Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations: (a) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), with respect to such Losses; (b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement. (c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company); (d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement; (e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement; (f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement; (g) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value; (h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value; (i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person; (j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value; (k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i); (l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter; (m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and (n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreement.
Appears in 3 contracts
Sources: Contribution Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.), Contribution Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.), Contribution Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.)
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e10.2(c) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i10.2(b)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (wx) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers), ) or (xy) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.;
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i10.2(c)(i) or Section 10.2(d)(ii10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(d)(i10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), ) or Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), ) and Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement12.15) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement);
(fe) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii10.2(c)(i) or Section 10.2(e)(i10.2(c)(ii) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii10.2(c)(i) and Section 10.2(e)(i10.2(c)(ii) (as limited by the provisions of Section 10.4(a), ) and Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement12.15) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement);
(gf) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i10.2(c)(i) and Section 10.2(d)(ii10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i10.2(c)(i) and Section 10.2(d)(ii10.2(c)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(ig) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreement.
Appears in 3 contracts
Sources: Contribution Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.), Contribution Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.), Contribution Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.)
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Purchaser Indemnitees shall not be entitled to recover in respect of any individual claim receive amounts pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii6.2(a) or Section 10.2(c)(i) unless the aggregate (other than for Losses relating to breaches of the Special Representations) for any individual item or series of related items based on substantially the same facts and circumstances where the Losses relating to such item or series of related items based on substantially the same facts and circumstances are less than $10,000, and such Losses shall not be applied against the Basket.
(b) Seller shall not have any obligation to indemnify Purchaser Indemnitees with respect to Losses arising out under Section 6.2(a) (other than pursuant to breaches or inaccuracies in any of such claim the Special Representations) until the aggregate amount of all Losses thereunder exceeds $50,000 (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000the “Basket”); provided, however, that this 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 10.4(b) shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies6.2(a), Section 3.3 (Authority) or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees Seller shall not be entitled have any obligation to recover in indemnify Purchaser Indemnitees with respect of any individual claim to Losses arising under Section 6.2(a) (other than pursuant to Section 10.2(d)(ibreaches or inaccuracies in any of the Special Representations) or Section 10.2(d)(ii) unless the in excess of an aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) 1,000,000 (the “Cap”). Seller shall not apply have any obligation to any claim for indemnification indemnify Purchaser Indemnitees with respect to Losses arising under Section 6.2(a) pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach or inaccuracy of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) a Special Representation or Section 5.10 (New Company);6.2(b) in excess of an aggregate amount equal to $2,000,000.
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) Notwithstanding anything to the extent such claim is based upon a breach of the representations and warranties set forth contrary in Section 5.2 (Authority) of the Barceloneta Contribution this Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement each Party’s rights to indemnification and any other recovery under law or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except equity with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c)Losses based upon fraud, the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectivelywillful misconduct or intentional misrepresentation, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) limited in excess any way, including by any of the Aggregate Unit Value;
(h) the aggregate liability terms and conditions of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreement.
Appears in 2 contracts
Sources: Asset Purchase Agreement (Cleanspark, Inc.), Asset Purchase Agreement (Pioneer Power Solutions, Inc.)
Limitations on Indemnification Obligations. The rights to indemnification pursuant Notwithstanding anything to the provisions of contrary contained in this Agreement (but except as set forth in the proviso in this Section 10.2 are subject to the following limitations:10.03):
(a) no Purchaser Indemnitee shall be entitled to recover under Section 10.02(a)(i) or Section 10.02(b)(i) unless and until the aggregate amount of any and all Losses recoverable pursuant (after giving effect to Section 10.2(athe De Minimis Threshold) suffered by Purchaser Indemnitees thereunder exceeds one percent (1%) of the Cash Consideration (the Deductible), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) whereupon such Purchaser Indemnitee shall be determined net entitled to recover only such Losses in excess of any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), with respect to such LossesDeductible;
(b) the Parent Indemnitees no Purchaser Indemnitee shall not be entitled to recover under Section 10.02(a)(i) or Section 10.02(b)(i) with respect to any single claim or series of related claims unless and until the amount of Losses suffered by such Purchaser Indemnitee in respect of any individual such claim or series of related claims exceeds $50,000 (the De Minimis Threshold); and
(c) the Sellers’ maximum aggregate liability pursuant to Section 10.2(a)(i), 10.02(a)(i) and Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b10.02(b)(i) shall not exceed an amount equal to five percent (5%) of the Cash Consideration (the Cap); provided that the limitations in clauses (a), (b) and (c) above shall not apply with respect to any claim for indemnification pursuant to (w) Section 10.2(a)(i) under Article VII or in respect of Losses to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon arising from a breach of a representation Fundamental Representation or Fraud on the part of any Seller, and warranty set forth in Section 4.2 (Authority)such event, Section 4.4 (Title) or Section 4.6 (Brokers)other than with respect to the Fundamental Representations contained in Article III for which each Seller shall be severally, and not jointly, liable for the full amount of such Losses, the Sellers shall be jointly and severally liable to the Purchaser Indemnitees for the full amount of such Losses. Notwithstanding the foregoing and anything contained in this Agreement to the contrary, (y1) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim each Seller’s maximum aggregate liability pursuant to Section 10.2(d)(i10.02(a) or Section 10.2(d)(iiand (b) unless shall not exceed the portion of the Cash Consideration actually received by such Seller; and (2) the Sellers’ combined maximum aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or liability under this Agreement shall not exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach Cash Consideration plus the value of the representations and warranties set forth Consideration Shares (calculated in accordance with Section 5.2 (Authority2.01(d), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreement.
Appears in 2 contracts
Sources: Unit Purchase Agreement, Unit Purchase Agreement (KLX Energy Services Holdings, Inc.)
Limitations on Indemnification Obligations. The rights to indemnification pursuant (a) Subject to the provisions of Section 10.2 8.4(b) below, the rights of the Buyer Indemnitees to indemnification pursuant to Section 8.2(a) are subject to the following limitations:
(ai) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Buyer Indemnitees shall not be entitled to recover in respect of for any individual claim particular Loss pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i) unless the aggregate Losses relating to or arising out of such claim clause (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokersi), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Titleii) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Companyiv) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii8.2(a) unless the aggregate Losses relating to such Loss (or arising out group of such claim (together with any related claims Losses) equals or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to exceeds $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company)250,000;
(dii) the Barceloneta Member Buyer Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Indemnitees shall will not be entitled to recover Losses pursuant to Section 10.2(a)(iclause (i), (ii) or (iv) of Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi8.2(a) until the aggregate total amount which the Parent Buyer Indemnitees would recover under such sections clauses (as limited by the provisions i), (ii) and (iv) of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i8.2(a) (as limited by the provisions of Section 10.4(aSections 8.4(a)(i) and 8.4(c) ), but for this Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority8.4(a)(ii), Section 5.6 exceeds $10,000,000 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach "Threshold"), at which time all amounts from the first dollar of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;Loss may be recovered; and
(giii) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not Buyer Indemnitees will be entitled to recover Losses pursuant to Section 10.2(d)(iclauses (i), (ii) and (iv) of Section 10.2(d)(ii8.2(a) in excess of the Aggregate Unit Value;
(h) the an aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess no more than 30% of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;Amount.
(jb) Notwithstanding anything to the aggregate liability contrary contained herein, the provisions of any Barceloneta Contributor pursuant to Section 10.2(c)(i8.4(a) shall not exceed the aggregate consideration actually received by such Person pursuant apply to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover any Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of resulting from a breach of a representation or warranty contained in any of Section 3.1 (Organization of the Company), Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (TitleAuthorization), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 3.3 (Capitalization of the Company) (other than the last sentence of the Barceloneta Contribution Agreement and Section 4.4 3.3), Section 3.14 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(iTaxes) and Section 10.2(a)(vi3.26 (Brokers), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);.
(lc) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash The amount of any and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was all Losses indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum this Article 8 will be determined net of (i) amounts actually received by the Indemnified Party under any amount previously so paid insurance policy with respect to such Losses (except to the extent that recovery under such insurance policy results in a premium increase or on behalf of such Parent Indemnitee in respect of such matter and other damage to the Indemnified Party), (ii) any amount expended Tax benefit actually realized by the Representative in pursuing Indemnified Party arising from the facts or defending circumstances giving rise to such Losses and (iii) any claim arising out of such matter;
(m) Following recoveries obtained by the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees Indemnified Person from any other third party. Each Indemnified Party shall take exercise commercially reasonable steps efforts to mitigate obtain such amounts, benefits and recoveries. If any Losses such amounts, proceeds or recoveries are received by an Indemnified Party with respect to which indemnification may be requested under this Article 10 and any Losses after an Indemnifying Party has made a payment to the costs associated with such mitigation shall be included in the Losses Indemnified Party with respect thereto, the Indemnified Party shall pay to which indemnification may be requested under this Article 10; and
the Indemnifying Party the amount of such amounts, benefits or recoveries (n) In no event shall (x) a Parent Indemnitee be entitled up to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach the amount of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution AgreementIndemnifying Party's payment).
Appears in 2 contracts
Sources: Equity Purchase and Merger Agreement (Refco Information Services, LLC), Equity Purchase and Merger Agreement (Refco Inc.)
Limitations on Indemnification Obligations. The rights of the Indemnified Parties to indemnification pursuant to the provisions of Section 10.2 7.2(a) and Section 7.2(b) are subject to the following limitationsprovisions:
(a) None of the Indemnified Parties shall be entitled to recover for any particular Loss pursuant to Section 7.2(a)(i) or Section 7.2(b)(i) (except in the case of Fraud) unless such Loss equals or exceeds $10,000 (and no such Loss less than $10,000 shall be applied against the Deductible).
(b) The Indemnified Parties shall not be entitled to recover Losses pursuant to Section 7.2(a)(i) or Section 7.2(b)(i) (except in the case of Fraud) until the total amount which the Indemnified Parties would recover under Section 7.2(a)(i) or Section 7.2(b)(i), as applicable, in the aggregate (as limited by the other provisions hereof), but for this Section 7.4(b), exceeds $1,192,500 (the “Deductible”), in which case the applicable Indemnified Parties shall only be entitled to recover Losses in excess of such amount, subject to the other limitations herein.
(c) Except, in each case, in the case of Fraud, (i) the maximum liability of Seller to the Purchaser Indemnitees with respect to any Losses of the Purchaser Indemnitees indemnifiable pursuant to Section 7.2(a)(i) shall not exceed $1,192,500 and (ii) the maximum liability of Seller or Purchaser, as applicable, for indemnifiable Losses pursuant to this Article VII shall not exceed the Aggregate Purchase Price.
(d) The amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) indemnifiable hereunder shall be determined net of any amounts actually recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, Indemnified Parties under insurance policies (excluding, in the case of the Purchaser Indemnitees, the Representation and Warranty Insurance Policy) or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement)) with respect to such Losses (which amounts actually recovered by the Indemnified Parties shall be calculated, including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect net of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i) unless the aggregate Losses relating to or arising out of reasonable out-of-pocket costs and any Taxes incurred in connection with such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(arecovery). In any case where a Parent Purchaser Indemnitee actually recovers, under insurance policies (excluding, in the case of the Purchaser Indemnitees, the Representation and Warranty Insurance Policy) or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee Indemnified Party was previously indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c)hereunder, such Parent Indemnitee Indemnified Party shall promptly pay over to the Representative (for further distribution Responsible Party a refund equal to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the reasonable out-of-pocket costs and expenses and any Taxes incurred by such Parent Indemnitee in procuring connection with such recovery), if and solely to the extent that such amount of recovery would have reduced the amount to which the Indemnified Party would have been entitled pursuant to the first sentence of this Section 7.4(d), but not in excess of the sum aggregate amount previously paid to the Indemnified Parties hereunder in respect of such matter.
(ie) The Purchaser Indemnitees shall use commercially reasonable efforts to recover under the Representation and Warranty Insurance Policy, to the extent available and subject to applicable retention and other coverage limitations thereunder, for any Losses for Indemnified Taxes pursuant to Section 7.2(a)(iv) or for any Losses pursuant to Section 7.2(a)(ii) prior to seeking indemnification from Seller under this Agreement; provided that nothing in this Section 7.4(e) shall limit the Purchaser Indemnitees’ rights to indemnification pursuant to Section 7.2(a)(iv) or pursuant to Section 7.2(a)(ii) to the extent that recovery is not available under the Representation and Warranty Insurance Policy for any reason with respect to all or any portion of such Losses. The amount of any and all indemnifiable Losses for Indemnified Taxes pursuant to Section 7.2(a)(iv) or for any indemnifiable Losses pursuant to Section 7.2(a)(ii) shall be determined net of any amounts actually recovered by the Indemnified Parties under the Representation and Warranty Insurance Policy with respect to such Losses (which amounts actually recovered by the Indemnified Parties shall be calculated, in each case, net of any reasonable out-of-pocket costs and any Taxes incurred in connection with such recovery). In any case where a Purchaser Indemnitee actually recovers under the Representation and Warranty Insurance Policy any amount in respect of a matter for which such Indemnified Party was previously indemnified hereunder, such Indemnified Party shall promptly pay over to the Responsible Party a refund equal to the amount so recovered (after deducting therefrom the amount of the reasonable out-of-pocket costs and expenses and any Taxes incurred in connection with such recovery), if and solely to the extent that such amount of recovery would have reduced the amount to which the Indemnified Party would have been entitled pursuant to the first sentence of this Section 7.4(e), but not in excess of the aggregate amount previously paid to the Indemnified Parties hereunder in respect of such matter; provided that for the avoidance of doubt, Purchaser shall not be required to repay to Seller any amounts recovered under the Representation and Warranty Insurance Policy to the extent such repayment would, after taking into account the deductible and other limitations under the Representation and Warranty Insurance Policy, have the effect of reducing the amount of indemnifiable Losses actually recovered by Purchaser with respect to such claim below the amount of indemnified Losses to which Purchaser would otherwise be entitled to recover from Seller pursuant to this Article VII, but for this Section 7.4(e). Purchaser covenants and agrees that the Representation and Warranty Insurance Policy will expressly exclude any right of subrogation against the Seller Group (other than with respect to Fraud).
(f) The Indemnified Parties shall be entitled to recover for a Loss only once under Article VII even if a claim or claims for indemnification in respect of such Loss has been made as a result of a breach of more than one representation, warranty, covenant or agreement contained in this Agreement.
(g) The Indemnified Parties shall not be entitled to recover any Loss to the extent such Loss was included in or otherwise expressly taken into account in the determination of the Aggregate Purchase Price.
(h) The rights to indemnification of the Indemnified Parties under this Article VII shall not be affected or deemed waived by reason of any investigation made by or on behalf of such Parent Indemnitee in respect any party hereto (including by any of such matter party’s advisors or representatives) or by reason of the fact that such party or any of such advisors or representatives knew or should have known that any representation or warranty is, was or might be inaccurate.
(i) For purposes of determining the breach or inaccuracy of any representation or warranty of the Company set forth in Article III or the Seller set forth in Article IV and in calculating the amount of any Losses attributable thereto, any “materiality,” “Material Adverse Effect,” or similar qualifications in such representations and warranties shall be disregarded, except that the foregoing shall not apply to (i) the use of the term “Material Contract” in any representation or warranty or (ii) any amount expended by the Representative representation or warranty set forth in pursuing Section 3.4(a) or defending any claim arising out of such matter;Section 3.6(a).
(mj) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member The Purchaser Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee only be entitled to recover under this Article VII for any breach of any representations and warranties regarding Losses pursuant for Taxes with respect to Section 10.2(b)(i) in respect of taxable periods, or portions thereof, that end on or before the Closing Date, except to the extent such Losses arise from or are attributable to a breach of the representations and or warranties contained in Article 3 hereof Sections 3.15(e), 3.15(k) or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreement3.15(l).
Appears in 2 contracts
Sources: Purchase Agreement, Purchase Agreement (Hub Group, Inc.)
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) Notwithstanding the foregoing, or anything in this Agreement to the contrary, (i) the aggregate amount payable to the Parent Indemnified Parties with respect to claims under Section 12.2 shall not exceed fifty million dollars ($50,000,000) (the “Cap”) and (ii) no indemnity shall be payable to any Parent Indemnified Party with respect to any claim under Section 12.2(a) unless and until the aggregate of any and all Losses recoverable pursuant to for which claims are made under Section 10.2(a12.2(a) exceeds two million five hundred thousand dollars ($2,500,000) (the “Basket”), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, then only to the extent includable such Losses exceed the Basket; provided, however, that the foregoing clauses (i) and (ii) shall not be applicable to, and the Parent Indemnified Parties shall be indemnified in indemnifiable Losses)full for, with respect Losses (x) arising out of, relating to such Losses;or resulting from breaches or inaccuracies in the representations and warranties contained in the Company Fundamental Representations and the Designated Monitor Fundamental Representations, or (y) Losses arising out of or resulting from fraud or intentional misrepresentation by the Company.
(b) Notwithstanding the Parent Indemnitees foregoing, or anything in this Agreement to the contrary, (i) the aggregate amount payable to Company Indemnified Parties with respect to claims under Section 12.3 shall not exceed the Cap and (ii) no indemnity shall be entitled payable to recover in the Company Indemnified Parties with respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim under Section 12.3(a) unless and until the aggregate of all Losses for indemnification pursuant to (wwhich a claim is made under Section 12.3(a) Section 10.2(a)(i) exceeds the Basket, and then only to the extent such claim is based upon a breach of Losses exceed the Basket; provided, however, that the foregoing clauses (i) and (ii) shall not be applicable to, and the Company Indemnified Parties shall be indemnified in full for, Losses (x) arising out of, relating to or resulting from breaches or inaccuracies in the representations and warranties set forth contained in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) Parent Fundamental Representations or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach Losses arising out of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement resulting from fraud or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement intentional misrepresentation by Parent or Section 4.6 (Brokers) of the Barceloneta Contribution AgreementMerger Sub.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to Section 10.2(d)(i) Notwithstanding anything to the extent such claim is based upon a breach of the representations and warranties set forth contrary contained in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such no Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested liable under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect XII for any consequential, punitive, special, incidental or indirect damages, including lost profits or diminution of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreementvalue.
Appears in 2 contracts
Sources: Acquisition Agreement (EverBank Financial Corp), Acquisition Agreement (EverBank Financial Corp)
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e10.2(c) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i10.2(b)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000***25; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (wx) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers), ) or (xy) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.;
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i10.2(c)(i) or Section 10.2(d)(ii10.2(c)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000***26; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to (x) Section 10.2(d)(i10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);; 25 Certain portions have been omitted in connection with an application for confidential treatment therefor. 26 Certain portions have been omitted in connection with an application for confidential treatment therefor.
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), ) or Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), ) and Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement12.15) exceeds $5,000,000 ***27 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement);
(fe) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii10.2(c)(i) or Section 10.2(e)(i10.2(c)(ii) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii10.2(c)(i) and Section 10.2(e)(i10.2(c)(ii) (as limited by the provisions of Section 10.4(a), ) and Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement12.15) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i10.2(c)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement);
(gf) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i10.2(c)(i) and Section 10.2(d)(ii10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i10.2(c)(i) and Section 10.2(d)(ii10.2(c)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(ig) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreement.
Appears in 2 contracts
Sources: Contribution Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.), Contribution Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.)
Limitations on Indemnification Obligations. The rights to indemnification pursuant (a) Notwithstanding anything in Section 6.2 to the provisions of Section 10.2 are subject to the following limitationscontrary:
(ai) the amount of any and all indemnifiable Losses recoverable pursuant to Section 10.2(a), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) shall be determined net of any amounts actually recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, Indemnified Party under insurance policies or other collateral sources (such as contractual indemnities of any Person Indemnified Party which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), ) with respect to such LossesLosses (net of any costs of recovery, insurance deductibles, chargebacks and to the extent reasonably quantifiable, increases in insurance premiums resulting from such insurance claim);
(bii) the Parent Buyer Indemnitees shall not be entitled to recover in respect of for any individual claim Losses pursuant to Section 10.2(a)(i), 6.2(a)(i) and Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i6.2(a)(ii) unless and until the aggregate amount of such Losses relating pursuant to Section 6.2(a)(i) and Section 6.2(a)(ii) equals or exceeds Two Hundred Fifty Thousand Dollars ($250,000) (the “Deductible”); provided that if the aggregate amount of such Losses (limited as provided in Section 6.5(a)) pursuant to Section 6.2(a)(i) and Section 6.2(a)(ii) equals or exceeds the Deductible, the Buyer Indemnitees shall be entitled to recover those Losses in excess of the Deductible, subject to the limitations in Section 6.5(a)(iii);
(iii) the maximum amount of indemnifiable Losses arising out of such claim (together with any related claims or other claims which arise resulting from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties causes set forth in Section 3.2 (Capitalization 6.2(a)(i) which may be recovered from the Company, and the maximum amount of indemnifiable Losses arising out of or resulting from the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty causes set forth in Section 4.2 6.2(b)(i) which may be recovered from Buyer, whether pursuant to any single claim or multiple claims, shall not exceed a total amount equal to five percent (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company5%) of the Barceloneta Contribution Agreement, Section 3.3 Purchase Price (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.“Cap”);
(civ) the Member Company Indemnitees shall not be entitled to recover in respect of for any individual claim Losses pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii6.2(b)(i) unless and until the aggregate Losses relating to or arising out amount of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification Losses pursuant to Section 10.2(d)(i6.2(b)(i) equals or exceeds the Deductible; provided that if the aggregate amount of such Losses pursuant to Section 6.2(b)(i) equals or exceeds the extent such claim is based upon a breach of Deductible, the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Company Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover those Losses in excess of the Threshold; providedDeductible, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) subject to the extent such claim is based upon a breach of the representations and warranties limitation set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii6.5(a)(iii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a6.5(a)(iv), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;and
(gv) except with respect to in determining the amount of any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including Loss, no adjustment shall be made as a result of any waiver multiple, increase factor, or any other premium over fair market, book or historical value which may have been paid by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess Buyer as part of the Aggregate Unit Value;
(h) the aggregate liability of Parent REITPurchase Price whether or not such multiple, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor increase factor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received other premium has been used by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, Buyer at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claimsof, or series of related in connection with, calculating or substantially similar facts, conditions, conduct preparing its bid or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) any preliminary or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreementfinal Purchase Price.
Appears in 2 contracts
Sources: Asset Purchase Agreement, Asset Purchase Agreement (Zayo Group LLC)
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) the amount of any and all Losses recoverable pursuant to Notwithstanding Section 10.2(a)5.1, Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) there shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, no liability for indemnification under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i5.1(a) unless the aggregate amount of Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 50,000 (the “Threshold”), in at which case, time the Parent Indemnitees shall only Seller Parties will be entitled obligated to recover Losses indemnify the
(a) in excess of the Threshold; provided, provided that the Threshold shall not apply to the misrepresentation, breach or inaccuracy of any claim representation or warranty made by any Seller Party in any of the following Sections: 2.1 (due organization), 2.2(a) (authorization; validity), 2.3 (capitalization), 2.8 (assets)(and other provisions relating to title to the Acquired Assets), 2.21 (absence of claims; business relationships with affiliates), 2.22 (certain matters relating to the Holding Companies), and 2.24 (brokers and agents) (the “Seller Fundamental Representations”).
(b) Notwithstanding Section 5.2, there shall be no liability for indemnification pursuant to (xunder Section 5.2(a) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until unless the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) Losses thereunder exceeds the 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 which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses Section 5.2(a) in excess of the Threshold; provided, provided that the Threshold shall not apply to the misrepresentation, breach or inaccuracy of any claim representation or warranty made by Buyer in any of the following Sections: 3.1 (xdue organization), 3.2(a) for (authorization; validity) and 3.3 (brokers and agents) (the “Buyer Fundamental Representations”).
(c) The indemnification pursuant obligations of the Seller Parties under Section 5.1(a) shall be limited to Section 10.2(d)(ian amount (the “Cap”) equal to the extent “Net Cash Surplus” reflected on the Funds Flow.
(d) The indemnification obligations of Buyer under Section 5.2(a) shall be limited to an amount equal to the Cap.
(e) 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 claim 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 such breach shall be preserved without regard to its knowledge of such information, it being agreed that each Party, in entering into this Agreement, has bargained for the correctness of each representation, warranty, covenant and agreement of the other Parties contained herein.
(f) No Claim shall be brought or maintained by any Buyer Indemnified Party or any of their respective successors or permitted assigns against any present or former officer, director, employee or Affiliate of any party hereto which is not otherwise expressly identified as a Party, and no recourse shall be brought or granted against any such present or former officer, director, employee or Affiliate, by virtue of or based upon a any alleged misrepresentation or inaccuracy in or breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach any of the representations and warranties set forth in Section 5.2 (Authority) representations, warranties, agreements or covenants of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Seller Parties contained in this Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;any Transaction Document delivered by a Seller Party hereunder.
(g) except with respect to any claims resulting from the failure to complete the Financing pursuant Notwithstanding anything to the terms contrary in this Agreement, for purposes of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) determining (x) whether there has been a breach requiring the Escrow Units Seller Parties to indemnify as provided in Section 5.1 and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect thereto, each representation, warranty, covenant and agreement made by any Seller Party, whether made herein (other than the last sentence of Section 2.4(c) (fraud relating to which indemnification may books and records), Section 2.5 (absence of certain changes), the last sentence of Section 2.12(a) (investigations relating to fraud), Section 2.16(a)(ix) (certain contracts) and Section 2.23 (disclosure)) or in any other document, agreement or instrument delivered in connection herewith, shall be requested under this Article 10; and
deemed to have been made without any qualifications or limitations as to materiality (n) In no event shall (x) including any qualifications or limitations made by reference to a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution AgreementMaterial Adverse Change).
Appears in 1 contract
Limitations on Indemnification Obligations. (a) The rights to indemnification obligations of the Key Securityholders pursuant to the provisions of Section 10.2 8.1 are subject to the following limitations:
(ai) the amount of any Key Securityholders shall be required to indemnify and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b), Section 10.2(c), Section 10.2(dhold harmless under Sections 8.1(a)(i) and 8.1(b)(i) and Section 10.2(e8.1(a)(iii) shall be determined net of (but only as to the failure to pay, perform or discharge any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources Excluded Liability described in clauses (such as contractual indemnities of any Person which are contained outside of this Agreemente), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Lossesf), (g), (h) and
(i) of Section 2.10) with respect to such Losses;
Losses and Expenses incurred by Parent Group Members (b) the Parent Indemnitees shall not be entitled to recover in respect other than Losses and Expenses incurred as a result of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i) to the extent such claim is based upon a breach inaccuracies of the representations and warranties set forth contained in Sections 4.1, 4.2, 4.3, 4.7, 4.15, 5.1, 5.2 and 5.3 (the “Securityholder Excluded Representations”), as to which this subsection (i) shall have no effect) only if the aggregate amount of such Losses and Expenses exceeds $750,000 and then only to the extent of such excess;
(ii) the aggregate amount that the Key Securityholders shall be required to indemnify and hold harmless under Sections 8.1(a)(i) and 8.1(b)(i) (other than Losses or Expenses incurred as a result of inaccuracies of any Securityholder Excluded Representation, as to which this subsection (ii) shall have no effect) shall not exceed an amount equal to the sum of (x) $11,250,000 and (y) fifteen percent (15%) of the amount of the Contingent Payment, if any, pursuant to Section 2.8; provided that no Key Securityholder shall have any liability for Losses or Expenses under Section 8.1 (other than Losses or Expenses incurred as a result of inaccuracies of any Securityholder Excluded Representation or Losses or Expenses incurred as a result of any breach or failure to perform by such Key Securityholder of such Key Securityholder’s covenants, agreements or obligations in Section 3.2 (Capitalization 7.1, as to all of which this proviso shall have no effect) in excess of an amount equal to such Key Securityholder’s Securityholder Percentage of the sum of (x) $75,000,000 and (y) the amount of the Contingent Payment, if any, pursuant to Section 2.8;
(iii) the indemnification provided for in Sections 8.1(a)(i) and 8.1(b)(i) shall terminate on the last day of the eighteenth (18th) month following the Closing Date (and no claims shall be made by any Parent Group CompaniesMember under Sections 8.1(a)(i) or 8.1(b)(i) thereafter), except that the indemnification by the Key Securityholders shall continue as to: (A) the Securityholder Excluded Representations (other than the representations and warranties contained in Sections 4.7 and 4.15), as to which no time limitation shall apply, (B) the representations and warranties contained in Sections 4.7 and 4.15, which shall terminate thirty (30) days following the expiration of the applicable statute of limitations, (C) the representations and warranties contained in Section 3.3 4.12, which shall terminate on the last day of the thirty-sixth (Authority36th) month following the Closing Date and (D) any Losses or Expenses in connection with or arising from any claim of which any Parent Group Member has notified the Securityholder Representative in accordance with the requirements of Section 3.15 8.3 on or prior to the date such indemnification would otherwise terminate in accordance with this Section 8.5, as to which the obligation of the Key Securityholders shall continue until the liability of the Key Securityholders shall have been determined pursuant to this Article VIII, and Key Securityholders shall have reimbursed all Parent Group Members for the full amount of any such Losses and Expenses determined to be payable to such Parent Group Members in accordance with this Article VIII;
(Brokersiv) after the later of (A) the fourth (4th) anniversary of the Closing Date and (B) the date on which RLHI is dissolved and liquidated and all of its assets are distributed to its partners (the later of such dates being the “RLH Expiration Date”), (x) the obligations of the RLH Funds provided for in Section 10.2(b)(i8.1(a) shall terminate (and no claims against the RLH Funds may be made by any Parent Group Member under
Section 8.1 (a) thereafter) and (y) the obligations of each of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ provided for in Section 8.1(a)(iii) shall be several (and not joint) in proportion to his Securityholder Percentage, except that in each case the indemnification by the Key Securityholders shall continue as to any Losses or Expenses in connection with or arising from any claim of which any Parent Group Member has notified the Securityholder Representative in accordance with the requirements of Section 8.3 or on prior to the extent RLH Expiration Date, as to which the obligation of the Key Securityholders shall continue (without giving effect to any provision of this subsection (iv)) until the liability of the Key Securityholders shall have been determined pursuant to this Article VIII, and the Key Securityholders shall have reimbursed all Parent Group Members for the full amount of any such claim is based upon a breach of a representation Losses and warranty set forth Expenses determined to be payable to such Parent Group Members in accordance with this Article VIII;
(v) the indemnification provided for in Section 4.2 8.1(a)(iii) shall terminate on the sixth (Authority)6th) anniversary of the Closing Date (and no claims may be made by any Parent Group Member under Section 8.1(a)(iii) thereafter) except that the indemnification by the Key Securityholders shall continue as to any Losses or Expenses in connection with or arising from any claim of which any Parent Group Member has notified the Securityholder Representative in accordance with the requirements of Section 8.3 on or prior to the sixth (6th) anniversary of the Closing Date, as to which the obligation of the Key Securityholders shall continue until the liability of the Key Securityholders shall have been determined pursuant to this Article VIII, and the Key Securityholders shall have reimbursed all Parent Group Members for the full amount of any such Losses and Expenses determined to be payable to such Parent Group Members in accordance with this Article VIII; and
(vi) notwithstanding anything to the contrary in this Agreement, any indemnification obligations of the Key Securityholders pursuant to Section 4.4 (Title8.1(a) or Section 4.6 8.1(b) must first be drawn from the Escrow Account.
(Brokers), (yb) Section 10.2(a)(vi) The obligations of Parent pursuant to the extent such claim is based upon provisions of Section 8.2 are subject to the following limitations:
(i) Parent shall be required to indemnify and hold harmless under Sections 8.2(a)(i) with respect to Losses and Expenses incurred by Securityholder Group Members (other than Losses and Expenses incurred as a breach result of inaccuracies of the representations and warranties set forth contained in Section 3.2 Sections 6.1, 6.2, 6.3 and 6.4 (Capitalization the “Parent Excluded Representations”) , as to which this subsection (i) shall have no effect) only if the aggregate amount of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) such Loss and Expense exceeds $750,000 and then only to the extent of such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.excess;
(cii) the Member Indemnitees aggregate amount that Parent shall be required to indemnify and hold harmless under Sections 8.2(a)(i) (other than Losses or Expenses incurred as a result of inaccuracies of any Parent Excluded Representation, as to which this subsection (ii) shall have no effect) shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to the sum of (x) $50,000; provided11,250,000 and (y) fifteen percent (15%) of the amount of the Contingent Payment, that this Section 10.4(c) shall not apply to any claim for indemnification if any, pursuant to Section 10.2(d)(i2.8; and
(iii) to the extent such claim is based upon a breach indemnification provided for in Sections 8.2(a)(i) shall terminate on the last day of the representations eighteenth (18th) month following the Closing Date (and warranties set forth in Section 5.2 (Authorityno claims shall be made by any Securityholder Group Member under Sections 8.2(a)(i) thereafter), Section 5.6 except that the indemnification by the Parent shall continue as to: (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(eA) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i)Excluded Representations, Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees no time limitation shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) apply and (B) any Losses or Expenses of which any Securityholder Group Member has notified Parent in accordance with the case of a breach requirements of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect 8.3 on or prior to the dual claim (it being understood that date such indemnification would otherwise terminate in accordance with this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts8.5, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant as to which the obligation of Parent Indemnitees are entitled to indemnification shall continue until the liability of Parent shall have been determined pursuant to Section 10.2(a)(i) this Article VIII, and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter reimbursed all Securityholder Group Members for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by any such Parent Indemnitee Losses and Expenses determined to be payable to such Securityholder Group Members in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses accordance with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution AgreementVIII.
Appears in 1 contract
Sources: Agreement and Plan of Merger (Navigant Consulting Inc)
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) Notwithstanding the above, there shall be no liability for indemnification under Section 7.1(a), Section 7.2(a) or Section 7.3(a) or, as the case may be, unless the aggregate amount of Damages with respect to all Claims thereunder exceeds [***] Dollars ($[***]) (the “Deductible”), at which point the Indemnifying Party(ies) will only be obligated to indemnify the Indemnified Parties for the amount of any and all Losses recoverable pursuant to Damages described in Section 10.2(a7.1(a), Section 10.2(b7.2(a) or Section 7.3(a) (as applicable) exceeding the Deductible; provided that the Deductible shall not apply to the misrepresentation, breach or inaccuracy of any representation or warranty made by the Unitholders in Article III and any of the following Sections: Section 2.1 (due organization), Section 10.2(c2.2 (authorization; no conflict), Section 10.2(d2.3 (capitalization), Section 2.9 (assets), Section 2.10 (taxes), Section 2.16 (intellectual property), Section 2.19 (brokers and agents), Section 3.1 (due organization, authorization), Section 3.3 (ownership of units), Section 3.7 (brokers), Section 4.1 (organization and authorization), Section 4.2 (authorization; no conflict), and Section 4.3 (brokers and agents) (collectively, the “Fundamental Reps”). With respect to any claim as to which an Indemnified Party may be entitled to indemnification hereunder, the Indemnifying Party shall not be liable for any Damages arising out of any individual or related set of facts and circumstances that do not exceed thirty-seven thousand five hundred Dollars ($37,500) (which Damages shall not be counted towards the Deductible).
(b) The indemnification obligations of each of the parties under Section 7.1(a), Section 7.2(a) and Section 10.2(e) 7.3(a), respectively, shall not exceed on a cumulative basis for the Unitholders, on the one hand, or Buyer on the other hand, an amount equal to the Cap (as defined below), determined as of the date of assertion of any Claim for indemnification hereunder, provided, that the Cap shall not apply with respect to any misrepresentation, breach or inaccuracy of any Fundamental Rep, which shall be capped at an amount equal to the Total Purchase Consideration (determined net as of the date of assertion of any amounts recovered Claim for indemnification hereunder). For purposes of this Agreement, the “Cap” shall be equal to the Escrow Amount.
(c) The amount of Damages recoverable by the Parent Indemnitees Buyer and Buyer Indemnified Parties under this Article VII shall be reduced, on a dollar-for-dollar basis, by any amounts actually recovered (after deducting therefrom the full amount of costs, Taxes and expenses incurred in procuring such recovery, including any increase in premiums and any deductible or their Affiliates, retention associated therewith) by the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, Buyer and Buyer Indemnified Parties under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement). Buyer agrees to use commercially reasonable efforts to make a claim under any insurance policy, including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each caseor against any other collateral source, available to the extent includable in indemnifiable Losses), it with respect to the facts giving rise to the right to indemnification hereunder. For clarity, the making of any such Losses;claim shall not impact the timing or amount of any indemnification that may be due from the Unitholders to the Buyer Indemnified Parties. To the extent that any Buyer Indemnified Party receives a payment under any such insurance policy or collateral source corresponding to an indemnification payment made by the Unitholders with respect a Claim for indemnification hereunder, such Buyer Indemnified Parties shall reimburse the Unitholders for such indemnification payment up to the amount of such insurance policy or collateral source payment.
39881135.1 ACTIVE/118012393.3
(bd) The right to indemnification or other remedy based on the Parent Indemnitees representations, warranties, covenants and agreements herein shall not be entitled to recover in respect affected or deemed waived by reason of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(iiinvestigation made or conducted by or on behalf of the party seeking indemnification (including by any of their advisors or representatives) or Section 10.2(c)(i) unless by reason of the aggregate Losses relating to fact that the party seeking indemnification or arising out any of such claim (together with any related claims its advisors or other claims which arise from a substantially similar course of conduct representatives knew, or facts) equal or exceed $50,000; providedshould have known, that this Section 10.4(bsuch representation or warranty is or might be inaccurate or that any fact, event or circumstance had or had not occurred.
(e) shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i) Notwithstanding anything herein to the extent such claim is based upon contrary, for purposes of (i) determining whether a breach of the applicable representation or warranty has occurred and (ii) calculating Damages under this Section 7.4, the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies)Article II, Section 3.3 (Authority) or Section 3.15 (Brokers)Article III, (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees Article IV shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply read without regard to any claim for indemnification pursuant limitation as to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) materiality or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also Material Adverse Effect contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreementtherein.
Appears in 1 contract
Sources: Unit Purchase Agreement (Ultragenyx Pharmaceutical Inc.)
Limitations on Indemnification Obligations. (a) The rights to indemnification obligations of Parent, Seller and the Shareholders pursuant to the provisions of Section 10.2 8.1 are subject to the following limitations:
(ai) Seller and the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) Members shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, required to indemnify and hold harmless under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), Section 8.1(a)(iii) with respect to such Losses;
Loss and Expense incurred by Buyer Group Members (bother than Loss and Expense incurred as a result of inaccuracies of the representations and warranties contained in Sections 5.1, 5.3, 5.7, 5.15, 5.17 and 5.27, as to which this subsection (i) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(iihave no effect) or Section 10.2(c)(i) unless only if the aggregate Losses relating to or arising out amount of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed Loss and Expense exceeds $50,000; providedprovided that if the aggregate amount of Loss and Expense incurred by Buyer Group Members exceeds $50,000, that then this Section 10.4(bsubsection (i) shall not apply and Buyer Group Members shall be entitled to any claim indemnification for indemnification pursuant all Loss and Expense irrespective of this subsection (i);
(ii) the aggregate amount that Parent, Seller and the Shareholders shall be required to (windemnify and hold harmless under Section 8.1(a)(iii) Section 10.2(a)(i) shall not exceed an amount equal to the extent Purchase Price;
(iii) the aggregate amount that any Shareholder shall be required to indemnify and hold harmless under Section 8.1(a)(iii) shall not exceed an amount equal to the portion of the Purchase Price received by such claim is based upon a breach of Shareholder as set forth on Schedule 8.5(a)(iii); and
(iv) the indemnification provided for in Section 8.1(a)(iii) shall terminate two (2) years after the Closing Date (and no claims shall be made by any Buyer Group Member under Section 8.1(a)(iii) thereafter), except that the indemnification by Parent, Seller and the Shareholders shall continue as to: (A) the representations and warranties set forth in Sections 5.1, 5.3, 5.7, 5.15, 5.17 and 5.27 as to all of which no time limitation shall apply and (B) any Loss or Expense of which any Buyer Group Member has notified Parent, Seller or the Shareholders in accordance with the requirements of Section 3.2 8.3 on or prior to the date such indemnification would otherwise terminate in accordance with this Section 8.5, as to which the obligation of Parent, Seller and the Shareholders shall continue until the liability of Parent, Seller and the Shareholders shall have been determined pursuant to this Article VIII, and Parent, Seller and the Shareholders shall have reimbursed all Buyer Group Members for the full amount of such Loss and Expense in accordance with this Article VIII.
(Capitalization b) The obligations of Buyer pursuant to the provisions of Section 8.2 are subject to the following limitations:
(i) Buyer shall be required to indemnify and hold harmless under Section 8.2(a)(iii) with respect to Loss and Expense incurred by Seller Group Members (other than Loss and Expense incurred as a result of inaccuracies of the representations and warranties contained in Sections 6.1, 6.2, 6.4 and 6.5, as to which this subsection (i) shall have no effect) only if the aggregate amount of such Loss and Expense exceeds the $50,000; provided, that if the aggregate amount of Loss and Expense incurred by Seller Group CompaniesMembers exceeds $50,000, then this subsection (i) shall not apply and Seller Group Members shall be entitled to indemnification for all Loss and Expense irrespective of this subsection (i);
(ii) the aggregate amount that Buyer shall be required to indemnify and hold harmless under Section 8.3(a)(iii) shall not exceed an amount equal to the Purchase Price; and
(iii) the indemnification provided for in Section 8.2(a)(iii) shall terminate two (2) years after the Closing Date (and no claims shall be made by any Seller Group Member under Section 8.2(a)(iii) thereafter), Section 3.3 except that the indemnification by Buyer shall continue as to: (AuthorityA) or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution AgreementSections 6.1, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation 6.2, 6.4 and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement6.5, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees no time limitation shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) apply and (B) any Loss or Expense of which any Seller Group Member has notified Buyer in accordance with the case of a breach requirements of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect 8.3 on or prior to the dual claim (it being understood that date such indemnification would otherwise terminate in accordance with this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts8.5, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant as to which the Parent Indemnitees are entitled to indemnification obligation of Buyer shall continue until the liability of Buyer shall have been determined pursuant to Section 10.2(a)(i) this Article VIII, and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and Buyer shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter reimbursed all Seller Group Members for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee Loss and Expense in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses accordance with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution AgreementVIII.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of an Indemnified Party to indemnification pursuant to the provisions of under Section 10.2 7.2 are subject to the following limitations:
(a) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees An Indemnified Party shall not be entitled to recover Damages under Section 7.2 until the cumulative amount of Damages claimed by the Indemnified Parties exceeds $500,000.00, in respect which case, such Indemnified Party shall be entitled to indemnification for all Damages in excess of (but not including) such amount subject to the limitations set forth herein. Notwithstanding the foregoing, the limitations contained in this Section 7.3(a) shall not apply to Excluded Damages, as defined below, and any individual claim pursuant to Excluded Damages shall not be included in determining the cumulative Damages under this Section 10.2(a)(i7.3(a), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii.
(b) or Section 10.2(c)(i) unless the aggregate Losses Except for injunctive relief and similar equitable remedies and except for Damages relating to or arising out of:
(i) fraud by Confio,
(ii) any breach of such claim the Surviving Claims by Confio,
(together iii) any payment due SolarWinds under Section 6.5,
(iv) claims set forth in Section 7.2(a)(iii), (iv), (v) or (vi) above (collectively, subparts (i), (ii), (iii) and (iv), the “Excluded Damages”), and
(v) (A) breaches of Section 4.10(o) and all matters disclosed on Section 4.10(o) of the Confio Disclosure Schedule (if any disclosed); and (B) breaches of Sections 4.10(w)(iii), (iv) or (v) and all matters disclosed on Part II of Section 4.10(w)(iv) and Section 4.10(v) of the Confio Disclosure Schedule; (collectively, subparts (A) and (B), the “Customer Contract Damages”), recourse to the Escrow Fund in accordance with the provisions hereof shall be the Indemnified Parties’ sole and exclusive remedy available for any related claims or other claims which arise from a substantially similar course Damages under Section 7.2, subject to the below provisions of conduct or facts) equal or exceed $50,000this Section 7.3; provided, however, that this Section 10.4(bwith respect to Excluded Damages and Customer Contract Damages, the Indemnified Parties shall first seek to satisfy such Excluded Damages and Customer Contract Damages from the Escrow Fund and, if the Escrow Fund is insufficient to satisfy such Excluded Damages and Customer Contract Damages or has been released, then the Indemnified Parties shall be entitled to seek recourse from other sources.
(c) The Indemnifying Parties shall not apply 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 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 compensation for such Damages pursuant to any claim policy of insurance maintained by any Indemnified Party, taking into account any increase in insurance premiums of SolarWinds. In determining the amount of Damages under this Agreement, the amount of Damages shall be decreased to take into account any Tax benefit available to the Indemnified Party as a result of the matter giving rise to such Damages.
(d) The Indemnifying Parties shall not be liable for indemnification pursuant Customer Contract Damages related to items disclosed on Part II of Section 4.10(w)(iv) of the Confio Disclosure Schedule to the extent such Damages result from SolarWinds not continuing to perform consistent with Confio’s past practice.
(we) Section 10.2(a)(iNotwithstanding anything to the contrary contained herein, the Indemnifying Parties shall not have any Liability under any provision of this Agreement for (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 hereunder, except, with respect to clauses (i), (ii) and (iii) to the extent such claim is based upon Damages are payable to a breach third party pursuant to a Third Party Claim; provided, however, that Confio will be liable for any Damages consisting of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies)lost revenue, Section 3.3 (Authority) profits or Section 3.15 (Brokers)earnings, (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreementincreased expenses.
(cf) Notwithstanding anything to the Member Indemnitees shall not be entitled contrary contained herein, in no event shall: (i) any Indemnifying Party’s aggregate liability with respect to recover Damages, other than Excluded Damages and Customer Contract Damages, arising out of or relating to this Agreement exceed such Confio Equity Holder’s Pro Rata Share of the Escrow Cash; (ii) any Indemnifying Party’s liability with respect to Damages in respect of any individual indemnification claim pursuant to Section 10.2(d)(ihereunder exceed the product of (A) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out amount of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover Damages indemnified by all Indemnifying Parties in respect of any individual such indemnification claim pursuant multiplied by (B) such Indemnifying Party’s Pro Rata Share; (iii) any Indemnifying Party’s aggregate liability with respect to Section 10.2(e)(i) unless the aggregate Losses relating to or Damages arising out of or relating to this Agreement exceed such claim Indemnifying Party’s net proceeds received in connection with the Merger; or (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(eiv) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the Indemnifying Parties’ collective aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except liability with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim Damages arising out of such matter;
(m) Following or relating this Agreement exceed the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution AgreementPurchase Price.
Appears in 1 contract
Sources: Merger Agreement (SolarWinds, Inc.)
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees Purchaser Indemnities shall not be entitled to recover in respect of any individual claim receive amounts pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii6.2(a) or Section 10.2(c)(i) unless the aggregate (other than for Losses relating to breaches of the Special Representations) for any individual item or series of related items based on substantially the same facts and circumstances where the Losses relating to such item or series of related items based on substantially the same facts and circumstances are less than $10,000, and such Losses shall not be applied against the Basket.
(b) Seller shall not have any obligation to indemnify Purchaser Indemnities with respect to Losses arising out under Section 6.2(a) (other than pursuant to breaches or inaccuracies in any of such claim the Special Representations) until the aggregate amount of all Losses thereunder exceeds $50,000 (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000the “Basket”); provided, however, that this 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 10.4(b) shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies6.2(a), Section 3.3 (Authority) or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees Seller shall not be entitled have any obligation to recover in indemnify Purchaser Indemnities with respect of any individual claim to Losses arising under Section 6.2(a) (other than pursuant to Section 10.2(d)(ibreaches or inaccuracies in any of the Special Representations) or Section 10.2(d)(ii) unless the in excess of an aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) 200,000 (the “Cap”). Seller shall not apply have any obligation to any claim for indemnification indemnify Purchaser Indemnities with respect to Losses arising under Section 6.2(a) pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach or inaccuracy of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) a Special Representation or Section 5.10 (New Company);6.2(b) in excess of an aggregate amount equal to $300,000.
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) Notwithstanding anything to the extent such claim is based upon a breach of the representations and warranties set forth contrary in Section 5.2 (Authority) of the Barceloneta Contribution this Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement each Party’s rights to indemnification and any other recovery under law or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except equity with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c)Losses based upon fraud, the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectivelywillful misconduct or intentional misrepresentation, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) limited in excess any way, including by any of the Aggregate Unit Value;
(h) the aggregate liability terms and conditions of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreement.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent The Purchaser Indemnitees shall not be entitled to recover Losses pursuant to for claims made against the Sellers under Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) with respect to breaches of the Non-Fundamental Representations (i) until the aggregate total amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Purchaser Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement10.2(a)(i) exceeds $50,000 (the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title“Basket”), in which case the Parent Purchaser Indemnitees shall only be entitled to recover directly from the applicable Contributor aggregate amount of all such Losses including the Basket and (ii) for an amount in excess of $5,000,000.00, except that, with respect to the dual claim Section 4.11, such amount shall be $2,500,000.00; and
(it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4b) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in In the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Purchaser Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom recovers the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of Losses sought pursuant to Section 10.2 from an Indemnifying Party and thereafter receives (i) any amount previously so paid insurance proceeds directly attributable to the, and in payment or on behalf of such Parent Indemnitee in respect of such matter and reimbursement of, the Losses, (ii) any amount expended by indemnity or contribution amounts from third parties (other than Purchaser or the Representative in pursuing or defending any claim arising out of such matter;
(mCompany) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which such Losses, or (iii) 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).
(c) Any claim for indemnification hereunder arising from a single event or occurrence may be requested asserted under this Article 10 one or more of the separate clauses set forth in Section 10.2, and the costs associated with such mitigation 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 included in credited against Losses sought to be recovered under a different clause and arising from the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no same event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreementoccurrence.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 8.2 are subject to the following limitations:
(a) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Buyer Indemnitees shall not be entitled to recover Losses pursuant to clause (i) of Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi8.2(a) until the aggregate total amount which the Parent Buyer Indemnitees would be entitled to recover under such sections clause (i) of Section 8.2(a) (as limited by the other provisions of this Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement8.4) exceeds $5,000,000 650,000 (the “Threshold”), in which case, case the Parent Buyer Indemnitees shall only be entitled to recover Losses in excess of such amount, and in no event shall the Thresholdaggregate recovery of Losses by Buyer Indemnitees pursuant to clause (i) of Section 8.2(a) exceed $10,000,000, subject to the other limitations set forth in this Section 8.4; provided, provided that the Threshold this Section 8.4(a) shall not apply to Losses suffered or incurred as a result of or arising from or relating to any claim breach of, or inaccuracy in any Fundamental Representation. 72
(b) with respect to any Losses for which the Buyer Indemnitees may be entitled to indemnification pursuant to clause (xi) of Section 10.2(a)(i8.2(a), Parent shall not be liable for any individual or series of related Losses which do not exceed $50,000 (which Losses shall not be counted towards the Threshold); provided that this Section 8.4(b) shall not apply to Losses suffered or incurred as a result of or arising from or relating to any breach of or inaccuracy in any Fundamental Representation.
(c) in no event shall the aggregate recovery of Losses by Buyer Indemnitees pursuant to clause (i) of Section 8.2(a) with respect to any breach of a Fundamental Representation, or pursuant to any of clauses (ii), (iii) or (iv) of Section 8.2(a), exceed the Purchase Price, in each case, subject to the other limitations set forth in this Section 8.4;
(d) the amount of any Losses recoverable by Buyer Indemnitee pursuant to Section 8.2(a) shall be determined net of (i) the amount of any such Losses that were set forth on the Final Closing Statement and included in the calculation of the Final Cash Purchase Price pursuant to Section 2.5(c); (ii) the amount of any indemnification payment actually received by any Buyer Indemnitee from any third party in respect of such Losses; and (iii) the amount of any insurance proceeds actually received by any Buyer Indemnitee from any third party insurer with respect to such Losses, in each case of clause (ii) and (iii), net of any deductibles or other reasonable costs and expenses incurred by any Buyer Indemnitee in procuring such recovery; provided, however, that (A) if Parent or any Company pays to any Buyer Indemnitee an amount in respect of Losses and any Buyer Indemnitee thereafter receives from a third party a sum in respect of such Losses, then Buyer shall promptly tender to Parent an amount equal to the lesser of such sum and the amount that Parent or such Company paid in respect of such Losses; and (B) Buyer shall, and shall cause the other Buyer Indemnitees to, use commercially reasonable efforts to obtain available recoveries as contemplated by clauses (ii) and (iii) of this Section 8.4(d); provided that such commercially reasonable efforts shall not obligate Buyer or any Buyer Indemnitee to expend any amount of money other than de minimis amounts (unless such other amounts are advanced by Parent or the Companies), commence any Action, or otherwise take any action that could reasonably be expected to have an adverse impact on the Business;
(e) no party shall be liable for any punitive or exemplary damages (except to the extent such claim is based upon paid in connection with a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) Third Party Claim or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;Fraud); and
(f) the Member Indemnitees and the Barceloneta Member Buyer Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(iiclause (iii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i8.2(a) in respect of any Environmental Liability that is discovered through or during any intrusive or subsurface investigations or other sampling of environmental media undertaken other than (i) in connection with any necessary or ordinary course maintenance or repairs, (ii) in connection with any improvement, remodel or development activity at any Theatre, (iii) as required by Law or at the direction of a breach of the representations and warranties in Article 3 hereof Governmental Entity, or (yiv) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect as deemed necessary or advisable by Buyer based on the advice of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreementcounsel.
Appears in 1 contract
Sources: Asset Purchase Agreement
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(aA) the amount of Notwithstanding any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside provision of this Agreement, the aggregate indemnification obligations of the Principal Shareholders, on the one hand, and Buyer, on the other hand, shall not exceed an amount equal to Thirty Seven Million Dollars ($37,000,000).
(B) Notwithstanding any other provision of this Agreement, after the Closing, the Principal Shareholders on the one hand, and Buyer, on the other hand, shall not have any obligation to indemnify the other party hereto for any Losses incurred by it or them unless, until and to the extent the aggregate amount of such Losses equals or exceeds $250,000; provided, however, that the foregoing shall not apply to: (i) any obligations with respect to payments of, or adjustments to, the Base Amount (and the Series A or Series B Merger Consideration) under Article II above, (ii) claims made by Buyer pursuant to Sections 12.2(b), including (c), (d) or (f) above, or (iii) claims arising out of any breaches of representations or warranties of any Principal Shareholder to the Tax Matters extent that such Principal Shareholder had actual knowledge that such representation or warranty was incorrect or inaccurate in any material respect at the time made, or (iv) claims arising out of any breach of the representations and warranties contained in Section 5.26. The limitation set forth in this Section 12.6(b) shall not apply to any indemnification obligations arising out of any breach of the representations and warranties contained in Section 5.11(g) or 5.21(b).
(C) Upon payment in full by an indemnifying party of any indemnification claim, whether such payment is effected by setoff or otherwise, or upon the payment in full by an indemnifying party of any judgment with respect to a third-party claim, the indemnifying party shall be subrogated (to the extent permitted by applicable law) to the extent of such payment to the rights of the indemnified party against any landlords (other than Magnolia and its subsidiaries), vendors, fee mortgagees, insurance carrier, workmens' compensation fund, attorneys, title insurance carrier, engineers, any Shareholder, surveyors, environmental inspectors, zoning experts and the other parties to the SCHM Agreements and the Barceloneta Tax Matters Agreement (SV/South Florida Agreements. The foregoing shall not be deemed to require any Shareholder to reimburse the Company or any Subsidiary for any legal fees previously advanced or for any amounts accrued, in each case, to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) Financial Statements or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution AgreementClosing Date Balance Sheet.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreement.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) Notwithstanding anything to the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contrary contained outside of in this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees an Responsible Party shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to liable for any claim for indemnification pursuant to Section 7.2(a)(i) or Section 7.1(b)(i), except in the case of liability resulting from fraud or breach of a Fundamental Representation, (wx) with respect to any Loss having an aggregate value of less than $125,000 (“De Minimis Losses”) and (y) unless and until the aggregate amount of all such indemnifiable Losses (excluding any De Minimis Losses) equals or exceeds $5,000,000 (the “Threshold”); provided that once Losses equal or exceed the Threshold, the Responsible Party shall be liable for all Losses (excluding any De Minimis Losses) in excess of $2,500,000. The Threshold shall not apply to Losses claimed by the Buyer Indemnitees for (A) all Losses arising in connection with Section 10.2(a)(i6.3 (Fees and Expenses), (B) Losses relating to Section 2.15 (Taxes) and (C) all Losses arising in connection with Section 2.16 (Brokers).
(b) Except in the case of fraud by the Company or Seller or breach of a Fundamental Representation, and for equitable relief (including specific performance), the remedies set forth in this Article 7 (together with the Escrow Agreement) represent the sole source of recovery of any claims made by a Responsible Party after the Closing with respect to claims under this Agreement.
(c) Seller shall not be liable for cumulative aggregate claims for indemnification pursuant to Section 7.2(a) or Section 7.3 (except in the case of liability resulting from breach of a Fundamental Representation) in excess of amounts remaining in the Escrow Account and no Buyer Indemnitee will be entitled to recover such Losses from any source other than the Escrow Account.
(d) In no event shall Seller be liable for cumulative aggregate claims for indemnification pursuant to Section 7.2(a)(i) with respect to a breach of a Fundamental Representation in excess of the proceeds of the Purchase Price received by Seller.
(e) Notwithstanding the foregoing, the limitations on indemnification provided above in subparagraphs (a) and (b) of this Section 7.2 shall not apply to Taxes, which shall be governed by Section 7.5 below.
(f) No Buyer Indemnitee shall have any right to indemnification hereunder with respect to any environmental investigatory, corrective or Remedial Action (collectively, “Response Actions”) except to the extent such claim Response Action is based upon affirmatively required by Environmental Laws and is attributable to a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers), (x) Section 10.2(b)(i) 2.11 and then only to the extent any such claim Response Action is conducted in a reasonably cost-effective manner and required to attain compliance with minimum remedial standards applicable under Environmental Laws based upon a breach on existing industrial or commercial uses, employing risk based standards and institutional controls where available. Seller shall have no obligation to indemnify any Buyer Indemnitee or the Company with respect to any Response Action arising from (i) any conditions of a representation and warranty set forth in Section 4.2 (Authority)contamination identified through any environmental sampling or analysis, Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (zii) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply report to any claim for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”)Governmental Entity, in either case which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall is not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited affirmatively required by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;Environmental Laws.
(g) except The amount of any Loss for which indemnification is provided under this Article 7 shall be net of any amounts actually recovered by the indemnified party under insurance policies with respect to such Loss (net of any claims resulting costs of recovery, deductibles and premium increases) and net of any tax benefits actually received by the indemnified party with respect to such Loss (if and when such indemnified party elects to receive such benefit). If an indemnified party has been indemnified for a Loss hereunder, and at any time thereafter such indemnified party recovers all or a portion of such Loss from the failure to complete the Financing a third Person (including pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(cinsurance policy), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant indemnified party which made such recovery shall promptly refund the amount previously paid to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed it with respect to such Loss (up to the Aggregate Unit Value and amount recovered from the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;third Person).
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess The amount of the Barceloneta Aggregate Unit Value;Loss arising out of any item included as a liability in calculating the Closing Net Working Capital shall be calculated net of the amount so included.
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall the amount of any Loss include any punitive, incidental, consequential, special or indirect damages, including business interruption, loss of future revenue, profits or income, or loss of business reputation, or opportunity, and in particular no “multiple of profits,” “multiple of cash flow,” diminution of value or similar valuation method shall be used in calculating the amount of any Loss.
(xj) a Parent Indemnitee No party shall be entitled to recover hereunder for the same Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreementmore than once.
Appears in 1 contract
Limitations on Indemnification Obligations. The Notwithstanding anything to the contrary contained in this Agreement, the rights to indemnification indemnification, except in relation to Taxes, pursuant to the provisions of Section 10.2 8.2 and Section 8.3 are subject to the following limitations:
(a) the amount The maximum aggregate Liability of Seller to all Purchaser Indemnified Parties taken together for Losses for any and all Losses recoverable claims for indemnification (i) pursuant to Section 10.2(a8.2(a) shall be limited to $28,050,000.00 (the “Cap”) and (ii) pursuant to Section 8.2(b), Section 10.2(b8.2(c), Section 10.2(c8.2(d), Section 10.2(d8.2(e), Section 8.2(f), Section 8.2(g) and Section 10.2(e) 8.2(k), shall be determined net limited to the Adjusted Purchase Price; provided, however, that in no event shall Seller be liable in the aggregate to the Purchaser Indemnified Parties for any claims for indemnification pursuant to this Agreement in an amount greater than the Adjusted Purchase Price (except in the case of any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreementclaims for indemnification pursuant to Section 8.2(h), including Section 8.2(i) or Section 8.2(j)); provided, further, that in no event shall the Tax Matters Agreements limitations set forth in clause (ii) in respect of Sections 8.2(e), Section 8.2(f) and the Barceloneta Tax Matters Agreement (Section 8.2(g) limit Seller’s indemnification obligation in each caserespect of Excluded Liabilities pursuant to Section 8.2(i). In addition, Seller shall not be liable for Losses for any claims for indemnification pursuant to Section 8.2(a) and Section 8.2(b) unless and to the extent includable in indemnifiable Losses)that each individual claim for indemnification made by the Purchaser Indemnified Party pursuant to Section 8.2(a) and Section 8.2(b) is for an amount greater than $25,000 (the “De Minimis Amount”) and, with respect to claims for indemnification pursuant to Section 8.2(a), the total of all Losses for any such Losses;claims for indemnification shall exceed $1,870,000.00 in the aggregate (the “Deductible”), and then only for the excess amount over the Deductible.
(b) the Parent Indemnitees shall not be entitled The maximum aggregate Liability of Purchaser to recover in respect of all Seller Indemnified Parties taken together for Losses for any individual claim claims for indemnification (i) pursuant to Section 10.2(a)(i8.3(a) shall be limited to the Cap and (ii) pursuant to Section 8.3(b), Section 10.2(a)(ii8.3(c), Section 10.2(a)(iv)(A8.3(d), Section 10.2(a)(vi8.3(e), Section 10.2(b)(i), 8.3(f) and Section 10.2(b)(ii8.3(g) or Section 10.2(c)(i) unless shall be limited to the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000Adjusted Purchase Price; provided, however, that this Section 10.4(b) in no event shall not apply Purchaser be liable in the aggregate to the Seller Indemnified Parties for any claim claims for indemnification pursuant to this Agreement in an amount greater than the Adjusted Purchase Price (wexcept in the case of claims for indemnification pursuant to Section 8.3(h), Section 8.3(i) or Section 10.2(a)(i8.2(j)); provided, further, that in no event shall the limitations set forth in clause (ii) in respect of Sections 8.3(e) or Section 8.3(f) limit Purchaser’s indemnification obligation in respect of Assumed Liabilities pursuant to Section 8.3(h). In addition, Purchaser shall not be liable for Losses for any claims for indemnification pursuant to Section 8.3(a) and Section 8.3(b) unless and to the extent that each individual claim for indemnification made by a Seller Indemnified Party pursuant to Section 8.3(a) and Section 8.3(b) is for an amount greater than the De Minimis Amount and, with respect to claims for indemnification pursuant to Section 8.3(a), the total of all Losses for any such claims for indemnification shall exceed the Deductible, and then only for the excess amount over the Deductible.
(c) Notwithstanding anything in this Article 8 to the contrary, Seller shall have no obligation under this Article 8 to indemnify any Purchaser Indemnified Party with respect to any Loss to the extent it (i) was included in the Actual Working Capital or (ii) was the subject of a dispute with respect to the Final Working Capital Closing Date Calculation pursuant to the terms of Section 2.3(b) but did not result in an adjustment to the Initial Purchase Price pursuant to Section 2.3(d). Any such Loss shall be disregarded for all purposes of indemnification pursuant to this Article 8.
(d) Recovery by any Indemnified Party of any Loss suffered or incurred by such party as a result of any breach by any other party of any of its obligations under this Agreement shall be limited to the actual damages suffered or incurred by such party as a result of the breach by the breaching party of its obligations hereunder. In furtherance of and without limiting the foregoing, no Indemnified Party shall be entitled to any recovery under this Agreement for (i) special, exemplary, punitive, consequential, incidental or indirect damages and (ii) diminution in value or lost profits (including with respect to any Losses on account of lost opportunities); provided, however, that the foregoing limitation shall not apply in the case of clause (i) to any such Losses (y) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 Losses (Capitalization of the Group Companies), Section 3.3 (Authorityother than punitive damages) or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement were reasonably foreseeable or (z) Section 10.2(c)(i) to the extent such claim if any Indemnified Party is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply held liable to any claim third party for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;Losses.
(e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except with respect to any claims resulting from the failure to complete the Financing Any amounts payable pursuant to the terms of indemnification obligations under this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time 8 shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a)paid without duplication, and in no event shall any Indemnified Party be indemnified under different provisions of this Agreement for the Parent Indemnitees same Loss. The amount which an Indemnifying Party is or may be entitled required to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant pay to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount an Indemnified Party in respect of a matter Losses for which indemnification is provided under this Agreement will be reduced by any amounts actually received (including amounts received under insurance) by or on behalf of the Indemnified Party (after deducting therefrom the full amount of any applicable premiums, deductibles, collection costs, premium adjustments, retrospectively rated premiums or other Losses incurred by it in procuring such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(brecovery) or Section 10.2(c), and any Tax benefit actually realized in the taxable year of such Parent Indemnitee shall promptly pay over to the Representative (Loss for further distribution to the Contributors or Barceloneta Contributorssuch Indemnified Party in each case, as applicable) a result of the amount so recovered accrual, incurrence or payment of any such Losses (such amounts (after deducting therefrom the full amount of the expenses Losses incurred by such Parent Indemnitee it in procuring such recovery) are collectively referred to herein as “Indemnity Reduction Amounts”); provided, but not that no Indemnified Party shall be obligated to make such an insurance claim related to any Loss for which it is seeking indemnification or has obtained indemnification pursuant to this Article 8. If any Indemnified Party receives any Indemnity Reduction Amounts in respect of a claim for which indemnification is provided under this Agreement after the full amount of such claim has been paid by an Indemnifying Party or after an Indemnifying Party has made a partial payment of such claim and such Indemnity Reduction Amounts exceed the remaining unpaid balance of such claim, then the Indemnified Party will promptly remit to the Indemnifying Party an amount equal to the excess of the sum (if any) of (i) any the amount previously so theretofore paid to or on behalf of such Parent Indemnitee by the Indemnifying Party in respect of such matter claim, less (ii) the amount of the indemnity payment that would have been due if such Indemnity Reduction Amounts in respect thereof had been received before the indemnity payment was made. An insurer or other third party who would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto or have any subrogation rights with respect thereto, solely by virtue of the indemnification provisions hereof, it being expressly understood and agreed that no insurer or any other third party shall be entitled to any benefit they would not be entitled to receive in the absence of the indemnification provisions by virtue of the indemnification provisions hereof. Each party hereto, as appropriate, will, or will cause each Indemnified Party to, use its commercially reasonable efforts to pursue promptly any claims or rights it may have against all third parties which would reduce the amount of Losses for which indemnification is provided under this Agreement.
(f) In valuing a Loss, no adjustment shall be made as a result of any multiple, increase factor, or any other premium over fair market value, book or historical value which may have been paid by Purchaser for the Shares whether or not such multiple, increase factor or other premium had been used by Purchaser at the time of, or in connection with, calculating or preparing its bid, its proposed purchase price for the Shares or its final purchase price for the Shares.
(g) Notwithstanding anything to the contrary herein, the rights and remedies of an Indemnified Party shall not be limited by the fact that any Indemnified Party (i) had actual or constructive knowledge (regardless of whether such knowledge was obtained through such Indemnified Party’s own investigation or through disclosure by the other Party, its Representatives or any other Person) of any breach, event or circumstances, whether before or after the execution and delivery of this Agreement or the Closing, or (ii) waived (A) any breach of representation or compliance with any covenant or (B) any condition to the Closing set forth in Article 6.
(h) For purposes (i) of determining whether a breach of representation or warranty has occurred for the purposes of Section 8.2 and Section 8.3 any qualification as to “Material Adverse Effect” contained in Article 3 and Article 4 (other than Section 3.1 and Section 3.7) of this Agreement shall be deemed to be replaced with “material and adverse to the Business” and (ii) of calculating the amount of Losses related thereto, any amount expended by the Representative in pursuing qualification as to materiality, “Material Adverse Effect” or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties similar qualification or standard contained in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach and Article 4 of the representations Agreement shall be disregarded (it being understood that the word Material in the defined term “Material Contracts,” the qualification as to “Material Adverse Effect” contained in Section 3.7 and warranties in Article 3 the qualification of the Barceloneta Contribution Agreementword “material” in Section 3.12(a) shall not be disregarded for any of such purposes).
Appears in 1 contract
Sources: Stock Purchase Agreement (Albany International Corp /De/)
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) the amount of any Deductibles and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution AgreementIndividual Claim Threshold.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Except as provided in Section 10.2(b)(i6.4(a)(iv) and Section 10.2(b)(ii6.4(a)(v) shall not exceed and after first applying the aggregate consideration actually received by such Person pursuant to Article 2 (valuedlimitation in Section 6.4(a)(iii), in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall Buyer Indemnified Persons will not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to any Claims based on Section 10.2(a6.1(a)(i), other than such Claims with respect to any Fundamental Representation or Specified IP Representation, unless and until the aggregate amount of all Damages of the Buyer Indemnified Persons pursuant to Section 6.1(a)(i) exceeds $12,500,000 (the “General Deductible”). If the aggregate amount of all Damages of the Buyer Indemnified Persons pursuant to any Claims based on Section 6.1(a)(i) exceed the General Deductible, then Seller will be obligated for any Damages pursuant to Section 6.1(a)(i) (other than such Damages with respect to any Fundamental Representation or Specified IP Representation) only in excess of the General Deductible (subject to the other express limitations set forth in this ARTICLE VI).
(ii) Except as provided in Section 6.4(a)(iv) and after first applying the limitation in Section 10.2(b) or Section 10.2(c6.4(a)(iii), the Parent Indemnitees shall only Buyer Indemnified Persons will not be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) any Claims based on breach of any Specified IP Representation, unless and Section 10.2(a)(vi), until the Parent Indemnitees shall only be entitled to recover for such Losses aggregate amount of all Damages of the Buyer Indemnified Persons pursuant to Section 10.2(a)(vi6.1(a)(i) and shall have no rights to indemnification exceed $1,000,000 (the “IP Deductible”). All Claims made pursuant to Section 10.2(a)(i);
(l6.1(a)(i) Notwithstanding anything contained herein will be taken into account in determining whether the IP Deductible has been satisfied, without regard to whether such Claim relates to any Specified IP Representation. If the contraryaggregate amount of all Damages of the Buyer Indemnified Persons pursuant to any Claims based on Section 6.1(a)(i) with respect to breach of any Specified IP Representation exceed the IP Deductible, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In then Sellers will be obligated for any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified Damages pursuant to Section 10.2(a), Section 10.2(b6.1(a)(i) or Section 10.2(c), such Parent Indemnitee shall promptly pay over with respect to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount breach of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not any Specified IP Representation only in excess of the sum of IP Deductible (isubject to the other express limitations set forth in this ARTICLE VI).
(iii) No Buyer Indemnified Persons will assert, or be entitled to, Damages for any amount previously so paid claims for indemnification pursuant to or any Claims based on behalf of Section 6.1(a)(i), other than such Parent Indemnitee Claims with respect to any Fundamental Representation, in respect of any Damage incurred or suffered by such matter Buyer Indemnified Person that is not equal to or in excess of $50,000.
(iv) The limitations set forth in Section 6.4(a)(i) and (ii) any amount expended by will not apply to or otherwise affect the Representative in pursuing Buyer Indemnified Persons’ ability to make Claims or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses recover Damages with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses Claims based on or for (A) a breach or inaccuracy of any Fundamental Representation (or any inaccuracy of any Seller Closing Certificate with respect to which Fundamental Representations), (B) Fraud, or, for the avoidance of doubt, (C) indemnification may be requested under this Article 10; andSections 6.1(a)(ii), (iii), (iv), (v) or (vi).
(nv) In no event shall (xThe limitations set forth in Section 6.4(a)(i) a Parent Indemnitee be entitled will not apply to or otherwise affect the Buyer Indemnified Persons’ ability to make Claims or recover Losses pursuant Damages with respect to Section 10.2(b)(i) in respect of Claims based on or for a breach or inaccuracy of the representations and warranties in Article 3 hereof any Specified IP Representation (or (y) a Parent Indemnitee be entitled any inaccuracy of any Seller Closing Certificate with respect to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreementany Specified IP Representations).
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Buyer Indemnitees to indemnification pursuant to the provisions of Section 10.2 9.2 are subject to the following limitations:
(a) other than with respect to Losses paid, directly or indirectly, as a result of, in connection with, or arising out of the Fundamental Representations, the Buyer Indemnitees shall not be entitled to recover Losses pursuant to Section 9.2(a)(i) or Section 9.2(a)(ii) until the total amount of Losses which the Buyer Indemnitees would recover under Section 9.2(a)(i) or Section 9.2(a)(ii), but for this Section 9.5(a), exceeds $2,450,000, in which case, the Buyer Indemnitees shall be entitled to recover the entire amount of such Losses (including such amounts previously restricted by this Section 9.5(a));
(b) other than with respect to Losses paid, directly or indirectly, as a result of, in connection with, or arising out of the Fundamental Representations, the Buyer Indemnitees shall not 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(a)(ii) unless such Loss (including any series of related Losses) equals or exceeds $50,000;
(c) except with respect to the representations and warranties set forth in Section 3.15(g), Losses with respect to which shall not count towards or be included in the maximum liability limits set forth in this Section 9.5(c) , the maximum liability of Seller with respect to Losses indemnifiable pursuant to Section 9.2(a) shall be an amount equal to the dollar value of the Indemnity Escrow Amount immediately after adjustment pursuant to Section 2.4(d)(ii); provided, that:
(i) on the First Release Date, the maximum liability of Seller with respect to Losses indemnifiable pursuant to Section 9.2(a) (other than with respect to the representations and warranties set forth in Section 3.15(g)) shall be adjusted and shall equal an amount equal to the lesser of (A) (1) $7,350,000 plus (2) the aggregate amount of payments made by Seller to the Buyer Indemnitees in accordance with this Agreement prior to the First Release Date (whether directly or from the Escrow Account) (other than with respect to the representations and warranties set forth in Section 3.15(g)), plus (3) the aggregate amount of claims for payment made by the Buyer Indemnitees in accordance with this Agreement and not fully resolved prior to the First Release Date (other than with respect to the representations and warranties set forth in Section 3.15(g)), and (B) the dollar value of the Indemnity Escrow Amount immediately after adjustment pursuant to Section 2.4(d)(ii);
(ii) on the Second Release Date, the maximum liability of Seller with respect to Losses indemnifiable pursuant to Section 9.2(a) (other than with respect to the representations and warranties set forth in Section 3.15(g)) shall be adjusted and shall equal the lesser of (A) (1) $3,675,000 plus (2) the aggregate amount of payments made by Seller to the Buyer Indemnitees in accordance with this Agreement prior to the Second Release Date (whether directly or from the Escrow Account) (other than with respect to the representations and warranties set forth in Section 3.15(g)), plus (3) the aggregate amount of claims for payment made by the Buyer Indemnitees in accordance with this Agreement and not fully resolved prior to the Second Release Date (other than with respect to the representations and warranties set forth in Section 3.15(g)), and (B) the dollar value of the Indemnity Escrow Amount immediately after adjustment pursuant to Section 2.4(d)(ii);
(iii) on the Third Release Date, except with respect to breaches of representations and warranties set forth in Section 3.15(g), the Buyer Indemnitees shall no longer be entitled to bring a claim for indemnification pursuant to Section 9.2(a), and the maximum liability of Seller with respect to Losses indemnifiable pursuant to Section 9.2(a) (other than with respect to the representations and warranties set forth in Section 3.15(g)) shall be fixed at the lesser of (A) (1) the aggregate amount of payments made by Seller to the Buyer Indemnitees in accordance with this Agreement prior to the Third Release Date (whether directly or from the Escrow Account) (other than with respect to the representations and warranties set forth in Section 3.15(g)), plus (2) the aggregate amount of claims for payment made by the Buyer Indemnitees in accordance with this Agreement and not fully resolved prior to the Third Release Date (other than with respect to the representations and warranties set forth in Section 3.15(g)), and (B) the dollar value of the Indemnity Escrow Amount immediately after adjustment pursuant to Section 2.4(d)(ii); and
(iv) if at any time following the First Release Date, if an amount claimed by the Buyer Indemnitees is resolved, in whole or part, in Seller’s favor, to the extent that following such resolution the maximum liability of Seller with respect to Losses indemnifiable pursuant to Section 9.2(a) (other than with respect to the representations and warranties set forth in Section 3.15(g)) as of the immediately prior Release Date would have been a lower amount than the calculation of such maximum liability as of such Release Date (calculating the amount of maximum liability as of such Release Date as though such amount had been resolved on such Release Date), then the maximum liability of Seller with respect to Losses indemnifiable pursuant to Section 9.2(a) (other than with respect to the representations and warranties set forth in Section 3.15(g)) shall immediately be re-adjusted to equal such lower amount;
(d) the maximum liability of Seller with respect to Losses indemnifiable pursuant to Section 9.2(a) arising out of any breach of the representation and warranties set forth in Section 3.15(g) shall be $35,000,000;
(e) each Party entitled to indemnification hereunder shall take all commercially reasonable steps to mitigate all Losses after becoming aware of any event which would reasonably be expected to give rise to any Losses that are indemnifiable or recoverable hereunder or in connection herewith; provided, that any failure to mitigate Losses in accordance with the foregoing shall not relieve the applicable indemnifying Party of its obligations hereunder, except with respect to that portion of a Loss directly resulting from a Party’s failure to mitigate;
(f) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) shall be determined net of (i) any cash amounts actually recovered by the Parent Buyer Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or from other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement ) with respect to such Losses (in each case, to case net of expenses of recovery thereof) and (ii) the extent includable in indemnifiable Losses), amount of any Tax benefits actually realized with respect to such Losses;, as and to the extent such benefits are realized as a refund, credit or other reduction in Taxes (determined by comparing the Taxes that would have been payable taking into account any deductions attributable to the Loss with those Taxes that would have been payable in the absence of such deductions, assuming that such deductions are the last item of deduction on any Tax Return) in the tax year in which the Loss occurs or in either of the two immediately subsequent tax years; and
(bg) in calculating any Loss hereunder, the Parent Indemnitees amount of such Loss shall not be entitled reduced to recover the extent that (i) prior to the date hereof the Group Companies recorded a reserve in their books and records with respect to such Loss, or (ii) such Loss was taken into account in the determination of any individual claim the Final Purchase Price pursuant to Section 10.2(a)(i2.4(d).
(h) Seller shall have no obligation to indemnify any Buyer Indemnitee with respect to any environmental investigation, Section 10.2(a)(ii)monitoring, Section 10.2(a)(iv)(A)clean-up, Section 10.2(a)(vi)containment, Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims removal or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; providedcorrective action (collectively, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i“Response Actions”) to the extent that such claim Response Action (i) is not required under Environmental Law or by any Governmental Entity; (ii) is not tailored to attain compliance with minimum remedial standards applicable under Environmental Law employing where applicable risk-based upon a breach of remedial standards and institutional controls, where such standards or controls would not unreasonably interfere with ongoing commercial operations at the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) relevant property or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement facility; or (ziii) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including arises as a result of any waiver sampling or testing of environmental media or any disclosure or reporting to any third party by the Contributors or on behalf of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess any Buyer Indemnitee or potential subsequent buyer of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization business of the Group Companies) and Section 4.4 (Title), in each case which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that is not required under Environmental Laws or by any Governmental Entity in this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a9.8(e). In any case where a Parent Buyer Indemnitee or a Group Company recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Buyer Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c9.2(a), such Parent Buyer Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) Seller the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Buyer Indemnitee or Group Company, as applicable, in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid by Seller to or on behalf of such Parent Buyer Indemnitee in respect of such matter and (ii) any amount expended by the Representative Seller in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreement.
Appears in 1 contract
Sources: Securities Purchase Agreement (Compass Diversified Holdings)
Limitations on Indemnification Obligations. The rights to of the Indemnified Persons to, and the liabilities and obligations of the Indemnifying Parties for, indemnification pursuant to the provisions of Section 10.2 and Section 10.3, as applicable, are subject to the following limitations:
(a1) The Vendors and the Purchaser Parties shall not have any liability or obligation with respect to any single claim for indemnification or otherwise with respect to the matters described in Section 10.2 or Section 10.3, respectively, unless the amount of Damages with respect to any such claim is greater than $35,000 (the “Minimum Claim Threshold”); provided, that any series of claims relating to, resulting from or arising out of the same set of facts or circumstances may be aggregated for purposes of determining whether the Minimum Claim Threshold has been met.
(2) The Vendors and the Purchaser Parties shall not have any liability or obligation to make any payment for Damages for indemnification or otherwise with respect to the matters described in Section 10.2 or Section 10.3, respectively, until the aggregate of all Losses recoverable pursuant to Section 10.2(a)Damages suffered by, Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) shall be determined net of any amounts recovered by imposed upon or asserted against the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, Purchaser Indemnified Persons or the Barceloneta Member Indemnitees or their AffiliatesVendor Indemnified Persons, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), with respect to such Losses;matters exceeds $3,100,000 (the “Deductible”), and then for all Damages (dollar one recovery) up to an aggregate amount of Damages equal to $35,000,000 (the “Cap”), subject to the other limitations in this Article 10.
(b3) Notwithstanding the foregoing, the Minimum Claim Threshold, the Deductible and the Cap shall not apply to: (i) any claim pursuant to Section 10.2(1) or Section 10.3(1) relating to any breach or inaccuracy of any Vendor Fundamental Representations or Purchaser Fundamental Representations; (ii) any claim pursuant to Section 10.2(2) or Section 10.3(2) relating to any failure to perform or fulfill any covenant on the part of the Vendors or the Purchaser hereunder; (iii) any claim pursuant to Section 10.2(3) or Section 10.2(5); or (iv) any indemnifiable Damages suffered by, imposed upon or asserted against the Purchaser Indemnified Persons or the Vendor Indemnified Persons, as applicable, resulting from or arising out of the fraud, willful misconduct or intentional misrepresentation of the Indemnifying Party; provided that, in each case of (i) through (iv), (A) no Vendor shall be liable for indemnification for any amount with respect to such matters in excess of such Vendor’s Pro Rata Portion; and (B) the Parent Indemnitees Purchaser Parties shall not be liable for indemnification for any amount with respect to such matters in excess of the Purchase Price.
(4) The Purchaser Indemnified Persons shall not be entitled to recover in respect of any individual claim Damages pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) 10.2 if such Damages solely arose or Section 10.2(c)(i) unless the aggregate Losses relating to resulted from (or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i) to the extent such claim is based upon Damages were exacerbated by) an investigation (including any environmental sampling or analysis), inquiry or report to a breach third Person, including a Governmental Entity, by or at the direction of any Purchaser Indemnified Person, in each case, which was not required by Law.
(5) The amount of any Damages subject to indemnification under this Article 10 shall be calculated net of any Tax benefit reasonably realizable by the representations Indemnified Person from the incurrence or payment of such Damages.
(6) No claims for Taxes may be claimed by the Purchaser Parties to the extent that such Taxes have been reflected or accrued or reserved for in the Actual Closing Working Capital and warranties set forth reflected in Section 3.2 the Purchase Price as finally determined pursuant to this Agreement.
(Capitalization 7) Notwithstanding anything contrary in this Agreement or any other agreement, the Purchaser Parties shall not have any right to indemnification under this Agreement with respect to Taxes to the extent such Taxes: (a) result solely from transactions or actions taken by the Purchaser Parties or any of their respective Affiliates after the Closing (including any of the Group Companies), Section 3.3 ; (Authorityb) are imposed on or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery Group Company with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); any period (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(cportion thereof) other than a Pre-Closing Tax Period; or (Ac) result from or arise solely in the case of connection with a breach or non-fulfillment of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title)any representation, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also warranty, covenant or agreement contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution this Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing Purchaser Parties or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreementtheir respective Affiliates.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) No indemnity shall be payable to any Indemnitee with respect to any claim under Section 8.2 or Section 8.3 or Section 9.1(a) unless and until the aggregate of all Losses for which all claims are made under Section 8.2 and Section 9.1(a) as to the Buyer, and Section 8.3 as to Seller, in each case exceeds $500,000 (the “Deductible Amount”), at which time such Indemnitee shall be entitled to indemnification only for the amount of any and all such Losses recoverable pursuant to Section 10.2(a)that exceeds the Deductible Amount; provided, Section 10.2(b)however, Section 10.2(c), Section 10.2(d) and Section 10.2(e) shall be determined net of any amounts recovered by that the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees foregoing shall not be entitled applicable to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i) unless the aggregate Losses relating to or arising out of such claim or resulting from (together with any related claims i) a breach by the Seller of the representations in Sections 3.2 (Authorization, etc.), 3.4 (Title to Shares and Capitalization) and 4.2 (Capitalization), or other claims which arise from a substantially similar course of conduct (ii) fraud by the Parent, the Seller or facts) equal the Buyer. Notwithstanding the foregoing, or exceed $50,000; provided, that anything in this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i) Agreement to the extent such claim is based upon a contrary, and excluding Losses arising out of or resulting from fraud by the Seller or the Parent, or any breach of the representations and warranties set forth contained in Section 3.2 (Capitalization of Sections 3.2, 3.4 or 4.2, for which there shall be no limitation, the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers), (x) Section 10.2(b)(i) aggregate amount payable to the extent such claim is based upon a breach of a representation and warranty set forth in Buyer with respect to claims (i) under Section 4.2 (Authority), Section 4.4 (Title8.2(a) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) shall not exceed an amount equal to the extent such claim is based upon a breach of the representations Seller Indemnity Cap, and warranties set forth in (ii) under Section 3.2 (Capitalization of the Company9.1(a) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) shall not exceed an amount equal to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Initial Purchase Price. Excluding Losses relating to or arising out of such claim (together or resulting from fraud by the Buyer, the aggregate amount payable to the Seller with any related respect to the claims or other claims which arise from a substantially similar course of conduct or factsunder Section 8.3(a) equal or shall not exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);10,000,000.
(db) the Barceloneta Member Indemnitees An Indemnitee shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) 8.2 or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (8.3 or Section 9.1(a) for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may any individual breach of a representation or warranty or series of related breaches of representations or warranties arising out of the same facts and circumstances if the amount of such Losses does not exceed $25,000.
(c) If any Loss under Sections 8.2 and 8.3 can be requested reduced by any recovery, settlement or otherwise under this Article 10 or pursuant to insurance coverage, the Indemnitee shall take all appropriate steps to enforce such recovery to the extent it is commercially reasonable to do so and the costs associated with such mitigation amount of Losses for which any Person is entitled to indemnification hereunder shall be included in the reduced by any portion of such Losses with respect to for which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses such Person actually recovers against an insurance policy or against any third party other than pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution this Agreement.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights to indemnification pursuant Notwithstanding anything to the provisions of Section 10.2 are subject to the following limitations:
contrary contained herein, (a) except to the extent provided below, each Seller shall only be obligated to indemnify the Parent Indemnitees for a Parent Indemnitee's aggregate claim for Damages multiplied by such Seller's percentage interest in the Company as set forth on EXHIBIT A attached hereto (based upon the assumption that ▇▇▇ ▇▇▇▇▇ is not a stockholder of the Company); (b) only a Seller that breached the terms of Sections 3.2(d), (f), (h), (k) or (x) or the terms of a Seller Ancillary Document to which such Seller is a party shall be liable to the Purchaser Indemnitees for Damages cause by a breach of such section or such agreement, as the case may be; (c) no party hereto shall be obligated to indemnify any other party hereto (i) for any individual claim or related claims for Damages unless the amount of any such claim or related claims exceeds $1,000, and (ii) until and unless all Losses recoverable pursuant to Section 10.2(a)claims or related claims for Damages in excess of $1,000 exceed $20,000 in the aggregate, Section 10.2(b)and then, Section 10.2(c), Section 10.2(donly for such excess claims; (d) and Section 10.2(e) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) neither Sellers nor the Parent Indemnitees shall not be entitled to recover in respect of any individual claim liable for Damages pursuant to this Article 5 in excess of the sum of (i) $500,000 in the aggregate; plus (ii) 50% (but 100% with respect to claims for Damages under Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii5.2(c)(iv) or Section 10.2(c)(i5.2(a) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization 3.2(j)) of the Group Companies)Contingent Consideration payable to Sellers pursuant to Section 1.5 hereof; plus (iii) with respect to claims for Damages against Sheridan, 50% (but 100% with respect to claims for Damages under Section 3.3 (Authority5.2(c)(iv) or Section 3.15 (Brokers), (x5.2(a) Section 10.2(b)(i) relating to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company3.2(j)) of the Barceloneta Contribution aggregate compensation owed to Sheridan for Bonus and Contingent Consideration (as such terms are defined in Sheridan's Employment Agreement); provided, Section 3.3 (Authority) of however, that the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth limitations contained in Section 4.2 (Authority) of the Barceloneta Contribution AgreementSections 5.4(a), Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim and (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(cd) shall not apply to any claim claims for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon Damages resulting from a breach of the representations and warranties set forth in Section 5.2 (Authority5.2(c)(iv) or Sections 3.2(d), Section 5.6 (Brokersf), (h), (k) or Section 5.10 (New Company);
(dx) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
a Seller's Ancillary Document; (e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time no party hereto shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(athis Article 5 to the extent the indemnified party receives insurance proceeds with respect to such claim for Damages; and (f) only Sheridan shall be liable to Parent and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover Surviving Corporation for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreement3.3 hereof.
Appears in 1 contract
Limitations on Indemnification Obligations. (a) The rights of the Purchaser Indemnitees to indemnification pursuant to the provisions provision of Section 10.2 10.2(a)(i) are subject to the following limitations:
(ai) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Purchaser Indemnitees shall not be entitled to recover Losses for claims made with respect to breaches of the Non-Fundamental Representations (other than breaches of the Limitations Representations or the representations and warranties in Section 4.8, Losses with respect to which shall not be subject to the limitation in this Section 10.5(a)(i)) and the IP Representations pursuant to Section 10.2(a)(i) until the total amount which the Purchaser Indemnitees would recover under Section 10.2(a)(i) exceeds $400,000 (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;
(ii) the Purchaser Indemnitees shall be entitled to recover Losses for claims made with respect to breaches of (A) Non-Fundamental Representations (other than breaches of the Limitations Representations, Losses with respect to which shall not be subject to the limitation in this Section 10.5(a)(ii)) pursuant to Section 10.2(a)(i) only up to the Escrow Amount; and (B) the IP Representations only up to thirty-five percent (35%) of the aggregate of the Final Consideration and any Contingent Payments, provided that with respect to claims made for breaches of the IP Representations after the Release Date, only with respect to an amount up to the Release Amount; and
(iii) in connection with any claim for indemnification pursuant to Section 10.2(a)(i), Section 10.2(a)(iieach Seller shall only be severally liable for his or its Pro Rata Share of any Losses (individually or in the aggregate), but not to exceed his or its Pro Rata Share of the Final Consideration and any Contingent Payments; provided, that (A) with respect to the Non-Fundamental Representations (other than the Limitations Representations), no Seller shall be responsible for aggregate Losses in excess of his or its Pro Rata Share of the Escrow Amount, and (B) with respect to the IP Representations, no Seller shall be responsible for aggregate Losses in excess of his or its Pro Rata Share of the amount equal to thirty-five percent (35%) of the aggregate of the Final Consideration and any Contingent Payments; provided that with respect to claims made after the Release Date for breaches of the IP Representations, no Seller shall be responsible for aggregate Losses in excess of his or its Pro Rata Share of the Release Amount; provided, further, that with respect to a breach of a representation or warranty contained in Article 5 (Representations and Warranties of the Sellers and the Representative) by a particular Seller, only such particular Seller shall be liable for Losses arising in connection with such breach, and the parties agree that no other Seller shall be liable hereunder for such breach.
(b) In connection with any claim for indemnification by a Purchaser Indemnitee pursuant to Section 10.2(a)(iv)(A10.2(a), other than pursuant to Section 10.2(a)(i), or any claim for fraud, intentional misrepresentation or willful breach with respect to a representation or warranty made by the Company (except to the extent such Seller or the Representative had knowledge of or participated in such fraud, intentional misrepresentation or willful breach), the Sellers or the Representative pursuant to this Agreement, each Seller shall only be severally liable for his or its Pro Rata Share of any Losses (individually or in the aggregate), but not to exceed his or its Pro Rata Share of the Final Consideration and any Contingent Payments.
(c) The Seller Indemnitees shall not be entitled to indemnification under Section 10.2(a)(vi10.2(b)(i) to recover Losses (i) until the aggregate total amount which of Losses the Parent Seller Indemnitees would recover under such sections (as limited by would exceed an amount equal to the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”)Deductible, in which case, case the Parent Seller Indemnitees shall only be entitled only to recover Losses in excess of the Thresholdsuch amount; provided, that the Threshold shall not apply to any claim for indemnification pursuant to and (xii) Section 10.2(a)(i) in excess of an amount equal to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;Escrow Amount.
(fd) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover The amount of any Losses for which indemnification is sought pursuant to Section 10.2(d)(i10.2 shall be reduced by (i) the amount of any insurance proceeds actually recovered by the Indemnified Parties, (ii) indemnity or contribution amounts actually recovered by any Indemnified Party from third parties (other than Purchaser or the Company), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except each case with respect to such Losses, and (iii) the value of any claims resulting from Tax benefit actually recognized by the failure to complete the Financing pursuant to the terms of this Agreement (including Indemnified Party as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution AgreementLosses.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Buyer Indemnitees and the Seller Indemnitees to indemnification pursuant to the provisions of Section 10.2 9.2 are subject to the following limitations:
(a) the Buyer Indemnitees shall not be entitled to recover Losses pursuant to Section 9.2(a)(i)(1) or Section 9.2(a)(ii)(1) until the total amount of Losses which the Buyer Indemnitees would be entitled to recover under both Section 9.2(a)(i)(1) and Section 9.2(a)(ii)(1) taken together, but for this Section 9.4(a), exceeds one percent (1%) of the Aggregate Purchase Price, in which case, the Buyer Indemnitees shall only be entitled to recover Losses in excess of such amount; provided, however, that any Losses incurred by any Buyer Indemnitees as a result of a breach of the representations or warranties made by Sellers in Section 4.6(a) (Railcar Tape) or in Section 5(a) of any Subsequent Closing Certificate, in each case, solely to the extent that such breach relates to the information in clauses (viii), (ix) or (xi) of the definition of Railcar Information, shall not be subject to the limitations set forth in this Section 9.4(a);
(b) the Buyer Indemnitees shall not be entitled to recover for any particular Loss (including any series of related Losses) pursuant to Section 9.2(a)(i)(1) or Section 9.2(a)(ii)(1) unless such Loss (including any series of related Losses) equals or exceeds $100,000;
(c) the maximum liability of Sellers with respect to Losses indemnifiable pursuant to Section 9.2(a)(i)(1), Section 9.2(a)(ii)(1) and Section 10.1(a)(iv) shall not exceed ten percent (10%) of the Aggregate Purchase Price;
(d) the Seller Indemnitees shall not be entitled to recover Losses pursuant to Section 9.2(b)(i) until the total amount of Losses which the Seller Indemnitees would be entitled to recover under Section 9.2(b)(i), but for this Section 9.4(d), exceeds one percent (1%) of the Aggregate Purchase Price, in which case, the Seller Indemnitees shall only be entitled to recover Losses in excess of such amount;
(e) the Seller Indemnitees shall not be entitled to recover for any particular Loss (including any series of related Losses) pursuant to Section 9.2(b)(i) unless such Loss (including any series of related Losses) equals or exceeds $100,000;
(f) the maximum liability of Buyer with respect to Losses indemnifiable pursuant to Section 9.2(b)(i) shall not exceed ten percent (10%) of the Aggregate Purchase Price;
(g) in no event shall the Indemnified Party be required to first bring an Action against, or recover any amount from, any third party or under any applicable insurance policy as a precondition to the Indemnifying Party’s obligation to provide indemnification hereunder;
(h) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) shall be determined net of any amounts actually recovered by the Parent Buyer Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or from other collateral sources or third parties (net of any related deductible or expenses incurred by it in procuring such recovery) (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), ) with respect to such Losses;
(bi) for the Parent Indemnitees shall not be entitled to recover purposes of this Article IX, (1) any inaccuracy in respect or breach of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(iirepresentation or warranty (other than (A) or Section 10.2(c)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i) to the extent such claim is based upon a breach of the those representations and warranties set forth in Section 3.2 4.4(c) (Capitalization of the Group CompaniesFinancial Statements), Section 3.3 4.8(a) (Authority) or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (AuthorityMaterial Contracts), Section 4.4 (Title4.9(a) or and Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach 4.9(b)(vi)(Absence of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000Changes; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (AuthorityUndisclosed Liabilities), Section 5.6 4.10(a) (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(iLitigation), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi4.11(a) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(bPermits) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i4.12(a) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4Employee Plans) and (B) the Company’s Fundamental Representations (other than Section 4.1(c)) and the Subsequent Seller Fundamental Representations) shall be determined without regard to any Company Material Adverse Effect, materiality and similar qualifiers contained in or otherwise applicable to such representation or warranty, and (2) any inaccuracy in or breach of any representation or warranty set forth in the case of a breach second sentence of Section 3.2 (Capitalization of the Company4.21(a), or in Section 4.21(b) of the Barceloneta Contribution Agreement and or Section 4.4 (Title4.21(f) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled determined without regard to recover directly from the applicable Barceloneta Contributor any qualification set forth therein with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 Knowledge of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10Company; and
(nj) In no event shall (x) a Parent Indemnitee be entitled nothing in this Agreement limits the obligations of either Party under applicable law to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreementmitigate any Losses.
Appears in 1 contract
Sources: Equity and Asset Purchase Agreement (Icahn Enterprises Holdings L.P.)
Limitations on Indemnification Obligations. The Except in the case of fraud, the rights of the Buyer Indemnitees and the Seller Indemnitees to indemnification pursuant to the provisions of Section 10.2 9.2 are subject to the following limitations:
(a) the Buyer Indemnitees shall not be entitled to recover Losses pursuant to Section 9.2(a)(i) unless and until the total amount of Losses which the Buyer Indemnitees would recover under Section 9.2(a)(i) (except with respect to any breach of (i) any of the representations and warranties of the Company contained in Section 3.11 (Employee Plans) and Section 3.16 (Tax Matters) or (ii) any breach of a Specified Representation), but for this Section 9.4(a), exceeds $8,500,000 (the “Deductible”), in which case, following the incurrence by the Buyer Indemnitees of Losses in excess of the Deductible, the Buyer Indemnitees shall be entitled to recover only the Losses incurred by them in excess of $4,250,000;
(b) the Buyer Indemnitees shall not be entitled to recover for any particular Loss (including any series of related Losses) pursuant to Section 9.2(a)(i) (except with respect to any breach of (i) any Specified Representation or (ii) the representations and warranties of the Company contained in Section 3.4 (Financial Statements), Section 3.8 (Absence of Changes and Undisclosed Liabilities), Section 3.11 (Employee Plans) and Section 3.16 (Tax Matters)) unless such Loss (including any series of similar or related Losses) equals or exceeds $25,000; provided, that, for purposes of determining the thresholds set forth in the immediately preceding two paragraphs, any reference in the representations and warranties of the Company and Seller contained in ARTICLE III and ARTICLE IV (other than Section 3.4 (Financial Statements), Section 3.8 (Absence of Changes and Undisclosed Liabilities) and Section 3.18(b) (Personal Property)) to materiality, material adverse effect, Company Material Adverse Effect or similar qualifications shall be disregarded but, for the avoidance of doubt, knowledge and dollar threshold qualifications shall not be disregarded);
(c) without limiting the last paragraph of this Section 9.4, the maximum liability of Seller with respect to Losses indemnifiable (i) pursuant to Section 9.2(a) (except with respect to (x) any breach of the Specified Representations and Section 3.20 (Regulatory Matters) or (y) Section 9.2(a)(iii), (iv) or (v)), together with any Losses indemnifiable with respect to any breach of the Specified Representations or any representation or warranty of the Company contained in Section 3.20 (Regulatory Matters), shall be equal to $42,500,000 in the aggregate; (ii) pursuant to Section 9.2(a) with respect to any breach of any representation or warranty of the Company contained in Section 3.20 (Regulatory Matters), together with any Losses indemnifiable pursuant to Section 9.2(a) (except with respect to Section 9.2(a)(iii), (iv) or (v)) shall be equal to $85,000,000 in the aggregate, (iii) pursuant to Section 9.2(a) with respect to (x) willful misconduct constituting an intentional and knowing breach of Seller’s covenants hereunder and (y) Section 9.2(a)(iii), together with any Losses indemnifiable pursuant to Section 9.2(a), shall not exceed $125,000,000 in the aggregate, or (iv) pursuant to Section 9.2(a) with respect to (x) any breach of any Specified Representation and (y) Section 9.2(a)(iv) or (v), together with any Losses indemnifiable pursuant to Section 9.2(a) shall not exceed an amount equal to the Purchase Price;
(d) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) shall be determined net of any amounts recovered by the Parent Buyer Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or from other third party collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), ) with respect to such Losses;
(be) the Parent Buyer Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to Section 10.2(d)(i9.2(a) for any Loss to the extent that such claim is based upon a breach Loss was taken into account in the determination of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim Final Purchase Price pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,0002.4; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;and
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) no Buyer Indemnitee or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time Seller Indemnitee shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(athis ARTICLE IX with respect to, and solely to the extent that, any Loss would have been mitigated had such Buyer Indemnitee or Seller Indemnitee, as applicable, had used commercially reasonable efforts to mitigate all Losses (solely to the extent such efforts are required by Law) and Section 10.2(b) or Section 10.2(c)after becoming aware of any event which could reasonably be expected to give rise to such Loss, the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to including seeking indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) the Agreement and Plan of Merger, dated June 20, 2008, by and among Seller, Bondi Merger Sub, Inc., BGI and T.I. GPO, Inc. and the Escrow Agreement, dated as of August 15, 2008, by and among BGI, the Company, T.I. GPO, Inc. and ▇▇▇▇▇ Fargo Bank, N.A. Except in the case of a breach fraud, the sole recourse of Section 3.2 (Capitalization of any Buyer Indemnitee for any Losses that are indemnifiable or recoverable hereunder from Seller pursuant to this ARTICLE IX shall be an offset against the Group Companies) and Section 4.4 (Title)Deferred Payment Amount and, if applicable, the Seller Note, in which case event the Parent Indemnitees Deferred Payment Amount and, if applicable, the Seller Note shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood reduced by any such amounts so offset; provided, however, that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in claim for Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreement.Section
Appears in 1 contract
Limitations on Indemnification Obligations. The rights to indemnification pursuant Notwithstanding anything to the provisions of Section 10.2 are subject to the following limitationscontrary contained herein:
(ai) With respect to the amount indemnification obligations of any and all Losses recoverable Sellers pursuant to Section 10.2(a7.1(a)(i)(A) or Section 7.1(a)(i)(B), no Seller shall be obligated to indemnify the Purchaser Indemnified Parties under Section 7.1(a)(i)(A) or under Section 7.1(a)(i)(B) unless the aggregate of all Losses for which Sellers would, but for this clause (i), be liable under Section 7.1(a)(i)(A) and Section 7.1(a)(i)(B) exceeds on a cumulative basis $10,000, at which point, subject to any other applicable limitations contained in this Section 7.1(e), the Purchaser Indemnified Parties shall be entitled to all indemnification amounts under Section 7.1(a)(i)(A) and Section 7.1(a)(i)(B) from Sellers, including the first full $10,000 of Losses (the “Threshold”); provided, however, that the limitations in this Section 7.1(e)(i) shall not apply (A) to any indemnification obligations arising from or relating to any of the Fundamental Representations, or (B) in the case of fraud or intentional breach with respect to this Agreement or the transactions contemplated hereby.
(ii) With respect to the indemnification obligations of Sellers pursuant to Section 7.1(a)(i)(A), Section 10.2(b7.1(a)(i)(C), and Section 10.2(c7.1(a)(ii) through Section 7.1(a)(vi), each Seller’s indemnification obligations shall be joint and several.
(iii) With respect to the indemnification obligations of Sellers pursuant to Section 10.2(d7.1(a)(i)(B) and Section 10.2(e7.1(a)(i)(D), each Seller shall only be obligated to indemnify the Purchaser Indemnified Parties with respect to (A) an inaccuracy or breach of a representation or warranty covered by Section 7.1(a)(i)(B) (that does not also relate to any inaccuracy or breach of a representation or warranty subject to Section 7.1(a)(i)(A)) to the extent that such inaccuracy or breach related to or involved such Seller, or (B) a breach of a covenant, understanding or agreement covered by Section 7.1(a)(i)(D) to the extent that such Seller or Sellers’ Representative breached or caused or permitted the breach of such covenant, understanding or agreement.
(iv) Any indemnification obligations of Sellers under this ARTICLE VII shall be determined net satisfied first by recourse to the Escrow Fund, and to the extent the Escrow Fund is no longer available or is insufficient to satisfy the indemnification obligation, and second by direct recourse to Sellers.
(v) With respect to the indemnification obligations of any Purchaser pursuant to Section 7.1(b)(i), Purchaser shall not be obligated to indemnify Sellers under Section 7.1(b)(i) unless the aggregate of all Losses for which Purchaser would, but for this clause (v), be liable under this Agreement exceeds on a cumulative basis the Threshold, at which point Sellers shall be entitled to all indemnification amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this AgreementSection 7.1(b)(i), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each casefirst full $10,000 of Losses, to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, however, that the limitations in this Section 10.4(b7.1(e)(v) shall not apply (A) to any claim for indemnification obligations arising from the Fundamental Representations, or (B) in the case of fraud or intentional breach with respect to this Agreement or the transactions contemplated hereby.
(vi) With respect to the indemnification obligations of Purchaser pursuant to Section 7.1(b), Purchaser shall not be obligated to indemnify Sellers under Section 7.1(b) for any Losses for which Purchaser would, but for this clause (wvi), be obligated to indemnify Sellers under Section 7.1(b) Section 10.2(a)(iin excess of an amount equal to the Purchase Price; provided, however, that the limitations in this clause (vi) shall not apply (A) to the extent such claim is based upon a breach of any indemnification obligations arising from the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) 4.2 or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A)4.6, or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a fraud or intentional breach of Section 3.2 with respect to this Agreement or the transactions contemplated hereby.
(Capitalization vii) The Parties acknowledge and agree that one of the Company) purposes of the Barceloneta Contribution Agreement representations, warranties, covenants, agreements, and Section 4.4 (Title) of the Barceloneta Contribution indemnities made in this Agreement, the schedules and exhibits hereto, or in which case any certificate furnished in connection with the Parent Indemnitees transactions contemplated hereby, is to shift the economic risk and responsibility for certain known and unknown Liabilities among the Parties. Accordingly, the right to indemnification, payment of Losses or other remedy based on breaches or inaccuracies of representations, warranties or compliance with the covenants and obligations granted pursuant to this ARTICLE VII, will not be affected by any investigation conducted with respect to, or any knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement by the Claimant. All representations, warranties, covenants, agreements, and indemnities shall only be deemed material and relied upon by the Claimant, regardless of any knowledge or investigation.
(viii) No Seller shall be entitled to recover directly contribution or any other payments from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches Company or any of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event its subsidiaries for any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified Seller is obligated to make any payment to any Purchaser Indemnified Party pursuant to Section 10.2(athis Agreement (including ARTICLE VII), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreement.
Appears in 1 contract
Sources: Stock Purchase Agreement (Elite Education Group International LTD)
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 8.2 are subject to the following limitations:
(a) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Buyer Indemnitees shall not be entitled to recover Losses pursuant to clause (i) of Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi8.2(a) until the aggregate total amount which the Parent Buyer Indemnitees would be entitled to recover under such sections clause (i) of Section 8.2(a) (as limited by the other provisions of this Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement8.4) exceeds $5,000,000 650,000 (the “Threshold”), in which case, case the Parent Buyer Indemnitees shall only be entitled to recover Losses in excess of such amount, and in no event shall the Thresholdaggregate recovery of Losses by Buyer Indemnitees pursuant to clause (i) of Section 8.2(a) exceed $10,000,000, subject to the other limitations set forth in this Section 8.4; provided, provided that the Threshold this Section 8.4(a) shall not apply to Losses suffered or incurred as a result of or arising from or relating to any claim breach of, or inaccuracy in any Fundamental Representation.
(b) with respect to any Losses for which the Buyer Indemnitees may be entitled to indemnification pursuant to clause (xi) of Section 10.2(a)(i8.2(a), Parent shall not be liable for any individual or series of related Losses which do not exceed $50,000 (which Losses shall not be counted towards the Threshold); provided that this Section 8.4(b) shall not apply to Losses suffered or incurred as a result of or arising from or relating to any breach of or inaccuracy in any Fundamental Representation.
(c) in no event shall the aggregate recovery of Losses by Buyer Indemnitees pursuant to clause (i) of Section 8.2(a) with respect to any breach of a Fundamental Representation, or pursuant to any of clauses (ii), (iii) or (iv) of Section 8.2(a), exceed the Purchase Price, in each case, subject to the other limitations set forth in this Section 8.4;
(d) the amount of any Losses recoverable by Buyer Indemnitee pursuant to Section 8.2(a) shall be determined net of (i) the amount of any such Losses that were set forth on the Final Closing Statement and included in the calculation of the Final Cash Purchase Price pursuant to Section 2.5(c); (ii) the amount of any indemnification payment actually received by any Buyer Indemnitee from any third party in respect of such Losses; and (iii) the amount of any insurance proceeds actually received by any Buyer Indemnitee from any third party insurer with respect to such Losses, in each case of clause (ii) and (iii), net of any deductibles or other reasonable costs and expenses incurred by any Buyer Indemnitee in procuring such recovery; provided, however, that (A) if Parent or any Company pays to any Buyer Indemnitee an amount in respect of Losses and any Buyer Indemnitee thereafter receives from a third party a sum in respect of such Losses, then Buyer shall promptly tender to Parent an amount equal to the lesser of such sum and the amount that Parent or such Company paid in respect of such Losses; and (B) Buyer shall, and shall cause the other Buyer Indemnitees to, use commercially reasonable efforts to obtain available recoveries as contemplated by clauses (ii) and (iii) of this Section 8.4(d); provided that such commercially reasonable efforts shall not obligate Buyer or any Buyer Indemnitee to expend any amount of money other than de minimis amounts (unless such other amounts are advanced by Parent or the Companies), commence any Action, or otherwise take any action that could reasonably be expected to have an adverse impact on the Business;
(e) no party shall be liable for any punitive or exemplary damages (except to the extent such claim is based upon paid in connection with a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) Third Party Claim or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;Fraud); and
(f) the Member Indemnitees and the Barceloneta Member Buyer Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(iiclause (iii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i8.2(a) in respect of any Environmental Liability that is discovered through or during any intrusive or subsurface investigations or other sampling of environmental media undertaken other than (i) in connection with any necessary or ordinary course maintenance or repairs, (ii) in connection with any improvement, remodel or development activity at any Theatre, (iii) as required by Law or at the direction of a breach of the representations and warranties in Article 3 hereof Governmental Entity, or (yiv) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect as deemed necessary or advisable by Buyer based on the advice of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreementcounsel.
Appears in 1 contract
Limitations on Indemnification Obligations. The Other than with respect to Losses related to breaches of Fundamental Representations and Section 4.15, the rights of the Purchaser Indemnitees to indemnification pursuant to the provisions provision of Section 10.2 10.2(a)(i) are subject to the following limitations:
(a) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Purchaser Indemnitees shall not be entitled to recover Losses for claims made with respect to breaches of the Non-Fundamental Representations (other than breaches of Section 4.15, Losses with respect to which shall not be subject to the limitation in this clause (a)) pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until (i) the aggregate Losses relating to or arising out of the same or related facts, events or circumstances exceed $7,500 (any other claim for Losses, a “Minor Claim”) and (ii) the total amount which the Parent Purchaser Indemnitees would recover under such sections Section 10.2(a)(i), excluding all Minor Claims (as limited by the provisions of Section 10.4(a10.6), but for this Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) 10.5(a), exceeds $5,000,000 990,000 (the “Threshold”), in which case, case the Parent Purchaser Indemnitees shall only be entitled to recover the aggregate amount of all such Losses in excess of (including the amount up to the Threshold; provided), that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) subject to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreementother limitations herein;
(fb) notwithstanding anything to the Member Indemnitees and contrary in this Agreement, the Barceloneta Member Indemnitees amount of Losses for claims made with respect to breaches of the Non-Fundamental Representations (other than breaches of Section 4.15, Losses with respect to which shall not be entitled subject to recover Losses pursuant to Section 10.2(d)(ithe limitation in this clause (b), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited that may be recovered by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Purchaser Indemnitees shall only be entitled to recover Losses limited, individually and in excess of the Threshold; providedaggregate, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) by application to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), Amount; and in no event shall the Parent Purchaser Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover Amount for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor claims made with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and Non-Fundamental Representations (B) in the case of a breach other than claims for breaches of Section 3.2 (Capitalization of the Company4.15) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreementaggregate.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights of the Purchaser Indemnitees and Seller Indemnities to indemnification pursuant to the provisions provision of Section 10.2 8.2(a) or Section 8.2(b), as applicable, are subject to the following limitations:
(a) the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) shall be determined net of any amounts recovered by the Parent Purchaser Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), ) with respect to such Losses, in each case, net of costs of collection and any increase to premiums resulting from making any claim thereunder;
(b) the Parent Purchaser Indemnitees and Seller Indemnitees shall not be entitled to recover in respect of for any individual claim particular Loss pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii8.2(a) or Section 10.2(c)(i) 8.2(b), as applicable, unless the aggregate Losses relating to such Loss equals or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed exceeds $50,000100,000; provided, that for all purposes of this Section 10.4(b) shall not apply Article 8, other than with respect to any claim for indemnification pursuant to (w) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies3.4(c)(ii) and Section 3.4(d), Section 3.3 (Authority) or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach any qualification of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the any representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) by reference to the extent such claim is based upon a materiality of or Company Material Adverse Effect relating to the matters stated therein, or words of similar effect, shall be disregarded in determining any breach thereof or the amount of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.any Loss arising therefrom;
(c) the Member Purchaser Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Seller Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i8.2(a) or Section 8.2(b), Section 10.2(a)(ii)as applicable, Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate total amount which the Parent Purchaser Indemnitees or Seller Indemnitees, as applicable, would recover under such sections Section 8.2(a) (as limited by the provisions of Section 10.4(aSections 8.4(a), Section 10.4(b(b) and 10.13), but for this Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) 8.4(c), exceeds $5,000,000 3,000,000 (the “Threshold”), in which casecase the Purchaser Indemnitees or Seller Indemnitees, the Parent Indemnitees as applicable, shall only be entitled to recover Losses in excess of the Threshold; providedsuch amount, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) subject to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 other limitations herein (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, provided that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except recoveries made with respect to any claims resulting from the failure to complete the Financing pursuant to the terms breach that constitutes actual fraud (which for purposes of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c)clarity, shall be intentional and knowing) shall neither be limited by, nor applied toward, the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit ValueThreshold);
(hd) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time the remaining portion of the Indemnity Escrow Amount shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a8.2(a), and in no event shall the Parent Purchaser Indemnitees be entitled to recover more than the amount of Indemnity Escrow Cash and Escrow Units available in the Escrow Account Amount pursuant to Section 10.2(a); (y8.2(a) in the event aggregate (provided that recoveries made with respect to any factsbreach of a representation that constitutes actual fraud (which for purposes of clarity, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which shall be intentional and knowing) shall not be so limited;
(e) the Parent Purchaser Indemnitees are shall not be entitled to indemnification pursuant to Section 10.2(a8.2(a) for any Loss to the extent that (i) prior to the date hereof the Group Companies recorded a reserve in their consolidated books and Section 10.2(brecords with respect to such Loss, (ii) or Section 10.2(c), such Loss was taken into account in the Parent Indemnitees shall only be entitled to recover for such Losses Purchase Price as finally determined pursuant to Section 10.2(a2.9(b), (iii) the Purchaser Indemnitees could have, with commercially reasonable efforts, mitigated or prevented such Loss and shall have no rights (iv) to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than the extent such Loss was actually taken into account in calculation of Consolidated EBITDA as set forth on the Consolidated EBITDA Certificate; and
(Af) in no event shall Sellers’ aggregate liability for Losses hereunder exceed the case Purchase Price (including, for purposes of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title)clarity, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to any breach that constitutes actual fraud). For avoidance of doubt, any recoveries by the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Purchaser Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to Escrow Funds shall be included in calculating whether the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of aggregate Sellers’ aggregate liability for Losses hereunder exceeds the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Purchase Price. Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units Funds are reduced to zero, the Parent Purchaser Indemnitees shall have no further rights to indemnification under Section 10.2(a8.2 (other than with respect to any breach of a representation that constitutes actual fraud (which for purposes of clarity, shall be intentional and knowing)) or payment under Section 2.9(c). In any case where a Parent Purchaser Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Purchaser Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c)8.2, such Parent Purchaser Indemnitee shall promptly return to the Escrow Account or, if the Escrow Agreement has expired, promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicableon behalf of Sellers) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Purchaser Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Purchaser Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreement.
Appears in 1 contract
Sources: Agreement and Plan of Merger (Logan's Roadhouse of Kansas, Inc.)
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) Notwithstanding Section 8.1, there shall be no liability for indemnification under Section 8.1(a) unless the aggregate amount of any and all Losses recoverable pursuant to Section 10.2(aunder this Agreement exceeds $[**] (the “Seller Indemnification Threshold”), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) shall at which ▇▇▇▇ ▇▇▇▇▇▇ will be determined net of any amounts recovered by obligated to indemnify the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), Buyer Indemnified Parties with respect to such Losses;the aggregate amount of all Losses described in Section 8.1(a) (i.e., from the first dollar); provided that the Seller Indemnification Threshold shall not apply in the case of fraud, intentional or knowing misrepresentation or willful breach or to the 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; no conflict), 2.7 (assets) (and other provisions relating to title to the Acquired Assets), 2.8 (taxes), 2.9 (employee benefit plans), 2.15 (intellectual property), 2.18 (regulatory matters), 2.19 (affiliate transactions) and 2.24 (brokers and agents).
(b) the Parent Indemnitees Notwithstanding Section 8.2, there shall not be entitled to recover in respect of any individual claim pursuant to no liability for indemnification under Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i8.2(a) unless the aggregate amount of Losses relating thereunder exceeds $[**] (the “Buyer Indemnification Threshold”), at which time Buyer will be obligated to or arising out indemnify the Seller Indemnified Parties with respect to the aggregate amount of such claim all Losses described in Section 8.2(a) (together with any related claims or other claims which arise i.e., from a substantially similar course of conduct or facts) equal or exceed $50,000the first dollar); provided, provided that this Section 10.4(b) the Buyer Indemnification Threshold shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i) in the case of fraud, intentional or knowing misrepresentation or willful breach or to the extent such claim is based upon a breach of or inaccuracy in any representation or warranty made by Buyer in any of the representations following Sections: 3.1 (due organization) and warranties set forth in Section 3.2 (Capitalization of the Group Companiesauthorization; no conflict), Section 3.3 (Authority) or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) The indemnification obligations of Seller under Section 8.1(a) shall be limited to $[**] (the Member Indemnitees “Lower Cap”), provided, however, that the Lower Cap shall not apply in the case of fraud, intentional or knowing misrepresentation or willful breach or to (i) Seller’s indemnification obligations under Section 8.1(a) for breaches of or inaccuracies in any representation or warranty set forth in Sections 2.15 (intellectual property) and 2.18 (regulatory matters), which obligations (when aggregated with Seller’s other indemnification obligations under Section 8.1(a)) shall be entitled limited to recover [**] percent ([**]%) of the Purchase Price, or (ii) Seller’s indemnification obligations under Section 8.1(a) for breaches of or inaccuracies in respect of any individual claim pursuant to Section 10.2(d)(irepresentation or warranty set forth in Sections 2.1 (due organization), 2.2(a) or Section 10.2(d)(ii(authorization; no conflict), 2.7 (assets) unless the aggregate Losses (and other provisions relating to or arising out of such claim title to the Acquired Assets), 2.8 (together taxes), 2.9 (employee benefit plans), 2.19 (affiliate transactions) and 2.24 (brokers and agents), which obligations (when aggregated with any related claims or Seller’s other claims which arise from a substantially similar course of conduct or factsindemnification obligations under Section 8.1(a)) equal or exceed shall be limited to an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);Purchase Price.
(d) the Barceloneta Member Indemnitees The indemnification obligations of Buyer under Section 8.2(a) shall not be entitled limited to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000the Purchase Price; provided, however, that this Section 10.4(d) such limit shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to in the extent such claim is based upon a breach case of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreementfraud, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement intentional or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;knowing misrepresentation or willful breach.
(e) Notwithstanding anything to the Parent Indemnitees contrary in this Agreement: (i) Buyer shall not have no obligations under Section 8.2 with respect to any matter for which any Buyer Indemnified Party is or would be entitled to recover Losses indemnification under Section 8.1 (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 8.1 or 8.2, as the case may be, such 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 disbursement from the Escrow Funds or by offset pursuant to Section 10.2(a)(i8.6, provided that Buyer shall proceed first against the Escrow Funds in the event of an indemnification claim under Section 8.1(a), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;.
(f) Notwithstanding a Party’s knowledge of any breach by the Member Indemnitees other Party of any representation, warranty, covenant or agreement contained in this Agreement (and regardless of how the Barceloneta Member Indemnitees non-breaching Party shall not be entitled to recover Losses pursuant to Section 10.2(d)(ihave acquired such knowledge), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which non-breaching Party shall have the Member Indemnitees right to consummate the transactions provided for herein, and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 all of the Barceloneta Contribution Agreement) exceeds the Thresholdnon-breaching Party’s rights and remedies with respect to such breach shall be preserved without regard to its knowledge of such information, it being agreed that each Party, in which caseentering into this Agreement, has bargained for the Member Indemnitees correctness of each representation, warranty, covenant and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess agreement of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;other Parties contained herein.
(g) except The amount of Losses recoverable by the Indemnified Party under this Article VIII shall be reduced, on a dollar-for-dollar basis, by the amount of any insurance proceeds received by the Indemnified Party in connection with respect to a Claim under this Article VIII under any claims resulting from the failure to complete the Financing pursuant insurance policies if and only if such proceeds were paid or received under an insurance policy maintained by Seller prior to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value Closing and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;premiums for such insurance policies were paid by Seller.
(h) Notwithstanding anything to the aggregate liability contrary in this Agreement, for purposes of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
determining (i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of whether there has been a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled requiring Seller to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions indemnify as provided in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter 8.1 and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect thereto, each representation, warranty, covenant and agreement made by Seller, whether made herein (other than Section 2.4(b) (absence of changes)) or in any other document, agreement or instrument delivered in connection herewith, shall be deemed to which indemnification may be requested under this Article 10; and
have been made without any qualifications or limitations as to materiality (n) In no event shall (x) including any qualifications or limitations made by reference to a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution AgreementMaterial Adverse Change).
Appears in 1 contract
Limitations on Indemnification Obligations. (a) The rights to indemnification obligations of Seller, Seller Subsidiary and the Selling Parties pursuant to the provisions of Section 10.2 8.1 are subject to the following limitations:
(ai) Seller, Seller Subsidiary and the amount of any and all Losses recoverable pursuant to Section 10.2(a), Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) Selling Parties shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, required to indemnify and hold harmless under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), Section 8.1(b) with respect to such Losses;
Loss and Expense incurred by Buyer Group Members (b) the Parent Indemnitees shall not be entitled to recover in respect other than Loss and Expense incurred as a result of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i) to the extent such claim is based upon a breach inaccuracies of the representations and warranties set forth contained in Section 3.2 Sections 5.1, 5.3, 5.7, 5.16 and 5.26 (Capitalization of the Group Companies“Seller Excluded Representations”)), Section 3.3 as to which this subsection (Authorityi) or Section 3.15 shall have no effect) only if the aggregate amount of such Loss and Expense exceeds $200,000; provided, however, that if the aggregate amount of Loss and Expense incurred by Buyer Group Members exceeds $200,000, then this subsection (Brokersi) shall not apply and Buyer Group Members shall be entitled to indemnification for all Loss and Expense irrespective of this subsection (i);
(ii) the aggregate amount that Seller, Seller Subsidiary and the Selling Parties shall be required to indemnify and hold harmless under (x) Section 10.2(b)(i8.1(a) to the extent such claim is based upon a in connection with or arising from any breach of a representation and warranty the covenants set forth in Section 4.2 Article VII (Authorityother than the covenants set forth in Sections 7.1, 7.2, 7.3, 7.4 (subsections (c), Section 4.4 (Titlef) or Section 4.6 and (Brokersg) only), 7.8 or 7.12 (the “Seller Excluded Covenants”), as to which this subsection (ii) shall have no effect) and (y) Section 10.2(a)(vi8.1(b) (other than Loss or Expense incurred as a result of inaccuracies of any Seller Excluded Representation, as to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 which this subsection (Capitalization of the Companyii) of the Barceloneta Contribution Agreement, Section 3.3 (Authorityshall have no effect) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,0008,000,000; providedand
(iii) the indemnification provided for in (x) Section 8.1(a) in connection with or arising from any breach of the covenants set forth in Article VII or (y) Section 8.1(b) shall terminate eighteen (18) months after the Closing Date (and no claims shall be made by any Buyer Group Member under Section 8.1(b) thereafter), except that the indemnification by Seller, Seller Subsidiary and the Selling Parties shall continue as to: (A) the representations and warranties contained in the Seller Excluded Representations (other than those contained in Section 5.7), as to all of which no time limitation shall apply, and as to the representations and warranties contained in Section 5.7 until the expiration of the relevant statute of limitations, (B) the covenants contained in the Seller Excluded Covenants and Section 7.12, as to which no time limitation shall apply, (C) the covenants contained in Section 7.7 which shall apply until the later of (1) eighteen months after the date hereof and (2) the date at which all Excluded Receivables have been collected and (D) any Loss or Expense of which any Buyer Group Member has notified Seller, Seller Subsidiary or the Selling Parties in accordance with the requirements of Section 8.3 on or prior to the date such indemnification would otherwise terminate in accordance with this Section 10.4(c) 8.5, as to which the obligation of Seller, Seller Subsidiary, and the Selling Parties shall not apply to any claim for indemnification continue until the liability of Seller, Seller Subsidiary and the Selling Parties shall have been determined pursuant to Section 10.2(d)(i) this Article VIII, and Seller, Seller Subsidiary and the Selling Parties shall have reimbursed all Buyer Group Members for the amount of such Loss and Expense determined in accordance with, and subject to the extent such claim is based upon limitations of, this Article VIII.
(b) The obligations of Buyer pursuant to the provisions of Section 8.2 are subject to the following limitations:
(i) Buyer shall be required to indemnify and hold harmless under Section 8.2(b) with respect to Loss and Expense incurred by Seller Group Members (other than Loss and Expense incurred as a breach result of inaccuracies of the representations and warranties contained in Sections 6.1, 6.2 and 6.3 (the “Buyer Excluded Representations”), as to which this subsection (i) shall have no effect) only if the aggregate amount of such Loss and Expense exceeds $200,000; provided, however, that if the aggregate amount of Loss and Expense incurred by Seller Group Members exceeds $200,000, then this subsection (i) shall not apply and Seller Group Members shall be entitled to indemnification for all Loss and Expense irrespective of this subsection (i); and
(ii) the aggregate amount that Buyer shall be required to indemnify and hold harmless under (x) Section 8.2(a) in connection with or arising from any breach of the covenants set forth in Section 5.2 Article VII (Authorityother than the covenants set forth in Sections 7.2, 7.4(a) and 7.4(b) (the “Buyer Excluded Covenants”)), as to which this subsection (ii) shall have no effect and (y) Section 5.6 8.2(b) (Brokersother than Loss or Expense incurred as a result of inaccuracies of any Buyer Excluded Representation, as to which this subsection (ii) or Section 5.10 (New Company);
(dshall have no effect) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,0008,000,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;and
(eiii) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), indemnification provided for in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i8.2(a) to in connection with or arising from the extent such claim is based upon a breach of the representations and warranties covenants set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) Article VII or (y) Section 10.2(a)(vi8.2(b) to shall terminate eighteen (18) months after the extent such claim is based upon a breach of Closing Date (and no claims shall be made by any Seller Group Member under Section 8.2(b) thereafter), except that the indemnification by Buyer shall continue as to: (A) the representations and warranties set forth contained in Section 3.2 the Buyer Excluded Representations, as to all of which no time limitation shall apply, (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(fB) the covenants contained in the Buyer Excluded Covenants, as to which no time limitation shall apply and (C) any Loss or Expense of which any Seller Group Member Indemnitees and has notified Buyer in accordance with the Barceloneta Member Indemnitees requirements of Section 8.3 on or prior to the date such indemnification would otherwise terminate in accordance with this Section 8.5, as to which the obligation of Buyer shall not be entitled to recover Losses continue until the liability of Buyer shall have been determined pursuant to Section 10.2(d)(i)this Article VIII, Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees Buyer shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) have reimbursed all Seller Group Members for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash such Loss and Escrow Units allocated Expense determined in accordance with, and subject to such Person and not distributed thereto and the Parent Indemniteeslimitations of, collectivelythis Article VIII.
(c) For purposes of this Article VIII, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time Loss or Expense shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event reduced by any facts, conditions, conduct Tax benefit resulting from such Loss or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood Expense that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended is actually realized by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution AgreementIndemnified Party.
Appears in 1 contract
Limitations on Indemnification Obligations. The rights Notwithstanding the foregoing, (a) the right of the Thin Crust Equityholders to indemnification pursuant under Section 9.2(a), (b) the right of the Deep Dish Post-Merger Equityholders to indemnification under Section 9.2(b) and (c) the provisions right of the Remaining Thin Crust Equityholders and the Deep Dish Post-Merger Equityholders to indemnification under Section 10.2 are 9.2(c) shall be subject to the following limitationsprovisions:
(a) the amount of any and all Losses recoverable No indemnification shall be available (i) pursuant to Section 10.2(a)9.2(a)(i) or Section 9.2(a)(iii) above to Thin Crust Equityholders, Section 10.2(b), Section 10.2(c), Section 10.2(d(ii) and Section 10.2(e) shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii9.2(b)(i) or Section 10.2(c)(i9.2(b)(iii) above to the Deep Dish Post-Merger Equityholders or (iii) pursuant to Section 9.2(c)(A) above to the Remaining Thin Crust Equityholders and the Deep Dish Post-Merger Equityholders, in each case unless the total of all claims for indemnification pursuant to the applicable Sections shall exceed Ten Million Dollars ($10,000,000) in the aggregate (the “Deductible”), whereupon the full amount of Losses relating to or arising out of such claim (together from the first dollar thereof shall be recoverable in accordance with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000the terms hereof; provided, however, that this Section 10.4(b(A) the Deductible shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers9.2(a)(i) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i9.2(b)(i) in respect of a breach of any of the Fundamental Representations the Capitalization Representations, or the representations and warranties contained in Article 3 hereof Section 5.2(g), or (yin the case of any claim arising out of fraud or intentional misrepresentation committed by or on behalf of any other party hereto, and the Deep Dish Post-Merger Equityholders or the Thin Crust Equityholders, as applicable, shall, subject to Section 9.3(b) a Parent Indemnitee below, be entitled to recover full recovery in seeking indemnification in respect of Losses incurred in connection with any breach of any Fundamental Representations, Capitalization Representations, the representations and warranties contained in Section 5.2(g), or fraud or intentional misrepresentation;
(b) notwithstanding Section 9.3(a), no indemnification shall be available pursuant to Section 10.2(c)(i9.2(a)(i) above to the Thin Crust Equityholders or pursuant to Section 9.2(b)(i) above to the Deep Dish Post-Merger Equityholders, in each case solely in respect of any breach of the Capitalization Representations, unless the total of all claims for indemnification pursuant to the applicable Sections shall exceed Five Hundred Thousand Dollars ($500,000) in the aggregate, whereupon the full amount of Losses from the first dollar thereof shall be recoverable in accordance with the terms hereof;
(c) the maximum amount indemnifiable (i) by the Deep Dish Post-Merger Equityholders with respect to claims asserted pursuant to Section 9.2(a)(i) or (ii) by the Thin Crust Equityholders with respect to claims asserted pursuant to Section 9.2(b)(i) in each case shall be, in the aggregate, One Hundred Million Dollars ($100,000,000) (the “Indemnity Cap”); provided, however, that the Indemnity Cap shall not apply to any claims for indemnification pursuant to Section 9.2(a)(i) or Section 9.2(b)(i) in respect of a breach of the representations and warranties in Article 3 any of the Barceloneta Contribution AgreementFundamental Representations or the Capitalization Representations or in the case of any claim arising out of fraud or intentional misrepresentation committed by or on behalf of any other party hereto, and the Deep Dish Post-Merger Equityholders or the Thin Crust Equityholders, as applicable, shall be entitled to full recovery in seeking indemnification in respect of Losses incurred in connection with any breach of any Fundamental Representations or Capitalization Representations, or fraud or intentional misrepresentation;
(d) the amount of any indemnifiable Losses payable under this ARTICLE IX by shall be net of amounts actually recovered (i) under applicable insurance policies or (ii) from any other third party with indemnification or contribution obligations, in each case, net of the costs of recovery of such amounts and net of any deductibles or co-payments paid by the Indemnified Party and any retro-premium adjustments.
(e) none of the Thin Crust Equityholders or the Deep Dish Post-Merger Equityholders shall be liable for any punitive or similar damages, except for those payable pursuant to a Third-Party Claim.
Appears in 1 contract
Sources: Reorganization and Contribution Agreement (GrubHub Inc.)
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) the amount of any and all Losses recoverable pursuant to Notwithstanding Section 10.2(a)8.1, Section 10.2(b), Section 10.2(c), Section 10.2(d) and Section 10.2(e) there shall be determined net of any amounts recovered by the Parent Indemnitees or their Affiliates, the Member Indemnitees or their Affiliates, or the Barceloneta Member Indemnitees or their Affiliates, as applicable, no liability for indemnification under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), with respect to such Losses;
(b) the Parent Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i8.1(a) unless the aggregate amount of Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000; provided, that this Section 10.4(b) shall not apply to any claim for indemnification pursuant to (w) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c) shall not apply to any claim for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(e) the Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 1,400,000 (the “Seller Indemnification Threshold”), in at which case, ▇▇▇▇ ▇▇▇▇▇▇ will be obligated to indemnify the Parent Indemnitees shall only be entitled Buyer Indemnified Parties with respect to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover all Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth described in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii8.1(a) in excess of the Aggregate Unit Value;Seller Indemnification Threshold; provided that the Seller Indemnification Threshold shall not apply in the case of (i) Fraud, or (ii) 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 (authorization; no conflict), 2.5(a) (assets), 2.6 (taxes) and 2.18 (brokers and agents).
(hb) Notwithstanding Section 8.2, there shall be no liability for indemnification under Section 8.2(a) unless the aggregate liability amount of Parent REITLosses thereunder exceeds $1,400,000 (the “Buyer Indemnification Threshold”), Parent OP and Parent Sub pursuant 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 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)8.2(a) in excess of the Barceloneta Aggregate Unit Value;
(i) Buyer Indemnification Threshold; provided that the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) Buyer Indemnification Threshold shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, apply in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to Fraud or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses with respect to which indemnification may be requested under this Article 10 and the costs associated with such mitigation shall be included in the Losses with respect to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties or inaccuracy in Article 3 hereof any representation or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) warranty made by Buyer in respect of a breach any of the representations and warranties in Article 3 of the Barceloneta Contribution Agreement.following Sections:
3.1 (due organization), 3.2 (authorization; no conflict), 3.4 (capitalization), 3.5 (buyer stock) and
Appears in 1 contract
Limitations on Indemnification Obligations. The rights to indemnification pursuant to the provisions of Section 10.2 are subject to the following limitations:
(a) Required payments by an Indemnifying Party pursuant to this Article IX shall be limited to the amount of any and all Losses Loss remaining after deducting therefrom (i) any insurance or reinsurance proceeds recoverable pursuant by the Indemnified Party on account of the Loss (other than with respect to Section 10.2(aany insurance or reinsurance coverage provided by an Affiliate of the Indemnified Party), Section 10.2(b), Section 10.2(c), Section 10.2(d(ii) and Section 10.2(e) shall be determined net of any amounts recovered Tax benefit by the Parent Indemnitees or their AffiliatesIndemnified Party in respect of such Loss determined at the highest marginal Tax rate, the Member Indemnitees or their Affiliatesand (iii) any indemnity, contribution, or the Barceloneta Member Indemnitees or their Affiliatesother similar payment recoverable by any Indemnified Party from any third party, as applicable, under insurance policies or other collateral sources (such as contractual indemnities of any Person which are contained outside of this Agreement), including the Tax Matters Agreements and the Barceloneta Tax Matters Agreement (in each case, to the extent includable in indemnifiable Losses), case with respect to such Losses;Loss. The Indemnified Party shall use commercially reasonable efforts to collect all such proceeds, indemnity, contribution or other similar payments.
(b) Except for the Parent Indemnitees representations and warranties contained in Sections 3.1, 3.2(a), 3.2(c), 3.9, 3.10, 3.11, 4.1, 4.2(a), 4.2(c), 4.10, 4.11, and 4.12, all representations and warranties made by the CNA Parties and NICO in Articles III and IV of this Agreement or in any certificate delivered by the applicable Party pursuant to Sections 6.1(c) or 7.1(c) shall survive the Closing for the period of one (1) year after the Closing Date, whereupon they shall expire, and all claims for inaccuracy or breach of such representations and warranties will be deemed waived unless notice of the inaccuracy or breach thereof shall have been given to the breaching Party prior to the expiration of such one (1) year period, in which event such representation or warranty shall survive to the extent of the claim referred to in the notice until such claim has been resolved. The representations and warranties contained in Sections 3.1, 3.2(a), 3.2(c), 3.9, 3.10, 3.11, 4.1, 4.2(a), 4.2(c), 4.10, 4.11 and 4.12 shall continue in perpetuity. All covenants and agreements contained in this Agreement made by the Parties that contemplate performance following the Closing shall survive the Closing. All other covenants and agreements made by the Parties contained in this Agreement shall not be entitled survive the Closing and shall terminate as of the Closing.
(c) The CNA Parties shall have no obligation to recover in respect indemnify the NICO Indemnitees under Section 9.1(a) for breaches or inaccuracies of any individual claim pursuant to Section 10.2(a)(irepresentation or warranty made by the CNA Parties under Article III until Losses arising from such breaches or inaccuracies that would otherwise be indemnifiable hereunder incurred by such NICO Indemnitees exceed ten million dollars ($10,000,000) in the aggregate (the “Indemnity Threshold”), Section 10.2(a)(ii)and thereafter, Section 10.2(a)(iv)(A), Section 10.2(a)(vi), Section 10.2(b)(i), Section 10.2(b)(ii) or Section 10.2(c)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed $50,000CNA Parties shall be responsible only for the excess over the Indemnity Threshold; provided, however, that in no event shall the aggregate of all indemnifiable claims paid by the CNA Parties to the NICO Indemnitees under Section 9.1(a) exceed one hundred million dollars ($100,000,000) in the aggregate (the “Indemnity Cap”). For any individual items under Section 9.1(a) where the Loss relating thereto is less than twenty-five thousand dollars ($25,000) (the “De Minimis Amount”), the Losses related to any such items shall be disregarded for purposes of the Indemnity Threshold. The limitations on amounts set forth in this Section 10.4(b9.4(c) shall not apply to any claim limit recovery by the NICO Indemnitees for indemnification pursuant with respect to breaches or inaccuracies of Section 3.9 or for indemnification under Section 9.1(b) or 9.1(c).
(wd) NICO shall have no obligation to indemnify the CNA Indemnitees under Section 10.2(a)(i9.2(a) for breaches or inaccuracies of any representation or warranty made by NICO under Article IV until Losses arising from such breaches or inaccuracies that would otherwise be indemnifiable hereunder incurred by such CNA Indemnitees exceed the Indemnity Threshold, and thereafter, NICO shall be responsible only for the excess over the Indemnity Threshold; provided, however, that in no event shall the aggregate of all indemnifiable claims paid by NICO to CNA Indemnitees under Section 9.2(a) exceed the extent Indemnity Cap. For any individual items under Section 9.2(a) where the Loss relating thereto is less than the De Minimis Amount, the Losses related to any such claim is based upon a breach items shall be disregarded for purposes of the representations and warranties Indemnity Threshold. The limitations on amounts set forth in Section 3.2 (Capitalization of the Group Companies), Section 3.3 (Authority) or Section 3.15 (Brokers), (x) Section 10.2(b)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority), Section 4.4 (Title) or Section 4.6 (Brokers), (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement, Section 3.3 (Authority) of the Barceloneta Contribution Agreement or Section 3.15 (Brokers) of the Barceloneta Contribution Agreement or (z) Section 10.2(c)(i) to the extent such claim is based upon a breach of a representation and warranty set forth in Section 4.2 (Authority) of the Barceloneta Contribution Agreement, Section 4.4 (Title) of the Barceloneta Contribution Agreement or Section 4.6 (Brokers) of the Barceloneta Contribution Agreement.
(c) the Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(d)(i) or Section 10.2(d)(ii) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(c9.4(d) shall not apply to any claim limit recovery by CNA Indemnitees for indemnification pursuant with respect to breaches or inaccuracies of Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in 4.10 or for indemnification under Section 5.2 (Authority), Section 5.6 (Brokers9.2(b) or Section 5.10 (New Company9.2(c);
(d) the Barceloneta Member Indemnitees shall not be entitled to recover in respect of any individual claim pursuant to Section 10.2(e)(i) unless the aggregate Losses relating to or arising out of such claim (together with any related claims or other claims which arise from a substantially similar course of conduct or facts) equal or exceed an amount equal to $50,000; provided, that this Section 10.4(d) shall not apply to any claim for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;.
(e) the Parent Indemnitees The Parties shall not be entitled to recover Losses pursuant to Section 10.2(a)(i), Section 10.2(a)(ii), Section 10.2(a)(iv)(A), or Section 10.2(a)(vi) until the aggregate amount which the Parent Indemnitees would recover under such sections (as limited by the provisions of Section 10.4(a), Section 10.4(b) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds $5,000,000 (the “Threshold”), in which case, the Parent Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Group Companies) or Section 3.3 (Authority) or (y) Section 10.2(a)(vi) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement or Section 3.3 (Authority) of the Barceloneta Contribution Agreement;
(f) the Member Indemnitees and the Barceloneta Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(d)(i), Section 10.2(d)(ii) or Section 10.2(e)(i) until the aggregate amount which the Member Indemnitees and Barceloneta Member Indemnitees would recover under Section 10.2(d)(i), Section 10.2(d)(ii) and Section 10.2(e)(i) (as limited by the provisions of Section 10.4(a), Section 10.4(d) and Section 12.15 of this Agreement and Section 12.15 of the Barceloneta Contribution Agreement) exceeds the Threshold, in which case, the Member Indemnitees and Barceloneta Member Indemnitees shall only be entitled to recover Losses in excess of the Threshold; provided, that the Threshold shall not apply to any claim (x) for indemnification pursuant to Section 10.2(d)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority), Section 5.6 (Brokers) or Section 5.10 (New Company) or (y) for indemnification pursuant to Section 10.2(e)(i) to the extent such claim is based upon a breach of the representations and warranties set forth in Section 5.2 (Authority) of the Barceloneta Contribution Agreement, Section 5.6 (Brokers) of the Barceloneta Contribution Agreement or Section 5.10 (New Company) of the Barceloneta Contribution Agreement;
(g) except cooperate with each other with respect to any claims resulting from the failure to complete the Financing pursuant to the terms of this Agreement (including as a result of any waiver by the Contributors of Section 8.3(c), the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) shall not exceed the Aggregate Unit Value and the Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(d)(i) and Section 10.2(d)(ii) in excess of the Aggregate Unit Value;
(h) the aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(e)(i) shall not exceed the Barceloneta Aggregate Unit Value and the Barceloneta Member Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(e)(i)) in excess of the Barceloneta Aggregate Unit Value;
(i) the aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i) and Section 10.2(b)(ii) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 (valued, in the case of Parent OP Common Units, at the Parent Closing Price) less the amount of Escrow Cash and Escrow Units allocated to such Person and not distributed thereto and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a), Section 10.2(b)(i) and Section 10.2(b)(ii) in excess of the Aggregate Consideration Value less the amount of Escrow Cash and Escrow Units allocated to such Person;
(j) the aggregate liability of any Barceloneta Contributor pursuant to Section 10.2(c)(i) shall not exceed the aggregate consideration actually received by such Person pursuant to Article 2 of the Barceloneta Contribution Agreement (valued, in the case of Parent OP Common Units, at the Barceloneta Parent Closing Price) and the Parent Indemnitees, collectively, shall not be entitled to recover Losses pursuant to Section 10.2(a) and Section 10.2(c)(i) in excess of the Barceloneta Aggregate Consideration Value;
(k) (x) the Escrow Units and Escrow Cash in the Escrow Account at any given time shall be the sole source of recovery with respect to Losses indemnifiable pursuant to Section 10.2(a), and in no event shall the Parent Indemnitees be entitled to recover more than the amount of Escrow Cash and Escrow Units available in the Escrow Account pursuant to Section 10.2(a); (y) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a) and Section 10.2(b) or Section 10.2(c), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a) and shall have no rights to indemnification pursuant to Section 10.2(b) or Section 10.2(c) other than (A) in the case of a breach of Section 3.2 (Capitalization of the Group Companies) and Section 4.4 (Title), in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 that are not also contained in Section 4.4) and (B) in the case of a breach of Section 3.2 (Capitalization of the Company) of the Barceloneta Contribution Agreement and Section 4.4 (Title) of the Barceloneta Contribution Agreement, in which case the Parent Indemnitees shall only be entitled to recover directly from the applicable Barceloneta Contributor with respect to the dual claim (it being understood that this shall not create a limit on claims relating to breaches of provisions in Section 3.2 of the Barceloneta Contribution Agreement that are not also contained in Section 4.4 of the Barceloneta Contribution Agreement); and (z) in the event any facts, conditions, conduct or claims, or series of related or substantially similar facts, conditions, conduct or claims, result in Losses pursuant to which the Parent Indemnitees are entitled to indemnification pursuant to Section 10.2(a)(i) and Section 10.2(a)(vi), the Parent Indemnitees shall only be entitled to recover for such Losses pursuant to Section 10.2(a)(vi) and shall have no rights to indemnification pursuant to Section 10.2(a)(i);
(l) Notwithstanding anything contained herein to the contrary, after the Closing, on the date that the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees shall have no further rights to indemnification under Section 10.2(a). In any case where a Parent Indemnitee recovers, under insurance policies or from other collateral sources, any amount in respect of a matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a), Section 10.2(b) or Section 10.2(c), such Parent Indemnitee shall promptly pay over to the Representative (for further distribution to the Contributors or Barceloneta Contributors, as applicable) the amount so recovered (after deducting therefrom the full amount of the expenses incurred by such Parent Indemnitee in procuring such recovery), but not in excess of the sum of (i) any amount previously so paid to or on behalf of such Parent Indemnitee in respect of such matter and (ii) any amount expended by the Representative in pursuing or defending resolving any claim arising out of such matter;
(m) Following the Closing, the Parent Indemnitees, the Member Indemnitees and the Barceloneta Member Indemnitees shall take commercially reasonable steps to mitigate any Losses or liability with respect to which indemnification may an Indemnifying Party is obligated to indemnify any Indemnified Party hereunder, including by making commercially reasonable efforts to mitigate or resolve any such claim or liability. In the event that an Indemnified Party shall fail to make such commercially reasonable efforts to mitigate or resolve any claim or liability, then notwithstanding anything else to the contrary contained herein, the Indemnifying Party shall not be requested under this Article 10 and the costs associated with required to indemnify such mitigation shall Indemnified Party for any Loss that could reasonably be included in the Losses with respect expected to which indemnification may be requested under this Article 10; and
(n) In no event shall (x) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(b)(i) in respect of a breach of the representations and warranties in Article 3 hereof or (y) a Parent Indemnitee be entitled to recover Losses pursuant to Section 10.2(c)(i) in respect of a breach of the representations and warranties in Article 3 of the Barceloneta Contribution Agreementhave been avoided if such Indemnified Party had made such efforts.
Appears in 1 contract