one hundred eighty (180) calendar days after receipt of a Notice of Insurance, the Indemnified Party shall use its commercially reasonable efforts to collect the maximum amount of insurance proceeds thereunder, in which event all such proceeds actually received, net of costs reasonably incurred by the Indemnified Party in seeking such collection, shall be considered “Eligible Insurance Proceeds”. Any amount payable by a Responsible Party pursuant to this Article IX shall be paid promptly and payment shall not be delayed pending any determination of Eligible Insurance Proceeds. In any case where an Indemnified Party recovers from a third Person any Eligible Insurance Proceeds and/or any other amount in respect of any Losses for which a Responsible Party has actually reimbursed such Indemnified Party pursuant to this Article IX, such Indemnified Party shall promptly pay over to the Purchased Units Responsible Party such Eligible Insurance Proceeds and/or the amount so recovered (after deducting therefrom the amount of expenses incurred by it in procuring such recovery), but not in excess of the sum of (i) any amount previously paid by the Responsible Party to or on behalf of the Indemnified Party in respect of such claim and (ii) any amount expended by the Responsible Party in pursuing or defending any claim arising out of such matter.
(h) Any Indemnified Party shall take all commercially reasonable steps to mitigate any Losses incurred by such party upon and after becoming aware of any event or condition that would reasonably be expected to give rise to any indemnification rights hereunder.
(i) If the Indemnified Party receives any payment from a Responsible Party in respect of any Losses pursuant to Sections 9.2 or 9.3 and the Shares sold by Indemnified Party could have recovered all or a part of such Seller Losses from a third party (a “Potential Contributor”) based on the underlying claim asserted against the Responsible Party, the Indemnified Party shall assign such of its rights to proceed against the Purchasers hereunderPotential Contributor as are necessary to permit the Responsible Party to recover from the Potential Contributor the amount of such payment.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees to indemnification pursuant (a) Notwithstanding anything to the provisions of contrary in Section 7.2(b7.2(a) are subject or (b), in no event shall the Sellers be required to the following limitations:
provide indemnification under this Article VII: (i) unless and until the amount Purchaser Indemnified Parties shall have incurred aggregate indemnifiable Losses under this Article VII of any Loss subject to indemnification hereunder or of any Claim therefor at least fifty thousand dollars ($50,000) (the “Seller Indemnification Deductible”), at which point the Sellers shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources required to the same extent as they would if such Loss were not subject to provide indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees only with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations indemnifiable Losses in respect excess of such Loss shall be reduced by the aggregate amount of the insurance recovery amount; or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result for aggregate indemnifiable Losses under this Article VII in excess of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against LossesSeller Indemnification Cap; provided, however, that thereafter solely neither the Seller Indemnification Deductible nor the Seller Indemnification Cap shall be applicable to any Losses resulting from: (A) any breach of any covenant or agreement of any of the Companies or any of the Sellers set forth in this Agreement or any inaccuracy in the Seller Closing Certificate relating to any of such covenants or agreements; (B) any willful or intentional breach of this Agreement by any of the Companies or any of the Sellers; (C) any fraud by any of the Companies or any of the Sellers related to the transactions contemplated hereby; (D) any breach of, or inaccuracy in, any of the Seller Fundamental Representations or any inaccuracy in the Seller Closing Certificate relating to any of the Seller Fundamental Representations; or (E) any of the matters described in Section 7.2(a)(iv), (v), or (vi).
(b) Notwithstanding anything to the contrary in Section 7.2(c), in no event shall the Purchaser or Purchaser Europe be required to provide indemnification under this Article VII: (i) unless and until the Seller Indemnified Parties shall have incurred aggregate indemnifiable Losses under this Article VII of at least fifty thousand dollars ($50,000) (the “Purchaser Indemnification Deductible”), at which point the Purchaser and Purchaser Europe shall be required to provide indemnification only with respect to any such indemnifiable Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent excess of such excess);
amount; or (ivii) except for Claims arising aggregate indemnifiable Losses under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and this Article VII in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) excess of the Purchase Price (as adjusted pursuant Purchaser Indemnification Cap; provided, however, that neither the Purchaser Indemnification Deductible nor the Purchaser Indemnification Cap shall be applicable to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for any Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if resulting from: (A) the Purchasers (any breach of any covenant or any director or officer of Purchasers who is not a Seller or a director, officer or consultant agreement of the Company prior to Closing) had actual knowledge at any time on Purchaser or prior to the Closing Date of the facts, events or conditions constituting or resulting Purchaser Europe set forth in such breach of representation, warranty or covenant or this Agreement; (B) any willful or intentional breach of this Agreement by the Purchasers could have mitigated Purchaser or prevented such Loss using commercially reasonable effortsPurchaser Europe; and
(viB) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify any fraud by the Purchasers Indemnitees up Purchaser or Purchaser Europe related to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchaserstransactions contemplated hereby; or (C) any breach of, for themselves and for the Purchasers Indemniteesor inaccuracy in, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant Purchaser Fundamental Representations or any inaccuracy in the Purchaser Closing Certificate relating to Section 2.6) for any of the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderPurchaser Fundamental Representations.
Appears in 1 contract
Sources: Purchase Agreement (Global Telecom & Technology, Inc.)
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees to indemnification pursuant Notwithstanding anything to the provisions of Section 7.2(b) are subject to the following limitationscontrary contained herein:
(i) (A) With respect to the amount indemnification obligations of any Loss the Company Equityholders pursuant to Section 6.1(a)(i)1), the Company Equityholders shall not be obligated to indemnify the Parent Indemnified Parties under Section 6.1(a)(i)1) unless the aggregate of all Losses for which the Company Equityholders would, but for this clause (i)(A), be liable under Section 6.1(a)(i)1) exceeds on a cumulative basis $550,000 (the “Deductible”), at which point, subject to indemnification hereunder or of any Claim therefor other applicable limitations contained in this Section 6.1(e), the Parent Indemnified Parties shall be calculated net entitled to all indemnification amounts under Section 6.1(a)(i)1) from the Company Equityholders in excess of the Deductible up to an amount equal to $1,100,000 (the “Retention”); and (B) with respect to the indemnification obligations of the Company Equityholders pursuant to Section 6.1(a), the Company Equityholders shall not be obligated to indemnify Parent Indemnified Parties under Section 6.1(a) for any insurance proceeds Losses for which the Company Equityholders would, but for this clause (net B), be obligated to indemnify the Parent Indemnified Parties under Section 6.1(a) in excess of direct collection expenses) an amount equal to the Closing Payment plus the Earnout Amount that is actually paid pursuant to this Agreement (or other collateral sources (would be paid but for an offset against such as contractual indemnities of any Person which are contained outside of Earnout Amount in accordance with this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely the limitations in Section 6.1(e)(i)(A) shall not apply (x) to any indemnification obligations arising from the Fundamental Representations, or (y) in the case of Fraud with respect to this Agreement or the transactions contemplated hereby. The amount equal to the Retention minus the Deductible is defined herein as the “Stockholder Retention Amount”.
(ii) With respect to the indemnification obligations of Parent and Merger Sub pursuant to Section 6.1(b)(i), Parent and Merger Sub shall not be obligated to indemnify the Stockholder Indemnified Parties under Section 6.1(b)(i) unless the aggregate of all Losses that are individually less than $50,000 for which Parent and Merger Sub would, but for this clause (ii), be liable under this Agreement exceeds on a cumulative basis the Purchasers Indemnitees will not Deductible, at which point the Stockholder Indemnified Parties shall be entitled to recover for such Losses all indemnification amounts under Section 6.1(b)(i) in excess of the Deductible, provided, however, that the limitations in this Section 6.1(e)(ii) shall not apply (A) to any indemnification obligations arising from the Fundamental Representations, or (B) in the case of Fraud with respect to this Agreement or the transactions contemplated hereby.
(iii) With respect to the indemnification obligations of Parent and Merger Sub pursuant to Section 7.2(b6.1(b), Parent and Merger Sub shall not be obligated to indemnify the Stockholder Indemnified Parties under Section 6.1(b) until such for any Losses that are individually less than $50,000 are for which Parent or Merger Sub would, but for this clause (iii), be obligated to indemnify the Stockholder Indemnified Parties under Section 6.1(b) in excess of an amount equal to the Closing Payment plus the Earnout Amount; provided, however, that the limitations in this clause (iv) shall not apply (A) to any indemnification obligations arising from the representations and warranties set forth in Section 3.2 or exceed $300,000 Section 3.7, or (B) in the aggregate (and then only case of Fraud with respect to this Agreement or the extent of such excess);transactions contemplated hereby.
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case The Company or the SellersStockholders’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees Representative shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (contribution or any director other payments from the Company or officer any of Purchasers who is not a Seller its subsidiaries for any Losses for which the Company or a director, officer or consultant the Stockholders’ Representative (on behalf of the Company prior Equityholders) is obligated to Closing) had actual knowledge at make any time on or prior payment to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted Parent Indemnified Party pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderthis Agreement (including ARTICLE VI).
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees to indemnification pursuant to the provisions of provided for in Section 7.2(b) are 10.2 hereof shall be subject to the following limitations:
(ia) The Seller shall not be liable to the Buyer Indemnitees for indemnification under Section 10.2(a)(i) and 10.2(a)(ii) hereof until the aggregate amount of any Loss subject all Damages in respect of indemnification under Section 10.2(a)(i) and 10.2(a)(ii) exceeds US $500,000 (the “Deductible”), in which event the Seller shall only be required to indemnification hereunder pay or be liable for Damages in excess of the Deductible.
(b) The aggregate amount of all Damages for which the Seller shall be liable the Buyer Indemnitees pursuant to Section 10.2(a) hereof shall not exceed US $5,000,000.
(c) Notwithstanding the foregoing, the limitations contained in Sections 10.3(a) and 10.3(b) hereof will not limit the Seller’s obligations to indemnify the Buyer Indemnitees in respect of any Claim therefor shall be calculated net Damages that any Buyer Indemnitee may suffer, sustain, or become subject to, as a result of any insurance proceeds (net of direct collection expenses) fraud or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss intentional misrepresentation or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount and all breaches of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against LossesFundamental Representations; provided, however, that thereafter solely the aggregate amount of all Damages for which the Seller shall be liable to the Buyer Indemnitees under this Section 10.3(c) as result of fraud or intentional misrepresentation or with respect to Losses that are individually less than $50,000 any and all breaches of the Purchasers Indemnitees will Fundamental Representations shall not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), .
(d) Payments by the Purchasers Indemnitees will not be entitled to recover Losses Seller pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”10.2(a) in the aggregate, and each Seller’s liability for Losses hereunder respect of any Damages shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up limited to the amount of any liability or damage that remains after deducting therefrom any insurance proceeds received by the Buyer or the Target Company in respect of any such Loss multiplied claim (net of deductibles or other Damages incurred by such Seller’s Percentage Share. The PurchasersBuyer Indemnitee as a result of such claim, for themselves all direct collection expenses and any increased premium costs).
(e) In calculating the amount of Damages related to a breach of or inaccuracy in a representation, warranty, covenant or agreement hereunder (and for purposes of determining whether a breach or inaccuracy has occurred), the Purchasers Indemnitees, unconditionally waives Seller shall have no liability for any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller Damages under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller Agreement to the Purchasers hereunderextent such Damages were taken into account as a liability or a reduction in the value of assets in determining the Final Net Working Capital Amount.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees to (a) Notwithstanding Section 8.1, there shall be no liability for indemnification pursuant to the provisions of under Section 7.2(b8.1(a) are subject to the following limitations:
unless (i) the aggregate amount of any Loss subject all Losses for which indemnification is to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds provided thereunder exceeds $1,000,000 (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreementthe “Indemnification Threshold”), received by at which t▇▇▇ ▇▇▇▇▇▇ will be obligated to indemnify the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees Buyer Indemnified Parties with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of all such Losses in excess of the recovery Indemnification Threshold, and (ii) the amount of Losses with respect to any single Claim, or payment any aggregated Claims arising out of the same or related facts, events or circumstances, for which indemnification is to be provided under Section 8.1(a) exceeds $25,000 (net the “Per-Claim Indemnification Threshold”); provided that the Indemnification Threshold and the Per-Claim Indemnification Threshold shall not apply in the case of direct collection expenses (A) Fraud, (B) any breach of or inaccuracy in any representation or warranty made by Seller in any of the following Sections: 2.1 (due organization), 2.2(a) (authorization), 2.5 (assets) and Taxes2.17 (brokers and agents) (collectively, the “Seller Fundamental Representations”), (C) any breach of or inaccuracy in any representation or warranty made by Seller in Section 2.6 (taxes) or (D) any Taxes that constitute Retained Liabilities.
(b) Notwithstanding Section 8.2, there shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ no liability for indemnification obligations in respect of such Loss shall be reduced by under Section 8.2(a) unless (i) the aggregate amount of Losses for which indemnification is to be provided thereunder exceeds the insurance recovery or indemnification payment (net Indemnification Threshold, at which time Buyer will be obligated to indemnify the Seller Indemnified Parties with respect to the aggregate amount of direct collection expenses);
all Losses described in Section 8.2(a) in excess of the Indemnification Threshold, and (ii) no adjustment shall be made as a result the amount of Losses with respect to any multiple, increase factorsingle Claim, or any other premium over aggregated Claims arising out of the value paid by same or related facts, events or circumstances, for which indemnification is to be provided under Section 8.2(a) exceeds the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at Per-Claim Indemnification Threshold; provided that the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units Indemnification Threshold and the Shares Per-Claim Indemnification Threshold shall not apply in the case of (A) Fraud, (B) any breach of or its final purchase price for inaccuracy in any representation or warranty made by Buyer in any of the Purchased Units following Sections: 3.1 (due organization), 3.2(a) (authorization), 3.4 (capitalization), 3.5 (buyer common stock) and 3.13 (brokers and agents) (collectively, the Shares;“Buyer Fundamental Representations”) or (C) any breach of or inaccuracy in any representation or warranty made by Buyer in Section 3.8 (taxes).
(iiic) except for Claims arising The indemnification obligations of Seller under Section 3.5 or 8.1(a) shall be limited in respect of Operating Wind Project Liabilitiesthe aggregate to an amount equal to the Cap, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely the Cap shall not apply to Seller’s indemnification obligations under Section 8.1(a) in the case of (i) Fraud, (ii) any breaches of or inaccuracies in any Seller Fundamental Representations, (iii) any breaches of or inaccuracies in any of Seller’s representations or warranties set forth in Section 2.6 (taxes) or (iv) any Taxes that constitute Retained Liabilities, which obligations (when aggregated with Seller’s other indemnification obligations under Section 8.1(a)) shall be limited to an amount equal to the Maximum Liability Amount. Notwithstanding anything to the contrary in this Agreement, except in the case of Fraud, the maximum aggregate liability of Seller (for indemnification or otherwise) with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled any matter under this Agreement (including with respect to recover for such Losses any breaches of or inaccuracies in any Seller Fundamental Representations, any of Seller’s representations or warranties set forth in Section 2.6 (taxes) or pursuant to any of the other indemnities set forth in Section 7.2(b8.1) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 shall be the Maximum Liability Amount.
(d) The indemnification obligations of Buyer under Section 8.2(a) shall be limited in the aggregate (and then only to an amount equal to the extent of such excess);
(iv) except for Claims arising Cap, provided, however, that the Cap shall not apply to Buyer’s indemnification obligations under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”8.2(a) in the aggregatecase of (i) Fraud, and each Seller(ii) any breaches of or inaccuracies in any Buyer Fundamental Representations or (iii) any breaches of or inaccuracies in any of Buyer’s representations or warranties set forth in Section 3.8 (taxes), which obligations (when aggregated with Buyer’s other indemnification obligations under Section 8.2(a))) shall be limited to an amount equal to the Maximum Liability Amount. Notwithstanding anything to the contrary in this Agreement, except in the case of Fraud, the maximum aggregate liability of Buyer (for Losses hereunder shall not exceed its Percentage Share indemnification or otherwise) with respect to any matter under this Agreement (including with respect to any breaches of or inaccuracies in any Buyer Fundamental Representations, any of Buyer’s representations or warranties set forth in Section 3.8 (taxes) or pursuant to any of the other indemnities set forth in Section 8.2) shall be the Maximum Liability Cap;Amount.
(ve) except for Claims arising Notwithstanding anything to the contrary in this Agreement: (i) no Indemnified Party shall have any obligations under Section 3.58.1 or Section 8.2, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5as applicable, with respect to any matter for which any Indemnified Party is or would be entitled to indemnification under Section 8.1 or Section 8.2 (without giving effect to any limitations, including as to time, survival periods, deductibles, thresholds, caps, knowledge or materiality qualifiers); and (ii) if a particular LossParty is entitled to bring a claim under more than one provision of Section 8.1 or 8.2, each Seller as the case may be, such Party may choose in its sole and absolute discretion the provision or provisions under which it seeks indemnification.
(f) The amount of Losses recoverable by the Indemnified Party under this Article VIII shall only be required to indemnify the Purchasers Indemnitees up to reduced, on a dollar-for-dollar basis, by the amount of (i) any insurance proceeds received by the Indemnified Party in connection with a Claim under this Article VIII (net of any costs of obtaining such Loss multiplied recovery and increases in premiums resulting from such Losses which are borne by the Indemnified Party) and (ii) any amounts collected from any other third parties in respect of such Losses (net of any costs of obtaining such recovery).
(g) Notwithstanding anything to the contrary in this Agreement, for purposes of determining (i) whether there has been a breach of or inaccuracy in a representation or warranty requiring a Party to indemnify as provided in Section 8.1(a) or Section 8.2(a), as applicable, and (ii) the amount of Losses arising from any such breach, each representation or warranty made by such Seller’s Percentage Share. The Purchasers, for themselves Party (other than Section 2.4(b) (absence of changes); 3.6
(a) (SEC filings; financial statements; information provided) and for the Purchasers Indemnitees, unconditionally waives Section 3.6(b) (absence of changes)) shall be deemed to have been made without any right it qualifications or they may have limitations as to hold materiality (including any qualifications or limitations made by reference to a Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderMaterial Adverse Change or Buyer Material Adverse Change).
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of (a) Seller shall have no obligation to indemnify the Purchasers Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) are subject to the following limitations:
(i) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Purchaser Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to Adverse Consequences arising under Section 12.1(a) (other than the Unlimited Representations and the Tax Representations) until the aggregate amount of all Adverse Consequences thereunder exceeds One Hundred Thousand Dollars ($100,000), in which event the recovery or payment (net of direct collection expenses and Taxes) Sellers shall be made promptly obligated to indemnify the Sellers, which refund Purchaser Indemnitees only for the amount of Adverse Consequences in excess of such threshold.
(b) The Sellers shall be distributed based on have no obligation to indemnify the proportion Purchaser Indemnitees with respect to Adverse Consequences arising under Section 12.1(a) (other than the Unlimited Representations and the Tax Representations) in excess of Ten Million Dollars ($10,000,000) (the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid "Cap").
(c) The amount of any Adverse Consequences incurred by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall Purchaser will be reduced by the aggregate net amount of Purchaser actually recovers from any insurer or other party liable for such Adverse Consequences, provided, that nothing in the insurance recovery foregoing shall require Purchaser to take any action whatsoever to attempt to notify, file a claim with or indemnification payment (net of direct collection expenses);collect any amount from, any insurer or other party.
(iid) no adjustment shall be made as a result of any multipleNotwithstanding anything to the contrary in this Agreement, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims Purchaser Indemnitees' rights to indemnification with respect to Adverse Consequences arising under Section 3.5 12.1(b), (c) or in respect of Operating Wind Project Liabilities(d), the Purchasers Indemnitees will Unlimited Representations or the Tax Representations, or based upon fraud, willful misconduct or intentional misrepresentation, shall not be entitled subject to recover the first $200,000 limitations set forth in aggregate Losses Sections 12.5(a) and 12.5(b).
(as limited e) Any indemnity payments made pursuant to this Article XII shall be treated for all income tax purposes by the applicable provisions of this Section 7.2(c) pursuant parties hereto as an adjustment to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunder.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights 6.8.1 Notwithstanding Section 6.3, there shall be no liability for indemnification under Section 6.3(a) unless the aggregate amount of Losses under this Agreement exceeds One Hundred Thousand Dollars ($100,000) (the “Indemnification Threshold”), at which time the Seller and the Equity Holder will be obligated to indemnify the Buyer Indemnified Parties with respect to all Losses in excess of the Purchasers Indemnitees Indemnification Threshold; provided that the Indemnification Threshold shall not apply to the misrepresentation, breach or inaccuracy of any Fundamental and Statutory Representation.
6.8.2 Notwithstanding Section 6.4, there shall be no liability for indemnification under Section 6.4(a) unless the aggregate amount of Losses thereunder exceeds the Indemnification Threshold, at which time Buyer will be obligated to indemnify the Seller Indemnified Parties with respect to all Losses in excess of the Indemnification Threshold; provided that the Indemnification Threshold shall not apply to the misrepresentation, breach or inaccuracy of Section 3.1.
6.8.3 The indemnification obligations under Section 6.3(a) shall be limited to One Million Dollars ($1,000,000) (the “Cap”), provided, however, that the Cap shall not apply to indemnification pursuant obligations under Section 6.3(a) for breaches of any Fundamental and Statutory Representation.
6.8.4 The indemnification obligations under Section 6.4(a) shall be limited to the provisions Cap, provided, however, that the Cap shall not apply to indemnification obligations for breaches of Section 7.2(b) are subject to 3.1.
6.8.5 The amount of Losses recoverable by the following limitations:
Indemnified Party under this Article 6 shall be reduced, on a dollar-for-dollar basis, by (ia) the amount of any Loss subject insurance proceeds received by the Indemnified Party in connection with a claim under this Article 6 under any insurance policies and (b) an amount equal to indemnification hereunder or the amount of any Claim therefor Tax benefit realized by the Indemnified Party or its Affiliates with respect to such Losses.
6.8.6 AFTER THE CLOSING, THE RIGHTS SET FORTH IN THIS ARTICLE 6, WILL, EXCEPT FOR FRAUD OR EQUITABLE RELIEF, BE THE EXCLUSIVE REMEDY OF THE BUYER INDEMNIFIED PARTIES OR THE SELLER INDEMNIFIED PARTIES WITH RESPECT TO ANY BREACH OR INACCURACY OF ANY OF THE REPRESENTATIONS, WARRANTIES, COVENANTS, AGREEMENTS OR OBLIGATIONS CONTAINED IN THIS AGREEMENT.
6.8.7 Notwithstanding any other provision in this Agreement to the contrary or provided for under applicable Law, neither the Seller nor the Equity Holder nor any other Seller Indemnified Party shall in any event be calculated net of liable to the Buyer or any insurance proceeds (net of direct collection expenses) other Buyer Indemnified Party, and neither the Buyer nor any other Buyer Indemnified Party shall have the right to recover for or other collateral sources (such as contractual indemnities of be indemnified against, any Person which are contained outside special, consequential, incidental or punitive damages relating to the breach or alleged breach of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not the possibility of such multiple, increase factor damages has been disclosed to the other Party in advance or could have been reasonably foreseen by such other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against LossesParty; provided, however, that thereafter solely with respect any such damages suffered or incurred by any Buyer Indemnified Party to a third party shall not be subject to the limitation set forth in this Section 6.8.7.
6.8.8 Each Party shall take, and shall cause all Buyer Indemnified Parties and Seller Indemnified Parties, as applicable, to take, all commercially reasonable efforts (determined without regard to any indemnification rights of such Person hereunder) to mitigate all Losses that are individually less than $50,000 indemnifiable or recoverable hereunder or in connection herewith. If such Buyer Indemnified Party or Seller Indemnified Party, as applicable, mitigates his, her or its Loss after payment under any indemnification provision of this Agreement in respect of such Loss has been made, the Purchasers Indemnitees will not be entitled Buyer or the Seller, as applicable, shall immediately notify the other of such mitigation and shall pay to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to applicable Person the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) value of the Purchase Price benefit of that mitigation within five (as adjusted pursuant to Section 2.65) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who business days after such benefit is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderreceived.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees to indemnification pursuant Notwithstanding anything to the provisions of Section 7.2(b) are subject to the following limitationscontrary in this Article VIII:
(ia) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Purchaser Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses for any breach of any Seller Fundamental Representation pursuant to Section 7.2(b) to the extent the Sellers this Article VIII in excess of a maximum aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) amount of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;Enterprise Value.
(vb) except for Claims arising under Section 3.5, the Purchasers The Purchaser Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b8.01(a) if (A) the Purchasers (for any breach of any representation or any director warranty attributable to a single course of conduct or officer related set of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting circumstances unless the amount of Losses incurred or resulting in suffered by the Purchaser Indemnitees for such breach exceeds $250,000.
(c) The Purchaser Indemnitees shall not be entitled to recover Losses pursuant to Section 8.01(a) until the aggregate amount which the Purchaser Indemnitees would recover under Section 8.01(a) exceeds $14,000,000, in which case the Purchaser Indemnitees shall only be entitled to recover such Losses in excess of representationsuch amount, up to a maximum aggregate amount of Losses recovered under Section 8.01(a) of $35,000,000.
(d) For the avoidance of doubt, the limitations on Seller’s indemnification obligations as set forth in Section 8.05(a), Section 8.05(b) and Section 8.05(c) above shall not apply to the recovery of any Losses by the Purchaser Indemnitees for any breach by Seller relating to covenants and agreements contained in this Agreement, or otherwise for Excluded Assets, Excluded Liabilities, Pre-Closing Taxes or the Restructuring.
(e) The Seller Indemnitees shall not be entitled to recover Losses for any breach of the Purchaser Fundamental Representations pursuant to this Article VIII in excess of a maximum aggregate amount of the Enterprise Value.
(f) The Seller Indemnitees shall not be entitled to recover Losses pursuant to Section 8.02(a) for any breach of any representation or warranty attributable to a single course of conduct or covenant related set of facts, events or circumstances unless the amount of Losses incurred or suffered by the Seller Indemnitees for such breach exceeds $250,000.
(g) For the avoidance of doubt, the limitations on Purchaser’s indemnification obligations as set forth in Section 8.05(e) and Section 8.05(f) above shall not apply to the recovery of any Losses by the Seller Indemnitees for any breach by Parent or Purchaser relating to covenants and agreements contained in this Agreement and Business Assets and Business Liabilities.
(h) The Purchaser Indemnitees shall not be entitled to recover Losses pursuant to this Article VIII to the extent that such Losses were included in the calculation of Closing Working Capital and reflected or reserved for on the final Closing Statement setting forth the Actual Adjustment Amount.
(i) Each Indemnified Party shall use commercially reasonable efforts to collect any available third party insurance proceeds (“Insurance Proceeds”), in respect of any Loss; provided that such Indemnified Party need not attempt to so collect prior to making a claim for indemnification or receiving an indemnity payment in respect of such Loss under this Article VIII, (ii) any Loss for which an Indemnified Party may make a claim shall be reduced by any Insurance Proceeds actually collected by such Indemnified Party in respect of such Loss (net of any Taxes arising from the receipt of such Insurance Proceeds), (iii) if an Indemnified Party receives an indemnity payment in respect of a Loss under this Article VIII and subsequently collects any Insurance Proceeds in respect of such Loss, such Indemnified Party shall pay to the Indemnifying Party an amount equal to the excess of such indemnity payment received over the amount of such indemnity payment that would have been due if such Insurance Proceeds (net of any Taxes arising from the receipt of such Insurance Proceeds) had been collected before such indemnity payment was made, and (v) the Purchaser Indemnitees shall not be entitled to recover Losses (other than Taxes) for any matter to the extent specifically reserved against in the Business Financial Statements (or the notes thereto).
(j) None of Seller or any of its Subsidiaries shall have any obligation under Section 8.01(a) to indemnify, defend and hold harmless the Purchaser Indemnitees from and against any and all Losses which any Purchaser Indemnitee may incur or suffer to the extent such Losses (x) relate to any environmental, health or safety matters, including matters arising under Environmental Laws, and (y) result from, or with respect to clause (ii) below only, would not have arisen but for, or are increased by any of the following:
(i) Parent, Purchaser or any of their respective Subsidiaries undertaking any subsurface soil or groundwater investigation relating to any soil or groundwater conditions at any Business Property that have not been discovered through prior investigation as of the Closing, and where such investigation is not:
(A) required to comply with (x) an order, consent decree or similar binding instrument of a Governmental Entity with jurisdiction over such Business Property and the environment, safety or health, (y) Environmental Laws or (z) Environmental Permits;
(B) approved in writing by Seller in its sole discretion;
(C) in response to a bona fide third party or employee claim relating to a risk or harm to environmental or human health or safety matters; provided any voluntary sampling must be reasonably limited in scope to evaluate the specific allegation in the claim; or
(D) taken in connection with the cessation, closing, abandoning, decommissioning or terminating, in each case in the ordinary course of business, of current mining or manufacturing activities at such Business Property after the Closing, or otherwise in connection with repair, maintenance, replacement or construction activities at any Business Property, in each case in the ordinary course of business after the Closing (and not with the primary purpose of establishing a claim for Losses relating to any environmental, health or safety matters), in each case, where soil and groundwater investigations are both customary and necessary in the reasonable judgment of Purchaser or its Subsidiaries in connection with any of the foregoing activities;
(ii) a change in the use of any Business Owned Property to non-industrial purposes after the Closing (but this clause (ii) shall not apply to transfers to third-parties, provided that such transfers will not result in a change of use to a non-industrial purpose);
(iii) any act or omission by Parent, Purchaser or any of their respective Subsidiaries that (A) is reckless or grossly negligent, or (B) the Purchasers could have mitigated results in any exacerbation or prevented such Loss using commercially reasonable effortsworsening of any pre-Closing condition; andor
(viiv) except any notification, report, admission or disclosure by Parent, Purchaser or any of their respective Subsidiaries of any pre-Closing condition to any Governmental Entity or other third party other than (A) as required to comply with (x) an order, consent decree or similar binding instrument of a Governmental Entity with jurisdiction over such Business Property and the environment, safety or health, (y) Environmental Laws or (z) Environmental Permits, (B) such notifications, reports, admissions or disclosures that are made by Parent, Purchaser or any of its subsidiaries in the ordinary course of business (and not with the primary purpose of establishing a claim for Claims arising under Section 3.5Losses relating to any environmental, health or safety matters), (C) as approved in writing by Seller in its sole discretion or (D) in response to a bona fide third party or employee claim relating to a risk or harm to environmental or human health or safety matters; provided any such notifications, reports, admissions or disclosures must be reasonably limited in scope to address the specific allegation in the claim; or
(v) any failure to comply with the following cleanup standards in connection with any Remedial Action undertaken at any Business Property after the Closing: the Remedial Action shall be undertaken in a reasonable and cost-effective manner, which should include, where available, natural attenuation, the use of risk-based cleanup standards or deed restrictions and, with respect to a particular LossBusiness Property, each shall be to cleanup standards no more stringent than those that apply to industrial properties; provided that satisfaction of the foregoing limitations does not materially burden or interfere with the activities and operations of Parent, Purchaser or any of their respective Subsidiaries at any of the Business Properties or otherwise in relation to the Business.
(k) None of Seller or any of its Affiliates shall only have any obligation under Section 8.01 to indemnify, defend and hold harmless the Purchaser Indemnitees from and against any and all Losses which any Purchaser Indemnitee may incur or suffer to the extent that such Losses result from or are increased by a Purchaser Tax Act.
(l) All Losses shall be net of any Tax Benefit actually realized by the Indemnified Party or its Affiliates in connection with the incurrence of such Losses in (or prior to) the taxable year in which the applicable indemnity payment is received or in the subsequent taxable year; provided that (A) if a realized Tax Benefit that has been taken into account under this Section 8.05(l) is rendered unavailable by reason of a carryback of any Tax asset from a subsequent period or due to any other subsequent event, the Indemnifying Party shall make an appropriate reconciliation payment to the Indemnified Party (provided further that to the extent the Indemnified Party is permitted under applicable Law to waive a carryback, the Indemnified Party shall be deemed to have made an election to that effect) or (B) if a Tax Benefit is not included in the computation of a Loss and is subsequently realized, the Indemnified Party shall pay to the Indemnifying Party the amount of such Tax Benefit as promptly as practicable following the actual realization of such Tax Benefit.
(m) The Indemnified Party shall take reasonable steps to mitigate or resolve all indemnifiable Losses upon and after becoming aware of any event which could reasonably be expected to give rise to any Losses hereunder. In the event that the Indemnified Party shall fail to take such reasonable steps to mitigate or resolve any such Losses, then notwithstanding anything else to the contrary contained herein, the Indemnifying Party shall not be required to indemnify the Purchasers Indemnitees up any Person to the amount of extent such Loss multiplied by could reasonably be expected to have been avoided if the Indemnified Party had taken such Seller’s Percentage Share. The Purchaserssteps.
(n) None of Seller or any of its Affiliates shall have any obligation under Section 8.01 to indemnify, for themselves defend and for hold harmless the Purchasers IndemniteesPurchaser Indemnitees from and against (i) any and all Taxes attributable any taxable period (or portion thereof) beginning after the Closing Date or (ii) any and all Losses which any Purchaser Indemnitee may incur or suffer to the extent that such Losses are related to the existence, unconditionally waives any right it amount or they may have to hold any Seller jointly liable for the obligations usability of any net operating loss, capital loss, Tax basis or other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderTax attributes, in each case other than Pre-Closing Taxes.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights Section 8.5.1 Except in the case of fraud or willful misrepresentation in connection with this Agreement and the Purchasers Indemnitees transactions contemplated hereby, from and after the Effective Time, the Company Indemnifying Parties shall not be obligated to indemnification indemnify any Buyer Indemnified Party pursuant to the provisions clause (i)(A) of Section 7.2(b) are subject 8.2.1 unless and until the aggregate amount of all Losses paid, suffered, incurred or sustained by the Buyer Indemnified Parties under this Agreement exceeds $750,000 (the “Threshold Amount”), whereupon the Buyer Indemnified Parties shall be entitled to the following limitations:
recover pursuant to such clause (ii)(A) the amount of any Loss subject to indemnification hereunder or all such Losses in excess of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses375,000; provided, however, that thereafter solely with respect the Threshold Amount limitation set forth in this Section 8.5.1 shall not apply to Losses that are individually less than arising out of breaches of the representations and warranties of the Company set forth in Section 3.1, Section 3.2, Section 3.4, Section 3.7, Section 3.10 and Section 3.16, and any Losses arising out of any breaches of such representations and warranties shall not be taken into account for purposes of determining whether the Buyer Indemnified Parties have incurred Losses in excess of the Threshold Amount.
Section 8.5.2 From and after the Effective Time, the Company Indemnifying Parties shall not be obligated to indemnify any Buyer Indemnified Party pursuant to clause (i)(B) or clause (iv)(B) of Section 8.2.1 unless and until the aggregate amount of all Losses paid, suffered, incurred or sustained by the Buyer Indemnified Parties under such clauses of this Agreement exceeds $50,000 2,000,000 (the Purchasers Indemnitees will not “Deductible Amount”), whereupon the Buyer Indemnified Parties shall be entitled to recover for such Losses pursuant to such clauses (i)(B) and (iv)(B) only the amount in excess of the Deductible Amount.
Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 8.5.3 Except in the aggregate case of fraud or willful misrepresentation in connection with this Agreement and the transactions contemplated hereby, or in the case of any claim arising out of a breach of the representations and warranties set forth in Section 3.2, from and after the Effective Time, the Company Indemnifying Parties shall not be obligated to indemnify the Buyer Indemnified Parties pursuant to clauses (and then only i) – (v) of Section 8.2.1 (but specifically excluding clause (vi) of Section 8.2.1) for any amounts in excess of the amounts held in the Escrow Account at the time any such indemnification obligation is paid to the extent Buyer Indemnified Parties, and the funds held in the Escrow Account shall be the Buyer Indemnified Parties sole recourse and remedy for any indemnification claims arising hereunder.
Section 8.5.4 Except in the case of fraud or willful misrepresentation in connection with this Agreement and the transactions contemplated hereby, from and after the Effective Time, the Company Indemnifying Parties shall not be obligated to indemnify the Buyer Indemnified Parties pursuant to clause (i) – (v) of Section 8.2.1 (but specifically excluding clause (vi) of Section 8.2.1) for any indemnification claim that is made after the Expiration Date; provided, however, that such obligations shall not terminate with respect to any item as to which a Buyer Indemnified Party shall have, before the Expiration Date, previously made a bona fide claim by delivering a notice of such excess);indemnification claim pursuant to this Article 8.
Section 8.5.5 Except in the case of fraud or willful misrepresentation in connection with this Agreement and the transactions contemplated hereby, from and after the Effective Time, the indemnification provisions set forth in this Article 8 shall be the sole and exclusive recourse and remedy of the Buyer Indemnified Parties and the Company Indemnified Parties for any breach or violation of this Agreement and any claims or Losses arising out of the transactions contemplated hereby, and Parent, Buyer, Merger Sub and the Surviving Corporation (iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(don behalf of all Buyer Indemnified Parties), 4.22on the one hand, 4.27 and the Company (on behalf of all Company Indemnified Parties), on the other hand, hereby irrevocably waive any and all other remedies they may have against the Company Indemnifying Parties or the Buyer Indemnifying Parties, as the case may be, from and after the Effective Time, in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for any and all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units Agreement and the Shares sold by such Seller to the Purchasers hereundertransactions contemplated hereby and thereby.
Appears in 1 contract
Sources: Merger Agreement (Check Point Software Technologies LTD)
Limitations on Indemnification Obligations. (a) The rights of the Purchasers Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) are subject to the following limitations:
(i) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees Indemnified Party shall not be entitled to recover from the Indemnifying Party under this Section 8 unless and until the aggregate amount of all Losses by the Indemnified Party under this Section 8 exceeds $100,000 (the "Basket"). The parties hereto agree that once the aggregate amount of Losses by any Indemnified Party exceeds the Basket, the Indemnified Party shall be entitled to indemnity for the amount of all claims made by the Indemnified Party in excess of the Basket. The Indemnifying Party shall not be obligated to pay any Losses under this Section 8 once the aggregate amount of all Losses paid by such Indemnifying Party under this Section 8 equals $1,500,000 (the "Cap"). Notwithstanding the foregoing, the Cap shall not apply to (i) any indemnification claims based upon fraud or intentional misrepresentation and the Indemnified Party shall be entitled to recovery for all Losses in connection with claims pursuant to fraud or intentional misrepresentation, (ii) any indemnification claims based upon Section 7.2(b2.2, (iii) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant indemnification claims based upon failure of the Company prior to Closingperform or pay the liabilities of the Company after the Effective Date as and when due, and (iv) had actual knowledge at any time on indemnification claims based upon Section 8.2(b-g). In the case of 8.7(a)(ii) the Company shall be entitled to recover all Losses resulting therefrom and in either case of 8.7(a)(iii) or prior 8.7(a)(iv) the Seller shall be entitled to recover for all Losses resulting therefrom.
(b) Subject to the Closing Date provisions of this Section 8, an Indemnified Party shall be entitled to recover the facts, events or conditions constituting or resulting in such breach full amount of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up any Losses incurred due to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasersmatter for which indemnification is sought, for themselves and for the Purchasers Indemnitees, unconditionally waives but any right it or they may have to hold any Seller jointly liable for the obligations recovery shall be net of any other Sellereconomic benefit to which the Indemnified Party is entitled due to such Losses, including, without limitation, (i) any tax refund, reduction or benefit and (ii) any insurance proceeds (excluding self-insured amounts and deductible amounts). The aggregate liability of In no event shall any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderIndemnified Party be awarded punitive or multiple damages.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees to indemnification pursuant to Notwithstanding the provisions of Section 7.2(b) are subject this ▇▇▇▇▇▇▇ ▇, ▇▇▇▇ of the parties shall be obligated to indemnify or pay damages to any other party or parties, as the case may be, from and against any Losses arising from or related to this Agreement to the following limitations:
(i) the amount of any Loss subject extent that such Losses arise from or related to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount Agreement exceed [***] of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against LossesPurchase Price; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will (i) any claims brought by a party against another party or parties for fraud or willful misconduct shall not be entitled subject to recover for such Losses the foregoing limitations; and (ii) the Contacts Parties’ indemnification obligations pursuant to this Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then 8 shall exist only to the extent that, at the time of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price)an indemnification Claim by Mi Gwang, the Purchasers Indemnitees will not Contacts Parties own Mi Gwang Shares which have a market value equal to or in excess of [***]. Any indemnification funds to be entitled to recover Losses provided or paid by the Contacts Parties pursuant to the provisions of this Section 7.2(b) 8 shall come only from the sale or transfer of the Mi Gwang Shares, and the Contacts Parties shall, never, under any circumstances, have any obligation to pay any indemnification Claim by Mi Gwang in excess of the market value of the Mi Gwang Shares owned by the Contacts Parties. Furthermore, notwithstanding the provisions of this ▇▇▇▇▇▇▇ ▇, ▇▇▇▇ of the parties shall be obligated to indemnify or pay damages to any other party or parties, as the case may be, from and against any Losses arising from or related to this Agreement to the extent the Sellers aggregate liability hereunder for all that such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, arising from or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier related to this subsection Agreement do not cumulatively exceed One Hundred Thousand U.S. Dollars (the “Liability Cap”) in the aggregate$100,000); provided, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5however, the Purchasers Indemnitees that this limitation shall not be entitled applicable to recover Losses any cost, liability or obligation of the Contacts Parties expressly assumed by the Contacts Parties pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time that certain Reimbursement Agreement in form and content as set forth on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderExhibit D hereto.
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Limitations on Indemnification Obligations. The rights (i) Except with respect to breaches of the Purchasers Fundamental Representations, (A) the Sellers shall not have any obligation to indemnify any Buyer Indemnitee pursuant to Section 7.2(b)(i) unless and until the aggregate amount of all such individual Damages incurred or sustained by all Buyer Indemnitees with respect to which the Buyer Indemnitees would otherwise be entitled to indemnification under Section 7.2(b)(i) and under Section 7.3(b)(i) of the Merger Agreement exceeds €1,000,000 (the “Deductible”), whereupon the Sellers shall be liable for all Damages in excess of the Deductible, and (B) the aggregate liability of the Sellers to indemnify (or to cause to be indemnified) the Buyer Indemnitees for Damages under Section 7.2(b)(i) and under Section 7.3(b)(i) of the Merger Agreement shall in no event exceed €5,000,000 (the “Cap”).
(ii) (A) Parent shall not have any obligation to indemnify (or to cause to be indemnified) any Seller Indemnitees pursuant to Section 7.2(a)(i) unless and until the aggregate amount of all individual Damages incurred or sustained by all Seller Indemnitees with respect to which the Seller Indemnitees are entitled to indemnification under to Section 7.2(a)(i) and under Section 7.3(a)(i) of the Merger Agreement exceeds the Deductible, whereupon Parent shall be liable for all Damages in excess of the Deductible, and (B) the aggregate liability of Parent to indemnify (or to cause to be indemnified) the Seller Indemnitees for Damages under Section 7.2(a)(i) and under Section 7.3(a)(i) of the Merger Agreement shall in no event exceed an amount equal to the Cap.
(iii) Any Liability subject to indemnification pursuant to the provisions of this Section 7.2(b) are subject to the following limitations:
(i) the amount of any Loss subject to indemnification hereunder or of any Claim therefor 7.2 shall be calculated (A) net of Insurance Proceeds actually recovered, (B) net of any insurance proceeds actually recovered by an Indemnified Party from any third party for indemnification for such Liability (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement“Third Party Proceeds”), received (C) reduced by any Tax benefit actually realized by the Purchasers Indemnitees Indemnified Party for the taxable period in which the indemnified Damage giving rise to such Liability occurs (calculated on account a with and without basis) as a result of the incurrence or payment of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering Damage, and (D) increased by any Loss Tax detriment actually incurred or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss Indemnified Party for the taxable period in which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations Indemnity Payment in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery Damage is received or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made accrues as a result of the receipt or accrual of such Indemnity Payment. The amount which an Indemnifying Party is required to pay pursuant to this Section 7.2 to any multiple, increase factor, Indemnified Party will be reduced by any Insurance Proceeds or any other premium over the value paid Third Party Proceeds theretofore actually recovered by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or Indemnified Party in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited related Liability. If an Indemnified Party receives a payment required by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and Agreement from an Indemnifying Party in respect of Operating Wind Project Liabilities any Damages (in which case an “Indemnity Payment”) and subsequently receives Insurance Proceeds or Third Party Proceeds, then the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) Indemnified Party shall pay to the extent Indemnifying Party an amount equal to the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) excess of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to Indemnity Payment received over the amount of such Loss multiplied by such Seller’s Percentage Sharethe Indemnity Payment that would have been due if the Insurance Proceeds or Third Party Proceeds had been received, realized or recovered before the Indemnity Payment was made. The Purchasers, for themselves Each of the Parties shall use its reasonable best efforts to mitigate any Damages that are indemnifiable hereunder upon and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations after becoming aware of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed event or condition that would reasonably be expected to give rise to such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderDamages.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights right of the Purchasers Indemnitees Purchaser to indemnification pursuant to the provisions of Section 7.2(b) are 6.2is subject to the following limitations:
(ia) the amount of any Loss subject to indemnification hereunder or of any Claim therefor and all Losses shall be calculated determined net of any insurance proceeds (net of direct collection expenses) amounts actually recovered by Purchaser or other collateral sources (such by Purchaser indemnitees, as contractual indemnities of any Person which are contained outside of this Agreement)the case may be, received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses)Losses;
(iib) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees Purchaser shall not be entitled to recover Losses pursuant to Section 7.2(b) if 6.2until the total amount which Purchaser would recover under Section 6.2exceeds $250,000 (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director“Threshold”), officer or consultant in which case, Purchaser shall be entitled to recover for all Losses up to, including, and in excess of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable effortsThreshold; and
(vic) In no event shall the definition of Knowledge impose any personal liability on the Person(s) included therein, except to the extent such Persons(s) are found to have acted fraudulently, as determined by a court of competent jurisdiction. Notwithstanding the foregoing, the right of Purchaser to indemnification pursuant to the provisions of Section 6.2 with respect to breaches of the representations and warranties in connection with amounts payable to licensors of Intellectual Property Licenses (“License Payable Warranties”), as set forth in Exhibit D to the Disclosure Schedule, shall not be subject to or otherwise limited by the Threshold. Purchaser shall be able to immediately seek indemnification from Company for Claims arising under Section 3.5any additional amount paid to a licensor, or a substitute licensor for equivalent technologies, in excess of the amount shown with respect to a particular Losslicensor shown on Exhibit D in connection with Purchasers’ efforts to secure a license with one or more such licensors, each Seller shall only be required all in accordance with the Escrow Agreement. For clarity, while indemnity claims with respect to indemnify the Purchasers Indemnitees up License Payable Warranties are not subject to the amount of such Loss multiplied by such Seller’s Percentage Share. The PurchasersThreshold, for themselves and for they are to be taken into account in determining whether the Purchasers Indemnitees, unconditionally waives any right it or they may have threshold has been met with respect to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall indemnity claims not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant relating to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderLicense Payable Warranties.
Appears in 1 contract
Sources: Asset Purchase Agreement (Clearone Communications Inc)
Limitations on Indemnification Obligations. The rights of
(a) Subject to the Purchasers Indemnitees to other limitations contained in this Section 8.05, neither Buyer nor Buyer Indemnified Persons shall seek indemnification pursuant to Section 8.02(a) (other than for an intentional breach of any agreement or covenant contained in this Agreement or for breach of Seller’s Fundamental Representations) unless the provisions aggregate amount of Losses incurred by Buyer and Buyer Indemnified Persons under this Agreement exceeds one percent (1%) of the Purchase Price in the aggregate (the “Threshold Amount”), in which case Seller will then be liable only for Losses in excess of the Threshold Amount, except that the limitations contained in this Section 7.2(b8.05(a) are subject do not apply to any claims for indemnification based on fraud, intentional misrepresentation or willful misconduct.
(b) Subject to the following limitations:other limitations contained in this Section 8.05 neither Seller nor the Seller Indemnified Persons shall seek indemnification pursuant to Section 8.03(a) (other than for an intentional breach of any agreement or covenant contained in this Agreement) unless the aggregate amount of Losses incurred by Seller and Seller Indemnified Persons under this Agreement exceeds the Threshold Amount, in which case Buyer will then be liable only for Losses in excess of the Threshold Amount, except that the limitations contained in this Section 8.05(a) do not apply to any claims for indemnification based on fraud, intentional misrepresentation or willful misconduct.
(ic) Except in the amount case of any Loss subject fraud, intentional misrepresentation or willful misconduct (for which all applicable legal and equitable remedies will be available to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this AgreementBuyer), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees Buyer Indemnified Parties shall seek full recovery only be entitled to assert claims under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees Section 8.02(a) (other than claims with respect to breaches of any Loss for of the Seller Fundamental Representations, which any such Person has been indemnified hereunder, then a refund equal are not limited by this Section 8.05(c)) up to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty five percent (205%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”), which represents the sole and exclusive remedy of Buyer and the other Buyer Indemnified Parties for any such claims under Section 8.02(a) (other than claims with respect to breaches of any of the Seller Fundamental Representations or in the aggregatecase of fraud, and each Seller’s liability for Losses hereunder shall intentional misrepresentation or willful misconduct which are not exceed its Percentage Share of subject to the Liability Cap;, but is capped at the Purchase Price).
(vd) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses Payments by an Indemnifying Party pursuant to Section 7.2(b) if (A) the Purchasers (8.02 or Section 8.03 in respect of any director or officer of Purchasers who Loss is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up limited to the amount of any liability or damage that remains after deducting therefrom any insurance proceeds and any indemnity, contribution or other similar payment received or reasonably expected to be received by the Indemnified Party in respect of any such Loss multiplied by such Seller’s Percentage Shareclaim. The PurchasersIndemnified Party shall use its commercially reasonable efforts to recover under insurance policies or indemnity, contribution or other similar agreements for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller Losses before seeking indemnification under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price Agreement.
(as adjusted e) Payments by an Indemnifying Party pursuant to Section 2.68.02 or Section 8.03 in respect of any Loss will be reduced by an amount equal to any Tax benefit realized or reasonably expected to be realized as a result of such Loss by the Indemnified Party.
(f) for the Purchased Units Each Indemnified Party shall take, and the Shares sold by such Seller cause its Affiliates to take, all reasonable steps to mitigate any Loss upon becoming aware of any event or circumstance that would be reasonably expected to, or does, give rise thereto, including incurring costs only to the Purchasers hereunderminimum extent necessary to remedy the breach that gives rise to such Loss.
(g) Subject to the provisions of Sections 3.01, 7.06, 15.11 and any other provisions for equitable relief and/or specific performance, the Parties’ sole and exclusive remedy with respect to any and all claims for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement, the Parties shall pursue pursuant to the indemnification provisions set forth in this Article VIII. Each Party hereby waives, to the fullest extent permitted under Law, any and all rights, claims and causes of action for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement it may have against the other Party and their Affiliates and each of their respective Representatives arising under or based upon any Law, except pursuant to the indemnification provisions set forth in this Article VIII. Nothing in this Section 8.05(g) limits any Party’s right to seek and obtain any equitable relief and/or specific performance pursuant to this Agreement.
Appears in 1 contract
Limitations on Indemnification Obligations. (a) The rights of the Purchasers Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) are maximum cumulative aggregate amount payable by Seller as Buyer Damages shall be subject to the following limitations:
(i) the amount of any Loss subject to for indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreementobligations under Section 9.2(a), received by other than breaches of Fundamental Representations and claims for fraud and knowing misrepresentation: the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses)Holdback Amount;
(ii) for indemnification obligations under Section 9.2(c): the Holdback Amount;
(iii) for indemnification obligations under Section 9.2(d) and Section 9.2(f): no adjustment cap; and
(iv) for indemnification obligations under Section 9.2(b) and Section 9.2(e): the Purchase Price.
(b) The maximum cumulative aggregate amount payable by the Signing Members as Buyer Damages shall be subject to the following limitations: for indemnification in connection with a breach of the representations and warranties of Signing Member contained in Section 4.4, an amount equal to such Signing Member’s pro-rata share of the Holdback Amount; for breaches of the Fundamental Representations made as a result by Signing Member or for breaches of any multiplecovenant or obligation of such Signing Member in Section 8.12, increase factoran amount equal to such Signing Member’s pro-rata share of the Purchase Price; and for claims for fraud and knowing mispresentation, no cap.
(c) Other than for indemnification obligations under Section 9.4(c) or 9.4(d), which shall have no cap, the maximum aggregate amount payable by Buyer to any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time and all Seller Indemnitees for any and all Seller Damages arising out of, or in connection with, calculating or preparing its bid, its proposed purchase price for this Agreement and any of the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;other Transaction Documents shall be $2,500,000.
(iiid) except No claim for Claims arising indemnification under Section 3.5 9.2(a), 9.3(a) or in respect 9.4(a) may be asserted or be effective unless the aggregate amount of Operating Wind Project Liabilitiessuch claim (together with any other Claims), if successfully asserted, would entitle the Purchasers Indemnitees will not be entitled Indemnified Party to recover an amount of Damages in excess of $70,000, in which case the Indemnifying Party shall be liable for all such Damages from the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Lossesdollar; provided, however, that thereafter solely the foregoing limitation shall not apply to breaches of Fundamental Representations and claims for fraud and knowing misrepresentation.
(e) If a party is entitled to bring a claim under more than one provision of Section 9.2, 9.3 or 9.4, as the case may be, such party may choose in its sole and absolute discretion the provision or provisions under which it seeks indemnification.
(f) Notwithstanding a party’s knowledge of any breach by the other party of any representation, warranty, covenant or agreement contained in this Agreement (and regardless of how the non-breaching party shall have acquired such knowledge), the non-breaching party shall have the right to consummate the transactions provided for herein, and all of the non-breaching party’s rights and remedies with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not such breach shall be entitled preserved without regard to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent its knowledge of such excess);
(iv) except information, it being agreed that each party, in entering into this Agreement, has bargained for Claims arising under Sections 3.1the correctness of each representation, 3.2warranty, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 covenant and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) agreement of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderparties contained herein.
Appears in 1 contract
Sources: Asset Purchase Agreement (Endurance International Group Holdings, Inc.)
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees Indemnified Parties to indemnification pursuant to the provisions of Section 7.2(b) 9.2 are subject to the following limitations:limitations set forth in this Section 9.3 and elsewhere in this Article IX.
(ia) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources Notwithstanding anything to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchaserscontrary contained herein, the Company and the Subsidiaries Sellers shall not cancel be required to indemnify any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to Buyer Indemnified Party pursuant to, and shall not have any Loss for which any such Person has been indemnified hereunderliability under, then a refund equal to Section 9.2(a)(i) until the aggregate amount of all Losses for which the recovery or payment (net of direct collection expenses and Taxes) shall Sellers would be made promptly liable under Section 9.2(a)(i), but for this Section 9.3(a), exceeds on a cumulative basis an amount equal to the SellersDeductible, in which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellerscase, the Sellers’ indemnification obligations in respect of such Loss Buyer Indemnified Parties shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover indemnification only for the first $200,000 amount of such Losses in aggregate Losses (as limited by excess of the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against LossesDeductible; provided, however, that thereafter solely the Deductible shall not apply to any Losses which result from any inaccuracy or breach of any Fundamental Representation or Tax Representation made by Sellers, or any claim based on or arising out of Fraud.
(b) Notwithstanding anything to the contrary contained herein, the Buyers shall not be required to indemnify any Seller Indemnified Party pursuant to, and shall not have any liability under, Section 9.2(b)(i) until the aggregate amount of all Losses for which the Buyers would be liable under Section 9.2(b)(i), but for this Section 9.3(b), exceeds on a cumulative basis an amount equal to the Deductible, in which case, the Seller Indemnified Parties shall be entitled to indemnification only for the amount of such Losses in excess of the Deductible; provided, however, that the Deductible shall not apply to any Losses which result from any inaccuracy or breach of any Fundamental Representation made by Buyer, any claim based on or arising out of Fraud.
(c) No right to be indemnified or held harmless pursuant to Section 9.2(a)(i) shall exist and no claim may be made following such time, if any, that the aggregate amount paid by the Sellers for indemnification pursuant to Section 9.2(a)(i) (other than with respect to Losses which result from any inaccuracy or breach of any Fundamental Representation or Tax Representation made by Sellers, or any claim based on or arising out of Fraud) (whether from the Indemnity Escrow Account or directly from Sellers) equals $125,000.
(d) No right to be indemnified or held harmless pursuant to Section 9.2(b)(i) shall exist and no claim may be made following such time, if any, that the aggregate amount paid by the Buyers for indemnification pursuant to Section 9.2(b)(i) (other than with respect to Losses which result from any inaccuracy or breach of any Fundamental Representation made by Buyer, or any claim based on or arising out of Fraud) equals $7,500,000.
(e) No right to be indemnified or held harmless pursuant to Section 9.2(a) (other than pursuant to Section 9.2(a)(iii) with respect to clause (iv) of the definition of Pre-Closing Taxes or Losses in respect of Fraud, which claims shall be uncapped) shall exist and no claim may be made following such time, if any, that the aggregate amount paid by Sellers for indemnification pursuant to Section 9.2(a) (other than with respect to Fraud or with respect to any Losses which relate to clause (iv) of the definition of Pre-Closing Taxes) (whether from the Indemnity Escrow Account or directly from Sellers) equals the Purchase Price.
(f) No right to be indemnified or held harmless pursuant to Section 9.2(b) shall exist and no claim may be made following such time, if any, that the aggregate amount paid by Buyers for indemnification pursuant to Section 9.2(b) (other than with respect to any claim based on or arising out of Fraud) equals the Purchase Price.
(g) The Indemnified Parties shall diligently pursue recovery for Losses under any available insurance coverage (including, as to the Buyer Indemnified Parties, the R&W Policy) and shall use commercially reasonable efforts to pursue payment from any applicable Person under any agreement, contract, arrangement or commitment pursuant to which any Indemnified Party is entitled to indemnification for any Loss for which an Indemnified Party seeks indemnification pursuant to this ARTICLE IX.
(h) Neither Seller nor Buyers shall (and each shall cause its Affiliates not to) solicit claims from any Persons for the primary purpose of creating claims for indemnification for which any Person would be responsible under this Agreement.
(i) The Parties acknowledge that Buyers are individually less than $50,000 obtaining the Purchasers Indemnitees R&W Policy. The Parties agree that, if a Buyer Indemnified Party is entitled to indemnification pursuant to Section 9.2(a)(i) or Section 9.2(a)(iii):
(i) The Indemnity Escrow Account held by the Escrow Agent will be the first source of recovery against Sellers for such amounts payable to the Buyer Indemnified Parties, after (if applicable) satisfaction of the Deductible threshold described above, until the earlier to occur of its exhaustion or release.
(ii) The R&W Policy will be the second source of recovery for the Buyer Indemnified Parties with respect to such claims covered thereby; provided, that, for Losses which result from breaches of Fundamental Representations or Tax Representations or pursuant to Section 9.2(a)(iii), to the extent (but only to the extent) that the retention under the R&W Policy has not been exhausted, the Losses are excluded from coverage under the R&W Policy or the policy limit of the R&W Policy has been reached and paid, the Buyer Indemnified Parties may recover directly from Sellers under Section 9.2(a)(i) and Section 9.2(a)(iii), as applicable, subject to the limits in this ARTICLE IX. NOTWITHSTANDING ANY PROVISION IN THIS AGREEMENT TO THE CONTRARY, BUYER, ON BEHALF OF ITSELF AND THE OTHER BUYER INDEMNIFIED PARTIES, ACKNOWLEDGES AND AGREES THAT THE FOREGOING SHALL CONTINUE TO APPLY EVEN IF (I) THE R&W POLICY IS REVOKED, CANCELLED OR MODIFIED, OR EXPIRES, IN ANY MANNER (AND EVEN IF THE R&W POLICY IS NOT ISSUED); (II) ANY CLAIM MADE AGAINST THE R&W POLICY IS DENIED BY THE INSURER; OR (III) ALL AMOUNTS PERMITTED TO BE RECOVERED AGAINST THE R&W POLICY HAVE BEEN RECOVERED.
(iii) For the avoidance of doubt, nothing contained herein shall in any way limit the Buyer Indemnified Parties’ ability to recover under the R&W Policy.
(j) In no event shall any Buyer Indemnified Party be entitled to recover for such Losses indemnification pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, Article IX with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up specific Loss to the amount of extent such Loss multiplied by such Seller’s Percentage Share. The Purchasers, is accounted for themselves and for in the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share calculation of the Purchase Price Price, as finally determined in accordance with Section 2.3 to avoid “double dipping.”
(as adjusted pursuant k) With respect to any indemnifiable Losses arising under Section 2.6) for 9.2(a)(v), such Losses shall be limited to direct Losses incurred or suffered by the Purchased Units Buyer Indemnified Persons and shall not include Losses based on a multiple of losses or damages or diminution in value or the Shares sold costs of investigation (unless, with respect an investigation, an investigation commenced in connection with a Claim by such Seller to the Purchasers hereundera Governmental Entity).
Appears in 1 contract
Sources: Securities Purchase Agreement (Astrana Health, Inc.)
Limitations on Indemnification Obligations. The rights of (a) Notwithstanding Section 6.1, there shall be no liability for indemnification under Section 6.1(a)(i) unless the Purchasers Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) are subject to the following limitations:
(i) the aggregate amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds Damages under this Agreement exceeds $30,000 (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreementthe “Seller Indemnification Threshold”), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources at which time Sellers will be obligated to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees indemnify Buyer Indemnified Parties only with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net all Damages described in Section 6.1(a)(i) in excess of direct collection expenses and Taxes) shall be made promptly such amount, subject to the Sellersremaining limitations in this Article VI (including the limitations set forth in Section 6.3(b)). In no event shall Sellers maximum indemnification liability to Buyer Indemnified Parties (i) pursuant to Section 6.1(a)(i) exceed $560,000 (the “Cap”), which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by and (ii) pursuant to this Agreement exceed the aggregate amount of the insurance recovery cash proceeds actually received directly by the Sellers pursuant to this Agreement (other than claims arising from Fraud on the part of a party hereto in connection with the transactions contemplated by this Agreement) or, with respect to each individual Seller, such Seller’s Pro Rata Portion of the aggregate cash proceeds actually received by the Sellers.
(b) Notwithstanding the foregoing, the Seller Indemnification Threshold and the Cap shall not apply to Damages based upon, arising out of, with respect to or indemnification payment by reason of (net i) any inaccuracy in or breach of direct collection expenses);
any Fundamental Representation, (ii) no adjustment shall be made as any claims arising from Fraud on the part of a result of any multiple, increase factorparty hereto in connection with the transactions contemplated by this Agreement, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims any claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities6.1(a)(iv).
(c) Subject to Section 6.3(a), the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions for purposes of this Section 7.2(c) pursuant to Section 7.2(b)Article VI, which solely for purposes of calculating the amount shall serve as of any Damages arising from a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of any representation, warranty or covenant contained in this Agreement which is qualified by the words “material,” “in all material respects” or similar “materiality” qualifiers, such Damages shall be calculated as if such qualifier were not contained therein.
(Bd) Notwithstanding anything in this Agreement to the Purchasers could contrary, no party will be entitled to indemnification or reimbursement under any provision of this Agreement for any amount to the extent such party or its Affiliates have mitigated been indemnified or prevented reimbursed for such Loss using amount under any other provision of this Agreement or any other document executed in connection with this Agreement or otherwise. For the avoidance of doubt, Damages shall not include any amounts that were actually included in Unpaid Company Indebtedness, Unpaid Transaction Expenses or Change of Control Payments or as liabilities in the final determination of Working Capital.
(e) Furthermore, in the event any Damages related to a claim by any of the Indemnified Parties are covered by insurance, the parties will use commercially reasonable efforts; and
efforts to seek recovery under available insurance (vi) except for Claims arising under Section 3.5with no requirement to file a lawsuit or any other legal proceeding against an insurer), with respect and no Indemnified Party will be entitled to a particular Loss, each Seller recover from any of the Indemnifying Parties (and shall only be required to indemnify the Purchasers Indemnitees refund amounts received up to the amount of indemnification actually received) with respect to such Loss multiplied by such Seller’s Percentage Share. The PurchasersDamages to the extent the Indemnified Party actually recovers the insurance payment specified in the policy, for themselves in each case giving effect to deductibles or self-insured or co-insurance payments made and for net of the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations present value of any reasonably probable increase in insurance premiums or other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed reasonable charges paid or to be paid by the Indemnified Party resulting from such Seller’s Percentage Share of Damages and all reasonable costs and expenses incurred by the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by Indemnified Party in recovering such Seller to the Purchasers hereunderproceeds from its insurers.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Verb Technology Company, Inc.)
Limitations on Indemnification Obligations. The Notwithstanding anything to the contrary contained herein, the rights of the Purchasers Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) 11.02 are subject to the following limitations:.
(a) With respect to the matters described in Section 11.02(a), the aggregate maximum amount of Losses recoverable by the Buyer Indemnitees shall not, except in cases of fraud (claims for which shall be limited to the portion of the Closing Cash Payment received by each of the Unitholders on a several and not joint basis), exceed the Indemnification Escrow Fund then available (the "Unitholder Cap").
(b) No indemnification under Section 11.02(a)(i) or Section 11.02(a)(ii) shall be available unless and until the aggregate Losses of the Buyer Indemnitees under such section exceed the Indemnification Deductible, in which case, indemnification (solely from the Indemnification Escrow Fund) under such section shall, subject to the Unitholder Cap and other limitations set forth in this Agreement, be available for all Losses in excess of the Indemnification Deductible; provided, however, that the Indemnification Deductible shall not apply to Losses arising from breaches of a Fundamental Representation or Section 5.15(b). Without limiting the foregoing, the Buyer Indemnitees shall not be entitled to indemnification under Section 11.02(a)(i) or Section 11.02(a)(ii), and no such claim by any Buyer Indemnitees shall be so asserted, if the Losses relating to or resulting from such claim or other claims relating to or resulting from the same facts, events or circumstances are less than $50,000. For purposes of determining whether or not a breach of a representation or warranty has occurred all qualifications or limitations as to "materiality," "in all material respects" or "Material Adverse Effect" and words of similar import set forth therein shall be taken into account, but for purposes of determining Losses hereunder, all qualifications or limitations as to "materiality," "in all material respects" or "Material Adverse Effect" and words of similar import set forth therein shall be disregarded.
(c) No indemnification under Section 11.02(b)(i) shall be available unless and until the aggregate Losses of the Unitholder Indemnitees under such section exceed the Indemnification Deductible, in which case, indemnification under such section shall, subject to the limitations set forth in this Agreement, be available for all Losses in excess of the Indemnification Deductible; provided, however, that the Indemnification Deductible shall not apply to Losses arising from breaches of a Fundamental Representation. Without limiting the foregoing, the Unitholder Indemnitees shall not be entitled to indemnification under Section 11.02(b)(i), and no such claim by any Unitholder Indemnitees shall be so asserted, if the Losses relating to or resulting from such claim or other claims relating to or resulting from the same facts, events or circumstances are less than $50,000. For purposes of determining whether or not a breach of a representation or warranty has occurred all qualifications or limitations as to "materiality," "in all material respects" or "Material Adverse Effect" and words of similar import set forth therein shall be taken into account, but for purposes of determining Losses hereunder, all qualifications or limitations as to "materiality," "in all material respects" or "Material Adverse Effect" and words of similar import set forth therein shall be disregarded.
(d) Notwithstanding anything to the contrary in this Agreement, (i) the Buyer Indemnitees shall not be entitled to recover any Losses to the extent reflected or reserved for on the Financial Statements or included in the calculation of any component of the Closing Cash Payment, including any Loss that is included with as a Liability in the calculation of the Working Capital, and (ii) the Buyer Indemnitees shall have no claim under this ARTICLE XI to the extent arising from actions taken or not taken by the Buyer Indemnitees, or any event or occurrence occurring, after Closing.
(e) The Parties acknowledge and agree that the same Loss may be subject to indemnification under more than one subsection of Section 11.02; provided, however, that, in no event shall the Unitholder Indemnitees, on the one hand, or the Buyer Indemnitees, on the other hand, be entitled to duplicative recoveries for the same underlying Loss.
(f) Notwithstanding the foregoing, the Buyer Indemnitees shall not have any right to indemnification with respect to any environmental matter or condition, including arising under Environmental Laws or relating to Hazardous Materials, or any Losses relating thereto, to the extent that: (i) such matter or condition is discovered or detected by any testing, sampling, or other intrusive investigation or any reporting to any Governmental Authority, by or on behalf of any Buyer Indemnitee, including at the Owned Real Property or Leased Real Property, except to the extent such testing, sampling or other intrusive investigation or reporting is (A) affirmatively required to comply with Environmental Law or is directed to be conducted by a Governmental Authority; or (B) necessary to comply with any legal requirements arising out of a judicial order, suit or action or to comply with an order by a Governmental Authority; (ii) arises from or relates to any maintenance, removal or abatement of asbestos or asbestos-containing building materials (other than such asbestos or asbestos containing material in friable form and the condition of which as of Closing requires removal, abatement or encapsulation by a Buyer Indemnitee to comply in all material respects with Environmental Law); or (iii) is caused, accelerated or exacerbated in any material respect by any act or omission by or on behalf of any Buyer Indemnitee. Indemnification in favor of Buyer Indemnitees shall be limited to such cost effective action that is reasonably necessary to achieve the minimum applicable remedial standards allowable under Environmental Law for continued industrial use of the relevant property or facility, employing where applicable risk-based remedial standards, land use restrictions and institutional controls, where such standards, restrictions or controls would not unreasonably interfere with ongoing industrial or commercial operations at the relevant property or facility.
(g) Buyer Indemnitees shall not have any right to indemnification under Section 11.02(a) or otherwise under this Agreement with respect to the representations and warranties under Section 4.02(g) and Section 5.15 to the extent such Losses or Taxes (i) are attributable to taxable periods (or portions thereof) beginning after the Closing Date, (ii) are due to the unavailability in any taxable period (or portion hereof) beginning after the Closing Date of any net operating losses, credits or other Tax attribute from a taxable period (or portion thereof) ending on or prior to the Closing Date, or (iii) that result from the breach of the covenant in Section 8.02.
(h) The amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any amounts recovered under any insurance proceeds (net of direct collection expenses) policies or from other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees Indemnified Party shall use commercially reasonable efforts to seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closinghereunder. In the event that an insurance or other recovery or indemnification payment is received by the Purchasers Indemnitees any Indemnified Party, in each case with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the SellersIndemnifying Party that made or directed such indemnification payments to such Indemnified Party.
(i) Prior to the Closing, which refund shall be distributed based on notwithstanding anything to the proportion contrary contained in this Agreement, none of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant ARTICLE XI shall apply to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 or limit the Purchasers Indemnitees will not be entitled Company's and the Unitholders' right to recover for such Losses pursuant from Buyer if Buyer fails to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in consummate the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderTransactions.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Purchasers Buyer Indemnitees and the Seller Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) 9.2 are subject to the following limitations:
(ia) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Buyer Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b9.2(a)(i) if (other than Losses in respect of inaccuracies or breaches of the Fundamental Representations and Warranties and Losses in respect of the Reserved Matters) until the total amount of Losses which the Buyer Indemnitees would recover under Section 9.2(a)(i), but for this Section 9.4(a), exceeds three million dollars $3,000,000, in which case, the Buyer Indemnitees shall only be entitled to recover Losses in excess of such amount;
(b) the Seller Indemnitees shall not be entitled to recover Losses pursuant to Section 9.2(b)(i) (other than Losses in respect of inaccuracies or breaches of the representations and warranties of Buyer set forth in Section 5.2(b) and Section 5.12) until the total amount of Losses which the Seller Indemnitees would recover under Section 9.2(b)(i), but for this Section 9.4(b), exceeds three million dollars $3,000,000, in which case, the Seller Indemnitees shall only be entitled to recover Losses in excess of such amount;
(c) no Indemnified Party shall be entitled to recover for any particular Loss (including any series of related Losses) pursuant to Section 9.2(a)(i) or Section 9.2(b)(i) unless such Loss (including any series of related Losses) equals or exceeds $50,000;
(d) except in the case of fraud or with respect to Losses indemnifiable pursuant to Section 9.2(a)(iv), the maximum liability of Seller and the Seller Related Parties with respect to Losses indemnifiable pursuant to Section 9.2(a) (other than Section 9.2(a)(iv)) and Section 10.18 (i) with respect to Losses for which Buyer Indemnitees assert a claim for indemnification hereunder prior to the Survival Date shall be an amount equal to the Escrow Amount less the Seller Excess Adjustment and (ii) with respect to Losses for which Buyer Indemnitees do not assert a claim for indemnification hereunder prior to the Survival Date, shall be an amount equal to the lesser of (A) five million dollars ($5,000,000) and (B) that portion of the Purchasers (Escrow Amount in excess of the Seller Excess Adjustment not paid to Buyer or any director Buyer Indemnitee in respect of claims for indemnification pursuant to Section 9.2(a) or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or Section 10.18 asserted prior to the Closing Survival Date (the “Extended Survival Cap”), and, in each case, in no event shall the Buyer Indemnitees be entitled to collect in excess of such amount with respect to such Losses;
(e) except in the factscase of fraud, events or conditions constituting or resulting in such breach the maximum liability of representationBuyer and the Buyer Related Parties with respect to Losses indemnifiable pursuant to Section 9.2(b)(i) with respect to Losses for which Seller Indemnitees assert a claim for indemnification hereunder prior to the Survival Date shall be an amount equal to the Escrow Amount less the Buyer Excess Adjustment and (ii) with respect to Losses for which Seller Indemnitees do not assert a claim for indemnification hereunder prior to the Survival Date, warranty or covenant or shall be an amount equal to the lesser of (A) five million dollars ($5,000,000) and (B) that portion of the Purchasers could have mitigated Escrow Amount in excess of the Buyer Excess Adjustment not paid to Seller or prevented any Seller Indemnitee in respect of claims for indemnification pursuant to Section 9.2(b)(i) or Section 10.18 asserted prior to the Survival Date, and, in each case, in no event shall the Seller Indemnitees be entitled to collect in excess of such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, amount with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to such Losses;
(f) solely for purposes of determining the amount of Losses subject to indemnification hereunder, but not for purposes of determining if an actual breach of an representation, warranty, covenant or other agreement has occurred and given rise to a claim for indemnification hereunder, any express qualifications or limitations set forth in such Loss multiplied by such Seller’s Percentage Share. The Purchasersrepresentation, for themselves and for warranty, covenant or other agreement as to materiality or “Company Material Adverse Effect” (or other similar materiality qualifier) contained therein, shall be disregarded;
(g) the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations amount of any other Seller. The aggregate liability and all Losses required to be paid to any Indemnified Party pursuant to this Article 9 will be reduced to the extent of any Seller under this Section 7.2 amounts such Indemnified Party actually receives (net of any costs of recovery) pursuant to the terms of any insurance policies covering such Losses;
(h) the Buyer Indemnitees shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted be entitled to indemnification pursuant to Section 2.69.2(a) for any Loss to the Purchased Units and extent that (i) a reserve was recorded with specificity in the Shares sold Latest Balance Sheet in respect of such Loss or (ii) such Loss was reflected as a liability in the Closing Working Capital amount used to determine the Final Purchase Price pursuant to Section 2.4(d);
(i) the indemnification obligations hereunder of any Indemnifying Party shall be subject to any duty to mitigate on the part of the Indemnified Party to the extent required by applicable Law;
(j) in any case where an Indemnified Party recovers, under insurance policies or from other sources of recovery, any amount in respect of a matter for which such Indemnified Party was indemnified pursuant to Section 9.2, such Indemnified Party shall promptly pay over to the applicable Indemnifying Party the amount so recovered (after deducting therefrom the amount of the expenses incurred by such Seller Indemnified Party in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid by the Indemnifying Party to or on behalf of such Indemnified Party in respect of such matter and (ii) any amount expended by the Purchasers hereunderapplicable Indemnifying Party in pursuing or defending any claim arising out of such matter.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Walter Investment Management Corp)
Limitations on Indemnification Obligations. The Notwithstanding anything to the contrary contained herein, the rights of the Purchasers Buyer Indemnitees to indemnification pursuant to the provisions of Section 7.2(b9.2(a) and Section 9.2(b) are subject to the following limitations:
(ia) the amount of any Loss subject to indemnification hereunder or of any Claim therefor and all Losses shall be calculated determined net of any amounts actually recovered by any Buyer Indemnitees under insurance proceeds policies (net of direct collection expensesany Taxes and other expenses incurred in connection with obtaining such amounts, as well as any increased premium costs associated therewith) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunderLosses, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect the Buyer Indemnitees and their Affiliates shall treat such amounts recovered under insurance policies as an adjustment to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in U.S. federal and applicable state and local income Tax purposes to the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Capmaximum extent permitted under applicable Legal Requirements;
(vb) except for Claims arising under Section 3.5, the Purchasers Buyer Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b9.2(a)(i) if or Section 9.2(b)(i) (Aother than with respect to breaches of Fundamental Representations and Section 3.16) until the total amount which the Buyer Indemnitees would recover under Section 9.2(a)(i) or Section 9.2(b)(i) (as limited by the provisions of Section 9.4(a)), but for this Section 9.4(b), exceeds $1,278,750, in which case, the Buyer Indemnitees shall only be entitled to recover Losses in excess of such amount, subject to the other limitations set forth herein;
(c) the Purchasers (Indemnity Escrow Funds remaining at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 9.2(a) or any director or officer of Purchasers who is not a Seller or a directorSection 9.2(b), officer or consultant and in no event shall the Buyer Indemnitees be entitled to recover more than the amount of the Company prior funds available in the Indemnity Escrow Account pursuant to ClosingSection 9.2(a) had actual knowledge at any time on or prior Section 9.2(b) in the aggregate;
(d) in no event shall a Buyer Indemnitee be entitled to indemnification pursuant to this ARTICLE 9 with respect to a specific Loss to the Closing Date extent such Loss is specifically included as a line-item deduction in the calculation of the factsPurchase Price, events or conditions constituting or resulting as finally determined in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable effortsaccordance with Section 2.4(b); and
(vie) except Notwithstanding anything herein to the contrary, no Buyer Indemnitee shall have any right to indemnification hereunder for Claims arising any Losses attributable to Taxes (i) of any Group Company for a post-Closing Tax period (or portion thereof) (other than as a result of breach of representations contained in Section 3.16(f)(ii), 3.16(f)(iii), 3.16(f)(iv), 3.16(f)(v) or 3.16(h)), (ii) as a result of any transaction occurring on the Closing Date after the Closing outside the Ordinary Course or (iii) attributable to any breach by Buyer and/or its Affiliates of any covenant in this Agreement. Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Indemnity Escrow Funds are reduced to zero, the Buyer Indemnitees shall have no further rights to indemnification under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it 9.2(a) or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunder9.2(b).
Appears in 1 contract
Sources: Stock Purchase Agreement (Fox Factory Holding Corp)
Limitations on Indemnification Obligations. The rights of the Purchasers Buyer Indemnitees and Seller Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) 10.2 are subject to the following limitations:
(a) In no event shall the aggregate liability of Seller and its Affiliates or Buyer and its Affiliates hereunder exceed the Purchase Price.
(b) Section 10.4 shall not apply to Losses based upon, arising out of, with respect to or by reasons of (i) the amount of any Loss subject to indemnification hereunder fraud or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount willful misconduct of the recovery other Party or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result any inaccuracy in or breach of any multipleFundamental Representation.
(c) Notwithstanding anything to the contrary, increase factorneither Party will be liable to the other Party or its Affiliates for any loss of future revenue, income, or profits or for any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or punitive damages in connection with, calculating with this Agreement or preparing its bid, its proposed purchase price for any of the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against LossesRelated Agreements; provided, however, that thereafter solely with respect this limitation shall not apply to claims for Losses that are individually less than $50,000 resulting from or arising out of fraud or willful misconduct on the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent part of such excess);either Party.
(ivd) except Without limiting the effect of any other limitation contained in this Section 10, for Claims arising under Sections 3.1purposes of computing the amount of any Losses incurred by an Indemnified Party hereunder, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not there shall be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up deducted an amount equal to the amount of such Loss multiplied any insurance proceeds, indemnification payments, contribution payments or reimbursements actually received by such Seller’s Percentage Share. The PurchasersIndemnified Party in connection with such Losses (it being agreed that, promptly after the realization of any such reduction of Losses pursuant hereto, such Indemnified Party shall reimburse the Responsible Party for themselves such reduction in Losses for which such Indemnified Party was indemnified prior to the realization of reduction of Losses).
(e) Buyer and for Seller shall cooperate with each other with respect to resolving any claim or liability with respect to which one Party is obligated to indemnify the Purchasers Indemniteesother Party under this Section 10, unconditionally waives including by making commercially reasonable efforts to mitigate the amount of Losses, whether by seeking the benefits of any right it insurance, indemnity, contribution or they may have other payments or recoveries of a like nature applicable to hold any Seller jointly liable for such Losses or otherwise.
(f) Without limiting the obligations effect of any other Seller. The aggregate liability limitation contained in this Section 10, the calculation of Losses shall not include losses arising because of a change after Closing in Legal Requirements or accounting principle.
(g) All materiality qualifications contained in the representations and warranties of the Parties set forth in this Agreement (however they may be phrased and including the term “Material Adverse Effect”) shall be ignored and not given any Seller effect for purposes of determining Losses under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunder10.
Appears in 1 contract
Sources: Asset Purchase Agreement
Limitations on Indemnification Obligations. The rights of (a) Notwithstanding Section 5.1, there shall be no liability for indemnification under Section 5.1(a) unless the Purchasers Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) are subject to the following limitations:
(i) the aggregate amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds Losses under this Agreement exceeds [***] (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreementthe “Seller Indemnification Threshold”), received by at which ▇▇▇▇ ▇▇▇▇▇▇ will be obligated to indemnify the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees Buyer Indemnified Parties with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of all Losses described in Section 5.1(a) in excess of such Seller Indemnification Threshold; provided that the recovery Seller Indemnification Threshold shall not apply in the case of fraud, intentional or payment knowing misrepresentation or willful breach or to the breach of or inaccuracy in any representation or warranty made by Seller in any of the Seller Fundamental Representations.
(net of direct collection expenses and Taxesb) Notwithstanding Section 5.2, there shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ no liability for indemnification obligations in respect of such Loss shall be reduced by under Section 5.2(a) unless the aggregate amount of Losses thereunder exceeds [***] (the insurance recovery “Buyer Indemnification Threshold”), at which time Buyer will be obligated to indemnify the Seller Indemnified Parties with respect to the aggregate amount of all Losses described in Section 5.2(a) in excess of such Buyer Indemnification Threshold; provided that the Buyer Indemnification Threshold shall not apply to the breach of or indemnification payment inaccuracy in any representation or warranty made by Buyer in any of the following: Sections: 3.1 (net of direct collection expensesDue Organization);, 3.2 (Authorization; No Conflict) and 3.6 (Brokers and Agents).
(iic) no adjustment The indemnification obligations of Seller under Section 5.1(a) shall be made as a result limited to [***] of any multiple, increase factor, or any other premium over the value paid by Purchase Price (the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b“Lower Cap”), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely the Lower Cap shall not apply to Seller’s indemnification obligations under Section 5.1(a) for breaches of or inaccuracies in any of the Seller Fundamental Representations, which obligations (when aggregated with Seller’s other indemnification obligations under Section 5.1(a)) shall be limited to an amount equal to [***], or in the case of fraud, intentional or knowing misrepresentation or willful breach.
(d) The indemnification obligations of Buyer under Section 5.2 shall be limited to an amount equal to [***].
(e) Notwithstanding anything to the contrary in this Agreement:(i) Buyer shall have no obligations under Section 5.2 with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not any matter for which any Buyer Indemnified Party is or would be entitled to recover for indemnification under Section 5.1 (without giving effect to any limitations, including as to time, survival periods, deductibles, thresholds, caps, knowledge or materiality qualifiers); (ii) if a Party is entitled to bring a claim under more than one provision of Section 5.1 or 5.2, as the case may be, such Losses Party may choose in its sole and absolute discretion the provision or provisions under which it seeks indemnification; and (iii) Seller shall be obligated to pay, by wire transfer of immediately available funds, any indemnification obligation owed to any Buyer Indemnified Party as set forth herein rather than such obligation being satisfied by offset pursuant to Section 7.2(b5.6.
(f) until The amount of Losses recoverable by the Indemnified Party under this Article V shall be reduced, on a dollar-for-dollar basis, by the amount of any insurance proceeds actually received by the Indemnified Party in connection with a Claim under this Article V under any insurance policies (net of any applicable fees and expenses incurred in connection with obtaining such Losses that are individually less than $50,000 are equal amounts, including reasonable attorneys’ fees and other advisors’ fees). If the Indemnified Party receives any amounts under applicable insurance policies, or from any other Person alleged to be responsible for any Losses, subsequent to an indemnification payment by the indemnifying Party, then such Indemnified Party shall promptly reimburse the indemnifying party for any payment made or exceed $300,000 expense incurred by such Indemnified Party in connection with providing such indemnification payment up to the aggregate (and then only amount received by the Indemnified Party, net of any expenses incurred by such Indemnified Party in collecting such amount. Upon the payment of any indemnification claim under this Agreement, the indemnifying party shall, to the extent of such excess);
(iv) except for Claims arising under Sections 3.1payment, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and be subrogated to all rights of the Indemnified Party against any insurer of the Indemnified Party in respect of Operating Wind Project Liabilities the Losses to which such payment relates, unless prohibited by the terms of the Contract with such insurer. The Indemnified Party and indemnifying Party shall duly execute upon request all instruments reasonably necessary to evidence and perfect the foregoing subrogation rights.
(in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(bg) Notwithstanding anything to the extent contrary in this Agreement, for purposes of determining (i) whether there has been a breach requiring Seller to indemnify as provided in Section 5.1 and (ii) the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11with respect thereto, 4.12each representation, 4.15warranty, 4.16covenant and agreement made by Seller, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause whether made herein or in the lead-any other document, agreement or instrument delivered in qualifier connection herewith, shall be deemed to this subsection have been made without any qualifications or limitations as to materiality (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (including any qualifications or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect limitations made by reference to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderMaterial Adverse Change).
Appears in 1 contract
Sources: Asset Purchase Agreement (Syros Pharmaceuticals, Inc.)
Limitations on Indemnification Obligations. (a) The rights Merger Stockholders shall not be liable to indemnify the Parent Indemnitees for breaches of the Purchasers Indemnitees to indemnification representations and warranties pursuant to the provisions of Section 7.2(bSections 10.2(a)(i) are subject to the following limitations:
(i) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect except for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees claims with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.73.15, 4.13.17, 4.5, 4.10, 4.15(d3.29 and 3.31 and the closing certificate in Section 6.1 insofar as it relates to such representations and warranties (the representation and warranties contained in such sections and certificate being the “Stockholder Fundamental Representations”)) until the aggregate Damages incurred by the Parent Indemnitees for which indemnification may be sought but for this sentence exceeds $460,000 (the “Basket Amount”), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in at which case point the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Parent Indemnitees will not shall only be entitled to recover Losses seek indemnification for the amount by which such Damages exceed the Basket Amount. The Stockholder Indemnitees may not make any claim for indemnification for breaches of representations and warranties pursuant to Section 7.2(b10.3(i) (except for claims with respect to Sections 4.1 and 4.2, and the closing certificate in Section 7.1 insofar as they relate to such representations and warranties (the representations and warranties contained in such sections and certificate being the “Parent Fundamental Representations”)) until the aggregate Damages incurred by the Stockholder Indemnitees for which indemnification may be sought but for this sentence exceeds the Basket Amount, at which point the Stockholder Indemnitees shall only be entitled to seek indemnification for the amount by which such Damages exceed the Basket Amount.
(b) The aggregate indemnification obligation of the Merger Stockholders for breaches of representations and warranties pursuant to Section 10.2(a)(i) hereof shall not exceed $6,900,000 (the “Cap Amount”); provided, that this limitation shall not apply to breaches of the Stockholder Fundamental Representations. The aggregate indemnification obligation of the Merger Stockholders for breaches of the Stockholder Fundamental Representations, claims made pursuant to Section 9.2 and claims made pursuant to Section 10.2(a)(ii) through Section 10.2(a)(xiv) shall not exceed $10,000,000; provided that this limitation shall not apply to claims for indemnification made by Parent pursuant to Section 10.2(a)(xi) hereof.
(c) The aggregate indemnification obligations of Parent and the Guarantor for breaches of representations and warranties pursuant to Section 10.3(i) shall not exceed the Cap Amount, provided that this limitation shall not apply to breaches of the Parent Fundamental Representations. The aggregate indemnification obligation of Parent and the Guarantor for breaches of the Parent Fundamental Representations and claims made pursuant to Section 10.3(ii) and Section 10.3(iii) shall not exceed $10,000,000.
(d) After the Effective Time, Parent shall seek recovery with respect to claims for indemnification pursuant to Section 9.2 and Section 10.2(a) against the Indemnity Escrow Funds (to the extent available) before seeking recovery directly from the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderMerger Stockholders.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of (a) Notwithstanding anything in this Agreement to the Purchasers contrary, no indemnification claims for Damages shall be asserted by the Seller Indemnitees to indemnification pursuant to Section 9.1(a)(i) or the provisions Buyer Indemnitees pursuant to Section 9.1(b)(i) unless any individual Damages or group or series of Section 7.2(brelated Damages exceeds $100,000 (such individual Damages or group or series of related Damages that does not exceed $100,000, the “DeMinimis Damages”); provided, that the foregoing clause (a) are subject shall not apply to Damages arising out of or relating to the following limitations:inaccuracy or breach of any representation or warranty in the event of fraud, willful misconduct or intentional misrepresentation.
(iA) The Seller shall not have any obligation to indemnify any Buyer Indemnitee pursuant to Section 9.1(b)(i) unless and until the aggregate amount of any Loss subject to indemnification hereunder all such individual Damages incurred or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received sustained by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Buyer Indemnitees with respect to which the Buyer Indemnitees would otherwise be entitled to indemnification under Section 9.1(b)(i) (which shall not include for such purposes DeMinimis Damages) exceeds $2,100,000 (the “Deductible”), whereupon the Seller shall be liable for all Damages in excess of the Deductible, and (B) the aggregate liability of the Seller to indemnify (or to cause to be indemnified) the Buyer Indemnitees for Damages under Section 9.1(b)(i) shall in no event exceed $10,500,000 (the “Cap”); provided, that the foregoing clause (b) shall not apply to Damages arising out of or relating to the inaccuracy or breach of any Loss for which representation or warranty to the extent of knowing and actual fraud, willful misconduct or intentional misrepresentation with respect thereto.
(A) The Buyer shall not have any such Person has been indemnified hereunder, then a refund equal obligation to indemnify (or to cause to be indemnified) any Seller Indemnitees pursuant to Section 9.1(a)(i) unless and until the aggregate amount of all individual Damages incurred or sustained by all Seller Indemnitees with respect to which the recovery Seller Indemnitees are entitled to indemnification under Section 9.1(a)(i) (which shall not include for such purposes all DeMinimis Damages) exceeds the Deductible, whereupon the Buyer shall be liable for the full amount of all Damages from the first dollar thereof, and (B) the aggregate liability of the Buyer to indemnify (or payment (net of direct collection expenses and Taxesto cause to be indemnified) the Seller Indemnitees for Damages under Section 9.1(a)(i) shall be made promptly in no event exceed an amount equal to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against LossesCap; provided, however, that thereafter solely with respect the foregoing clause (c) shall not apply to Losses that are individually less than $50,000 Damages arising out of or relating to the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to inaccuracy or exceed $300,000 in the aggregate (and then only breach of any representation or warranty to the extent of such excess);
(iv) except for Claims arising under Sections 3.1knowing and actual fraud, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, willful misconduct or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, intentional misrepresentation with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderthereto.
Appears in 1 contract
Sources: Purchase Agreement (Fifth & Pacific Companies, Inc.)
Limitations on Indemnification Obligations. The rights (a) Notwithstanding any contained herein to the contrary, if the Closing occurs, Sellers shall not have any liability (for indemnification or otherwise) to any Buyer Indemnified Persons with respect to any indemnification obligations set forth in Section 11.2 (i)(A) unless and until the amount of the Purchasers Indemnitees all Damages for which all Buyer Indemnified Persons are entitled to indemnification pursuant to Section 11.2 exceeds $75,000 (the provisions of Section 7.2(b) are subject to the following limitations:
(i) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement“Threshold Amount”), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees at which time Buyer Indemnified Persons shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder indemnification for all Damages sustained by such Losses will not be permitted to exceed Buyer Indemnified Persons in excess of the Purchase Price)Threshold Amount, the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(band (B) to the extent the Sellers aggregate amount of all Damages for which all Buyer Indemnified Persons are entitled to indemnification pursuant to Section 11.2, Seller’s liability hereunder for all such Losses would otherwise shall not exceed twenty percent (20%) the amount of the Purchase Price Price. (as adjusted the “Indemnification Cap”).
(b) Notwithstanding any contained herein to the contrary, if the Closing occurs, Buyer shall not have any liability (for indemnification or otherwise) to any Seller Indemnified Persons with respect to any indemnification obligations set forth in Section 11.3 (i)(A) unless and until the amount of all Damages for which all Seller Indemnified Persons are entitled to indemnification pursuant to Section 2.6) if 11.3 exceeds the Claim pertains to Section 4.11Threshold Amount, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder at which time Buyer Indemnified Persons shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant indemnification for all Damages sustained by such Buyer Indemnified Persons in excess of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the factsThreshold Amount, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderIndemnification Cap.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Purchasers Buyer Indemnitees and the Seller Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) 11.2 are subject to the following limitations:
(ia) The Buyer Indemnitees shall not be entitled to recover Losses pursuant to Section 11.2(a)(i) or Section 11.2(a)(ii)(A) until the total amount of Losses which the Buyer Indemnitees would recover under Section 11.2(a)(i) and Section 11.2(a)(ii)(A), but for this Section 11.4(a), exceeds two million dollars ($2,000,000) (the “Basket Amount”), in which case, the Buyer Indemnitees shall be entitled to recover Losses (including all Losses comprising the Basket Amount), except that claims related to any breach or inaccuracy in the Seller Fundamental Representations and Warranties shall not be subject to the Basket Amount.
(b) The Seller Indemnitees shall not be entitled to recover Losses pursuant to Section 11.2(b)(i) or Section 11.2(b)(ii)(A) until the total amount of Losses which the Seller Indemnitees would recover under Section 11.2(b)(i) and Section 11.2(b)(ii)(A) but for this Section 11.4(b), exceeds the Basket Amount, in which case, the Seller Indemnitees shall only be entitled to recover Losses (including all Losses comprising the Basket Amount), except that claims related to any breach or inaccuracy in the Buyer Fundamental Representations and Warranties shall not be subject to the Basket Amount.
(c) The Buyer Indemnitees shall not be entitled to recover for any particular Loss (including any series of related Losses) pursuant to Section 11.2(a)(i) or Section 11.2(a)(ii)(A) unless such Loss (including any series of related Losses) equals or exceeds $25,000 (the “De Minimis Threshold”) nor shall any Loss that does not meet the De Minimis Threshold be considered in determining whether the Basket Amount has been met; provided, however, that claims related to any breach or inaccuracy in the Seller Fundamental Representations and Warranties shall not be subject to the De Minimis Threshold.
(d) The Seller Indemnitees shall not be entitled to recover for any particular Loss (including any series of related Losses) pursuant to Section 11.2(b)(i) or Section 11.2(b)(ii)(A) unless such Loss (including any series of related Losses) equals or exceeds the De Minimis Threshold nor shall any Loss that does not meet the De Minimis Threshold be considered in determining whether the Basket Amount has been met; provided, however, that claims related to any breach or inaccuracy in the Buyer Fundamental Representations and Warranties shall not be subject to the De Minimis Threshold.
(e) Subject to the last paragraph of Section 11.2(a), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Parent and Seller shall have no liability under this Agreement to any Buyer Indemnitee for Losses in respect of Loss Sharing Claims other than pursuant to Section 11.2(a)(iii).
(f) Other than Losses arising out of fraud or any breach or inaccuracy in the Seller Fundamental Representations and Warranties, the maximum aggregate liability of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Parent and Seller with respect to Losses indemnifiable pursuant to Section 11.2(a)(i) and Section 11.2(a)(ii)(A) shall be $5,928,700.
(g) Other than Losses arising out of fraud or any breach or inaccuracy in the Buyer Fundamental Representations and Warranties, the maximum aggregate liability of Buyer with respect to Losses indemnifiable pursuant to Sections 11.2(b)(i) and Section 11.2(b)(ii)(A) shall be $5,928,700.
(h) The amount of any Loss subject to indemnification hereunder or of any Claim therefor and all Losses shall be calculated determined net of (i) any amounts actually recovered by the Indemnified Party under insurance proceeds (net of direct collection expenses) policies or from other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees ) with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses Losses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely Tax benefits actually received with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);Losses.
(ivi) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers The Buyer Indemnitees shall not be entitled to recover Losses indemnification pursuant to Section 7.2(b11.2(a) if for any Loss to the extent that (Ai) such Loss was taken into account in the determination of the Final Purchase Price pursuant to Section 2.5(d) or (ii) the Purchasers Buyer Indemnitees failed to mitigate or prevent such Loss as required by Law.
(j) The Buyer Indemnitees and the Seller Indemnitees, in each case, shall not be entitled to recover or make a claim for any amounts in respect of consequential, incidental, special or indirect damages, lost profits or punitive damages and, in particular, no “multiple of profits” or “multiple of cash flow” or other similar valuation methodology based upon multiples shall be used in calculating the amount of any Losses, except to the extent such damages are recovered by third parties in connection with claims made by such third parties that are indemnified under this Agreement.
(k) In any case where a Indemnified Party recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Indemnified Party was indemnified pursuant to Section 11.2(a) or Section 11.2(b), as applicable, such Indemnified Party shall promptly pay over to the Responsible Party the amount so recovered (after deducting therefrom the amount of the expenses incurred by such Indemnified Party in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid by the Responsible Party to or on behalf of such Indemnified Party in respect of such matter and (ii) any amount expended by the Responsible Party in pursuing or defending any claim arising out of such matter.
(l) In the event the Closing occurs and Seller or Parent (either before or after Closing) has made (or is required to make) any payment to any Buyer Indemnitee in satisfaction of all or some of its indemnification obligation hereunder, in no event shall Seller or Parent (or any director of their Affiliates) or officer any Seller Indemnitee be entitled to seek indemnification or contribution (or any similar theory) from the Company or its Subsidiaries (including any of Purchasers who is not a Seller or a directorofficers, officer or consultant directors, employees, agents, shareholders and Affiliates of the Company prior to Closingor its Subsidiaries) had actual knowledge at in respect of any time on such payments made (or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount be made) by Seller or Parent (or any of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereundertheir Affiliates).
Appears in 1 contract
Limitations on Indemnification Obligations. (a) The rights of the Purchasers Purchaser Indemnitees to indemnification pursuant to the provisions provision of Section 7.2(b) 10.2 other than as arising in respect of a Third Party Claim are subject to the following limitations:
(i) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Purchaser Indemnitees shall not be entitled to recover Losses pursuant for claims made against S▇▇▇▇▇▇ under Section 10.2(a)(i)(A) with respect to breaches of the Non-Fundamental Representations (1) until the cumulative aggregate amount which the Purchaser Indemnitees would recover under Section 7.2(b10.2(a)(i) if exceeds $75,000 (the “Deductible”), in which case the Purchaser Indemnitees shall be entitled to recover the aggregate amount of all such Losses in excess of the Deductible and (2) for an amount in excess of the lower of (x) $1,000,000.00 or (y) the aggregate Earn-out Payments actually paid or payable hereunder, and (B) with respect to breaches of the Fundamental Representations for an amount in excess of the aggregate Earn-out Payments actually paid or payable hereunder;
(ii) The Purchaser Indemnitees shall not be entitled to recover Losses for claims made against the Selling Parties other than S▇▇▇▇▇▇ under Section 10.2(b)(i) (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant with respect to breaches of the Company prior Non-Fundamental Representations (1) until the cumulative aggregate amount which the Purchaser Indemnitees would recover under Section 10.2(b)(i) exceeds the Deductible, in which case the Purchaser Indemnitees shall be entitled to Closing) had actual knowledge at any time on or prior to recover the Closing Date aggregate amount of all such Losses in excess of the factsDeductible and (2) for an amount in excess of $1,000,000.00, events or conditions constituting or resulting in such breach of representation, warranty or covenant or and (B) with respect to breaches of the Purchasers could have mitigated or prevented such Loss using commercially reasonable effortsFundamental Representations for an amount in excess of the Seller Closing Payment; and
(viiii) In the event a Purchaser Indemnitee recovers the full amount of Losses sought pursuant to Section 10.2 from an Indemnifying Party and thereafter receives (A) insurance proceeds directly attributable to, and in payment or reimbursement of, the Losses, (B) indemnity or contribution amounts from third parties (other than Purchaser or any Company) with respect to such Losses, or (C) any direct, recognizable Tax benefit as a result of any such Losses, then the Purchaser Indemnitee shall refund to such Indemnifying Party the amount thereof (net of costs of collection and similar costs). To the extent an indemnifiable Loss is covered by insurance and such coverage is confirmed by the insurer, then the Indemnifying Party shall not be liable for the amount of the Loss so covered by insurance to the extent of the amount received by the Indemnified Party.
(b) Any claim for indemnification hereunder arising from a single event or occurrence may be asserted under one or more of the separate clauses set forth in Section 10.2, and the assertion of a claim for indemnification under one clause shall not preclude or restrict the indemnified party from asserting a claim for indemnification under one or more different clauses, provided, however, that any Losses recovered by an Indemnified Party under one clause shall be credited against Losses sought to be recovered under a different clause and arising from the same event, occurrence or facts.
(c) Except for a breach of his Restrictive Covenant, and except as set forth in Sections 10.7(i), (ii) or (iii), the maximum amount of Losses for Claims arising which S▇▇▇▇▇▇ may be liable under Section 3.5this Article 10 shall not exceed the Consideration paid or payable to S▇▇▇▇▇▇ hereunder.
(d) Notwithstanding the foregoing, the Parties agree that, with respect to a particular Lossthe matters set forth on Schedule 10.5(d), each Seller the terms, provisions and limitations set forth therein shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations apply in lieu of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderprovisions set forth herein otherwise applicable thereto.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Purchasers Buyer Indemnitees to indemnification pursuant to the provisions of Section 7.2(b8.2(a) are subject to the following limitations:
(ia) the amount of any Loss subject to indemnification hereunder or and all Losses of any Claim therefor shall Buyer Indemnitees will be calculated determined net of any amounts actually recovered by Buyer Indemnitees under insurance proceeds (net of direct collection expenses) or other collateral sources (policies with respect to such as contractual indemnities Losses; provided that if, following the payment of any Person which are contained outside of this Agreementindemnification amounts pursuant to Section 8.2(a), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the PurchasersBuyer, the Company and the Subsidiaries shall not cancel or any of their Affiliates recover any amounts under insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunderLosses, then a refund equal the applicable Buyer Indemnitees shall reimburse the Escrow Account or Seller, as applicable, the amount of such insurance recoveries to the aggregate amount extent such recoveries were previously paid out of the recovery Escrow Fund or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(iib) no adjustment Buyer Indemnitees shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses any particular Loss pursuant to Section 7.2(b8.2(a) until unless such Loss equals or exceeds $15,000; provided that a succession of Losses that are individually less than $50,000 are equal 15,000 may be aggregated for purposes of satisfying the $15,000 threshold set forth in this Section 8.4(b); and provided further that amounts paid in connection with the Pending Tax Liability and the ABS Agreement shall be excluded from, and not required to or exceed meet, this $300,000 in the aggregate (and then only to the extent of such excess)15,000 threshold amount;
(ivc) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Buyer Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b8.2(a)(i) to until the extent the Sellers aggregate liability hereunder for all such Losses total amount which Buyer Indemnitees would otherwise exceed twenty percent (20%recover under Section 8.2(a)(i) of the Purchase Price (as adjusted limited by the provisions of Sections 8.4(a) and 8.4(b)), but for this Section 8.4(c), exceeds the Threshold Amount, and then only for the excess over the Threshold Amount; provided however that amounts paid in connection with the Pending Tax Liability and the ABS Agreement shall be excluded from, and not required to meet, the Threshold Amount; and
(d) at any time Buyer Indemnitees (x) pursuant to Section 2.6) if the Claim pertains this Agreement, will be entitled to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed recover no more in the immediately preceding clause or in aggregate than the lead-in qualifier Indemnity Cap; and (y) pursuant to this subsection (the “Liability Cap”) in the aggregateAgreement, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall will not be entitled to recover Losses from any source other than the Escrow Account, provided that, subject to the survival limitations set forth in Section 8.1, after termination of the Escrow Account or exhaustion of the Escrow Fund, the Buyer Indemnitees may seek indemnification directly from Seller for Losses to the extent aggregate indemnification for Losses theretofore pursuant to Section 7.2(b8.2(a) if (A) has not exceeded the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderIndemnity Cap.
Appears in 1 contract
Limitations on Indemnification Obligations. (a) The rights of the Purchasers Indemnitees to indemnification Joinder Parties’ obligations pursuant to the provisions of Section 7.2(b) 10.2 are subject to the following limitations:
(i) The PTI Indemnitees shall not be entitled to recover under Section 10.2(a) until the total amount which the PTI Indemnitees would recover under Section 10.2(a), but for this Section 10.3(a), exceeds $* (the “Threshold”), and then the PTI Indemnitees shall be entitled to recover all Damages back to the first dollar of Damages incurred. The limitation in the preceding sentence shall not apply to any Damages for the breach of any covenant or agreement or representation or warranty under Section 4.1 (organization and qualification), Section 4.2 (capitalization), Section 4.3 (authority) and 4.15 (Taxes) (such representations and warranties, collectively, the “Excluded Representations and Warranties”) or Section 4.19 (brokers) or the Diatos Obligation (and such Damages with respect to any breach of any covenant or agreement, any of the Excluded Representations and Warranties, Section 4.19 or the Diatos Obligation shall not be counted in determining whether the Threshold has been exceeded).
(ii) The aggregate amount of indemnification that the PTI Indemnitees may receive, collectively, shall be an amount equal to * payable in immediately available funds or PTI Ordinary Shares from time to time having a per share value equal to the average closing offer price of a PTI Ordinary Share as shown on the Official Daily List of the London Stock Exchange for the twenty (20) days immediately preceding the date of payment in settlement of any claim for indemnification under Section 10.2(a) (the “Joinder Parties’ Cap”). The limitation in the preceding sentence shall not apply to any Damages for the breach of any of the Excluded Representations and Warranties or the Company’s covenants or agreements hereunder (and such Damages with respect to any breach of such covenant or agreement or any of the Excluded Representations and Warranties shall be limited to an amount equal to the dollar value of all PTI Ordinary Shares delivered to the holders of Company Stock pursuant to this Agreement on the date of such delivery).
(b) PTI’s obligations pursuant to Section 10.2 are subject to the following limitations:
(i) The Joinder Party Indemnitees shall not be entitled to recover under Section 10.2(a) until the total amount that the Joinder Party Indemnitees would recover under Section 10.2(b), but for this Section 10.3(b), exceeds the Threshold, and then the Joinder Party Indemnitees shall be entitled to recover all Damages back to the first dollar of Damages incurred. The limitation in the preceding sentence shall not apply to any Damages for the breach of any covenant or agreement or representation or warranty under Section 5.1 (organization and qualification), Section 5.2 (authority), Section 5.3 (capitalization) (and such Damages with respect to any breach of any covenant or agreement or any of the representations and warranties set forth in Section 5.1, Section 5.2 and Section 5.3 shall not be counted in determining whether the Threshold has been exceeded).
(ii) The aggregate amount of indemnification that the Joinder Party Indemnitees may receive, collectively, to satisfy claims under Section 10.2(b) shall be * (the “PTI Cap”). The limitation in the preceding sentence shall not apply to any Damages for the failure of PTI to deliver the PTI Ordinary Shares to the holders of Company Stock pursuant to this Agreement, absent the occurrence of an event giving rise to PTI’s right to terminate this Agreement pursuant to Section 9.1 (such Damages for failure to deliver the PTO Ordinary Shares to the holders of Company Stock pursuant to this Agreement shall be limited to an amount equal to the dollar value of all PTI Ordinary Shares required to be delivered to the holders of Company Stock pursuant to this Agreement on the date such delivery would have been required). * Confidential treatment requested.
(c) In determining the amount of any Loss subject to indemnification hereunder or Damages, the amount of any Claim therefor such Damages shall be calculated net of any insurance proceeds (net of direct collection expenses) and any indemnity, contribution or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), similar payment received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to party claiming indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel from any insurance policies in effect for periods prior to the Closingthird party with respect hereto. In the event that an any party claiming indemnification hereunder shall collect any available insurance recovery proceeds and any indemnities, contributions or other similar payments from third parties following its receipt of indemnification payment is received by from another party pursuant hereto, such party shall reimburse the Purchasers Indemnitees with respect to other party or, in the event that PTI has applied any Loss for which of the Holdback Shares, PTI shall redeposit any such Person has been indemnified hereunder, then a refund PTI Ordinary Shares into the Holdback Shares in an amount equal to such proceeds or other payments used to reduce the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations Damages as set forth in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions sentence of this Section 7.2(c) pursuant to Section 7.2(b10.3(c), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunder.
Appears in 1 contract
Sources: Merger Agreement (Protherics PLC)
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) obligations under this Agreement are subject to the following limitations:
(ia) No claims for indemnification may be made by the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expensesPurchaser Indemnitees against the Vendor under Sections 11.1(a) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to 11.1(c) unless the aggregate amount of Losses for which the recovery or payment Purchaser Indemnitees are entitled to be indemnified under Sections 11.1(a) and 11.1(c) exceeds (net of direct collection expenses and Taxes) shall be made promptly to Redacted: dollar amount), in which event the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the accumulated aggregate amount of all Losses in excess of such amount may be recovered by the insurance recovery or indemnification payment (net of direct collection expenses);Purchaser.
(iib) no adjustment shall No claims for indemnification may be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at Vendor Indemnitees against the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising Purchaser under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c11.2(a) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in unless the aggregate (and then only to the extent accumulated amount of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not for which the Vendor Indemnitees are entitled to be permitted to exceed the Purchase Priceindemnified under Section 11.2(a) exceeds (Redacted: dollar amount), in which event the Purchasers Indemnitees will not accumulated aggregate amount of all Losses in excess of such amount may be entitled to recover Losses pursuant to Section 7.2(brecovered by the Vendor.
(c) to the extent the Sellers The maximum aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability a party for Losses hereunder shall not exceed its Percentage Share (Redacted: sensitive information).
(d) The sole recourse of the Liability Cap;
(vPurchaser Indemnitees for indemnification pursuant to Section 11.1 will be the right to set-off any such Losses to which it is entitled against any unpaid portion of the Purchase Price, including the right to set-off such amount against the Cash Payment referred to in Section 3.2(a)(ii) except for Claims arising under Section 3.5, and/or the Purchasers Indemnitees shall not issuance of any Shares. In no event will the Purchaser be entitled to make any claim against the Vendor to recover Losses the Cash Payment or any Shares already issued to the Vendor. For purposes of calculating the number of Shares to be withheld from issuance pursuant to this Section 11.3(d), the value of the Shares, determined in accordance with Section 3.1, shall be used.
(e) The Purchaser may, subject to approval of the TSX-V and all applicable Securities Laws, issue additional common shares in its capital in satisfaction of the Vendor Indemnitees indemnification rights pursuant to Section 7.2(b) if (A) 11.2. For purposes of calculating the Purchasers (or any director or officer number of Purchasers who is not a Seller or a directorshares to be issued pursuant to this Section 11.3(e), officer or consultant the value of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the factsShares, events or conditions constituting or resulting determined in such breach of representationaccordance with Section 3.1, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderused.
Appears in 1 contract
Sources: Asset Purchase Agreement
Limitations on Indemnification Obligations. The rights (a) Seller shall not be liable for indemnification under Section ------- 13.01 (other than indemnification arising from Seller's breach of its ----- representations in Section 5.10) until the Purchasers Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) are subject to the following limitations:
(i) the total amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds Losses incurred by ------------ the Buyer exceeds One Hundred Thousand Dollars (net of direct collection expenses$100,000 US) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreementthe "Threshold Amount"), received by provided that if the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment Threshold Amount is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely exceeded with respect to Losses that are individually less than $50,000 for which Seller has an indemnification obligation under this Article ------- XIII, then Seller's obligation shall be the Purchasers Indemnitees will difference between the full amount ---- of such Losses and the Threshold Amount. (Seller's obligation to repurchase the Universal Equipment under Section 7.09 shall not be entitled subject to recover the Threshold ------------ Amount.) For purposes of this Section 13.03, Seller and Buyer shall be referred ------------- to separately as an "Indemnifying Party."
(b) Neither Indemnifying Party shall be liable for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only indemnification payments to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all indemnification payments by such Losses will not be permitted to Indemnifying Party exceed the Purchase Price)sum of the Escrowed Closing Payment plus the Performance Amount actually received by the Seller, the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) except to the extent the Sellers aggregate liability hereunder due to fraud.
(c) No Claim for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price indemnification by an Indemnifying Party under this Article XIII shall be valid unless a Claims Notice (as adjusted pursuant defined in Section 13.04) ------------ ------------- has been delivered to Section 2.6such Indemnifying Party with respect to such Claim. Indemnification obligations shall only apply where such Claims Notice is received, on or prior to thirteen (13) if months following the Claim pertains to Section 4.11Closing Date, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except that indemnification obligations for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b(i) if (A) the Purchasers (or against Buyer by any director or officer of Purchasers who is not a taxing jurisdiction for taxes owed by Seller or a director, officer or consultant of the Company for any period prior to Closing) had actual knowledge at any time the Closing Date shall apply when such Claims Notice is received on or prior to the Closing Date expiration of the factsapplicable statute of limitations; (ii) of Seller against Buyer due to Buyer's obligations under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976 shall apply when such Claims Notice is received on or prior to the expiration of the applicable statute of limitations, events or conditions constituting or resulting in such and (iii) due to Seller's breach of representationSection 1.06 (Seller Not to Employ Continuing Employees), warranty Section 3.01 ------------ ------------ (Non-Competition), Section 4.01 (Seller's Obligation to Purchase Equipment from ------------ Buyer), Section 7.10 (Certain Consigned Inventory), Section 8.01 ------------ ------------ (Confidentiality), and Section 8.07 (Agreement to Comply with ▇▇▇▇▇▇ Non- ------------ Compete) shall apply when such Claims Notice is received on or covenant or prior to thirty (B30) days after the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; andend of the applicable obligation date.
(vid) except for Claims arising under Section 3.5Nothwithstanding the foregoing, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves Sections 13.03(b) and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 (c) shall not exceed such Seller’s Percentage Share of apply to Buyer's obligations to pay the Purchase Price (as adjusted pursuant Assumed Liabilities or to comply with Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunder.2.05. ------------ -65-
Appears in 1 contract
Sources: Sale and Purchase Agreement (Stevens International Inc)
Limitations on Indemnification Obligations. The rights of (a) Seller's obligations to indemnify any Indemnified Buyer Party under this Article XI is subject to, and limited by, the Purchasers Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) are subject to the following limitationsfollowing:
(i) Seller shall not be liable for any General Claims, Environmental Claims, and claims listed as Items 1, 2, 3 and 5(a) on Schedule 11.2(4) (collectively, "Deductible Claims") hereunder or for any reserve adjustment calculated pursuant to Exhibit A ("Reserve Adjustment") until the aggregate dollar amount of any Loss subject Losses relating to indemnification hereunder such Deductible Claims or of any Claim therefor Reserve Adjustment equals $1,000,000, after which ▇▇▇▇ ▇▇▇▇▇▇ will be liable for, and shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees indemnify Indemnified Buyer Parties with respect to any Loss to, only such Losses for which any Deductible Claims or Reserve Adjustments that exceed such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses1,000,000 minimum; provided, however, that thereafter solely with respect Seller shall be liable and shall indemnify the Indemnified Buyer Parties for any Tax Claims and for any claims relating to Losses that are individually less than $50,000 Item 5(b) on the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(battached Schedule 11.2(4) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only hereto without regard to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts$1,000,000 minimum; and
(viii) except The maximum aggregate liability of Seller for Claims indemnification for all Losses and Reserve Adjustments subject to indemnification under this Article XI shall be $13,000,000.
(b) Buyer's obligations to indemnify any Indemnified Seller Party under this Article XI is subject to, and limited by, the following:
(i) Buyer shall not be liable for any inaccuracy in or any breach of any representation, warranty, covenant or agreement of Buyer or GNC contained in this Agreement or in any Schedule, Exhibit or certificate (including any attachments thereto), delivered by Buyer or GNC pursuant hereto or thereto, until the aggregate dollar amount of Losses relating to such claims equals $1,000,000, after which time Buyer will be liable for, and shall indemnify Indemnified Seller Parties with respect to, only such Losses that exceed such $1,000,000 minimum; provided that, notwithstanding the foregoing limitation, Buyer shall be liable and shall indemnify the Indemnified Seller Parties for any Losses relating to GNC's breach of the terms and conditions of the Assignment of Leases; and provided further that nothing contained herein is intended or shall be construed to prevent Seller from exercising any remedy arising under Section 3.5the Assignment of Leases directly against GNC in the event of such breach.
(ii) The maximum aggregate liability of Buyer for indemnification for all Losses subject to indemnification under this Article XI shall be $13,000,000.
(c) Buyer and Seller agree that any payments required to be made by either Buyer or Seller, respectively, in respect of such party's indemnification of any Indemnified Seller Party or Indemnified Buyer Party, respectively, shall be made, without duplication or double-counting, only to Seller or Buyer, respectively;
(d) The indemnification provided under this Article XI shall be the sole remedy of any party to this Agreement against any other party for any claim covered by such indemnification other than claims for specific performance or injunctive relief. In no event shall either party seek or be entitled to a rescission of this Agreement;
(e) Except to the extent not permitted by the Code, Seller and Buyer agree that any indemnification payments pursuant to this Article XI and Exhibit A will constitute an adjustment to the Purchase Price; and
(f) Subject to the provisions of Exhibit A governing the calculation of the Reserve Adjustment, the amount of any Loss for which indemnification is owed under this Article XI shall be net of any amounts actually recovered by the indemnified party under insurance policies or reinsurance agreements of the Company in effect prior to or as of the Closing with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied (including any tail coverage purchased by such Seller’s Percentage Share. The Purchasers, for themselves Seller as described on Schedule 2.24) and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunder.be
Appears in 1 contract
Limitations on Indemnification Obligations. The rights (a) Purchaser Indemnitees shall not be entitled to receive amounts pursuant to Section 6.2(a) (other than for Losses relating to breaches of the Purchasers Indemnitees Special Representations) for any individual item or series of related items based on substantially the same facts and circumstances where the Losses relating to indemnification pursuant to such item or series of related items based on substantially the provisions of Section 7.2(b) same facts and circumstances are subject to less than $2,500, and such Losses shall not be applied against the following limitations:Basket.
(ib) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries Seller shall not cancel have any insurance policies in effect for periods prior obligation to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers indemnify Purchaser Indemnitees with respect to Losses arising under Section 6.2(a) (other than pursuant to breaches or inaccuracies in any Loss for which any such Person has been indemnified hereunder, then a refund equal to of the Special Representations) until the aggregate amount of all Losses thereunder exceeds $25,000 (the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses“Basket”);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely once such aggregate amount of such Losses exceeds the Basket, Seller shall be liable for the entire amount of such Losses otherwise recoverable under Section 6.2(a).
(c) Seller shall not have any obligation to indemnify Purchaser Indemnitees with respect to Losses that are individually less arising under Section 6.2(a) (other than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(bbreaches or inaccuracies in any of the Special Representations) until such Losses that are individually less than $50,000 are in excess of an aggregate amount equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection 1,000,000 (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder ). Seller shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims have any obligation to indemnify Purchaser Indemnitees with respect to Losses arising under Section 3.56.2(a) pursuant to a breach or inaccuracy of a Special Representation or Section 6.2(b) in excess of an aggregate amount equal to $3,800,000.
(d) Purchaser shall not have any obligation to indemnify Seller Indemnitees with respect to Losses arising under Section 6.3(a) until the aggregate amount of all Losses thereunder exceeds the Basket; provided, however, that once such aggregate amount of such Losses exceeds the Purchasers Basket, Purchaser shall be liable for the entire amount of such Losses otherwise recoverable under Section 6.3(a).
(e) Purchaser shall not have any obligation to indemnify Seller Indemnitees with respect to Losses arising under Section 6.3(a) in excess of the Cap.
(f) Notwithstanding anything to the contrary in this Agreement, each Party’s rights to indemnification and any other recovery under law or equity with respect to Losses based upon fraud, willful misconduct or intentional misrepresentation, shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or limited in any director or officer of Purchasers who is not a Seller or a directorway, officer or consultant including by any of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date terms and conditions of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderAgreement.
Appears in 1 contract
Sources: Asset Purchase Agreement (Alliqua BioMedical, Inc.)
Limitations on Indemnification Obligations. (a) The rights of the Purchasers Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) are parties hereto intend that each Liability subject to the following limitations:
indemnification, contribution or reimbursement pursuant hereto will be net of (i) all Insurance Proceeds, and (ii) all recoveries, judgments, settlements, contribution, indemnities and other amounts received (including by way of set-off) from all Third Parties, in each case that actually reduce the amount of any Loss subject of, or are paid to the applicable indemnitee in respect of, such Liability (“Third Party Proceeds”). Accordingly, the amount that a party (each, an “Indemnifying Party”) is required to pay to each Entity entitled to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenseseach an “Indemnified Party”) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount all Insurance Proceeds and Third Party Proceeds received by or on behalf of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or Indemnified Party in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Lossesrelevant Liability; provided, however, that thereafter solely all amounts described in Section 9.2 or Section 9.3 which are incurred by an Indemnified Party shall be paid promptly by the Indemnifying Party and shall not be delayed pending any determination as to the availability of Insurance Proceeds or Third Party Proceeds; provided, further, that upon such payment by or on behalf of an Indemnifying Party to an Indemnified Party in connection with a Third Party Claim, to the extent permitted by Applicable Laws such Indemnified Party shall assign its rights to recover all Insurance Proceeds and Third Party Proceeds to the Indemnifying Party and such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnified Party as to all events and circumstances in respect of which such Indemnified Party may have with respect to Losses all rights, defenses, and claims relating to such Third Party Claim. If, notwithstanding the second proviso in the preceding sentence, an Indemnified Party receives a payment required to be made under this Article IX (an “Indemnity Payment”) from an Indemnifying Party in respect of a Liability and subsequently receives Insurance Proceeds or Third Party Proceeds in respect of such Liability, then the Indemnified Party shall pay to the Indemnifying Party an amount equal to the excess of the amount paid by the Indemnifying Party over the amount that are individually less than $50,000 would have been due if such Insurance Proceeds and Third Party Proceeds had been received before the Purchasers Indemnitees will Indemnity Payment was made. Each EATC UT Entity and each EATC NV Entity shall use reasonable best efforts to seek to collect or recover all Insurance Proceeds and all Third Party Proceeds to which such Entity is entitled in respect of a Liability for which such Entity seeks indemnification pursuant to this Article IX; provided, however, that such Entity’s inability to collect or recover any such Insurance Proceeds or Third Party Proceeds shall not limit the Indemnifying Party’s obligations hereunder.
(b) An insurer that would otherwise be obligated to pay a claim shall not be relieved of the responsibility with respect thereto or, solely by virtue of the indemnification provisions hereof, have any subrogation rights with respect thereto, it being expressly understood and agreed that no insurer or other third party shall be entitled to a “windfall” (i.e., a benefit it would not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 receive in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) absence of the Purchase Price (as adjusted pursuant to Section 2.6indemnification provisions hereof) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) by virtue of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderindemnification provisions hereof.
Appears in 1 contract
Sources: Asset Transfer and Dividend Distribution Agreement (Energy Alliance Technology Corp)
Limitations on Indemnification Obligations. The rights Notwithstanding anything contained in this Agreement or the Additional Agreements:
(a) Subject to Section 11.4(f), in no event shall the cumulative liability of the Purchasers Indemnitees Seller for any and all claims arising under, out of, or related to indemnification pursuant this Agreement, or the sale and purchase of the Company Shares exceed the Purchase Price actually received by the Seller.
(b) No Purchaser Indemnitee or Seller Indemnitee shall be entitled to be compensated more than once for the provisions same Loss.
(c) In no event shall Seller or any of Section 7.2(bits Affiliates, or their successors, officers, directors, shareholders, employees, agents, trustees, advisers, lenders or representatives be liable or responsible in any manner whatsoever for any inaccuracy or breach of the representations and warranties, covenants, and obligations of the Company.
(d) are subject In no event shall Seller or any of its Affiliates, or their successors, officers, directors, shareholders, employees, agents, trustees, advisers, lenders or representatives be liable or responsible in any manner whatsoever except in case of any inaccuracy or breach of the Seller Fundamental Warranties as set forth in ARTICLE V.
(e) In no event shall the Seller or any of its Affiliates, or their successors, officers, directors, shareholders, employees, agents, trustees, advisers, lenders or representatives have any liability to the following limitationsa Purchaser Indemnitee for:
(i) any Losses, to the amount extent incurred or arising as a result of any Loss subject to indemnification hereunder adoption, implementation, or of change in any Claim therefor shall be calculated net of Law or permit (or any insurance proceeds interpretation or application thereof by any Authority) that occurs after the date hereof, and
(net of direct collection expensesii) or other collateral sources (such as contractual indemnities of any Person Losses, which are contained outside contingent, punitive, exemplary, or indirect, and in case of this Agreement)contingent Losses, received by the Purchasers Indemnitees on account of unless and until such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources contingent Losses have been finally determined and become an actual liability and are due and payable.
(f) Limitations not to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect apply for periods prior to the ClosingFraud. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery Purchaser Indemnitees or payment (net of direct collection expenses and Taxes) Seller Indemnitees shall be made promptly entitled to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made pursuant to Section 11.2 arises as a result of fraud of the Company, Purchaser, and/or Seller, as finally determined by a court exercising competent jurisdiction, none of the limits on indemnification stipulated under this Agreement shall be applicable. It being clarified that the Seller shall not in any multipleevent be liable for any fraud in, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to Company or exceed $300,000 in the aggregate (and then only otherwise pertaining to the extent of such excess);
(iv) except for Claims arising under Sections 3.1operations, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25business, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant affairs of the Company prior to Closing) had actual knowledge at in any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereundermanner whatsoever.
Appears in 1 contract
Sources: Stock Purchase Agreement (International Media Acquisition Corp.)
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees to indemnification pursuant Notwithstanding anything to the provisions of Section 7.2(b) are subject to the following limitationscontrary contained herein:
(ia) Seller shall not be obligated to indemnify the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this AgreementPurchaser Indemnified Parties under SECTION 8.1(a)(i), received by (x) unless the Purchasers Indemnitees on account aggregate of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss Losses for which any such Person has been indemnified hereunderSeller would, then but for this clause (x), be liable under SECTION 8.1(a)(i) exceeds on a refund equal to cumulative basis $350,000, at which point the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) Purchaser Indemnified Parties shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover all indemnification amounts from Seller under SECTION 8.1(a)(i) in excess of the first $200,000 in aggregate Losses (as limited by the applicable provisions 350,000 of this Section 7.2(c) pursuant to Section 7.2(b)Losses, which amount shall serve as a one-time deductible against Losses; provided, however, however that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up Purchaser Indemnified Parties with respect to a breach of a representation or warranty only if the losses arising therefrom exceed $1,000 and such Losses shall be applied against the cumulative $350,000 amount only if such Losses exceed $1,000, or (y) for any Losses in excess of such Loss multiplied by such Seller’s Percentage Share. The Purchasersan amount equal to $7,800,000; PROVIDED, for themselves and for HOWEVER, that the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under limitations in this Section 7.2 SECTION 8.4(a) shall not exceed such Seller’s Percentage Share apply to any indemnification obligations arising from the representations and warranties set forth in the first sentence of SECTION 4.1, SECTION 4.3 and the first sentence of SECTION 4.12; and
(b) Purchaser shall not be obligated to indemnify the Seller Indemnified Parties under SECTION 8.2(a)(i), (x) unless the aggregate of all Losses for which Purchaser would, but for this clause (x), be liable under SECTION 8.2(a) exceeds on a cumulative basis $350,000, at which point Seller shall be entitled to all indemnification amounts under SECTION 8.2(a) in excess of the Purchase Price first $350,000 of Losses, provided, however that Purchaser shall be required to indemnify the Seller Indemnified Parties with respect to a breach of a representation or warranty only if the losses arising therefrom exceed $1,000 and such Losses shall be applied against the cumulative $350,000 amount only if such Losses exceed $1,000, or (as adjusted pursuant to Section 2.6y) for any Losses in excess of an amount equal to $7,800,000; PROVIDED, HOWEVER, that the Purchased Units limitations in this SECTION 8.4(b) shall not apply to any indemnification obligations arising from the representations and the Shares sold by such Seller to the Purchasers hereunderwarranties set forth in SECTIONS 5.1 and 5.2.
Appears in 1 contract
Sources: Purchase Agreement (Heidrick & Struggles International Inc)
Limitations on Indemnification Obligations. The rights of the Purchasers Buyer Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) this Agreement are subject to the following limitations, other than in the event of Actual Fraud:
(ia) the amount of any Loss subject to indemnification hereunder or of any Claim therefor and all Losses shall be calculated determined net of (i) any amounts actually recovered by the Buyer Indemnitees under insurance proceeds (net of direct collection expenses) policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees ) with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely the Buyer Indemnitees shall be under no obligation to litigate against any key customer or key supplier and shall have the right to assert multiple claims under any insurance policy in the order it deems appropriate in its sole judgment; provided, further, that the amount deemed to be so received under insurance policies shall be net of the deductible EAST\134549672.25 71 for such policies and net of the out-of-pocket costs incurred by such Buyer Indemnitee in connection with obtaining such proceeds, and (ii) any net Tax benefits actually realized by the Buyer Indemnitees (or their direct or indirect beneficial owners) with respect to such Losses that are individually less than $50,000 with respect to Tax Returns for the Purchasers year of such Loss and the immediately succeeding year;
(b) the Buyer Indemnitees will shall not be entitled to recover for such Losses any particular Loss (or series of related Losses) pursuant to Section 7.2(b9.2(a)(i) until (other than claims arising out of or resulting from the breach of a Fundamental Representation) unless such Loss (or series of related Losses) equals or exceeds $30,000, after which point the Buyer Indemnitees will be entitled to recover from the first dollar of such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only subject to the extent of such excessother limitations set forth in this Article 9);
(ivc) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect any breach of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price)any Fundamental Representation, the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Buyer Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b9.2(a)(i) until the total amount which the Buyer Indemnitees would recover under Section 9.2(a)(i) (as limited by the provisions of this Section 9.4) exceeds $1,635,000 (the “Deductible”), in which case, the Buyer Indemnitees shall only be entitled to recover Losses in excess of the Deductible;
(d) subject to Section 9.6, (i) except for any breach of any Fundamental Representation, the Indemnity Escrow Amount remaining at any given time in the Indemnity Escrow Account (the “Cap”) shall be the sole and exclusive source of recovery with respect to any Losses indemnifiable pursuant to Section 9.2(a), and in no event shall the Buyer Indemnitees be entitled to recover more than the amount of the Indemnity Escrow Amount pursuant to Section 9.2(a) in the aggregate, (ii) the Indemnity Escrow Amount remaining at any given time in the Indemnity Escrow Account and the Holdback Amount retained by Sellers’ Representative pursuant to Section 9.9 shall be the sole and exclusive sources of recovery with respect to any Losses indemnifiable pursuant to Section 9.2(a)(i) for any breach of any Fundamental Representation, (iii) the Indemnity Escrow Amount remaining at any given time in the Indemnity Escrow Account and the Tax Escrow Amount remaining at any given time in the Tax Escrow Account shall be the sole and exclusive sources of recovery with respect to any Losses indemnifiable pursuant to Section 6.13, and (iv) the Buyer Indemnitees shall not be entitled to recover Losses pursuant to Section 9.2(a) or Section 6.13 if such Loss is due to the Buyer Indemnitees filing a Tax Return, or taking a position for Tax purposes, that is inconsistent with both (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or applicable Law and (B) a position taken on a Tax Return that was filed on or before the Purchasers could have mitigated Closing Date;
(e) in no event shall any Buyer Indemnitees be entitled to receive indemnification for the same Loss more than once under this Article 9 or prevented Section 6.13(j) even if a claim for indemnification in respect of such Loss using commercially reasonable effortshas been made as a result of a breach of more than one (1) representation, warranty, covenant or agreement contained in this Agreement;
(f) each Indemnified Party shall, if and to the extent required by applicable Laws, use good faith efforts to mitigate any Loss for which such Indemnified Party seeks indemnification hereunder;
(g) except for the Qualified Representations, the representations and warranties set forth in this Agreement or any certificate or schedule delivered in connection herewith that are qualified as to “material,” “materiality,” “material respects,” “Company Material Adverse Effect” EAST\134549672.25 72 or words of similar import or effect shall be deemed to have been made without any such qualification for purposes of determining whether a breach of any such representation or warranty has occurred and the amount of Losses resulting from, arising out of or relating to any such breach;
(h) in no event shall any Buyer Indemnitee be entitled to indemnification pursuant to this Article 9 or Section 6.13 with respect to a specific Loss to the extent such Loss is (i) clearly and separately reserved for on the face of the Latest Balance Sheet or in the footnotes to any other Financial Statements or (ii) is included in the calculation of the Purchase Price, as finally determined in accordance with Section 2.4(b); and
(vii) except no Buyer Indemnitee shall make any claim for Claims arising under Section 3.5, indemnification with respect to any environmental investigatory, corrective, remedial or response action or report to any Governmental Entity (collectively, “Response Action”) except to the extent such Response Action is (i) affirmatively required by Environmental Laws, or an Order or written demand by a particular LossGovernmental Entity; (ii) reasonably necessary to respond to substantial endangerment to human health, each Seller shall only be safety, the environment, or natural resources; (iii) required to indemnify respond to a bona fide third party claim or bona fide employee complaint arising under Environmental Laws or alleging exposure to Hazardous Substances; (iv) required in connection with a bona fide maintenance project to the Purchasers extent consistent with industry practice; or (v) a bona fide report to any Governmental Entity consistent with industry practice and not for the affirmative purpose of seeking an Order or written demand for Response Action, and is attributable to a breach of the representations and warranties set forth in Section 3.11, and then only to the extent any such Response Action is conducted in a cost-effective manner and required to attain compliance with minimum remedial standards applicable under Environmental Laws based on continued industrial or commercial uses, employing risk based standards and institutional controls where available.
(j) Notwithstanding anything contained herein to the contrary, but subject to Section 9.6, after the Closing, (i) on the date that the Indemnity Escrow Amount remaining in the Indemnity Escrow Account is reduced to zero, the Buyer Indemnitees up shall have no further rights to indemnification from any person under Section 9.2(a) or otherwise under or pursuant to this Agreement (other than in the case of a breach of the Fundamental Representations) and (ii) on the date that the Indemnity Escrow Amount and the Tax Escrow Amount remaining in the Indemnity Escrow Account and the Tax Escrow Account, respectively, is reduced to zero, the Buyer Indemnitees shall have no further rights to indemnification from any person under Section 6.13(j). In any case where a Buyer Indemnitee recovers, under insurance policies (but subject to Section 9.6) or from other collateral sources, any amount in respect of a matter for which such Buyer Indemnitee was indemnified pursuant to Section 9.2(a)(i) or Section 6.13(j), such Buyer Indemnitee shall promptly pay over to Sellers’ Representative the amount so recovered (after deducting therefrom the amount of such Loss multiplied the expenses incurred by such Seller’s Percentage Share. The PurchasersBuyer Indemnitee in procuring such recovery, and any Losses for themselves and for the Purchasers Indemniteeswhich Buyer Indemnitee had no other source of recovery), unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall but not exceed such Seller’s Percentage Share in excess of the Purchase Price sum of (as adjusted pursuant i) any amount previously so paid to or on behalf of such Buyer Indemnitee in respect of such matter, and (ii) any amount expended by Sellers in pursuing or defending any claim arising out of such matter under Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunder.9.3. EAST\134549672.25 73
Appears in 1 contract
Sources: Purchase Agreement (Cimpress N.V.)
Limitations on Indemnification Obligations. The rights (a) In addition to any other limitations contained in Articles VIII and IX hereof, the obligations of Sellers, Purchaser and LLANY to indemnify any Purchaser Indemnified Party or Sellers' Indemnified Party, as the Purchasers Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) case may be, are subject to to, and limited by, the following limitationsfollowing:
(i) Sellers shall be obligated to provide indemnification under this Article IX or under any Ancillary Agreement on account of any misrepresentation or breach of warranty only to the extent that the aggregate dollar amount of Losses with respect to all misrepresentations and breaches of warranty referred to in Section 9.01(a)(i) exceeds $30 million, but only for the amount in excess of $30 million. Sellers further shall be obligated to provide indemnification under this Article IX or under any Ancillary Agreement on account of Sellers' Extra Contractual Obligations only to the extent that the aggregate dollar amount of Losses incurred by Purchaser or LLANY, as applicable, with respect to such Sellers' Extra Contractual Obligations exceeds $10 million, but only for the amount in excess of $10 million. Losses incurred by Purchaser, or LLANY, if any, with respect to Sellers' Extra Contractual Obligations shall be applied against the $30 million deductible provided for above, except to the extent that such Losses exceed $10 million and are indemnified by Sellers.
(ii) The maximum aggregate liability of Sellers for indemnification for all Losses subject to indemnification under this Article IX including, without limitation, any amount paid pursuant to Section 9.05(a)(i) shall be $500 million.
(iii) Each Indemnified Party shall be obligated to use its commercially reasonable efforts to mitigate to the extent reasonably practicable the amount of any Loss subject Losses for which it is entitled to seek indemnification hereunder or of hereunder.
(iv) Upon making any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement)indemnification payment, received by the Purchasers Indemnitees on account Indemnifying Party will, to the extent of such Loss. The Purchasers Indemnitees shall seek full recovery under payment, be subrogated to all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount rights of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion Indemnified Party against any third party in respect of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by to which the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Lossesrelates; provided, however, that thereafter solely until the Indemnified Party recovers full payment of its Loss, any and all claims of the Indemnifying Party against any such third party on account of said payment are hereby made expressly subordinated and subjected in right of payment to the Indemnified Party's rights against such third party. Without limiting the generality of any other provision hereof, each such Indemnified Party and Indemnifying Party will duly execute upon request all instruments reasonably necessary to evidence and perfect the above-described subrogation and subordination rights.
(v) The amount of any Losses sustained by an Indemnified Party and owed by an Indemnifying Party shall be reduced by any amount received by such Indemnified Party with respect thereto under any insurance or reinsurance coverage or from any other party alleged to be responsible therefor. The Indemnified Party shall use reasonable efforts to collect any amounts available under such insurance or reinsurance coverage and from such other party alleged to have responsibility. If the Indemnified Party receives an amount under insurance or reinsurance coverage or from such other party with respect to Losses sustained at any time subsequent to any indemnification actually paid pursuant to this Article IX, then, subject to the immediately preceding sentence, such Indemnified Party shall promptly reimburse the applicable Indemnifying Party for any such indemnification payment actually made by such Indemnifying Party up to the actual amount of insurance actually received.
(vi) Any indemnification payments recoverable by an Indemnified Party pursuant to this Article IX shall be net of any Federal or state income tax benefits to such Indemnified Party as a result of the Loss as to which the payment is made, provided that are individually if the payment so recoverable will result in an increase in the income taxable for Federal or state income tax purposes by the Indemnified Party, the amount of the payment will be increased so that the Indemnified Party will receive on an after tax basis the full amount of the indemnification contemplated by this Article IX.
(vii) Purchaser acknowledges and agrees that, notwithstanding anything to the contrary contained in Article III of this Agreement, Sellers make no representation, warranty, guaranty or covenant regarding, and shall have no obligation to indemnify the Purchaser Indemnified Parties with respect to, the ultimate adequacy or sufficiency of any reserves reflected, or the ultimate collectibility of any reinsurance recoverable reported as an asset or contra-liability in any financial statement, book, record or account of the Sellers including, but not limited to, the Statutory Statements, ALIAC GAAP Statements, the Pro Forma Statements, the Closing Balance Sheet, Revised Closing Balance Sheet and Final Closing Balance Sheet.
(viii) During the periods set forth in Sections 8.01(a) and 8.01(c) during which Sellers have certain obligations to indemnify Purchaser, and Purchaser has certain obligations to indemnify Sellers, Purchaser, on the one hand, and Sellers, on the other hand, shall, no less than $50,000 annually, provide the Purchasers Indemnitees will not other party with a written statement summarizing any Claims Notices provided to such other party to date, and setting forth the Losses incurred by such party for which such party is claiming indemnification against the other party in accordance with this Article IX.
(ix) Purchaser and LLANY shall be entitled obligated to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to provide indemnification under this Article IX or exceed $300,000 in the aggregate (and then under any Ancillary Agreement on account of any misrepresentation or breach of warranty only to the extent that the aggregate dollar amount of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Lossall misrepresentations and breaches of warranty referred to in Section 9.01(b)(i) exceeds $10 million, each Seller shall but only be required to indemnify the Purchasers Indemnitees up to for the amount in excess of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunder$10 million.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Purchasers Holdings Indemnitees and the SELLER Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) 8.2 are subject to the following limitations:
(a) notwithstanding anything to the contrary contained in this Agreement;
(i) neither the Basket nor the General Reps Cap shall apply to (1) any indemnification claim made by any Holdings Indemnitee with respect to any breach of any Fundamental Representation, (2) any claim of bad faith, fraud, intentional misrepresentation or willful misconduct (collectively, “Fraud Claims”) or (3) any indemnification claim pursuant to Section 8.2.
(ii) except as otherwise expressly set forth in this Agreement, the maximum aggregate amount that the Holdings Indemnitees may recover from SELLERs with respect to any and all Losses resulting from breaches or inaccuracies of Fundamental Representations or pursuant to Section 8.2(a)(ii), provided, further, that the maximum aggregate amount that the Holdings Indemnitees may recover from a particular SELLER with respect to any and all Losses resulting from breaches or inaccuracies of Fundamental Representations or pursuant to Section 8.2(a)(ii), shall not exceed the value of the Units issued to such SELLER at Closing; and
(iii) for purposes of determining the amount of Losses with respect to, and for the purposes of determining the existence of, any Loss subject breach of a representation and warranty contained in ARTICLE 3 or ARTICLE 4 or any Ancillary Document in connection with SELLERs’ indemnification obligations under this ARTICLE 8 all of the representations and warranties set forth in ARTICLE 3 or in ARTICLE 4 or in any Ancillary Document that are qualified by materiality, Company Material Adverse Effect or words of similar import or effect will be deemed to indemnification hereunder or have been made without any such qualification.
(b) The amount of any Claim therefor and all Losses shall be calculated determined net of any amounts recovered and actually received by the Holdings Indemnitees under insurance proceeds (net of direct collection expenses) policies or from other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement)) with respect to such Losses (net of any costs of collection, received by including any co-payment or deductible, and that portion of any premium increase or replacement insurance policy resulting from the Purchasers Indemnitees on account assertion of such Loss. The Purchasers Indemnitees shall seek full claim attributable to such recovery under all insurance policies covering any Loss or collateral sources Losses).
(c) Notwithstanding anything herein to the same extent as they would if such Loss were not subject contrary, the representations, warranties and covenants set forth herein, and the Holdings Indemnitees’ right to indemnification hereunder and the Purchaserswith respect thereto, the Company and the Subsidiaries shall not cancel be affected or deemed waived by reason of any insurance policies investigation, inquiry or examination made for or on behalf of such Holdings Indemnitees, or by reason of the fact that such Holdings Indemnitee or any of its representatives knew or should have known at any time that any such representation, warranty or covenant is, was or might be inaccurate, or by reason of the acceptance by such Holdings Indemnitees of any certificate or opinion thereunder.
(d) Without limiting the limitations on indemnification rights and obligations elsewhere in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees this ARTICLE 8, with respect to any Loss claim for which indemnification that is pending or unresolved at the time any payment is due from Holdings under this Agreement, Holdings shall have the right, at its election and in addition to other rights and remedies (whether under this Agreement or applicable Law), to (i) subject to the terms and conditions of this Agreement, seek indemnification from SELLERs with respect to such Person has been indemnified hereunderclaims, (ii) to redeem any SELLER Units then a refund held by the applicable SELLERs having an aggregate value (based on the value given to the Units at Closing) equal to the aggregate amount of the recovery applicable claim for indemnification or (iii) withhold from any payment owing to SELLERs under this Agreement in an amount equal to the amount of the claim (net provided it has been or is then asserted in good faith and in writing against SELLERs in accordance with the provisions hereof) until such matters are resolved by mutual agreement or by a final, non-appealable judgment. If it is finally determined by mutual agreement or by a final, non- appealable judgment that SELLERs are required to indemnify the Holdings Indemnitees pursuant to this ARTICLE 8, the amount of direct collection expenses such claims may be
(i) set-off against the withheld payments and Taxes) the remainder of such withheld payments, if any, shall be made promptly delivered pursuant to this Agreement or
(ii) paid by the Sellers, which refund shall be distributed redemption of SELLER Units then held by the SELLERs having an aggregate value (based on the proportion of value given to the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by Units at Closing) equal to the aggregate amount of the insurance recovery or any such indemnification payment (net of direct collection expenses);
(iiclaim. Nothing in this Section 8.4(d) no adjustment shall be made construed as a result limiting the liability of SELLERs under this ARTICLE 8, nor shall amounts set-off against or withheld from any payment hereunder or paid pursuant to the redemption of any multiple, increase factor, Units be considered as liquidated damages for any breach under this Agreement or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderagreement contemplated hereby.
Appears in 1 contract
Sources: Contribution and Sale Agreement (Verus International, Inc.)
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees to indemnification pursuant to the provisions of Section 7.2(b(a) are subject to the following limitations:
(i) the amount of any Loss subject A person entitled to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses"INDEMNITEE") or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses indemnification unless an Indemnification Notice (as hereinafter defined) has been delivered by Indemnitee to the party that may be obligated to pay such indemnification ("INDEMNITOR") prior to the termination of the survival of the indemnification relating to such Indemnification Notice pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer 22.1. The indemnification obligations of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, an Indemnitor shall survive with respect to claims for any Losses relating to an inaccuracy in a particular Lossrepresentation or warranty made with respect to (x) any Other Property, for the nine (9) month period following the Initial Closing Date, (y) the Delayed Closing Property , for the nine (9) month period following the Delayed Closing Property Closing Date, and (z) a Development Property, for the nine (9) month period following the applicable Development Property Closing Date (and, in each Seller case, such additional period as is necessary to resolve a claim made within such period). Notwithstanding the foregoing, the Indemnity with respect to Section 2.3(c), Article 12 and Article 19 shall only be required to indemnify for the Purchasers Indemnitees up time periods specified therein. The total liability of an Indemnitor with respect to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the indemnification obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 set forth above shall not exceed such Seller’s Percentage Share of $3,000,000 with respect to claims pertaining to the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units Other Properties and the Shares sold by such Seller Delayed Closing Property and $2,000,000 with respect to claims pertaining to the Purchasers hereunderDevelopment Properties, but in no event shall the aggregate of all such claims exceed $3,000,000. In the case of any Losses by the TCR Group, such obligation shall be several as between the AMLI Parties and the Avalon Parties as provided in Section 1.4.
(b) If a claim for indemnification is asserted by Indemnitee against Indemnitor, Indemnitor shall have the right, at its own expense, to participate in the defense of any claim, action or proceeding ("CLAIM") asserted against Indemnitee which resulted in the Claim, and if such right is exercised, the parties shall cooperate in the defense of such Claim.
Appears in 1 contract
Sources: Contribution and Exchange Agreement (Avalon Properties Inc)
Limitations on Indemnification Obligations. The rights of the Purchasers Buyer Indemnitees and the Seller Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) 10.02 are subject to the following limitations:
(a) Notwithstanding anything in this Article X to the contrary and subject to Section 10.04(b):
(i) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Buyer Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b10.02(a)(i) if until the total amount which the Buyer Indemnitees would recover under this Article X exceeds the Basket (A) at which time the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior Buyer Indemnitees shall be entitled to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, full indemnification with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The PurchasersBasket and the Losses in excess thereof); provided, for themselves and for that notwithstanding the Purchasers Indemniteesforegoing, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 Basket shall not exceed such Seller’s Percentage Share apply to recovery of Losses pursuant to the Fundamental Representations which shall be exempt from the limitations of the Purchase Price Basket.
(as adjusted ii) The Seller Indemnitees shall not be entitled to recover Losses pursuant to Section 2.610.02(b)(i) for until the Purchased Units total amount which the Seller Indemnitees would recover under such Section exceeds the Basket (at which time the Seller Indemnitees shall be entitled to full indemnification with respect to the amount of such Basket and the Shares sold by such Seller Losses in excess thereof); provided, that notwithstanding the foregoing, the Basket shall not apply to recovery of Losses pursuant to Fundamental Representations which shall be exempt from the Purchasers hereunderlimitations of the Basket.
(b) The provisions of Section 10.04(a) shall not apply to (i) Losses asserted under Sections 10.02(a)(ii) or (a)(iii) or Sections 10.02(b)(ii) or (b)(iii), (ii) Losses arising out of the fraud or intentional misrepresentation of a Party, or (iii) any Liability for Taxes.
Appears in 1 contract
Sources: Asset Purchase Agreement (Rhino Resource Partners LP)
Limitations on Indemnification Obligations. The rights In addition to any other limitations contained in ARTICLE IX and ARTICLE X hereof, the obligations of Seller and Purchaser to indemnify any Purchaser Indemnified Party or Seller Indemnified Party, as the Purchasers Indemnitees case may be, are subject to, and limited by, the following:
(a) Seller shall be obligated to provide indemnification pursuant to Section 10.1(a)(i) only if the provisions aggregate dollar amount of Losses with respect to all misrepresentations and breaches of warranty referred to in Section 7.2(b10.1(a)(i) are subject exceeds an amount equal to 1.5% of the following limitations:Purchase Price as finally adjusted in accordance with Section 2.4 (the “Deductible”), and then only for the amount of Losses in excess of the Deductible; provided that Seller shall not be obligated to provide indemnification pursuant to Section 10.1(a)(i) if the dollar amount of any Loss resulting from a single claim or aggregated claims arising out of related facts, events or circumstances in connection with the breach of a representation or warranty is less than $15,000 and any such Loss or Losses shall not count towards the Deductible.
(ib) The maximum aggregate liability of Seller for indemnification for all Losses pursuant to Section 10.1(a)(i) shall be an amount equal to 22.5% of the Purchase Price as finally adjusted in accordance with Section 2.4.
(c) Each Indemnified Party shall be obligated to use its reasonable best efforts to mitigate the amount of any Loss subject Losses for which it is entitled to seek indemnification hereunder or hereunder.
(d) The amount of any Claim therefor indemnification payments finally determined to be due to an Indemnified Party pursuant to this ARTICLE X or ARTICLE VI shall be calculated net of taking into account any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made Income Tax benefits actually recognized as a result of the Loss as to which such payment is made (net of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or Income Tax detriment actually recognized in respect of Operating Wind Project Liabilitiesthe receipt of such payments) by such Indemnified Party. The Indemnified Party shall use its commercially reasonable efforts to contest any effort by a Governmental Authority to disallow any such net Income Tax benefits or to otherwise avoid such net Income Tax benefits becoming unavailable; notwithstanding the foregoing, to the extent any such net Income Tax benefit is subsequently finally determined to be disallowed or otherwise unavailable to the Indemnified Party, the Purchasers Indemnitees will not be entitled to Indemnified Party may recover the first $200,000 in aggregate Losses disallowed or unavailable amount from the Indemnifying Party.
(as limited by e) Upon making any indemnification payment, the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b)Indemnifying Party will, which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1payment, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and be subrogated to all rights of the Indemnified Party against any third party in respect of Operating Wind Project Liabilities the Loss to which the payment relates. Each such Indemnified Party and Indemnifying Party will duly execute upon request all instruments reasonably necessary to evidence and perfect the above-described subrogation rights.
(f) The amount of any Losses sustained by an Indemnified Party and owed by an Indemnifying Party shall be reduced by any amount to which such Indemnified Party actually receives with respect thereto under any insurance or reinsurance coverage, or from any other party alleged to be responsible therefor (taking into account any costs, expenses, and increased premiums incurred by the Indemnified Party or its Affiliates as a direct result of the pursuit or recovery of such amounts). The Indemnified Party shall use commercially reasonable efforts to collect any amounts available under such insurance or reinsurance coverage and from such other party alleged to have responsibility. If the Indemnified Party receives an amount under insurance or reinsurance coverage or from such other party with respect to Losses sustained at any time subsequent to any indemnification actually having been paid pursuant to this ARTICLE X, then such Indemnified Party shall promptly reimburse by that amount the applicable Indemnifying Party for any such indemnification payment actually made by such Indemnifying Party.
(g) Purchaser acknowledges and agrees that, notwithstanding anything to the contrary contained in which case ARTICLE III of this Agreement, Seller makes no representation, warranty, guaranty or covenant regarding, and shall have no obligation to indemnify Purchaser Indemnified Parties with respect to any Losses attributable to, (i) any changes in the Sellers’ aggregate liability hereunder level of risk-based capital that may be required to be held by any Transferred Company with respect to the liabilities and obligations arising under Insurance Contracts issued or assumed by such Transferred Company, or (ii) any change in Applicable Law, or in the interpretation, application or administration of Applicable Law, following the Closing Date.
(h) For the avoidance of doubt, Seller shall be under no obligation to indemnify any Purchaser Indemnified Party for all such any Losses will not to the extent reflected on the Closing Statement.
(i) Purchaser shall be permitted obligated to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses provide indemnification pursuant to Section 7.2(b10.1(b)(i) only if the aggregate dollar amount of Losses with respect to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%misrepresentations and breaches of warranty referred to in Section 10.1(b)(i) exceeds an amount equal to 1.5% of the Purchase Price (as finally adjusted in accordance with Section 2.4, and then only for the amount of Losses in excess of the Deductible; provided that Purchaser shall not be obligated to provide indemnification pursuant to Section 2.610.1(b)(i) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, dollar amount of any Loss resulting from a single claim or 4.26 and ten percent (10%) aggregated claims arising out of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the related facts, events or conditions constituting or resulting circumstances in such connection with the breach of representation, a representation or warranty or covenant or (B) the Purchasers could have mitigated or prevented is less than $15,000 and any such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 Losses shall not exceed such Seller’s Percentage Share of count towards the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderDeductible.
Appears in 1 contract
Sources: Stock Purchase Agreement (American Financial Group Inc)
Limitations on Indemnification Obligations. The rights (a) In addition to any other limitations contained in Articles VIII and IX hereof, the obligations of Sellers, Purchaser and LLANY to indemnify any Purchaser Indemnified Party or Sellers' Indemnified Party, as the Purchasers Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) case may be, are subject to to, and limited by, the following limitationsfollowing:
(i) Sellers shall be obligated to provide indemnification under this Article IX or under any Ancillary Agreement on account of any misrepresentation or breach of warranty only to the extent that the aggregate dollar amount of Losses with respect to all misrepresentations and breaches of warranty referred to in Section 9.01(a)(i) exceeds $30 million, but only for the amount in excess of $30 million. Sellers further shall be obligated to provide indemnification under this Article IX on account of Sellers' Extra Contractual Obligations only to the extent that the aggregate dollar amount of Losses incurred by Purchaser or LLANY, as applicable, with respect to such Sellers' Extra Contractual Obligations exceeds $10 million, but only for the amount in excess of $10 million. Losses incurred by Purchaser, or LLANY, if any, with respect to Sellers' Extra Contractual Obligations shall be applied against the $30 million deductible provided for above, except to the extent that such Losses exceed $10 million and are indemnified by Sellers.
(ii) The maximum aggregate liability of Sellers for indemnification for all Losses subject to indemnification under this Article IX including, without limitation, any amount paid pursuant to Section 9.05(a)(i) shall be $500 million; provided however, that Losses that constitute Direct Economic Losses shall not be subject to such $500 million limitation.
(iii) Each Indemnified Party shall be obligated to use its commercially reasonable efforts to mitigate to the extent reasonably practicable the amount of any Loss subject Losses for which it is entitled to seek indemnification hereunder or of hereunder.
(iv) Upon making any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement)indemnification payment, received by the Purchasers Indemnitees on account Indemnifying Party will, to the extent of such Loss. The Purchasers Indemnitees shall seek full recovery under payment, be subrogated to all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount rights of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion Indemnified Party against any third party in respect of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by to which the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Lossesrelates; provided, however, that thereafter solely until the Indemnified Party recovers full payment of its Loss, any and all claims of the Indemnifying Party against any such third party on account of said payment are hereby made expressly subordinated and subjected in right of payment to the Indemnified Party's rights against such third party. Without limiting the generality of any other provision hereof, each such Indemnified Party and Indemnifying Party will duly execute upon request all instruments reasonably necessary to evidence and perfect the above-described subrogation and subordination rights.
(v) The amount of any Losses sustained by an Indemnified Party and owed by an Indemnifying Party shall be reduced by any amount received by such Indemnified Party with respect thereto under any insurance or reinsurance coverage or from any other party alleged to be responsible therefor. The Indemnified Party shall use reasonable efforts to collect any amounts available under such insurance or reinsurance coverage and from such other party alleged to have responsibility. If the Indemnified Party receives an amount under insurance or reinsurance coverage or from such other party with respect to Losses sustained at any time subsequent to any indemnification actually paid pursuant to this Article IX, then, subject to the immediately preceding sentence, such Indemnified Party shall promptly reimburse the applicable Indemnifying Party for any such indemnification payment actually made by such Indemnifying Party up to the actual amount of insurance actually received.
(vi) Any indemnification payments recoverable by an Indemnified Party pursuant to this Article IX shall be net of any Federal or state income tax benefits to such Indemnified Party as a result of the Loss as to which the payment is made, provided that are individually if the payment so recoverable will result in an increase in the income taxable for Federal or state income tax purposes by the Indemnified Party, the amount of the payment will be increased so that the Indemnified Party will receive on an after tax basis the full amount of the indemnification contemplated by this Article IX.
(vii) Purchaser acknowledges and agrees that, notwithstanding anything to the contrary contained in Article III of this Agreement, Sellers make no representation, warranty, guaranty or covenant regarding, and shall have no obligation to indemnify the Purchaser Indemnified Parties with respect to, the ultimate adequacy or sufficiency of any reserves reflected, or the ultimate collectibility of any reinsurance recoverable reported as an asset or contra-liability in any financial statement, book, record or account of the Sellers including, but not limited to, the Statutory Statements, ALIAC GAAP Statements, the Pro Forma Statements, the Closing Balance Sheet, Revised Closing Balance Sheet and Final Closing Balance Sheet.
(viii) During the periods set forth in Sections 8.01(a) and 8.01(c) during which Sellers have certain obligations to indemnify Purchaser, and Purchaser has certain obligations to indemnify Sellers, Purchaser, on the one hand, and Sellers, on the other hand, shall, no less than $50,000 annually, provide the Purchasers Indemnitees will not other party with a written statement summarizing any Claims Notices provided to such other party to date, and setting forth the Losses incurred by such party for which such party is claiming indemnification against the other party in accordance with this Article IX.
(ix) Purchaser and LLANY shall be entitled obligated to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to provide indemnification under this Article IX or exceed $300,000 in the aggregate (and then under any Ancillary Agreement on account of any misrepresentation or breach of warranty only to the extent that the aggregate dollar amount of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Lossall misrepresentations and breaches of warranty referred to in Section 9.01(b)(i) exceeds $10 million, each Seller shall but only be required to indemnify the Purchasers Indemnitees up to for the amount in excess of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunder$10 million.
Appears in 1 contract
Sources: Asset Purchase Agreement (Aetna Life Insurance & Annuity Co /Ct)
Limitations on Indemnification Obligations. (a) The rights of the Purchasers Purchaser Indemnitees and Seller Indemnities, as applicable, to indemnification pursuant to the provisions of Section 7.2(b) 6.2 are subject to the following limitations:
(i) the amount of any Loss subject to indemnification hereunder or of any Claim therefor An Indemnified Party shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses any Loss pursuant to Section 7.2(b) 6.2 unless and until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to amount of all Losses, which the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be Indemnified Party would have been entitled to recover Losses pursuant to under Section 7.2(b) to 6.2 but for this Section 6.5(a), exceeds the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed amount of twenty percent (20%) of the Purchase Price Price, and then only for such Losses in excess of such amount (as adjusted pursuant the “Threshold”). Notwithstanding the foregoing, Purchaser shall be entitled to Section 2.6recover any and all Losses related to Warranty Liabilities without regard to the Threshold, and all such Claims shall be paid in full.
(ii) if In no event shall an Indemnified Party be entitled to recover more than the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten amount of forty percent (1040%) of the Purchase Price for all other items not listed Price, except in the immediately preceding clause case of fraud or in willful misconduct by a particular indemnitor hereunder. Notwithstanding the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregateforegoing, and each Seller’s liability for Losses hereunder Purchaser shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover any and all Losses related to Warranty Liabilities, which Losses shall be excluded from the foregoing 40% threshold.
(b) The aggregate Losses for which the Purchaser Indemnitees or the Seller Indemnitees shall be entitled to seek and obtain indemnification pursuant to Section 7.2(b6.2 shall not include (i) if amounts paid or required to be paid to any third party as punitive damages or exemplary damages or (Aii) any consequential damages incurred or suffered by the Purchasers (Indemnified Party. The parties hereby agree that no Losses incurred by an Indemnified Party shall be deemed or any director or officer treated for purposes of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closingthis Section 6.5(b) had actual knowledge at any time on or prior as consequential damages to the Closing Date of extent that such Losses (x) are incurred by the facts, events or conditions constituting or resulting Indemnified Party in such breach of representation, warranty or covenant or (B) connection with a Claim asserted by a third party against the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, Indemnified Party with respect to any matter for which there has been a particular Loss, each Seller shall only be breach by the other Party of any representation or warranty made in this Agreement by such Party and (y) consist solely of amounts paid or required to indemnify the Purchasers Indemnitees up be paid to such third party in connection with such Claim
(c) Notwithstanding anything to the amount contrary contained herein, upon any Indemnified Party’s becoming aware of such Loss multiplied any Claim as to which indemnification may be sought by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted Indemnified Party pursuant to Section 2.6) for the Purchased Units this Article 6, such Indemnified Party shall utilize all reasonable efforts, consistent with normal practices and the Shares sold by policies and good commercial practice, to mitigate such Seller to the Purchasers hereunderLosses.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) this Agreement are subject to the following limitations:
(ia) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Buyer Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses any particular Loss pursuant to Section 7.2(b8.1(a) (other than Losses relating to breaches of the Fundamental Representations) until such the total amount of Losses that are individually less than (or series of related Losses) which the Buyer Indemnitees would recover under Section 8.1(a) exceeds $50,000 are equal to or exceed $300,000 in 275,000 (the aggregate (“Deductible”), and then only to the extent Losses claimed exceed the Deductible, the Buyer Indemnitees shall be entitled to recover all Losses in excess of such excess)the Deductible;
(ivb) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Buyer Indemnitees will shall not be entitled to recover Losses for any particular Loss pursuant to Section 7.2(b8.1(a) relating to breaches of Section 4.12 (Financial Statements) until the total amount of Losses (or series of related Losses) which the Buyer Indemnitees would recover under Section 8.1(a) exceeds $250,000 (the “Financial Statements Deductible”), and to the extent Losses claimed exceed the Sellers aggregate liability hereunder for Financial Statements Deductible, the Buyer Indemnitees shall be entitled to recover all such Losses would otherwise exceed twenty percent (20%) in excess of the Purchase Price (as adjusted pursuant to Section 2.6) if Financial Statements Deductible. The Parties acknowledge that they have engaged in extensive discussion together and in conjunction with the Claim pertains to Section 4.11Company’s auditors regarding the calculation of EBITDA, 4.12the amount of accounts receivable, 4.15the allowance for doubtful accounts, 4.16and working capital, 4.17in each case, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items Group Companies and as set forth on the attached Exhibit D. The Parties acknowledge their agreement with Exhibit D based upon the facts and circumstances as known at such time of agreement, and further acknowledge and agree that no indemnification claims can be made by Buyer (i) with respect to the matters set forth on Exhibit D, unless such indemnification claims are based on the development and/or disclosure of, facts and/or circumstances, which such facts and circumstances were not listed taken into account in the immediately preceding clause or preparation of Exhibit D, thereby resulting in an error and/or omission with respect to the lead-matters contained in qualifier to this subsection Exhibit D and (the “Liability Cap”ii) in the aggregate, and each Seller’s liability for any Losses hereunder shall not exceed its Percentage Share solely arising from any restatements of the Liability Cap;Financial Statements resulting from changes to applicable accounting rules or regulations or a change in interpretation of such accounting rules or regulations or a change in a policy or practice at Buyer or Buyer’s Affiliates election from historical policy or practice; and
(vc) except for Claims arising under Section 3.5, the Purchasers Buyer Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b8.1 in the aggregate in excess of an amount equal to forty percent (40%) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant the “Cap”), other than Losses relating to Section 2.6(i) for Pre-Closing Taxes, (ii) any breach of any covenant made by Seller in this Agreement, (iii) fraud committed by the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderor any of its Affiliates or (iv) any breach of any Fundamental Representation.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Radiation Therapy Services Holdings, Inc.)
Limitations on Indemnification Obligations. The rights (a) Neither the Selling Parties nor Purchasing Parties shall have any liability (for indemnification or otherwise) with respect to claims under Section 9.2(a) or Section 9.3(a), respectively, until the total of all Damages with respect to such matters exceeds $250,000 and then only for the Purchasers Indemnitees amount by which such Damages exceed $250,000 (the "Basket"). However, this Section 9.5(a) will not apply to indemnification pursuant matters arising from breaches of Sections 2.1(c), 2.3, 2.16, 2.22, 3.3, and 4.11, and with regard to such Sections, the Indemnified Parties shall be entitled to seek compensation for all Damages without regard to the provisions Basket.
(b) In computing the amount of Section 7.2(b) Damages which are subject sustained, suffered or incurred by an Indemnitee, the Indemnifying Party or Parties are to be given the following limitations:
benefit of (i) insurance proceeds, if any (up to the maximum amount of any Loss subject Damages), that the Indemnitee shall have the right to indemnification hereunder or receive.
(c) Two Million Dollars ($2,000,000) principal amount of any Claim therefor the Notes (from the Sellers of Common Stock) shall be calculated net held by Purchaser as security for Sellers' indemnification obligations, but the holders of any insurance proceeds such Notes shall be entitled to receive all interest and principal on such Notes so long as such holder of the Notes shall not be in default of his or her indemnification obligations. Such Notes (net or the excess over claimed indemnification) shall be delivered to the holders of direct collection expensessuch Notes if no claim for indemnification has been made (or if made has been resolved) on the second anniversary of the Closing Date. Any Seller receiving Notes may pay for his, hers or other collateral sources its indemnification obligation by surrendering Notes issued to him, her or it, which will be valued for payment purposes at the principal amount thereof, plus accrued but unpaid interest. If the Damages are less than the Notes, the outstanding principal balance of Notes shall remain outstanding as to that portion thereof exceeding the Damages. Purchaser will give such Seller notice of the adjusted outstanding principal amount of such Notes.
(such as contractual indemnities of any Person which are contained outside of d) Notwithstanding anything to the contrary in this Agreement), received if the Closing occurs, no claim for indemnification may be asserted by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees Purchasing Party with respect to any Loss for which matter discovered by or known to any such Person has been indemnified hereunderPurchasing Party on or before the Closing Date.
(e) For purposes of this Article IX, then a refund equal if no agreement can be reached after good faith negotiation between the parties, either Purchaser, on behalf of Purchasing Parties, or Sellers Representative, on behalf of Selling Parties, may, by written notice to the aggregate other, demand arbitration of the matter unless the amount of the recovery Damages is at issue in pending litigation with a third party, in which event arbitration shall not be commenced until such amount is ascertained or payment (net of direct collection expenses both parties agree to arbitration; and Taxes) in either such event the matter shall be made promptly to the Sellers, which refund settled by arbitration conducted by one arbitrator. Purchaser and Sellers Representative shall be distributed based agree on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Lossesarbitrator; provided, however, that thereafter solely with respect if Purchaser and Sellers Representative cannot agree on the arbitrator, either Purchaser or Sellers Representative can request that the American Arbitration Association select the arbitrator. Any such arbitration shall be held in Sacramento, California, in each case under the commercial rules then in effect of the American Arbitration Association. The arbitrator shall set a limited time period and establish procedures designed to Losses that are individually less than $50,000 reduce the Purchasers Indemnitees will not be entitled to recover cost and time for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 discovery while allowing the parties an opportunity, adequate in the aggregate (sole judgment of the arbitrator, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrator shall rule upon motions to compel or limit discovery and then only shall have the authority to impose sanctions, including attorneys' fees and costs, to the same extent as a court of law or equity, should the arbitrator determine that discovery was sought without substantial justification or that discovery was refused or objected to without substantial justification. The decision of the arbitrator shall be written, shall be in accordance with applicable law and with this Agreement, and shall be supported by written findings of fact and conclusions of law which shall set forth the basis for the decision of the arbitrator. The decision of the arbitrator as to the validity and amount of any claim disputed by the parties hereto shall be binding and conclusive upon the parties to this Agreement, and notwithstanding anything in Article IX hereof, the parties shall be required to act in accordance with such excess);decision. Judgment upon any award rendered by the arbitrator may be entered in any court having jurisdiction.
(ivf) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(dFor purposes of this Section 9.5(f), 4.22in any arbitration hereunder in which any disputed claim or the amount is at issue, 4.27 and the party seeking indemnification shall be deemed to be the non-prevailing party unless the arbitrator awards the party seeking indemnification more than one-half (1/2) of the amount in respect of Operating Wind Project Liabilities (dispute, in which case the Sellers’ aggregate liability hereunder for all such Losses will not Person against whom indemnification is sought shall be permitted deemed to exceed be the Purchase Price)non-prevailing party. The non-prevailing party to an arbitration shall pay its own expenses, the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) fees of the arbitrator and the expenses, including attorneys' fees and costs, reasonably incurred by the other party to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderarbitration.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Purchasers Buyer Indemnitees to indemnification pursuant to the provisions of Section 7.2(b8.2(a) are subject to the following limitations:
(ia) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall and all Losses will be calculated determined net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received amounts actually recovered by the Purchasers Buyer Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to such Losses; provided that if, following the payment of any Loss for which indemnification amounts pursuant to Section 8.2(a), Parent, Surviving Corporation or any of their respective Affiliates recover any amounts under insurance policies with respect to such Person has been indemnified hereunderLosses, then a refund equal to the aggregate applicable Buyer Indemnitees shall reimburse the Company Securityholders of such prior indemnification payments in the amount of such insurance recoveries;
(b) the recovery Buyer Indemnitees shall not be entitled to recover for any particular Loss pursuant to Section 8.2(a) unless such Loss equals or payment exceeds $5,000; provided that (net of direct collection expenses and Taxesi) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined transaction or paid occurrence involving the same parties produces or results in (A) a number of separate Losses of a similar nature, or (B) a succession of similar Losses over a number of accounting periods, or (ii) a transaction or occurrence involving multiple parties produces or results in Losses by various parties of a similar nature, then such separate Losses will be deemed to be aggregated for purposes of satisfying the Sellers, the Sellers’ indemnification obligations $5,000 threshold set forth in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expensesthis Section 8.4(b);
(iic) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Buyer Indemnitees will not be entitled to recover Losses pursuant to clauses (i), (iv) and (v) of Section 8.2(a) until the first $200,000 in aggregate Losses total amount which the Buyer Indemnitees would recover under clauses (i), (iv) and (v) of Section 8.2(a) (as limited by the applicable provisions of Sections 8.4(a) and 8.4(b)), but for this Section 7.2(c8.4(c), exceeds the Threshold Amount, and then only for the excess over the Threshold Amount; provided that the limitations set forth in this Section 8.4(c) shall not apply to Losses relating to breaches of representations and warranties contained in Section 3.25 or Section 3.26;
(d) at any time the Buyer Indemnitees (x) will be entitled to recover no more than the amount of cash then in the Escrow Account and (y) pursuant to Section 7.2(b)this Agreement, which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less from any source other than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess)Escrow Account;
(ive) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Seller Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b8.2(b)(i), (X) until the total amount which the Sellers Indemnitees would recover under clause (i) of Section 8.2(b), but for this Section 8.4(e), exceeds the Threshold and then only for the excess over the Threshold, and (Y) in excess of $6,000,000 in the aggregate.
(f) no Indemnified Party shall have any right of indemnification hereunder with respect to the investigation or remediation of Hazardous Substances that have been released, disposed or discharged on any real property currently owned or operated by the Company or any of its Subsidiaries except to the extent that such action is required by applicable Environmental Laws, lawfully required by a relevant Governmental Authority or where concentrations of Hazardous Substances exceed the Sellers aggregate liability hereunder for all applicable action levels in the jurisdiction in which the property is located. Any such Losses would otherwise exceed twenty percent investigation or remedial action shall be conducted in a reasonable, cost effective manner (20%) taking into account the requirements of Environmental Law and the relevant Governmental Authority), assuming continued commercial or industrial use of the Purchase Price (as adjusted pursuant to Section 2.6) if subject property and employing risk based standards or institutional controls where available, provided that such controls and standards will not interfere with the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, continued commercial or 4.26 and ten percent (10%) industrial use of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, property and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of further provided that the Company prior or its Subsidiary has the legal right to Closing) had actual knowledge at any time on or prior accept such controls in connection with the subject property. Notwithstanding anything contained herein to the Closing Date of contrary, absent fraud, after the factsClosing, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) on the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to date that the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchaserscash in the Escrow Account is reduced to zero, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may Buyer Indemnitees shall have no further rights to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller indemnification under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderArticle VIII.
Appears in 1 contract
Sources: Agreement and Plan of Reorganization (Russell Corp)
Limitations on Indemnification Obligations. The rights (i) Except with respect to breaches of the Purchasers Fundamental Representations, (A) the Sellers shall not have any obligation to indemnify any Buyer Indemnitee pursuant to Section 7.3(b)(i) unless and until the aggregate amount of all such individual Damages incurred or sustained by all Buyer Indemnitees with respect to which the Buyer Indemnitees would otherwise be entitled to indemnification under Section 7.3(b)(i) and under Section 7.2(b)(i) of the Asset Purchase Agreement exceeds €1,000,000 (the “Deductible”), whereupon the Sellers shall be liable for all Damages in excess of the Deductible, and (B) the aggregate liability of the Sellers to indemnify (or to cause to be indemnified) the Buyer Indemnitees for Damages under Section 7.3(b)(i) and under Section 7.2(b)(i) of the Asset Purchase Agreement shall in no event exceed €5,000,000 (the “Cap”).
(ii) (A) Parent shall not have any obligation to indemnify (or to cause to be indemnified) any Seller Indemnitees pursuant to Section 7.3(a)(i) unless and until the aggregate amount of all individual Damages incurred or sustained by all Seller Indemnitees with respect to which the Seller Indemnitees are entitled to indemnification under Section 7.3(a)(i) and under Section 7.2(a)(i) of the Asset Purchase Agreement exceeds the Deductible, whereupon Parent shall be liable for all Damages in excess of the Deductible, and (B) the aggregate liability of Parent to indemnify (or to cause to be indemnified) the Seller Indemnitees for Damages under Section 7.3(a)(i) and under Section 7.2(a)(i) of the Asset Purchase Agreement shall in no event exceed an amount equal to the Cap.
(iii) Any Liability subject to indemnification pursuant to the provisions of this Section 7.2(b) are subject to the following limitations:
(i) the amount of any Loss subject to indemnification hereunder or of any Claim therefor 7.3 shall be calculated (A) net of Insurance Proceeds actually recovered, (B) net of any insurance proceeds actually recovered by an Indemnified Party from any third party for indemnification for such Liability (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement“Third-Party Proceeds”), received (C) reduced by any Tax benefit actually realized by the Purchasers Indemnitees Indemnified Party for the taxable period in which the indemnified Damage giving rise to such Liability occurs (calculated on account a with and without basis) as a result of the incurrence or payment of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering Damage, and (D) increased by any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received Tax detriment actually incurred by the Purchasers Indemnitees with respect to any Loss Indemnified Party for the taxable period in which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations Indemnity Payment in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery Damage is received or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made accrues as a result of the receipt or accrual of such Indemnity Payment. The amount which an Indemnifying Party is required to pay pursuant to this Section 7.3 to any multiple, increase factor, Indemnified Party will be reduced by any Insurance Proceeds or any other premium over the value paid Third-Party Proceeds theretofore actually recovered by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or Indemnified Party in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited related Liability. If an Indemnified Party receives a payment required by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and Agreement from an Indemnifying Party in respect of Operating Wind Project Liabilities any Damages (in which case an “Indemnity Payment”) and subsequently receives Insurance Proceeds or Third-Party Proceeds, then the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) Indemnified Party shall pay to the extent Indemnifying Party an amount equal to the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) excess of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to Indemnity Payment received over the amount of such Loss multiplied by such Seller’s Percentage Sharethe Indemnity Payment that would have been due if the Insurance Proceeds or Third-Party Proceeds had been received, realized or recovered before the Indemnity Payment was made. The Purchasers, for themselves Each of the Parties shall use its reasonable best efforts to mitigate any Damages that are indemnifiable hereunder upon and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations after becoming aware of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed event or condition that would reasonably be expected to give rise to such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderDamages.
Appears in 1 contract
Sources: Merger Agreement (Claiborne Liz Inc)
Limitations on Indemnification Obligations. The rights of the Purchasers Purchaser Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) 7.2 and of the Seller Indemnitees to indemnification pursuant to the provisions of Section 7.3 are subject to the following limitations:
(ia) the The amount of any Loss subject to indemnification hereunder or of any Claim therefor shall and all Damages will be calculated determined [net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received amounts actually recovered by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees similar arrangements with third parties with respect to such Damages (less expenses incurred by such Indemnitee in procuring such recovery, including the costs, if any, resulting from premium adjustments with respect to such insurance policies). If the amount to be netted hereunder from any Loss for which payment required under Sections 7.2 or 7.3 is determined after payment of any such Person has been indemnified hereunderamount otherwise required to be paid to an Indemnitee under this Article 7, then a refund equal the Indemnitee shall repay to the aggregate Indemnitors, promptly after such determination, any amount of that the recovery or payment (net of direct collection expenses and Taxes) shall be Indemnitors would not have had to pay pursuant to this Article 7 had such determination been made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;of such payment].
(iiib) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers The Purchaser Indemnitees shall not be entitled to recover Losses for any particular Damages or series of related Damages pursuant to Section 7.2(b7.2(a)(i) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to unless the amount of such Loss multiplied by Damages or series of related Damages equals or exceeds [***] dollars ($[***]), and then for all such Seller’s Percentage Share. The Purchasers, for themselves Damages from and for including the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations first dollar of any other Seller. The aggregate liability Damages; provided, however, that this Section 7.7(b) shall not apply in respect of any claim (i) for any breach of any of the Seller Fundamental Representations, or (ii) of fraud or willful Breach.
(c) The maximum aggregate obligation of Sellers under this Section 7.2 7.2(a)(i) and Section 7.2(a)(iv) (with respect to Section 7.2(a)(i)) (except in respect of any claim (i) for any breach of any of the Seller Fundamental Representations, or (ii) of fraud or willful Breach) for any Damages in the aggregate shall not exceed such Seller’s Percentage Share [***].
(d) In no event, shall the total amount of the Purchase Price Damages for which Sellers shall be liable under this Article 7 [***] (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderexcept in respect of any claim of fraud or willful Breach).
Appears in 1 contract
Sources: Asset Purchase Agreement (PhaseBio Pharmaceuticals Inc)
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees an Indemnified Party to indemnification pursuant to the provisions of Section 7.2(b) 8.1 are subject to the following limitations:
(a) The Seller Indemnifying Parties shall have no liability under Section 8.1(a)(A), (J), and (K) for Damages resulting from (i) any individual claim unless the Damages from such individual claim exceed [****] dollars ($[****]) (the “Threshold”), and (ii) unless the cumulative amount of Damages for which the Seller Indemnifying Parties would, but for this provision, be liable to the Buyer Indemnified Parties exceeds [****] Dollars ($[****]) (the “Basket”), in which case, such Buyer Indemnified Parties shall be entitled to indemnification only for Damages in excess of the Basket. For the avoidance of doubt, the Seller Indemnifying Parties shall not have any liability under Section 8.1(a)(A), (J), and (K) unless and until the amount of an individual claim for Damages equals or exceeds the Threshold. Once a claim exceeds the Threshold, then, to the extent that cumulative Damages exceed the Basket, the Buyer Indemnified Parties would be entitled to recover the full amount of Damages in excess of the Basket.
(b) The Seller Indemnifying Parties and Sellers shall not in the aggregate be liable for any Loss Damages in excess of [****] Dollars ($[****]) (the “Cap”); provided, however, with respect to Damages arising out of the Statute of Limitations Claims (except for Specified Indemnity Obligations and claims for indemnification under Section 3.1, Section 3.2, Section 3.11, and Section 3.13 of the Real Estate Purchase Agreement) or Fraud, the Seller Indemnifying Parties shall not in the aggregate be liable for any Damages in excess of the actual Purchase Price paid to Sellers under this Agreement; provided, further that with respect to Damages arising out of Specified Indemnity Obligations the Seller Indemnifying Parties and Sellers shall not in the aggregate be liable for any Damages in excess of [****] Dollars ($[****]) and with respect to Damages arising out of claims for indemnification under Section 3.1, Section 3.2, Section 3.11, and Section 3.13 of the Real Estate Purchase Agreement the Seller Indemnifying Parties and Sellers shall not in the aggregate be liable for any Damages in excess of [****] Dollars ($[****]).
(c) In any event in which indemnification is sought for Damages pursuant to Section 8.1(a) or Section 8.1(b), indemnification for such Damages shall firstly be sought from the Holdback and, if such Damages are not limited by the Cap pursuant to Section 8.3(b) and the Holdback has been fully exhausted, shall be sought directly from the Indemnifying Parties, subject to indemnification hereunder the limitations and other provisions set forth in this ARTICLE VIII.
(d) The Seller Indemnifying Parties and Sellers shall not be liable for any Damages to the extent that such Damages (i) arise out of changes after the Closing Date in any Laws or GAAP that retroactively applies to the Company or any of its Subsidiaries, (ii) are duplicative of any Claim therefor amounts that have previously been recovered under this Agreement or the other Transaction Documents, (iii) have been taken into account in calculating the Closing Working Capital amount or (iv) have been actually recovered by the Buyer Indemnified Party from another Person including, without limitation, as a result of the Buyer Indemnified Party receiving compensation for such Damages pursuant to any policy of insurance maintained by the Buyer Indemnified Party. Notwithstanding anything to the contrary in the Transaction Documents and subject to such other limitations set forth in the Transaction Documents, in no event shall the Seller Indemnifying Parties and Sellers be liable, in the aggregate, for any Damages arising out of any indemnity obligations under the Transaction Documents in excess of the actual Purchase Price paid to Sellers under this Agreement. The amount of any Damages of an Indemnified Person shall be calculated net of (A) any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), actually received by the Purchasers Indemnitees such Indemnified Party on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering Damages (less any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel increase in any insurance policies in effect for periods prior to the Closing. In the event policy premium that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made incurred as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as making a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover claim for such Losses pursuant to Section 7.2(binsurance proceeds) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or and/or (B) the Purchasers could have mitigated any non-recoverable indemnification or prevented contribution amounts actually paid to such Loss using Indemnified Party by any third party on account of such Damages. The Buyer Indemnified Party shall use commercially reasonable efforts; and
(vi) except efforts to pursue insurance coverage for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderDamages.
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Limitations on Indemnification Obligations. (a) The rights of Seller's and the Purchasers Indemnitees Shareholders' obligation to make indemnification pursuant payments to the provisions of Section 7.2(b) are subject to the following limitations:
(i) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees Purchaser Indemnified Parties on account of such Loss. The Purchasers Indemnitees shall seek full recovery Indemnifiable Losses claimed under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries Section 9.1(a) shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to arise until the aggregate amount of all Indemnifiable Losses claimed under Section 9.1(a) exceeds One Hundred Thousand Dollars ($100,000) (the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by "Threshold Amount"). Once the aggregate amount of Indemnifiable Losses claimed by the insurance recovery Purchaser Indemnified Parties under Section 9.1(a) exceeds the Threshold Amount, the Purchaser Indemnified Parties shall then be entitled to recover all such Indemnifiable Losses, except those Indemnifiable Losses that were used to reach the Threshold Amount. The foregoing Threshold Amount limitation shall not apply to, and the determination of whether the Threshold Amount has been reached shall not include, any Indemnifiable Losses which (i) relate to a breach by the Seller and the Shareholders of any of the representations and warranties contained in any of Section 3.6, Section 3.9, Section 3.20 and Section 3.26, or indemnification payment (net of direct collection expenses);
(ii) no adjustment arise from any misrepresentation or breach of warranty made fraudulently or with intent to defraud or mislead or recklessly or with gross negligence.
(b) The Purchaser's obligation to make indemnification payments to the Seller Indemnified Parties on account of Indemnifiable Losses claimed under Section 9.2(a) shall be made not arise until the aggregate amount of all Indemnifiable Losses claimed under Section 9.2(a) exceeds the Threshold Amount. Once the aggregate amount of Indemnifiable Losses claimed by the Seller Indemnified Parties as a result of any multiplethe events and circumstances described in Section 9.2(a) exceeds the Threshold Amount, increase factor, or any other premium over then the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not Seller Indemnified Parties shall then be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b)all such Indemnifiable Losses, which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to except those Indemnifiable Losses that are individually less than $50,000 were used to reach the Purchasers Indemnitees will Threshold Amount. The foregoing Threshold Amount limitation shall not be entitled apply to, and the determination of whether the Threshold Amount has been reached shall not include, any Indemnifiable Losses arising from any misrepresentation or breach of warranty made fraudulently or with intent to recover for such Losses pursuant defraud or mislead or recklessly or with gross negligence.
(c) The Seller's and the Shareholders' aggregate obligation to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only make indemnification payments to the extent Purchaser Indemnified Parties on account of such excess);
(ivIndemnifiable Losses claimed under Section 9.1(a) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share an amount equal to Four Million Five Hundred Thousand Dollars ($4,500,000) (the "Cap"). The foregoing Cap limitation shall not apply to, and the determination of whether the Cap has been reached shall not include, any Indemnifiable Losses which (i) relate to a breach by the Seller and the Shareholders of any of the Liability Cap;representations and warranties contained in any of Section 3.6, Section 3.9, Section 3.20 and Section 3.26 or (ii) arise from any misrepresentation or breach of warranty made fraudulently or with intent to defraud or mislead or recklessly or with gross negligence. In addition, the foregoing Cap limitation shall not apply to, and the determination of whether the Cap has been reached shall not include, any Indemnifiable Losses which are due under Section 9.3 and satisfied by a payment from the Escrow Amount.
(vd) except for Claims arising The Purchaser's aggregate obligation to make indemnification payments to the Seller Indemnified Parties on account of Indemnifiable Losses claimed under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b9.2(a) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of an amount equal to the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units Cap. The foregoing Cap limitation shall not apply to, and the Shares sold by such Seller determination of whether the Threshold Amount has been reached shall not include, any Indemnifiable Losses arising from any misrepresentation or breach of warranty made fraudulently or with intent to the Purchasers hereunderdefraud or mislead or recklessly or with gross negligence.
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Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees an Indemnified Party to indemnification pursuant to the provisions of Section 7.2(b9(b) and Section 9(c) are subject to the following limitations:
(i) the Buyer Indemnitees shall not be entitled to recover individual Losses pursuant to Section 9(b)(i)(A) or Section 9(c)(i)(E) if the total amount of any such individual Loss subject which the Buyer Indemnitees would recover under Section 9(b)(i)(A) or Section 9(c)(i)(E) (as limited by the provisions of Section 9(e)(iv)), but for this Section 9(e)(i), is less than $10,000 (the “Mini-Basket”); provided that (A) a series of related Losses shall be aggregated for purposes of this Section 9(e)(i) and (B) Losses that are less than the Mini-Basket shall be disregarded for purposes of Section 9(e)(iii);
(ii) the Buyer Indemnitees shall have no right to indemnification hereunder pursuant to Section 9(b)(i)(A) for Losses that are incurred to clean up or otherwise remediate any Hazardous Materials to the extent such cleanup or other remediation is not conducted in a reasonably cost-effective manner, taking into consideration (A) use of the relevant property (with respect to the Leased Property, as of the Closing Date), (B) applicable Environmental Requirements, (C) available risk-based approaches, engineering controls, institutional controls, deed restrictions and activity and use limitations (if any) under applicable Environmental Requirements and permitted by the relevant Governmental Entity with jurisdiction over the matter, (D) impact or threat to the environment or human health and (E) impact to or interference with the operations of the Buyer Indemnitees; provided that in no event shall such cleanup or other remediation be deemed to have not been conducted in a reasonably cost-effective manner for the purposes of the foregoing clause on the basis that such cleanup or other remediation does not include any Claim therefor engineering or institutional controls or other activity and use limitations or deed restrictions or is not based on any risk-based approach where such restrictions, limitations, controls or approach would unreasonably interfere with Buyer Indemnitees’ operation of the relevant property.
(iii) the Buyer Indemnitees shall not be entitled to recover Losses pursuant to Section 9(b)(i)(A) or Section 9(c)(i)(E) until the total amount which the Buyer Indemnitees would recover under Section 9(b)(i)(A) and Section 9(c)(i)(E) (as limited by the provisions of Section 9(e)(iv)), but for this Section 9(e)(iii), exceeds $2,750,000 (the “Deductible”), in which case, the Buyer Indemnitees shall only be entitled to recover such Losses in excess of such amount;
(iv) the funds in the Escrow Account, at any given time, shall be calculated the sole and exclusive source of recovery with respect to Losses indemnifiable pursuant to Section 9(b) and Section 9(c), and shall limit the liability of the Sellers and Optionholders, and in no event shall the Buyer Indemnitees be entitled to recover, or the liability of the Sellers and Optionholders exceed, more than the amount of the funds available in the Escrow Account pursuant to Section 2(a)(iv)(B), Section 9(b) and Section 9(c) in the aggregate;
(v) if an Indemnified Party does not use commercially reasonable efforts to mitigate Losses for which such Indemnified Party seeks indemnification pursuant to Section 9(b) or Section 9(c), the Indemnifying Party shall not be required to indemnify the Indemnified Party to the extent any such Losses could have been mitigated if the Indemnified Party had used such commercially reasonable efforts; Table of Contents
(vi) the amount of each Loss shall be determined net of any amounts actually recovered by the Indemnified Party which suffered such Loss under insurance proceeds (net of direct collection expenses) policies or from other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees ) with respect to such Loss; provided that such Indemnified Party shall use commercially reasonable efforts to pursue such recovery under available insurance policies or other available collateral sources;
(vii) in any Loss case where an Indemnified Party recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which any such Person has been Indemnified Party was indemnified hereunderpursuant to Section 9(b) or Section 9(c), then a refund equal such Indemnified Party shall promptly pay over to the aggregate Indemnifying Party the amount so recovered (after deducting therefrom the amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellersincurred by such Indemnified Party in procuring such recovery), which refund shall be distributed based on the proportion but not in excess of the Loss borne by each sum of any amount previously so paid to or on behalf of such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations Indemnified Party in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses)matter;
(iiviii) in no adjustment event shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not Indemnified Party be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as or make a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover claim for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and any amounts in respect of Operating Wind Project Liabilities special or indirect damages, lost revenues, income or profits, loss in value or diminution in value, of securities or assets or punitive damages and, in particular, no “multiple of profits” or “multiple of cash flow” or similar valuation methodology shall be used in calculating the amount of any Losses, unless, in each case, paid or payable (and subsequently paid) to a third party; and
(ix) for the avoidance of doubt, neither the Mini-Basket nor the Deductible shall be applicable to the indemnification obligations set forth in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Pricesubclauses (B), (C), (D), (E) or (F) of Section 9(b)(i) or subclauses (A), (B), (C), (D), (F), (G) or (H) of Section 9(c)(i). Notwithstanding anything contained in this Section 9 to the Purchasers contrary, no indemnification obligation of any Indemnifying Party under this Agreement that has been finally judicially determined to have resulted from fraud on the part of any Indemnifying Party shall be subject to any limitation set forth above in this Section 9(e); provided that in no event shall the Buyer Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share 9, any other Section of this Agreement or any combination thereof or otherwise, in excess of the Final Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderPrice.
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Limitations on Indemnification Obligations. The rights of the Purchasers Buyer Indemnitees and the Seller Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) 7.2 are subject to the following limitations:
(a) the Buyer Indemnitees shall not be entitled to recover for any particular Loss (including any series of related Losses) pursuant to Section 7.2(a)(i) (other than Losses arising from (x) Fraud or (y) breach of any of the Fundamental Representations or the representations and warranties in Section 3.15) unless such Loss (including any series of related Losses) equals or exceeds $10,000;
(b) the Seller Parties shall not be obligated to indemnify the Buyer Indemnitees for any Losses arising under Section 7.2(a)(i) (other than Losses arising from (x) Fraud or (y) breach of any of the Fundamental Representations or the representations and warranties in Section 3.15) until the Buyer Indemnitees shall have suffered such Losses in an aggregate amount equal to $220,000 (the “Basket Amount”), after which point the Seller Parties shall be obligated to indemnify each Buyer Indemnitee solely from and against the aggregate amount of such Losses in excess of the Basket Amount;
(c) the maximum liability of the Seller Parties (inclusive of any amounts paid out from the Indemnity Escrow Amount) with respect to Losses indemnifiable pursuant to Section 7.2(a)(i) shall be the Indemnity Cap, other than in the case of (i) Fraud or (ii) any breach of any of the Fundamental Representations, in which case such maximum liability of the Seller Parties shall be the Purchase Price actually received by the Seller;
(d) the maximum liability of the Seller Parties (inclusive of any amounts paid out from the Indemnity Escrow Amount) with respect to Losses indemnifiable pursuant to Section 7.2(a) shall be the Purchase Price;
(e) the amount of any Loss subject to indemnification hereunder or of any Claim therefor and all Losses shall be calculated determined net of any amounts actually recovered by the Buyer Indemnitees under insurance proceeds policies (net of direct collection expensesexcluding the R&W Insurance Policy) or from other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement) with respect to such Losses; and
(f) the Buyer Indemnitees shall not be entitled to indemnification pursuant to Section 7.2(a) for any Loss to the extent that (i) such Loss was taken into account in the determination of the Final Purchase Price pursuant to Section 2.4(d), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees (ii) with respect to any Loss such Losses that the Buyer Indemnitees pursue directly against Seller Parties, the Buyer Indemnitees have failed to first exhaust and use their commercially reasonable efforts to recover all such Losses from the Indemnity Escrow Amount or (iii) with respect to any such Losses that the Buyer Indemnitees pursue directly against Seller Parties in excess of the Indemnity Cap with respect to Losses arising out of Section 7.2(a)(i) which are covered by the R&W Insurance Policy, the Buyer Indemnitees have failed to use commercially reasonable efforts to recover all such Losses under the R&W Insurance Policy.
(g) In any case where a Buyer Indemnitee recovers, under insurance policies (excluding the R&W Insurance Policy) or from other collateral sources, any amount in respect of a matter for which any such Person has been Buyer Indemnitee was indemnified hereunderpursuant to Section 7.2(a), then a refund equal such Buyer Indemnitee shall promptly pay over to Seller the aggregate amount so recovered (after deducting therefrom the amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellersincurred by such Buyer Indemnitee in procuring such recovery), which refund shall be distributed based on the proportion but not in excess of the Loss borne by each such Seller, or, if a Loss has not yet been determined or sum of (i) any amount previously so paid by the Sellers, the Sellers’ indemnification obligations Seller to or on behalf of such Buyer Indemnitee in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
matter and (ii) no adjustment any amount expended by Seller in pursuing or defending any claim arising out of such matter.
(h) For purposes of this Article 7, in determining whether there has been any inaccuracy or breach of any representation or warranty (other than any Fundamental Representation) set forth in this Agreement or in any document, certificate or other instrument delivered in connection herewith and the resulting determination of Losses arising therefrom, each reference to any materiality, Company Material Adverse Effect, or similar qualification contained in or otherwise applicable to any such representation or warranty shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Lossesdisregarded; provided, however, that thereafter this Section 7.4(h) shall not be applied solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to determining whether there has been any inaccuracy or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representationany Unscraped Representation (but, warranty or covenant or (B) for the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5avoidance of doubt, shall still be applied with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount determination of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderLosses arising therefrom).
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Exela Technologies, Inc.)
Limitations on Indemnification Obligations. The rights (a) Sellers shall have no obligation to indemnify the Purchaser Indemnitees with respect to Adverse Consequences arising under Section 12.1(a) (other than Section 7.1 (Due Formation), Section 7.2 (Authority), Section 7.4 (Brokers), Section 7.7 (Title to Purchased Assets), Section 7.10(b) (Litigation and Compliance with Laws) and Section 7.19 (Taxes)) until the aggregate amount of all Adverse Consequences thereunder exceeds One Hundred Thousand Dollars ($100,000), in which event the Purchasers Sellers shall be obligated to indemnify the Purchaser Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) are subject to the following limitations:
(i) only for the amount of any Loss subject Adverse Consequences in excess of such threshold.
(b) Sellers shall have no obligation to indemnification hereunder or indemnify the Purchaser Indemnitees with respect to Adverse Consequences arising under Section 12.1(a) (other than Section 7.1 (Due Formation), Section 7.2 (Authority) and Section 7.7 (Title to Purchased Assets)) in excess of Five Million Dollars ($5,000,000) (the "Cap").
(c) The amount of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received Adverse Consequences incurred by the Purchasers Indemnitees on account of will be reduced by the net amount either Purchaser actually recovers from any insurer or other party liable for such Loss. The Adverse Consequences, provided, that nothing in the foregoing shall require Purchasers Indemnitees to take any action whatsoever to attempt to notify, file a claim with or collect any amount from, any insurer or other party with respect to any claim, loss or occurrence which shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods arise prior to the Closing. In .
(d) Notwithstanding anything to the event that an insurance recovery or contrary in this Agreement, Purchaser Indemnitees' rights to indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims Adverse Consequences arising under Section 3.5 12.1(b), (c), (d), (e), or in respect of Operating Wind Project Liabilities(f), the Purchasers Indemnitees will or based upon fraud, willful misconduct or intentional misrepresentation, shall not be entitled subject to recover the first $200,000 limitations set forth in aggregate Losses Sections 12.5(a) and 12.5(b).
(as limited e) Any indemnity payments made pursuant to this Article XII shall be treated for all income tax purposes by the applicable provisions of this Section 7.2(c) pursuant parties hereto as an adjustment to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunder.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees to (a) Notwithstanding Section 8.1, there shall be no liability for indemnification pursuant to the provisions of under Section 7.2(b8.1(a) are subject to the following limitations:
unless (i) the aggregate amount of any Loss subject all Losses for which indemnification is to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds provided thereunder exceeds $1,000,000 (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreementthe “Indemnification Threshold”), received by at which ▇▇▇▇ ▇▇▇▇▇▇ will be obligated to indemnify the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees Buyer Indemnified Parties with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of all such Losses in excess of the recovery Indemnification Threshold, and (ii) the amount of Losses with respect to any single Claim, or payment any aggregated Claims arising out of the same or related facts, events or circumstances, for which indemnification is to be provided under Section 8.1(a) exceeds $25,000 (net the “Per-Claim Indemnification Threshold”); provided that the Indemnification Threshold and the Per-Claim Indemnification Threshold shall not apply in the case of direct collection expenses (A) Fraud, (B) any breach of or inaccuracy in any representation or warranty made by Seller in any of the following Sections: 2.1 (due organization), 2.2(a) (authorization), 2.5 (assets) and Taxes2.17 (brokers and agents) (collectively, the “Seller Fundamental Representations”), (C) any breach of or inaccuracy in any representation or warranty made by Seller in Section 2.6 (taxes) or (D) any Taxes that constitute Retained Liabilities.
(b) Notwithstanding Section 8.2, there shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ no liability for indemnification obligations in respect of such Loss shall be reduced by under Section 8.2(a) unless (i) the aggregate amount of Losses for which indemnification is to be provided thereunder exceeds the insurance recovery or indemnification payment (net Indemnification Threshold, at which time Buyer will be obligated to indemnify the Seller Indemnified Parties with respect to the aggregate amount of direct collection expenses);
all Losses described in Section 8.2(a) in excess of the Indemnification Threshold, and (ii) no adjustment shall be made as a result the amount of Losses with respect to any multiple, increase factorsingle Claim, or any other premium over aggregated Claims arising out of the value paid by same or related facts, events or circumstances, for which indemnification is to be provided under Section 8.2(a) exceeds the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at Per-Claim Indemnification Threshold; provided that the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units Indemnification Threshold and the Shares Per-Claim Indemnification Threshold shall not apply in the case of (A) Fraud, (B) any breach of or its final purchase price for inaccuracy in any representation or warranty made by Buyer in any of the Purchased Units following Sections: 3.1 (due organization), 3.2(a) (authorization), 3.4 (capitalization), 3.5 (buyer common stock) and 3.13 (brokers and agents) (collectively, the Shares;“Buyer Fundamental Representations”) or (C) any breach of or inaccuracy in any representation or warranty made by Buyer in Section 3.8 (taxes).
(iiic) except for Claims arising The indemnification obligations of Seller under Section 3.5 or 8.1(a) shall be limited in respect of Operating Wind Project Liabilitiesthe aggregate to an amount equal to the Cap, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses; provided, however, that thereafter solely the Cap shall not apply to Seller’s indemnification obligations under Section 8.1(a) in the case of (i) Fraud, (ii) any breaches of or inaccuracies in any Seller Fundamental Representations, (iii) any breaches of or inaccuracies in any of Seller’s representations or warranties set forth in Section 2.6 (taxes) or (iv) any Taxes that constitute Retained Liabilities, which obligations (when aggregated with Seller’s other indemnification obligations under Section 8.1(a)) shall be limited to an amount equal to the Maximum Liability Amount. Notwithstanding anything to the contrary in this Agreement, except in the case of Fraud, the maximum aggregate liability of Seller (for indemnification or otherwise) with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will not be entitled any matter under this Agreement (including with respect to recover for such Losses any breaches of or inaccuracies in any Seller Fundamental Representations, any of Seller’s representations or warranties set forth in Section 2.6 (taxes) or pursuant to any of the other indemnities set forth in Section 7.2(b8.1) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 shall be the Maximum Liability Amount.
(d) The indemnification obligations of Buyer under Section 8.2(a) shall be limited in the aggregate (and then only to an amount equal to the extent of such excess);
(iv) except for Claims arising Cap, provided, however, that the Cap shall not apply to Buyer’s indemnification obligations under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”8.2(a) in the aggregatecase of (i) Fraud, and each Seller(ii) any breaches of or inaccuracies in any Buyer Fundamental Representations or (iii) any breaches of or inaccuracies in any of Buyer’s representations or warranties set forth in Section 3.8 (taxes), which obligations (when aggregated with Buyer’s other indemnification obligations under Section 8.2(a))) shall be limited to an amount equal to the Maximum Liability Amount. Notwithstanding anything to the contrary in this Agreement, except in the case of Fraud, the maximum aggregate liability of Buyer (for Losses hereunder shall not exceed its Percentage Share indemnification or otherwise) with respect to any matter under this Agreement (including with respect to any breaches of or inaccuracies in any Buyer Fundamental Representations, any of Buyer’s representations or warranties set forth in Section 3.8 (taxes) or pursuant to any of the other indemnities set forth in Section 8.2) shall be the Maximum Liability Cap;Amount.
(ve) except for Claims arising Notwithstanding anything to the contrary in this Agreement: (i) no Indemnified Party shall have any obligations under Section 3.58.1 or Section 8.2, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5as applicable, with respect to any matter for which any Indemnified Party is or would be entitled to indemnification under Section 8.1 or Section 8.2 (without giving effect to any limitations, including as to time, survival periods, deductibles, thresholds, caps, knowledge or materiality qualifiers); and (ii) if a particular LossParty is entitled to bring a claim under more than one provision of Section 8.1 or 8.2, each Seller as the case may be, such Party may choose in its sole and absolute discretion the provision or provisions under which it seeks indemnification.
(f) The amount of Losses recoverable by the Indemnified Party under this Article VIII shall only be required to indemnify the Purchasers Indemnitees up to reduced, on a dollar-for-dollar basis, by the amount of (i) any insurance proceeds received by the Indemnified Party in connection with a Claim under this Article VIII (net of any costs of obtaining such Loss multiplied recovery and increases in premiums resulting from such Losses which are borne by the Indemnified Party) and (ii) any amounts collected from any other third parties in respect of such Losses (net of any costs of obtaining such recovery).
(g) Notwithstanding anything to the contrary in this Agreement, for purposes of determining (i) whether there has been a breach of or inaccuracy in a representation or warranty requiring a Party to indemnify as provided in Section 8.1(a) or Section 8.2(a), as applicable, and (ii) the amount of Losses arising from any such breach, each representation or warranty made by such Seller’s Percentage Share. The Purchasers, for themselves Party (other than Section 2.4(b) (absence of changes); 3.6(a) (SEC filings; financial statements; information provided) and for the Purchasers Indemnitees, unconditionally waives Section 3.6(b) (absence of changes)) shall be deemed to have been made without any right it qualifications or they may have limitations as to hold materiality (including any qualifications or limitations made by reference to a Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderMaterial Adverse Change or Buyer Material Adverse Change).
Appears in 1 contract
Limitations on Indemnification Obligations. The rights In addition to any other limitations contained in Section 16.05 and this Article XVII hereof, the obligations of the Purchasers Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) are subject to the following limitations:
(i) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Ceding Company and the Subsidiaries shall not cancel Reinsurer to indemnify any insurance policies in effect for periods prior to Reinsurer Indemnified Party or Ceding Company Indemnified Party, as the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereundercase may be, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses are subject to, and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellerslimited by, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Lossesfollowing; provided, however, that thereafter the limitations set forth in Section 17.04(a) through Section 17.04(d) shall only apply to indemnification by the Ceding Company of any Reinsurer Indemnified Parties or indemnification by the Reinsurer of any Ceding Company Indemnified Parties on account of ▇▇▇▇▇▇▇▇.38 Losses relating to the In-Force Block (it being agreed that, for purposes of this Section 17.04, the projections set forth on Schedule X shall be deemed to apply solely to the In-Force Block):
(a) Solely with respect to Losses attributable to the In-Force Block, the Ceding Company shall be obligated to provide indemnification pursuant to Section 17.01(a)(i), only if the aggregate dollar amount of Losses with respect to all misrepresentations and breaches of warranty referred to in Section 17.01(a)(i) applicable to such Losses exceeds an amount equal to [*], and then only for the amount of such Losses that are individually less than $50,000 exceeds [*].
(b) Solely with respect to Losses attributable to the Purchasers Indemnitees will not be entitled to recover In-Force Block, the maximum aggregate liability of the Ceding Company for indemnification for all such Losses pursuant to Section 7.2(b17.01(a)(i) until applicable to the In-Force Block shall not exceed [*].
(c) Solely with respect to Losses attributable to the In-Force Block, the Reinsurer shall be obligated to provide indemnification pursuant to Section 17.01(b)(i) only if the aggregate dollar amount of Losses with respect to all misrepresentations and breaches of warranty referred to in Section 17.01(b)(i) applicable to such Losses exceeds an amount equal to [*], and then only for the amount of such Losses that are individually less than $50,000 are equal exceeds [*].
(d) Solely with respect to Losses attributable to the In-Force Block, the maximum aggregate liability of the Reinsurer for indemnification for all such Losses pursuant to Section 17.01(b)(i) applicable to the In-Force Block shall not exceed [*].
(e) The Ceding Company and the Reinsurer shall cooperate with each other with respect to resolving any claim or exceed $300,000 in liability with respect to which one party is obligated to indemnify the aggregate other party under this Article XVII, including by using commercially reasonable efforts to mitigate the amount of any Losses for which it is entitled to seek indemnification hereunder, whether by seeking claims against a non-affiliated third party, an insurer or otherwise.
(and then only f) Upon making any indemnification payment, the Indemnifying Party will, to the extent of such excess);
(iv) except for Claims arising under Sections 3.1payment, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and be subrogated to all rights of the Indemnified Party against any third party in respect of Operating Wind Project Liabilities the Loss to which the payment relates. Each such Indemnified Party and Indemnifying Party will duly execute upon request all instruments reasonably necessary to evidence and perfect the above-described subrogation rights.
(g) The amount of any Losses sustained by an Indemnified Party and owed by an Indemnifying Party shall be reduced by any amount to which such Indemnified Party collects with respect thereto under any insurance or reinsurance coverage, or from any other party alleged to be responsible therefor (less the out-of-pocket amount of the expenses reasonably incurred by the Indemnified Party in which case procuring such recovery, including the Sellers’ aggregate liability hereunder for all present value of any reasonably determined prospective increase in insurance premiums). The Indemnified Party shall use commercially reasonable efforts to collect any amounts available under such insurance or reinsurance coverage and from such other party alleged to have responsibility. If the Indemnified Party receives an amount under insurance or reinsurance coverage or from such other party with respect to Losses will not be permitted sustained at any time subsequent to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses any indemnification actually having been paid pursuant to Section 7.2(b) to this Article XVII, then such Indemnified Party shall promptly reimburse by that amount (less the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) out-of-pocket amount of the Purchase Price expenses reasonably incurred by the Indemnified Party in procuring such recovery, including the present value of any reasonably determined prospective increase in insurance premiums) the applicable Indemnifying Party for any such indemnification payment actually made by such Indemnifying Party.
(as adjusted pursuant to Section 2.6h) if The indemnities provided for in this Article XVII shall be the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 sole and ten percent (10%) exclusive remedy of the Purchase Price parties hereto and their respective officers, directors, employees, agents, Affiliates, successors, and permitted assigns for all other items not listed any breach of any representation or warranty or 46753330.38 any breach, nonfulfillment or default in the immediately preceding clause performance of any of the covenants or agreements contained in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregateAgreement, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees parties shall not be entitled to recover Losses pursuant a rescission of this Agreement or to Section 7.2(b) if (A) the Purchasers (any further indemnification rights or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations claims of any other Seller. The aggregate liability nature whatsoever in respect thereof (including any common law rights of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share contribution), all of which the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderparties hereto hereby waive.
Appears in 1 contract
Sources: Funds Withheld Coinsurance Agreement (National Western Life Group, Inc.)
Limitations on Indemnification Obligations. The rights (a) Subject to Section 7.3(j), there shall be no Liability of any Company Securityholders for indemnification under Section 7.1(a) unless the Purchasers Indemnitees to indemnification pursuant to the provisions of Section 7.2(b) are subject to the following limitations:
(i) the aggregate amount of any Loss subject to indemnification hereunder or of any Claim therefor Adverse Consequences thereunder exceeds $350,000 (the “Basket”), at which time the Purchaser Indemnified Parties shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees indemnified with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of all such Adverse Consequences, including the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover the first $200,000 in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against LossesBasket; provided, however, that the Basket shall not apply to fraud or the breach or inaccuracy of any of the Company Fundamental Representations.
(b) The aggregate amount of Adverse Consequences for which the Purchaser Indemnified Parties may be indemnified under Section 7.1(a) for breaches and inaccuracies of representations and warranties other than the Company Fundamental Representations shall be limited to the Escrow Amount.
(c) The aggregate amount of Adverse Consequences for which the Purchaser Indemnified Parties may be indemnified under Section 7.1 shall be limited to fifty percent (50%) of the aggregate Merger Consideration actually paid to Company Securityholders.
(d) If any Purchaser Indemnified Party is entitled to receive any amount under Section 7.1, Purchaser shall, on behalf of such Purchaser Indemnified Party, (i) first, seek recovery from the Escrow Amount for as much of such amount as is available, (ii) second, with respect to any such amount that cannot be satisfied through recovery from the Escrow Amount (and subject to the other limitations set forth in this Section 7.3), offset such remaining amount against the amount of any Earn Out Payment that is due and payable (but that has not yet been paid) at the time that such Purchaser Indemnified Party first becomes entitled to receive such amount or at any time thereafter and (iii) third, solely with respect to Losses any such amount that are individually less than $50,000 the Purchasers Indemnitees will cannot be satisfied through recovery from the Escrow Amount or from an offset against the Next Earnout Payment (and subject to the other limitations set forth in this Section 7.3), seek recovery from each Company Securityholder of such Company Securityholder’s pro rata portion of such unsatisfied amount (where such pro rata portion is based on the percentage that the Accrued Merger Consideration received by a Company Securityholder bears to the aggregate amount of Accrued Merger Consideration received by all Company Securityholders). “Next Earnout Payment” means, with respect to any amount that a Purchaser Indemnified Party is entitled to recover for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only to the extent of such excess);
(iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising receive under Section 3.57.1, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers Earn Out Payment that is due and payable (or any director or officer of Purchasers who is but that has not a Seller or a directoryet been paid) at the time that such Purchaser Indemnified Party first becomes entitled to receive such amount, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) if no such Earn Out Payment is then due and payable, the Purchasers could have mitigated Earn Out Payment, if any, that is reasonably expected to become due and payable within 120 days, or prevented (C) if no such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5Earn Out Payment is reasonably expected to become due and payable within 120 days and if the Representative provides a written election to Purchaser within such 120-day period, the Earn Out Payment, if any, that becomes due and payable with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of Annual Earnout Period in which such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunder.Purchaser Indemnified Party first becomes entitled to
Appears in 1 contract
Sources: Merger Agreement (Arthrocare Corp)
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees an Indemnified Party to indemnification pursuant to the provisions of Section 7.2(b) 7.2 are subject to the following limitations:
(ia) the amount of any Loss subject to indemnification hereunder or of any Claim therefor An Indemnified Party shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers, the Company and the Subsidiaries shall not cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers Indemnitees will not be entitled to recover Damages under Section 7.2 until the first $200,000 in aggregate Losses (as limited cumulative amount of Damages claimed by the applicable Indemnified Parties exceeds $650,000, in which case, such Indemnified Party shall be entitled to indemnification for all Damages in excess of (but not including) such amount. Notwithstanding the foregoing, the limitations contained in this Section 7.3(a) shall not apply to Excluded Damages, as defined below.
(b) Except for injunctive relief and similar equitable remedies and except for Damages relating to or arising out of (i) fraud, willful misrepresentation or willful breach by N-able, (ii) any breach of the Surviving Claims, (iii) any payment due SolarWinds under Section 3.2(d) or Section 6.6, or (iv) claims set forth in Section 7.2(a)(iv), (v), or (vi) above (collectively, the “Excluded Damages”), recourse to the Escrow Fund in accordance with the provisions hereof shall be the Indemnified Parties’ sole and exclusive remedy available for any Damages under Section 7.2 above, subject to the below provisions of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses7.3; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 Excluded Damages, the Purchasers Indemnitees will not Indemnified Parties shall first be required to satisfy such Excluded Damages from the Escrow Fund and, if the Escrow Fund is insufficient to satisfy such Excluded Damages or has been released in accordance with Section 7.4, then the Indemnified Parties shall be entitled to recover seek recourse from other sources.
(c) The Indemnifying Parties shall not be liable for such Losses pursuant to Section 7.2(b) until such Losses that are individually less than $50,000 are equal to or exceed $300,000 in the aggregate (and then only any Damages to the extent that such Damages have been reserved for on the Closing Balance Sheet and taken into account in calculating the Closing Working Capital Amount or have been otherwise recovered by any Indemnified Party or satisfied by any other Person including, without limitation, as a result of any Indemnified Party receiving or being reasonably able to receive compensation for such Damages pursuant to any policy of insurance maintained by any Indemnified Party.
(d) Notwithstanding anything to the contrary contained herein, in no event shall: (i) any Indemnifying Party’s aggregate liability with respect to Damages, other than Excluded Damages, arising out of or relating to this Agreement exceed such N-able Equity Holder’s Pro Rata Share of the Escrow Cash; (ii) any Indemnifying Party’s liability with respect to Damages in respect of any indemnification claim hereunder exceed (A) the amount of such excess);
Damages indemnified by all Indemnifying Parties in respect of any such indemnification claim multiplied by (B) such Indemnifying Party’s Pro Rata Share; (iii) any Indemnifying Party’s aggregate liability with respect to Damages arising out of or relating to this Agreement exceed such Indemnifying Party’s net proceeds received in connection with the Merger; or (iv) except for Claims arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the SellersIndemnifying Parties’ collective aggregate liability hereunder for all such Losses will not be permitted with respect to Damages arising out of or relating to this Agreement exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b.
(e) Notwithstanding anything to the extent the Sellers aggregate liability hereunder contrary contained herein, N-able shall not have any Liability under any provision of this Agreement for all such Losses would otherwise exceed twenty percent (20%i) any Damages consisting of any diminution in value, (ii) any punitive, incidental, consequential, special or indirect Damages or (iii) any Damages consisting of multiples of EBITDA, discounted cash flow or other multiples used to determine the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11hereunder, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5except, with respect to a particular Lossclauses (i), each Seller shall only be required to indemnify the Purchasers Indemnitees up (ii) and (iii), to the amount of extent such Loss multiplied by such Seller’s Percentage Share. The PurchasersDamages are payable to a third party pursuant to a Third Party Claim; provided, for themselves and for the Purchasers Indemniteeshowever, unconditionally waives any right it or they may have to hold any Seller jointly that N-able will be liable for the obligations any Damages consisting of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderlost revenue, profits or earnings, or increased expenses.
Appears in 1 contract
Sources: Merger Agreement (SolarWinds, Inc.)
Limitations on Indemnification Obligations. (a) The rights of the Purchasers Indemnitees Indemnifying Party’s obligation to indemnification pursuant to the provisions of Section 7.2(b) are subject to the following limitationsindemnify an Indemnified Party for any Loss under Article 10 shall be reduced:
(i) by the amount of any Loss subject to indemnification hereunder or of sum such Indemnified Party has recovered from any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement)third Person, received by the Purchasers Indemnitees on account of including an insurer, in compensation for such Loss. The Purchasers Indemnitees shall seek full , after deduction of all duly documented costs and expenses incurred in making such recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder and the Purchasers(including reasonable attorneys’ fees); provided, however, the Company and the Subsidiaries Indemnifying Party shall not cancel any insurance policies in effect for periods prior be obligated to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers Indemnitees with respect to any Loss for which any seek compensation from such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers, which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses)third Person;
(ii) no adjustment shall be made if and to the extent the Parent, the Buyer or any of their Affiliates consented to an action as per Article 5.3.1;
(iii) if and to the extent that such Loss is covered by any specific provision, reserve or expense in the Financials relating to such claim;
(iv) if and to the extent that such Loss has been caused or increased by a failure of the Indemnified Party or any of its Affiliates or, as from the Closing Date, any Group Company or any of its Affiliates, to comply with the duty to mitigate the damage; or
(v) if and to the extent that such Loss arises or is increased as a result of any multiplenew legislation, increase factorregulation, rule of law or practice not in force at the Closing Date or any amendment of any legislation, regulation, rule of law or practice after the Closing Date.
(b) The Indemnifying Party shall not have any obligation to indemnify the Indemnified Party under Article 10.2(a) unless the amount of the Indemnifying Party’s obligation to indemnify the Indemnified Party exceeds, or any other premium over when aggregated with the value paid by amount of the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at total indemnification obligation of the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or Indemnifying Party in respect of Operating Wind Project Liabilitiesall claims will exceed, EUR 850,000 (the Threshold Amount). If the Threshold Amount has been exceeded, the Purchasers Indemnitees will not Indemnifying Party shall be entitled required to recover indemnify the first $200,000 in aggregate Indemnified Party from and against any and all Losses (as limited suffered or incurred by the applicable provisions Indemnified Party, and not just the Losses in excess of this Section 7.2(c) pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Lossesthe Threshold Amount; provided, however, that thereafter solely with respect to Losses that are individually less than $50,000 the Purchasers Indemnitees will Threshold Amount shall not be entitled to recover for such Losses pursuant to Section 7.2(bapply to:
(i) until such Losses that are individually less than $50,000 are equal to any indemnification obligation of the Parties under Article 10.2(a) resulting from, arising out of or exceed $300,000 in based upon, any fraudulent or wilful misrepresentation or fraudulent or willful breach of warranty;
(ii) any indemnification obligation of the aggregate (and then only to the extent of such excessParties under Article 10.2(b);
(iii) any indemnification obligation of the Sellers under Article 10.1; or
(iv) except for Claims any indemnification obligation of the Sellers under Article 10.2(a) resulting from, arising under Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect out of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price)or based upon, the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) to the extent the Sellers aggregate liability hereunder for all such Losses would otherwise exceed twenty percent (20%) breach of any of the Purchase Price representations and warranties set forth in Clause 1 (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant Organization of the Company prior and the Subsidiaries), Clause 2 (Company Capital Structure), Clause 3 (Subsidiaries), Clause 4 (Authority), Clause 9(k) (No Changes), Clause 10 (Taxes), Clause 22 (Social Security, Pensions and Benefit Plans) and Clause 28 (Siemens APA) of Annex 9.1, it being however understood and agreed by the Parties that if any Loss arises out of a misrepresentation or a breach of a warranty or covenant under this Agreement (including those set forth under (i) to Closing(iv) had actual knowledge at any time above) for which Notice of Breach has been given on or prior to the Closing Second Tranche Payment Date in accordance with Article 3.2.3(c), the amount claimed (whether disputed or not or whether the amount exceeds or not the Threshold Amount) shall be first deducted from the Second Tranche and be placed in escrow to be held by the Escrow Agent as set forth in Article 3.2.3(c) before an Indemnified Party seeks to recover directly from an Indemnifying Party.
(c) The aggregate amount of the factsSellers’ indemnification obligations to the Buyer and its Affiliates
(i) with regard to any indemnification obligation of the Sellers under Article 10.2(a) resulting from, events arising out of or conditions constituting or resulting in such based upon, the breach of representation, warranty or covenant any of the representations and warranties other than described in Subclause (ii) or (Biii) below shall not exceed EUR 8,300,000;
(ii) with regard to any indemnification obligation of the Purchasers could have mitigated Sellers under Article 10.1 or prevented such Loss using commercially reasonable effortsunder Article 10.2(a) resulting from, arising out of or based upon, the breach of any of the representations and warranties set forth in Clause 10 (Taxes), Clause 13 (Intellectual Property) and Clause 28 (Siemens APA) of Annex 9.1 shall, together with any indemnification paid under Article 11.5(c)(i), not exceed EUR 26,970,000; and
(viiii) except for Claims with regard to any indemnification obligation of the Sellers under Article 10.2(b) or under Article 10.2(a) resulting from, arising under Section 3.5out of or based upon, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations breach of any other Seller. The aggregate liability of the representations and warranties set forth in Clause 1 (Organization of the Company and the Subsidiaries), Clause 2 (Company Capital Structure), Clause 3 (Subsidiaries) and Clause 4 (Authority) of Annex 9.1 shall together with any indemnification paid under Article 11.5(c)(i) or Article 11.5(c)(ii), not exceed EUR 87,000,000; (the limitations set forth in (i) through (iii) each a Cap and together the Caps) provided, however, that no Cap shall apply to any indemnification obligation of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share resulting from, arising out of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunderor based upon, any fraudulent or wilful misrepresentation or fraudulent or wilful breach of warranty.
Appears in 1 contract
Sources: Share Purchase Agreement (Nuance Communications, Inc.)
Limitations on Indemnification Obligations. The rights of the Purchasers Indemnitees to indemnification pursuant to the provisions of Section 7.2(b(a) are subject to the following limitations:
(i) the amount of any Loss subject to indemnification hereunder or of any Claim therefor shall be calculated net of any insurance proceeds (net of direct collection expenses) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), received by the Purchasers Indemnitees on account of such Loss. The Purchasers Indemnitees shall seek full recovery under all insurance policies covering any Loss or collateral sources to the same extent as they would if such Loss were not subject to indemnification hereunder Seller and the Purchasers, the Company and the Subsidiaries Shareholders shall not cancel any insurance policies in effect for periods prior be required to the Closing. In the event that an insurance recovery or indemnification payment is received by the Purchasers indemnify Buyer Indemnitees with respect to any Loss Claim for which any such Person has been indemnified hereunderindemnification arising out of, then a refund equal in connection with or relating to matters described in Section 9.2(a) unless and until the aggregate amount of all such Claims for such matters exceeds six hundred fifty thousand dollars ($650,000) (the recovery or payment (net of direct collection expenses and Taxes) shall be made promptly to the Sellers"Basket"), in which refund shall be distributed based on the proportion of the Loss borne by each such Seller, or, if a Loss has not yet been determined or paid by the Sellers, the Sellers’ indemnification obligations in respect of such Loss shall be reduced by the aggregate amount of the insurance recovery or indemnification payment (net of direct collection expenses);
(ii) no adjustment shall be made as a result of any multiple, increase factor, or any other premium over the value paid by the Purchasers at Closing whether or not such multiple, increase factor or other premium had been used by Purchasers at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Purchased Units and the Shares or its final purchase price for the Purchased Units and the Shares;
(iii) except for Claims arising under Section 3.5 or in respect of Operating Wind Project Liabilities, the Purchasers event Buyer Indemnitees will not be entitled to recover Losses in excess of the first $200,000 Basket arising out of, in aggregate Losses (as limited by the applicable provisions of this Section 7.2(c) connection with or relating to such matters pursuant to Section 7.2(b), which amount shall serve as a one-time deductible against Losses9.4(c) below; provided, however, that thereafter the Basket shall not apply to any breach of the Fundamental Representations or any breach of Seller's or Shareholders' representations and warranties constituting a Willful Breach.
(b) Except for Exempted Losses, the aggregate amount required to be paid by Seller Indemnitees pursuant to Section 9.2(a) shall not exceed in the aggregate six hundred fifty thousand dollars ($650,000) (the "Indemnification Cap").
(c) From and after the Closing, the sole and exclusive sources of payment of any Losses based upon, arising out of, with respect to, or by reason of an event or occurrence described in Section 9.2(a), shall be (i) first, Buyer’s own funds until the amount of Losses equals the Basket, (ii) second, the then-remaining Escrow Funds up to an amount equal to the Indemnification Cap, (iii) third, the R&W Insurance Policy and (iv) fourth, solely with respect to Exempted Losses, by payment from the Seller Indemnitees.
(d) The aggregate amount of all Losses that are individually less than $50,000 for which Seller and Shareholders shall be liable for Exempted Losses shall be limited to the Purchasers Purchase Price.
(e) Payments by Seller Indemnitees will not be entitled to recover for such Losses pursuant to Section 7.2(b9.2 in respect of any Losses shall be reduced by an amount equal to any insurance proceeds and any indemnity, contribution or other similar payment (net of the out-of-pocket costs reasonably incurred in obtaining such payment and any related increase in insurance costs or premiums caused as a result of such claim) until actually received by Buyer Indemnitees in respect of any such Loss. The Buyer Indemnitees shall use commercially reasonable efforts (which shall not include commencing any litigation or incurring material expenses) to recover under insurance policies (including the R&W Insurance Policy) all amounts of Losses that would otherwise be recoverable from the Seller and/or the Shareholders under this Article IX.
(f) For the purposes of determining any inaccuracy in or breach of, or the amount of any Losses related to the inaccuracy in or breach of, any of the representations or warranties as set forth in this Agreement, the representations and warranties set forth in this Agreement shall be considered without regard to any qualifications as to "material", "materiality" or "Company Material Adverse Effect" (or any correlative terms) set forth therein. In no event shall any Seller Indemnitee be liable to any Buyer Indemnitees for any punitive, incidental, consequential, special or indirect damages, including loss of future revenue or income or profit, loss of business reputation or opportunity relating to the breach or alleged breach of this Agreement, or diminution of value or any damages based on any type of multiple. P:01274586-13:86B79.003 69 I\14146902.20
(g) Subject to the limitations on indemnification obligations set forth in this Section 9.4, and solely with respect to (i) Exempted Losses and (ii) Losses indemnified pursuant to Section 9.2(b) – (f), Buyer Indemnitees shall have the right to satisfy any unpaid indemnification obligation by offsetting or withholding such amount against a portion of the Contingent Payment to be paid to Seller pursuant to the terms of Section 3.5; provided, that Buyer Indemnitees shall not be permitted to offset or withhold any amounts that are individually less than $50,000 are equal subject to or exceed $300,000 a Contested Claim (as defined in the aggregate Escrow Agreement) under the Escrow Agreement, to the extent (and then only to the extent) that there are sufficient funds remaining in the Escrow Account to pay and satisfy in full such Contested Claim. For the avoidance of doubt, in respect of any portion of the Contingent Payment that is off-set or withheld, if any such Claims are finally resolved in favor of Seller Indemnitees (whether by mutual agreement or otherwise), or if the portion of the Contingent Payment that is off-set or withheld by Buyer exceeds the amount ultimately payable to Buyer Indemnitees in respect of such Claim, Buyer shall promptly pay to Seller Indemnitees the excess amount off-set or withheld in respect of such Claim but only to the extent that such amount is otherwise payable by Buyer in accordance with the terms of such excess);this Agreement plus interest at a rate of eight percent (8%) per annum at the date of off-set until the date of payment.
(ivh) except for Claims arising under Sections 3.1Each Buyer Indemnitee shall take, 3.2and shall cause its Affiliates to take, 3.3all commercially reasonable steps to mitigate any Loss upon becoming aware of any event or circumstance that would be reasonably expected to, 3.4or does, 3.5give rise thereto, 3.7, 4.1, 4.5, 4.10, 4.15(d), 4.22, 4.27 and in respect of Operating Wind Project Liabilities (in which case the Sellers’ aggregate liability hereunder for all such Losses will not be permitted to exceed the Purchase Price), the Purchasers Indemnitees will not be entitled to recover Losses pursuant to Section 7.2(b) including incurring costs only to the minimum extent necessary to remedy the Sellers aggregate liability hereunder for all breach that gives rise to such Losses would otherwise exceed twenty percent (20%) of the Purchase Price (as adjusted pursuant to Section 2.6) if the Claim pertains to Section 4.11, 4.12, 4.15, 4.16, 4.17, 4.23, 4.25, or 4.26 and ten percent (10%) of the Purchase Price for all other items not listed in the immediately preceding clause or in the lead-in qualifier to this subsection (the “Liability Cap”) in the aggregate, and each Seller’s liability for Losses hereunder shall not exceed its Percentage Share of the Liability Cap;
(v) except for Claims arising under Section 3.5, the Purchasers Indemnitees shall not be entitled to recover Losses pursuant to Section 7.2(b) if (A) the Purchasers (or any director or officer of Purchasers who is not a Seller or a director, officer or consultant of the Company prior to Closing) had actual knowledge at any time on or prior to the Closing Date of the facts, events or conditions constituting or resulting in such breach of representation, warranty or covenant or (B) the Purchasers could have mitigated or prevented such Loss using commercially reasonable efforts; and
(vi) except for Claims arising under Section 3.5, with respect to a particular Loss, each Seller shall only be required to indemnify the Purchasers Indemnitees up to the amount of such Loss multiplied by such Seller’s Percentage Share. The Purchasers, for themselves and for the Purchasers Indemnitees, unconditionally waives any right it or they may have to hold any Seller jointly liable for the obligations of any other Seller. The aggregate liability of any Seller under this Section 7.2 shall not exceed such Seller’s Percentage Share of the Purchase Price (as adjusted pursuant to Section 2.6) for the Purchased Units and the Shares sold by such Seller to the Purchasers hereunder.
Appears in 1 contract